AIM movers: WANdisco, Symphony Environmental, MS International, Jangada Mines

Andrew Hore
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AIM movers: WANdisco, Symphony Environmental, MS International, Jangada Mines

Data management and analysis software provider WANdisco (LON: WAND) has won its largest ever contract with a major telecoms company that is an existing client. The shares rose 10% to 296p. The agreement is valued at $11.6m – $5.8m in advance – and takes the total value of contracts with the customer to $14.3m. The software will be used to move smart meter data to multiple cloud providers. WANdisco remains heavily loss-making so the additional cash will be useful. Last year, the cash outflow from operating activities was $28.2m and there was $5.76m of capital investment. There was $27.8m in the bank at the end of 2021, with a further $19.8m raised at 270p a share earlier this month.

Investors have been excited by a deal that Symphony Environmental Technologies (LON: SYM) has made with North American bread supplier Grupo Bimbo. The potential for the deal pushed the share price up 17.2% to 18.75p. The supply deal for d2p antimicrobial technology for use in the production of bread bags is for an initial period of three years. The new bread bags are already being produced. This follows successful legal action in Peru to get the government to differentiate between Symphony’s ox-biodegradable products and oxo-degradable products, which leave behind microplastics.

Shares in MS International (LON: MSI) rose 8.3% to 300p after it announced a 12% increase in the total dividend to 9.25p a share. In the year to April 2022, the defence and engineering products supplier improved pre-tax profit from £1.59m to £5.97m. That included a £1.19m settlement for a contract dispute, although there were £600,000 of legal expenses in overheads.  

Jangada Mines (LON: JAN) warns that its Pitomberias vanadium project in Brazil could require more cash. This means that the 100%-owned project may not start production this year. A decision should be made on sourcing the funding within three to nine months. The project has an NPV8% of $96.5m. The share price slumped 23.7% to 3.55p. At the end of December 2021, Jangada Mines had £3.5m in the bank and since then $650,000 has been raised from the sale of ValOre shares.

Oil and gas explorer Providence Resources (LON: PVR) has regained all its share price decline after it announced a proposed fundraising at a 35% discount to the previous day’s closing price. Today, the share price is up 25% to 2.75p, having been as low as 1.8p last week. Providence is raising $1.8m at 1.5p a unit (one ordinary share and one warrant exercisable at 1.5p). The cash will be spent on working capital and fund Providence’s lease undertaking application for Barryroe, which is an offshore field south of Cork.

Bango (LON: BGO) has signed its second agreement in less than one week. Bango shares rose 10.9% to 159.75p. The latest is with Spanish language programming-focused US network TelevisaUnivision Inc, which is licensing the Bango payments platform for its OTT subscription service ViX+, which will be offered around the world. Last week’s agreement was with an unnamed multinational technology company, which will use the Bango platform for carrier billing and bundling services for app store payments and subscription services. Prior to that announcement, the share price was 126.5p.

Limited cash to take advantage of Oxford BioDynamics prospects

Andrew Hore
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Limited cash to take advantage of Oxford BioDynamics prospects

Precision medicine tests developer Oxford BioDynamics (LON: OBD) fell 14.7% to 13.225p following its interim figures announcement. The company has significant opportunities but limited funds.

The cash outflow after R&D tax credits was £2.3m in the six-month period. There is £4.6m of cash in the bank at the end of March 2022. That was after £3.62m was raised at 46.5p a share last October.

Last week, EpiSwitch CiRT was launched in the UK, having been launched in the US in February. This is precision medicine test that can predict whether a patient will respond to immune checkpoint inhibitor therapies – they are infective treatments for 70% of patients.

Costs will be saved by not prescribing ineffective medicine and doctors can be reassured that it is correct to prescribe treatments.

Oxford BioDynamics is still talking with major pharma companies about the test so it will take time for revenues to build up. Once a reimbursement code is obtained in the US it should be easier to assess the potential.

Oxford BioDynamics has other products. The next diagnostic is likely to be for prostate cancer.  EpiSwitch CiRT is the one that could be significant in the medium-term, though. The prospects are positive.

