Tekmar seeks partner, Scirocco and Wentworth deal, N4 Pharma Nuvec progress

Andrew Hore
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Tekmar seeks partner, Scirocco and Wentworth deal, N4 Pharma Nuvec progress

Subsea cable protection services provider Tekmar Group (LON: TGP) is seeking a strategic partner or bidder because it believes that its weakened balance sheet will not enable it to turnaround the company and take advantage of opportunities, particularly in the wind power sector. The share price slumped 12.5p to 26.5p. In February, a placing and open offer raised £4.1m at 45p. Five years ago Tekmar joined AIM at a placing price of 135p. Interim revenues fell from £13.9m to £13m and it remains loss making. The order book has improved from £9.7m to £20.1m over the six months to March 2022. Net cash was £4.6m but losses and higher working capital requirements will reduce that figure.  

Scirocco Energy (LON: SCIR) is selling is 25% non-operated interest in the Ruvuma gas project in Tanzania to Wentworth Resources (LON: WEN). It appears to be a good del for both of them with Scirocco Energy up 0.05p to 0.475p and Wentworth Resources 1p higher at 26p. The project is next door to Wentworth’s Mnazi Bay gas project and makes Wentworth a significant player in Tanzania. Wentworth will pay $3m on completion, $3m when there is a final investment decision for the project and up to $8m from a share of net profit from Wentworth’s working interest. A further $2m will be paid when gross cumulative production reaches 50Bcf. Wentworth Energy has the cash to fund the deal and continue to increase the dividend. Scirocco Energy can concentrate on its anaerobic generation joint venture and other sustainable energy investments.

Positive data from studies using Nuvec has boosted the N4 Pharma (LON: N4P) share price has risen 0.25p to 2.8p. Nuvec is a delivery mechanism that pharma companies can use to get the antigens they have developed into cells to express the required protein. A study shows tumour suppression, and the company is trying to analyse whether the treatment went directly to the tumour or whether it was via other organs. Nuvec has also been successfully loaded with SiRNA and this could extend its use. A long-term study on oral applications has produced promising early data.

Tritax Big Box REIT secures 1m sq ft lease at Symmetry Park Rugby site

Natasha Doris
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Tritax Big Box REIT secures 1m sq ft lease at Symmetry Park Rugby site

Tritax Big Box REIT reported its one million square foot lease agreement across four buildings at its Symmetry Park Rugby development site to an unnamed global leader in storage and information management services today.

The trust commented that the logistic facilities would support its new client’s growth ambitions by enabling it to create its first UK campus to deliver a complete slate of services for its customers.

Tritax Big Box highlighted attractive returns to investors, with its client leasing four buildings, two of which are from the company’s speculative development programme.

The client also reportedly entered into an additional two pre-lets on buildings which are set to be constructed on a built-to-suit basis.

Tritax Big Box noted that each of the four buildings would be on a new 15 year lease with five yearly open market rent reviews, with the four buildings expected to deliver a yield on cost within the group’s 6% to 8% guidance range.

The firm mentioned that the delivery of the buildings would be phased, with 321,000 square feet due to practically complete in Q2 2023, and 643,000 square feet of pre-let space scheduled to practically complete in late FY 2023.

“Our successful letting of one million sq ft of prime logistics space will be one of the largest UK letting transactions completed so far this year and is further evidence of our strategy delivering growing rental income to our investors at an attractive yield on cost,” said Tritax Big Box REIT CEO Colin Godfrey.

“Our development activity continues to gather momentum as we benefit from strong and diversified occupational demand. Our significant land portfolio allows us to carefully match customers’ requirements in terms of building size, location and configuration.”

“We are delighted to be supporting a new customer’s growth plans and welcome them and these state of the art and highly sustainable buildings into our portfolio.”

Devolver Digital dives

Andrew Hore
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Devolver Digital dives

US-based video game publisher Devolver Digital Inc (LON: DEVO) has severely disappointed investors little more than seven months after joining AIM. The shares were already below their initial placing price of 157p at 136.5p and they have fallen a further 50p to 86.5p on the news that it has lowered its guidance on revenues to between $130m and $140m.

