Coats buys footwear components supplier Texon

Andrew Hore
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Coats buys footwear components supplier Texon

Industrial thread manufacturer Coats Group (LON: COA) has acquired Texon International Group for an enterprise value of $237m. This will increase the group’s presence in the Athleisure footwear sector.

Hong Kong-based Texon has facilities in Asia and Europe and previously had a private equity owner. It supplies insoles, heel counters, uppers and linings for footwear – 90% of revenues – and also supplies materials for handbags and accessories.

The main customers include adidas, Nike, Puma, Converse and Timberland and existing Coats clients could become its customers. Texon has a one-fifth market shares of the footwear structural components market.

In 2022, Texon is expected to generate revenues of $145m and operating profit of £18.5m. Underlying growth is expected to be around 10% a year and could be even better. There is enough capacity to generate revenues of $200m. Last year, Coats had revenues of $184m from the footwear and accessories sector.

Forecasts

Peel Hunt has upgraded its forecast for Coats for 2022 with revenues increasing from $1.57bn to $1.62bn and pre-tax profit edged up from $195m to $198m. A full contribution from Texon in 2023 has led to a pre-tax profit upgrade from $228m to $243m. There should be $5m of overhead cost benefits by 2024.

Net debt is expected to be $407m at the end of 2022, but cash generation should enable this to fall to $343m at the end of 2023.

The Coats share price rose 3.6% to 62.45p, which means that it is trading on around ten times prospective 2022 earnings, falling to eight next year.

AIM movers: Savannah Resources chief exec departs, Parkmead revenue increase

Andrew Hore
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AIM movers: Savannah Resources chief exec departs, Parkmead revenue increase

The departure of Savannah Resources (LON: SAV) chief executive David Archer has hit the share price, which slumped 30.8% to 2.3p. Dale Ferguson will be interim chief executive. The environmental impact assessment of the Barrosso lithium project in Portugal. Savannah Resources has six months to optimise the design of the project.

Energy supplier Parkmead (LON: PMG) says that its business in the Netherlands is generating record revenues thanks to higher gas prices, enabling a move into profit. This led to a 13.1% jump in the shares to 48.3p. In the year to June 2022, revenues of more than €14.5m were generated, compared with a forecast figure of €12.8m. This strong revenue generation continued into the new financial year. Exploration is being ramped up and two wells could be drilled earlier than previously expected.

Midlands-based property investor Real Estate Investors (LON: RLE) has sold £5.7m of properties so far this year with a further £10m planned. If the significant discount to NAV continues, then a special dividend will be considered. Contracted rental income is still £14m a year and the occupancy level is 85.9%. The share price rose 8% to 37.25p.

A first half trading updated from carbon fibre ceramic brakes manufacturer Surface Transforms (LON: SCE) shows a 240% increase in revenues and it is ready for further significant growth in demand following contract wins. This should help the company move towards profitability. The growth in interim revenues mainly came from Aston Martin Valkyrie production and development projects. The share price moved ahead by 8.1% to 47p.

Ecommerce technology provider Attraqt (LON: ATQT) says that interim revenues are in line with expectations, but it expects investment decisions to be delayed because of weak economic conditions. It is also taking longer for clients to build up to full usage. Annualised recurring revenues have risen by 15% to £23.4m. Attraqt increased last year’s total revenues by 9% to £22.9m but continues to lose money. There was £3.5m in the bank at the end of 2021. There was a 10% dip in the share price to 1.425p.

United Oil & Gas (LON: UOG) did not find any hydrocarbons at the ASV-1X exploration well in the Abu Sennan licence, onshore Egypt. The test results will be reviewed, and options considered. The share price fell 8.1% to 1.425p.

AO World cash call

Andrew Hore
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AO World cash call

Online domestic appliances retailer AO World (LON:AO.) has launched a £40m fundraising at 43p a share to reduce its debt pile. PrimaryBid is offering private investors the chance to buy shares in the placing, but the outlook for the company is poor.