Investors may be concerned about the cash position and the likely need for a fundraising in the next year. Revenues are unlikely to build up fast enough to enable the company to take advantage of the opportunities. There were warrants with the recent placing, but they are exercisable at 58.125p.

Credit Suisse found guilty on money laundering charges

Natasha Doris
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Credit Suisse found guilty on money laundering charges

Credit Suisse has been found guilty on charges of money laundering, according to the verdict reported on Monday, with the bank ordered to pay fines of £1.7 million alongside £17 million to the Swiss government.

The verdict found the banking company guilty of failure to adequately prevent members of a Bulgarian crime syndicate from profiting off cocaine trafficking across Europe.

The investigation reported a Credit Suisse employee failed to stop the criminal organisation from laundering over 19 million Swiss francs through the bank between July 2007 and December 2008 despite evidence that the money was illegally obtained.

The Swiss criminal court imposed a 20-month suspended sentence on the bank’s employee and an additional fine for her role in the money laundering scandal.

Swiss criminal law states that if a company is negligent in allowing its employees to launder money, the business is subject to a fine.

Credit Suisse denied complicity in any wrongdoing and confirmed it would be appealing the judgement.

“Credit Suisse Group has taken note of the Swiss Federal Criminal Court’s decision to impose a fine of CHF 2 million against Credit Suisse AG for certain historical organizational inadequacies (article 102 of the Swiss Criminal Code) for the period between July 2007 and December 2008,” said the bank in a statement.

“The investigation dates back more than 14 years. The bank will appeal the decision.”

The verdict is not the first time Credit Suisse has been under investigation for criminal activity.

A leak in February 2022 revealed a series of the banking group’s clients were involved in torture, money laundering, drug trafficking and general corruption.

The report was initially reported by German press agency Süddeutsche Zeitung before it was picked up by the New York Times and international news organisations.

A whistle-blower released the evidence with the statement that “I believe that Swiss banking secrecy laws are immoral…The pretext of protecting financial privacy is merely a fig leaf covering the shameful role of Swiss banks as collaborators of tax evaders.”

The notorious secrecy of Swiss banking laws mean banks tend to have cover behind which to operate without intensive public scrutiny, which makes illegal operations difficult to pinpoint and evict from the banking system.

Credit Suisse announced at the time that 90% of the leaked accounts had been closed down, and accused media reports of attempts to discredit the Swiss banking infrastructure overall.

“Following numerous inquiries by the consortium over the last three weeks, Credit Suisse has reviewed a large volume of accounts potentially associated with the matters raised,” said Credit Suisse in a statement.

“Approximately 90% of the reviewed accounts are today closed or were in the process of closure prior to receipt of the press inquiries, of which over 60% were closed before 2015.”

“Of the remaining active accounts, we are comfortable that appropriate due diligence, reviews and other control related steps were taken in line with our current framework.”

Croda secures $75m funding from US government to expand lipid facilities

Natasha Doris
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Croda secures $75m funding from US government to expand lipid facilities

Croda has secured funding from the US government in a $75 million agreement which will see the US support the firm’s US lipid systems facilities used in novel therapeutic drugs, such as mRNA vaccines.

Croda announced it would be investing up to $58 million in line with its ‘Empower Biologics Delivery’, bringing the project investment to $133 million.

The group reported the cost was included in its existing capital expenditure programme listed in its 2021 financial results.

The company highlighted the investment would be used to develop a lipid facility as part of a new multi-purpose cGMP site in Pennsylvania, with construction scheduled to kick off later this year and new capacity anticipated in 2025.

Croda mentioned the investment would support the expansion of its patient healthcare solutions portfolio by installing a third manufacturing site for lipid systems alongside its existing Alabama and Leek, UK facilities.

The funding from the US government comes as a joint award from the Biomedical Advanced Research and Development Authority (BARDA) and the Army Contracting Command’s Joint COVID Response Division (ACC JCRD).