Sales of new releases, such as Shadow Warrior 3 and Weird West, have been lower than anticipated. It appears that other games were more popular with new Devolver Digital games getting lower Metacritic ratings and reviews than the ones they released in 2021. Corporate costs were also higher than expected.

Shadow Warrior is a game that was published for a third party and Devolver Digital subsequently acquired the IP. Higher margins were expected for Shadow Warrior 3 because it was the company’s own IP. There was also a lot of investment in other games.

Devolver Digital believes that remote working has hampered the coordination of development and the quality of games. Quality assurance will be improved.

Operational gearing

The operational gearing of the business is indicated by the fact that house broker Zeus Capital has reduced its forecast 2022 revenues by 5.5% to $135m and its earnings forecast from 7.2 cents a share to 6 cents a share. Revenues and profit are still going to be higher than 2021.  

The balance sheet remains strong with net cash of $94.8m expected at the end of 2022, compared with the previous figure of $117.6m.

This year’s figures will be more second half weighted than in the past. New games Monkey Island and Cult of the Lamb will be launched in the second half. The shares are trading on 17 times prospective 2022 earnings. Earnings expectations for 2023 have been cut by one-third, even though profit should be higher, due to the likely exercise of options and prospective 2023 multiple increases to around 20.

Bitcoin and Ether tumble as investors flee from crypto assets

Natasha Doris
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Bitcoin and Ether tumble as investors flee from crypto assets

Bitcoin fell by 10% to below $25,000, marking its lowest rate since December 2020, and Ether slid by 13% to beneath the $1,270 level to its cheapest rate since January 2021.

Investors dropped the famous crypto assets like a hot potato as inflation fears set into the cryptocurrency hype, and sent multitudes of people fleeing from the plummeting coins as consumers worried about losses linked to their investments.

Crypto suffered additional pain as the US CPI index hit an eye-watering 40-year inflation record of 8.6% in May, leaving risky investments like Bitcoin and Ether in the dust.

“As inflation proves to be an even trickier opponent to beat than expected, Bitcoin and Ether are continuing to get a severe bruising in the ring,” said Hargreaves Lansdown senior investment and market analyst Susannah Streeter.

“They are prime victims of the flight away from risky assets as investors fret about spiralling  consumer prices around the world.”

Meanwhile, the spectre of increased interest rates from the US Federal Reserve has set many sets of teeth on edge as investors rapidly back away from assets liable to punch a hole in their wallets.

“The worry is that inflation is becoming too hot to handle by central banks who will be forced to douse economies with jets of freezing water, in the form of much steeper interest rate rises, to get it under control,” said Streeter.

“With the era of cheap money coming rapidly to an end, traders are becoming much more risk averse and turning their backs on crypto assets.”

“Crypto fans have become used to volatile rides, but these rollercoaster descents are increasingly hard to stomach. Bitcoin has lost 61% while Ether has fallen by 72% since their respective November highs.”

The figures don’t bode well for the risk-averse, as reports from the UK’s Financial Conduct Authority (FCA) revealed that 14% of adults who invested in crypto over the Covid-19 pandemic fell into debt as a result.

“At a time when costs are escalating all over the place, nursing a big hole in a crypto wallet is the last blow they need,” said Streeter.

“It’s a stark reminder that dabbling in the crypto wild west is highly risky and investments in such assets should only be at the edges of a portfolio, with money you can afford to lose.’”

UK GDP contracts 0.3% as all sectors contribute to economic slide

Natasha Doris
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0
UK GDP contracts 0.3% as all sectors contribute to economic slide

UK GDP contracted by 0.3% in April, representing the second consecutive month of decline after the 0.1% fall in March, according to the latest data from the Office of National Statistics (ONS).

The report confirmed services fell by 0.3% in April this year, which was the major contributor to the slide in GDP over the month, and reflected a significant decrease of 5.6% in human health and social work, which was linked to a substantial drop in NHS track and trace activity.

The GDP figures also took into account a 0.6% fall in production, driven by a 1% decline in manufacturing as a growing number of businesses continued to report the impact of price increases and supply chain shortages.

The ONS mentioned that construction declined by 0.4% after a strong growth in March, when there was notable repair and maintenance activity as a result of storms in the second half of February 2022.