The cash call follows the announcement that AO World was pulling out of Germany and that would cost £10m-£15m. This leaves AO World to focus on the UK market. It also removes a cash outflow from this business in future years. Even excluding, the closure costs AO World is expected to lose £23m in 2022-23 and remain loss-making next year.

Net debt was £32.8m at the end of March 2022, when there were £50m of facilities still available. However, management pointed out that seasonality meant that headroom had subsequently reduced. That is before any Germany closure costs.

Management says that AO World’s core domestic appliance market is resilient. The core business is cash generative, but the overheads of the group mean that the company is loss-making.

There does seem to be a realisation that chasing revenues is no good without making a profit. Reducing overheads and operational efficiency improvements could generate benefits of at least £25m by the year to March 2025.

The share price has declined 1.77p to 45.23p, so it is still well above the placing price. The PrimaryBid retail offer will close when the book building for the placing ends. The minimum subscription is £250.

Pound sinks to 2-year low against dollar

UK Investor Magazine
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Pound sinks to 2-year low against dollar

The pound has sunk to a 2-year low against the dollar as the UK government faced monumental disruption from a series of resignations by senior conservatives.

Boris Johnson was again found to have been loose with the truth and the latest debacle proved a bridge too far for 12 members of his government.

The pound sank on the news and traded as low as $1.1900.

“The pound was already sliding before the UK Government was plunged into chaos, yet the resignations of Rishi Sunak and Sajid Javid have simply added to the currency’s woes as it shows a cabinet in disarray,” says Russ Mould, investment director at AJ Bell.

Analysts also pointed to the terrible timing of the resignations as it coincided with a dismal report from the Bank of England pointing to further economic strife for the UK.

“The Chancellor’s resignation came on the same day as the Bank of England’s latest financial stability report, which warned that the economic outlook for the UK and globally has deteriorated with concerns UK households and businesses will struggle to pay outstanding debts,’ said  Mike Owens, UK Sales Trader at Saxo Markets.

Caracal Gold Investor Presentation

UK Investor Magazine
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Caracal Gold Investor Presentation

Caracal Gold presents at the UK Investor Magazine Investor Presentation June 2022.

Caracal Gold are in a position of strength. Ongoing production is helping fund a substantial exploration programme in Kenya and Tanzania having secured positive early evaluations of a number of projects. Caracal Gold CEO Robbie McCrae provides a comprehensive oversea of their portfolio and provides further insight through a Q&A.

Download Presentation Slides Here

Genflow Biosciences Investor Presentation

UK Investor Magazine
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Genflow Biosciences Investor Presentation

Genflow Biosciences present at the UK Investor Magazine Investor Evening June 2022.

Genflow Biosciences are developing life-prolonging and longevity therapies for use in humans and animals. Their focus is on improving the quality of life while helping people live a fuller life. This presentation includes a delve into the science and the current state of the longevity and age-related market.

Download Presentation Slides Here

SulNOx Investor Presentation

UK Investor Magazine
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SulNOx Investor Presentation

SulNOx Investor Presentation at the UK Investor Magazine Summer Investor Evening June 2022.

Ben Richardson, CEO at SulNOx, delivers the SulNOx investment case highlighting the progress the clean technology company has made since inception. SulNOx technology reduces the emissions of fossil fuels with a particular focus on Heavy fuel oil used in shipping.

Download presentation slides here

AIM movers: Kitwave and Equals upgrades, but forecast cut for Supreme

Andrew Hore
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0
AIM movers: Kitwave and Equals upgrades, but forecast cut for Supreme

Another of last year’s AIM flotations is doing better. Good results and forecast upgrades have pushed shares in Kitwave (LON: KITW) higher. The grocery distribution business benefited from a sharp rebound in the foodservice division as lockdowns came to an end. The ambient groceries and frozen foods businesses also grew, and all the divisions are back to pre-pandemic volumes. Cash generation is impressive and that will help to reduce net debt and fund add-on acquisitions. The 2021-22 pre-tax profit forecast has been increased from £13.5m to £18.7m. The share price has been declining in recent weeks, but it bounced back 10% to 151.25p, which is just above last year’s placing price of 150p.