The facility is set to form part of a programme to expand the US industrial base supporting vaccine and therapeutic manufacturing activities, with the base at Lamar supporting the US preparedness for future health emergencies by ensuring adequate capacity is available in the US to produce the vital components for vaccine manufacture.

Croda noted that given the scale of the current development pipeline, the market for lipid systems is expected to grow significantly over the coming decade due to its use in novel mRNA-based therapeutics, including vaccines and cancer treatments.

“We are grateful to the U.S. government for its support of Croda. The delivery technology based on lipid systems offers significant potential for the safe and efficient delivery of next generation vaccines and therapeutic drugs,” said Croda life sciences president Daniele Piergentili.

“As a result of this investment, Croda will be able to expand its capabilities to develop and manufacture ingredients in support of this important technology.”

“This will help ensure that the U.S. is well prepared for future health emergencies and equipped to offer advanced treatments for some of the most prevalent illnesses in the world today.”

SSE Thermal & Equinor to acquire Triton Power for £341m

Natasha Doris
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0
SSE Thermal & Equinor to acquire Triton Power for £341m

SSE Thermal and Equinor have reportedly agreed to acquire Triton Power from Energy Capital Partners for a consideration of £341 million.

The transaction will see the companies execute the next step in their collaboration to decarbonise the UK’s power system, with SSE Thermal and Equinor set to jointly own and run Triton Power between themselves.

Triton Power currently operates the 1.2 GW combined cycle gas turbine (CCGT) Saltend Power Station located in the Humber region in East Yorkshire.

The power station is a potential primary offtaker to Equinor’s H2H Saltend hydrogen production project, with H2H expected to kick off the wider decarbonisation of the Humber sector as part of the East Coast Cluster, one of the country’s first carbon capture, usage and storage clusters.

https://twitter.com/ssethermal/status/1541686330018742273

Humber is currently the UK’s most carbon-intensive industrial area. The operation aims to partially abate the region by 2027 through blending up to 30% of low-carbon hydrogen. The project will work towards 100% abatement by 2035.

Triton Power’s portfolio also includes the 140 MW open cycle gas turbine (OCGT) Indian Queens Power Station in Cornwall and the decommissioned CCGT Deeside Power Station in north Wales, which provides carbon-free inertia to the system.

The agreement will reportedly see Triton Power used as a platform by the two companies to develop additional low-carbon projects to support the transition to net zero and progress the decarbonisation work already completed by Triton.

The deal is scheduled to close in September, subject to UK National Security Filing and EU Merger Control.

“Flexible energy will be absolutely essential as renewable energy scales up over the coming years, providing vital back-up while protecting security of supply,” said SSE Thermal managing director Catherine Raw.

“But the real prize will be how we decarbonise that flexible energy over the longer term, and we are excited, in particular, by the hydrogen and carbon capture opportunities at Saltend. Together with Equinor, we will explore every avenue to decarbonise Saltend and create new opportunities at other assets so they can play a continued role in a net zero future.”

“We welcome our new colleagues and I look forward to working with them all as they play a critical role over the years ahead.”

Shell shares: is now the time to buy?

Natasha Doris
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Shell shares: is now the time to buy?

Shell has seen its already impressive profits rise higher in 2022, with the oil giant reporting a tripled profit intake for Q1 and a higher dividend payout. The price of oil has surged to heights of almost $130 per barrel since the war in Ukraine kicked off in late February, and currently stands at $112 per barrel for benchmark Brent Crude.

It’s probable that the ongoing conflict will see the price of oil remain high and in turn bolstering Shell’s profits. The Shell share price has been on the rise, and has increased 23.5% in the year-to-date. However, there is an argument that now is a good time to buy Shell shares, with a recent pull back and profits set to likely rise even further.

The energy giant has benefited greatly from western sanctions against Russia, with the sudden scarcity in supply sending its Q1 2022 profits surging to $9.1 billion from $3.9 billion year-on-year.

Shell dividend

Shell paid out a dividend of $0.25 per share for the period. The group is also currently in the middle of an $8.5 billion share buyback programme, with $4 billion completed on 4 May 2022, and the remaining amount scheduled to be bought back in advance of its Q2 2022 results on 28 July.