The latest figures reportedly marked the first time that all main sectors contributed negatively to monthly GDP estimates since January 2021.

The report reflected the impact of the Ukraine conflict, with the prices of everything from labour to fuel rising rapidly on the back of Russia’s war in the region.

Inflation has seen consumers scale back on their spending as families guard their wallets while inflation continues to bite chunks out of them.

“Confidence is shaky, inflation is taking a big bite out of consumers budgets and businesses are caught between the devil and the deep blue sea. Hike their prices and lose sales or offer discounts and watch margins wither,” said AJ Bell financial analyst Danni Hewson.

Analysts have also highlighted that the Bank of England is almost certain to raise its interest rates an additional 0.25%, marking a jump to 1.25% as investors brace for a potential recession later in the year.

“With just days to go before the Bank of England makes its next rate decision there will be plenty of debate about how best to curb searing levels of inflation whilst still providing a “soft landing”. Is recession an inevitability at this point?” said Hewson.

“With the OECD’s warning still ringing in the ears there’s plenty to be concerned about. Russia’s invasion of Ukraine has seriously set back Covid recovery plans around the world but a backdrop of reduced trade, rising taxes and a price cap creating artificial energy peaks, the UK has particular problems.”

Meanwhile, the Sterling slid in light of the report, with the Pound to Euro exchange rate dropping one third to 1.1664 and the Pound against the Dollar falling 0.5% to 1.2217.

Three catalysts that could move the Greatland Gold share price higher

Natasha Doris
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0
Three catalysts that could move the Greatland Gold share price higher

Greatland Gold shares have languished 2022, despite the recent progress at the Haverion project – one of the most prominent gold discoveries of recent years. So what catalysts could provide some support and possibly push the Greatland Gold share price higher?

Positive updates on Havieron

Havieron is Greatland Gold’s most important asset, and is currently under development in a joint-venture with Australia’s largest gold producer, Newcrest Mining.

Newcrest currently has the right to earn up to a 70% interest in the venture through completing a slate of exploration and development milestones in a four-stage Farm-in.

Newcrest further has the right to acquire an additional 5% interest at the close of the farm-in term at fair market value.

The operation has discovered gold-copper mineralisation, with four key target zones and the potential for expansion beyond its resource shell.

The company updated its mineral resource and reserve for the project in March 2022, which reported a 53% increase in total gold content to 5.5 million ounces, alongside a 63% rise in indicated mineral resource gold ounces to 3.1 million ounces, an initial inferred mineral resource estimated at the Eastern Breccia and mineral resources which included 33 million tonnes at 3.2 grams per tonne of gold and 0.4% copper containing 3.5 million ounces gold, and 158 kilo tonnes copper in the South East Crescent Zone.

Greatland Gold noted that it would be drilling 90,000 metres to explore the asset further and gave investors an update in early June on their most recent findings.

The company is currently waiting for the completion of a feasibility study for the asset this year, and is aiming for commercial production in 2023 within three years of boxcut commencement.

The project is promising and shareholders will need to wait for the company to travel the path towards to production to truly unlock the value at Havieron. Each milestone along this journey will provide a potential upside catalyst in Greatland shares.

Positive updates on remainder of Greatland Gold’s Portfolio Assets

The Scallywag licence is completely owned by Greatland Gold, and has been identified as a site of gold mineralisation in four of the seven holes recently drilled by the company in its exploration programme at the operation.

The exploration programme was completed in April 2022, and is scheduled to be followed up by further analysis of drilling results and integration into ongoing basin-wide geophysical and geological modelling to kick off further targeting.

The project stands to become a literal goldmine of potential for the company, however additional information and analysis is needed before anyone gets too excited about the operation.

The Juri prospect is based in Western Australia, and apparently holds similar qualities to the Havieron project, so the conclusions from its current exploration programme at this project could signal major reason for the share price to fly if resource studies prove similarly fruitful as Havieron.

The gold-copper operation is held in a joint-venture with Newcrest Mining, and is currently undergoing an exploration programme. Newcrest has the right to earn up to 75% interest in the project by spending up to $20 million as part of a two-stage Farm-in over five years.

Greatland Gold’s Rudall and Canning gold-copper exploration licence applications are currently pending, and are reportedly expected in due course. The licences are both considered potential sites for gold-copper mineralisation similar to Havieron’s style.