Lighting prospects has dimmed the share price of consumer products supplier Supreme (LON: SUP) and it has slumped 31% to 87p. In the year to March 2022, underlying pre-tax profit was 6% ahead at £17.4m. The vaping business continues to grow and is the largest profit contributor, while the batteries division provides good cash flow. Even so, a fall in pre-tax profit to around £14m is expected for this year because of a sharp drop in lighting sales, partly due to destocking.

Canaccord Genuity has upgraded its forecasts for currency trading services provider Equals Group (LON: EQLS) following its trading statement. Interim revenues have jumped from £16.9m to £31.3m, thanks to a large increase in solutions revenues. There is £15.1m in the bank. The full year pre-tax profit forecast has been raised from £9.8m to £10.8m. There was a 10.8% increase in the share price to 87p following the news.

Nanosynth Group (LON: NANO) continues its share price rise. Executive directors have been buying shares at 0.48p. The share price has risen a further 37.9% to 0.495p.

There has been some profit-taking at MySale Group (LON: MYSL) and Inspirit Energy Holdings (LON: INSP). MySale has fallen 17.1% to 3.4p, while Inspirit has declined 12.5% to 0.0525p. They both remain higher than at the start of last week.

FTSE 100 sinks as growth fears grip markets

UK Investor Magazine
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0
FTSE 100 sinks as growth fears grip markets

The FTSE 100 sank on Tuesday as investors fled risk asset over fears further rate hikes could cause a central bank induced global recession.

Lower volumes make moves in stocks more pronounced and after a jump yesterday, London-listed shares took a step back as investors accessed the threat of inflation and a possible recession.

The FTSE 100 was down over 2% at the time of writing while the Euro hit a 20-year low against the dollar as markets questioned the ECB’s plans for monetary policy.

Cyclical weakness

Early declines were led by cyclical stocks with WPP the biggest faller in morning trade, off nearly 5%. The advertising agency would suffer during a recession as the world’s biggest advertisers – which are typically consumer brands – tend to reduce spending during economic downturns.

However, in the afternoon WPP was overtaken by commodities companies who displayed signs of disappointment about the state of the Chinese economy.

“Reports that China is planning a $75 billion infrastructure fund to revive economy has failed to lift demand for iron ore, with factories cutting production. Iron ore prices have slipped again reaching $113.4 a tonne, a level not seen since January.That’s keeping commodities giants Anglo American and Glencore on the back foot in early trade,” said Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown.

Anglo American and Glencore were both were down over 7%.

Oil majors Shell and BP were weaker as the energy situation in Europe became ever tenser following reports German gas company Uniper was seeking a €9 billion.

Selling in oil companies picked up in afternoon trade as oil prices fell on fears of an economic slowdown.

Defensive positioning

The FTSE 100’s gainers were dominated by defensive plays with pharma stock Dechra Pharmaceuticals providing some support for the index as it rose 4%.

Sainsbury’s edged marginally higher following a ‘so-so’ update that pointed to a drop in sales that was largely influenced by a bumper period a year. Sainsbury’s also said they were feeling the pressure of discount competitors, but were preparing for a battle over prices by matching over 200 lines with discounters.

ReNeuron Group (LSE: RENE) Finals: Keep on Searching

Jon Levinson
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ReNeuron Group (LSE: RENE) Finals: Keep on Searching

ReNeuron Group (LSE: RENE)28.5p, Mkt Cap: £16.26m. Reported finals to March 2022 on Monday and has been on the cutting edge of Proprietary Stem Cell technologies having listed in 2005. The business Strategy, blunted by lack of success is fully focused on expanding its Exosome platform. (Exosomes are nano‐sized and serve as mediators for cell‐to‐cell communication). These results reported progress with seven discovery-stage collaborations with global pharma, biotech and academic institutions. The pre-clinical data shows  that ReNeuron's exosome drug delivery technology ...

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