The company reported its shareholder distributions for HY2 2022 were expected to be in excess of 30% of cash flow from operating activities, which grew 81% to $14.8 billion against $8.1 billion quarter-on-quarter to Q1 2022.

Shell currently has a strong dividend yield of 3.5, and a dividend cover of 2.3, displaying an adequate level of assurance for shareholders that their payouts are secure.

Shell shares valuation

The oil and gas firm also boasts a PE ratio of 12.6 and a forward PE ratio of 5.2, indicating expectations of serious profit growth in the coming months. The stock price has risen in recent months, however it is dramatically undervalued on a historically earning basis.

Meanwhile, the price of oil is not anticipated to return back below the $100 per barrel mark in the near term which will support Shells earnings.

Renewable Energy

Shell are further adapting, slowly, to become a more renewables-focused energy company. The business is first and foremost an oil and gas firm, which not in dispute. However, the group have been taking steps to gradually adapt to a greener model of operations.

Shell has been moving to become a more climate-friendly investment, which is worth noting if ethical investing is something to take into consideration.

Shell has committed to hit net-zero emissions by 2050, in adherence to the Paris Agreement to limit the rise of average global temperatures to 1.5 degrees Celsius.

The firm plans to reduce its emissions from operations, and capture remaining emissions using technology or balancing them with offsets.

So far, Shell has rolled out charging for electric vehicles, alongside hydrogen and electricity generated by solar and wind power.

The company set a goal to reduce absolute emissions by 50% by 2030 against 2016 levels, and reported peak emissions in 2018 which it is committed to reducing until it achieves net zero.

Shell further operates Shell Recharge Solutions, which aims to expand from its network of 10,000 EV charging points across the UK to 100,000 by 2030. The group said 90% of UK drivers would be within a 10-minute drive of a Shell rapid charger by the end of the decade.

In its Q1 2022 results, Shell confirmed several renewable energy developments in its operations. The oil and gas company mentioned it had won bids alongside ScottishPower to develop 5 GW of floating wind power in the UK.

It also started a power-to-hydrogen electrolyser with 20 MW of production capacity, and acquired online energy retailer Powershop Australia in February 2022.

Shell also reported its win of Block OCS-0541 through its Atlantic Shores Offshore Wind joint venture with EDF Renewables North America in the New York Bight offshore wind auction.

In April, Shell signed an agreement with Actis Solenergi Limited to acquire 100% of Solenergi Power Private Limited, along with the Sprng Energy selection of companies based in India.

Shell have seen skyrocketing profits in the year-to-date, and the price of oil is looking set to climb higher as the year goes on, taking Shell’s profits soaring with it. Shell shares are currently undervalued on a historical earnings basis, and the company have made a commitment to transition to net-zero to lessen its burden on the planet which will likely support the Shell share price long into the future.

CareTech recommends Amalfi Bidco £870.3m bid to shareholders

Natasha Doris
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CareTech recommends Amalfi Bidco £870.3m bid to shareholders

CareTech shares soared 21% to 741p in late afternoon trading on Monday after the group reached agreement on a takeover offer for £870.3 million from Amalfi Bidco Limited.

CareTech confirmed it was recommending the offer from Amalfi Bidco to its shareholders, who would receive 750p per company share.

The cash consideration for the entire company’s issued and to be issued shares represents a premium of approximately 28% to the CareTech closing share price on 4 March 2022, the last business day before the offer period commenced.

“On behalf of the CareTech Independent Board, we are pleased to have reached agreement on the terms of a recommended cash offer by Bidco,” said CareTech non-executive director Jamie Cumming.

“We believe that this is in the best interests of our investors and other stakeholders, with the potential to deliver a number of strategic opportunities for the business through private ownership by Bidco.”

“As a consequence of the offer, CareTech’s founders will remain the controlling shareholders of the business. We believe this will allow the existing care-focused culture of the organisation to continue and enable CareTech to continue to deliver high standards of care to its service users.”