The Ernest Giles project is 100% owned by Greatland Gold, and covers around 850 kilometres of territory in Yilgarn Craton, which hosts greenstone belts and intrusives with over 85 kilometres of strike of prospective rocks.

The company has applied for two new exploration licences at Mount Smith E38/3612 and Welstead Hill E38/3613, which would expand the project to 1,950 square kilometres, after an internal review of historical and recent regional exploration data concluded the broader project area was prospective for gold, nickel and base metals mineralisation.

Keep an eye on the approval of these licences, because if the mining group receives a thumbs-up, its share price may to follow suit in the long term should early evaluation be positive.

The Panorama project is 100% owned by Greatland Gold, and has identified gold mineralisation and potentially the largest coherent cobalt in-streams anomaly in Western Australia.

The project is under exploration at the current moment, and has potential gold targets on the north-western and southern licence, including rock chip samples with up to 18.4 grams per tonne in gold.

Higher gold price

A higher gold price is obviously good news for a company which has built its business on gold exploration, so where is the price of gold heading in the near-term?

The price of gold has recently been pushed down by a rally in the dollar, the anchor currency for the commodity. The prospect of higher interest rates has supported the dollar in 2022, trumping any gold inflation hedge trade.

Meanwhile, rising 8.3% inflation in the US has caused concern, with gold failing to operate in its usual role as an inflation hedge. Nonetheless, inflation is projected to rise through 2022, which could see gold prices rise further if the inflation hedge trade suddenly kicks in.

If the price of gold climbs higher, the Greatland Gold share price is primed to benefit. However, with gold diverging from historical correlations, the outlook for gold prices will be tough to predict.

Molten Ventures gross portfolio value rises to £1.5bn on wave of new investment opportunities

Natasha Doris
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Molten Ventures gross portfolio value rises to £1.5bn on wave of new investment opportunities

Molten Ventures shares decreased 5.5% to 450p in early morning trading on Monday, following a gross portfolio value rise to £1.5 billion in FY 2022 against £984 million in the previous year.

The tech investment company saw a 37% gross portfolio fair value growth compared to 51% the year before, alongside £311 million in cash invested in the year and an extra £45 million from EIS/VCT funds compared to £128 million from plc and £34 million from EIS/VCT funds in FY 2021.

The growth was attributed to a higher level of follow-up opportunities in its existing portfolio, leading to consistent rounds in new primary investment opportunities and the continued expansion of its scalable platform.

The company also committed to 22 new seed funds through its Fund of Funds programme, which brought its overall seed portfolio to 57 funds.

Molten Ventures reported a NAV per share of 937p from 743p, and £78 million in plc cash against £161 million year-on-year.

The group announced a post-tax profit growth to £301 million compared to £267 million, with cash proceeds from realisations of £126 million from £206 million the last year, linked to its sale of shares in Trustpilot and UiPath, alongside its exits from SportPursuit, Premfina, Conversocial and Bright Computing, and amounts which were released from escrow related to previously announced disposals.

Molten Ventures noted £108 million in net funds raised over 2022 against £107 million in 2021, and that its operating costs remained at less than 1% of year-end NAV.

“This year, we made huge progress across the business from both an operational and financial perspective,” said Molten Ventures CEO Martin Davis.

“Our job is not only to identify the best opportunities but to do everything we can to support the growth of the companies in our portfolio, and ensure they have all the tools they need to realise their full potential. Molten is better positioned than ever to take advantage of investing in these sought-after assets right the way through their lifecycle from seed to exit.”

“Despite recent volatility in world markets caused in part by the tragic events in Ukraine, VC remains resilient, and the European technology market continues to be an area of growth. We have successfully navigated several market cycles and our adaptable and scalable business model, combined with the significant progress made this year, puts us in an advantaged position within the current market context.”

Molten Ventures declined to distribute a dividend for FY 2022 in its financial results.

Sirius Real Estate rent roll climbs 73.1%, German and UK assets grow

Natasha Doris
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Sirius Real Estate rent roll climbs 73.1%, German and UK assets grow

Sirius Real Estate shares fell 3% to 107.2p in early morning trading on Monday, despite a 73.1% growth in annualised rent roll to €167 million in FY 2022 compared to €96.5 million in FY 2021.