FTSE 100 higher on commodities rebound

Natasha Doris
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FTSE 100 higher on commodities rebound

The FTSE 100 was up 0.6% in midday trading on Monday, as mining firms lifted the index higher following commodity price weakness last week as a result of concerns around global growth.

However, the large dividends offered by miners proved attractive after a dip last week, sending commodities stocks soaring to the top of the FTSE 100 in Monday trading.

“On the UK market, the FTSE 100 moved 0.3% higher to 7,228, driven by miners regaining favour with investors after a patchy session last week caused by a retreat in metal prices,” said AJ Bell investment director Russ Mould.

“The market has been concerned in recent weeks about the outlook for the global economy and how recession fears might translate into weaker commodities demand. Names like Rio Tinto lost share price momentum, and in many cases these big miners saw all their year-to-date share price gains wiped out.”

“With big dividends on offer, investors have clearly been hovering over the ‘buy’ button following recent share price weakness and today seems to be the day these mining names are being added to portfolios once again.”

Anglo American shares rose 3.2% to 3,164.5p, Glencore share gained 3% to 459.9p, Rio Tinto shares increased 2.9% to 5,126.5p, Antofagasta shares picked up 2.6% to 1,216p and Fresnillo shares saw an uptick of 1.9% to 802.4p.

Chinese-focused stocks rebound

Meanwhile, Chinese-focused stocks gained as the Hang Seng rose 2.3% to 22,229.5 on the back of easing Covid-19 restrictions.

Asia-focused Prudential increased 1.9% to 1,005.2p and Scottish Mortgage Investment Trust rose 2.7% to 752.8p as its portfolio holdings including Tencent and Alibaba climbed.

European Markets

The European markets also enjoyed a strong trading session, with the German DAX rising 0.9% to 13,240.1.

“A good start to the week for European equities bodes well for investors hoping for their portfolios to be repaired after a damaging start to the year,” said Mould.

“Germany’s DAX index jumped … thanks to strength in consumer-facing companies, miners, industrial groups and healthcare names. The top performer for automotive parts specialist Continental while Adidas was also in fashion.”

US markets rise

Across the Atlantic, revised expectations saw US Federal Reserve interest rate projections lower from 4% to 3.5%, providing a wave of relief in the American market.

The NASDAQ was up 0.4% to 12,189.5 in pre-open trading, with the Dow Jones up 0.2% to 31,551 and the S&P 500 up 0.3% to 3,928.

Aim movers: CareTech, Verditek, Inspirit Energy, Caspian Sunrise, Immupharma

Andrew Hore
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Aim movers: CareTech, Verditek, Inspirit Energy, Caspian Sunrise, Immupharma

CareTech Holdings (LON: CTH) is recommending a 750p a share cash offer from a private equity backed management bid vehicle. The share price jumped 20.8% to 739.5p. This values the social care services provider at £870.3m. There is an alternative offer that enables shareholders the choice of taking non-voting shares in the bidder.

Verditek (LON: VDTK) distribution partner Bradclad Group is setting up a joint venture with Norway-based PVC roof membranes manufacturer Protan AB, which will use Verditek lightweight flexible solar panels. There has been 12 months of R&D and testing to perfect lamination of the solar panels to the roofing material. The first order is in England, but Protan will be sending samples to 35 distributors in Europe. The Verditek share price reached an all-time low of 1.3p last Thursday before rising to 1.8p on Friday. There has been a further 38.9% increase to 2.5p today.

Inspirit Energy Holdings (LON: INSP) is the biggest mover on the day rising 47.5% to 0.0435p. The company’s waste heat recovery system, where waste heat exhaust is converted to energy, has completed the first phase of development. The unit has recorded an output of more than 30kW in the first stage build test period. Further enhancements will be made before there are trials. A marine version is also being developed. Inspirit Energy had £348,000 in the bank at the end of 2021, but the company has limited resources to push forward the development of the waste heat recovery system. The market capitalisation is £1.9m.