Sirius Real Estate highlighted growth across its UK and German assets, with a 7.6% increase in like-for-like annualised rent roll in the group’s 4.5 month term ownership of Bizspace, which it acquired for cash consideration of approximately £245 million based on an enterprise value £380 million, representing a net initial yield of 7.1%.

The group also noted a like-for-like annualised rent roll uptick of 6.4% in its German portfolio in the firm’s eighth consecutive year of rent roll growth over 5%, with €201.9 million in acquisitions completed or notarised in 10 sites across the country. Sirius Real Estate drew attention to the blend of income and value-add opportunity for its portfolio in the region.

Sirius Real Estate mentioned a pre-tax profit rise of 3.2% to €168.9 million against €163.7 million year-on-year, and a funds from operations climb of 22.5% to €74.6 million from €60.9 million.

The company also completed two strategic disposals which provided €30 million in capital to recycle into the business completed or expected to complete after the period end.

“Against an ongoing period of challenging market conditions, Sirius has delivered another very positive set of annual results leading to a 20% total accounting return including a 16.1% increase in dividend for shareholders,” said Sirius Real Estate CEO Andrew Coombs.

“This strong operating performance was underpinned by continued demand and asset management led rental growth across both our German and UK platforms.”

“The Company grew acquisitively through the commitment of over €200 million into acquisitions in Germany, as well as the acquisition of BizSpace in November 2021 for £380 million.”

Sirius Real Estate said its outlook highlighted post-year end trading which fell in line with market expectations, reportedly driven by continued strong occupier demand, investment and consistent on-shoring of production and supply chains by UK and German manufacturers.

The company remarked that the positive impacts of its FY 2022 acquisitions were expected to be more evident in FY 2023, and the firm said it was actively assessing new opportunities for growth across the UK and Germany.

Sirius Real Estate added that it remained well-placed to deliver attractive returns for shareholders, despite the volatile geopolitical environment for the coming months.

“We remain focused on driving property returns through the capability of our internal operating platforms and, despite the inflationary environment and the uncertainty created by the situation in Ukraine, are confident that we can continue to deliver attractive risk-adjusted returns through active asset management,” said Coombs.

“Looking ahead, we expect the ten assets acquired or notarised in Germany during the period to have a greater impact on earnings in FY23 compared to FY22, whilst the encouraging operating performance of BizSpace provides further income growth opportunities.”

“Against an ongoing period of challenging market conditions, Sirius has delivered another very positive set of annual results leading to a 20% total accounting return including a 16.1% increase in dividend for shareholders,” said Sirius Real Estate CEO Andrew Coombs.

Sirius Real Estate noted a total dividend rise of 16.1% for the financial year to 4.4c per share compared to 3.8c the year before, with an unchanged payout ratio of 65% of the group’s funds from operations and a total shareholder accounting return of 20% against 19.5% the last year.

Mind Gym’s valuable content

Andrew Hore
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Mind Gym’s valuable content

AIM-quoted learning and development products and services provider Mind Gym (LON: MIND) fell into loss last year, but it is set to bounce back in 2022-23. The true value of the business is in the IP that is being created over more than two decades.
In the year to March 2022, revenues were 24% ahead at £48.7m with US revenues growing even faster. Repeat revenues from customers that have bought products and services in the past three years were 86% of the total.
Gross margins remain stable at around 87%, but overheads are higher as management anticipates future growth in demand. There were also ...

AEX Gold finds partner for strategic minerals prospects

Andrew Hore
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AEX Gold finds partner for strategic minerals prospects

Greenland-focused AEX Gold Inc (LON: AEXG) has signed non-binding terms for the creation of a joint venture with ACAM that will hold the group’s strategic mineral assets. The AEX Gold share price rose 1.5p to 45.5p.
ACAM will invest £18m for a 49% stake and AEX Gold will inject the non-gold assets and cover site support, logistics and overhead costs relating to the group’s infrastructure in southern Greenland. The investment has already been made in this infrastructure for the gold projects. It has already contracted rigs for drilling.
AEX Gold will have managerial and operational control. The...

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