Oil and gas explorer and producer Arrow Exploration Corp (LON: AXL) shares rose 16.4% to 17p after better than expected results from the well test on the Tapir block on the Llanos Basin of Colombia. The well was drilled to 8,656 feet and encountered six hydrocarbon bearing intervals and was under budget. This is the third well on the block. Arrow Exploration believes that it is still on target to achieve a production rate of 3,000 barrels of oil equivalent per day.

Caspian Sunrise (LON: CASP) shares slumped 14.2% to 4.375p after taking a $12.5m impairment charge. The Kazakhstan-focused oil and gas producer has increased production to 4,050 barrels per day and this could be increased to 5,000 barrels per day.  In 2021, cash generated from operating activities was £7.76m, compared with an outflow in 2020. There have also been disappointing attempts to establish long-term flow rates for deeper structures. On the plus side, Caspian Sunrise says it could pay a dividend in 2022 following the recent capital reduction.

Orosur Mining Inc (LON: OMI) says that the latest drilling at the Anza project in Colombia has shown lower gold anomaly levels, although there are signs of high-grade zinc and copper at depth. However, the existing equipment cannot reach that depth. The share price slipped 8.3% to 8.25p.

ImmuPharma (LON: IMM) says that its US partner Avion Pharmaceuticals is seeking final regulatory guidance from the FDA ahead of the planned phase 3 trial of Lupuzor in Lupus patients. However, there appears to have been little progress since the announcement in May. A study has shown that Lupuzor is safe and well tolerated and been submitted to the FDA. The slow progress may be the reason for the fall in the share price by 5.3% to 5.91p. Avion has exclusive US rights and will fund the phase 3 trial.

AstraZeneca receives recommendations for EU approvals for two breast cancer treatments

Natasha Doris
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AstraZeneca receives recommendations for EU approvals for two breast cancer treatments

AstraZeneca announced it had officially received recommendations for EU approval for its breast cancer treatments Enhertu and Lynparza on Monday.

The pharmaceutical giant reported the recommended approval of its Enhertu treatment for patients with HER2-positive metastatic breast cancer treated with a prior anti-HER2-based regimen, and the use of its Lynparza (olaparib) treatment for patients with germline BRCA-mutated HER-2-negative high-risk early breast cancer.

AstraZeneca confirmed Enhertu had been recommended for approval in the EU as a monotherapy for the treatment of adult patients with unresectable or metastatic HER2-positive breast cancer who had previously received at least one previous anti-HER2-based regimen.

The drug was developed and commercialised by AstraZeneca and Daiichi Sankyo.

The approval recommendation was based off the positive results of the project’s DESTINTY-Breast03 Phase three trial, which indicated a 72% reduction in the risk of disease progression or death compared to trastuzumab emtansine in patients previously treated with trastuzumab and a taxane.

“This recommendation reflects the transformative progression-free survival benefit seen in the DESTINY-Breast03 trial compared to T-DM1, supporting Enhertu as a potential new standard of care and setting a new benchmark in the treatment of HER2-positive metastatic breast cancer,” said AstraZeneca executive vice president of oncology research and development Susan Galbraith.

“If approved by the European Commission, patients in Europe may be able to benefit from this important medicine earlier in the treatment of their disease, improving their chance for better outcomes.”

AstraZeneca’s Lynparza treatment has been recommended for marketing authorisation in the EU for adult patients previously treated with neoadjuvant chemotherapy.

The recommendation was based off results from the company’s OlympiA Phase three trial, which reportedly displayed a reduced risk of breast cancer recurrences, new cancers or death by 42% against a placebo.

The treatment also increased chances of survival overall, with a reduced risk of death by 32% compared to a placebo. The safety of the drug lined up with results in previous trials.

“For patients with high-risk, early-stage breast cancer, the risk of recurrence remains unacceptably high and cancer will return for more than one in four of these patients,” said OlympiA Phase three trial chair Professor Andrew Tutt.

“Today’s recommendation is hopeful news for patients in Europe, as we move closer to setting a potential new standard of care that improves overall survival in patients suitable for treatment with olaparib.”

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