AIM movers: Shield Therapeutics, Cornerstone FS, Kefi, Tower Resources, ex-dividends

Andrew Hore
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AIM movers: Shield Therapeutics, Cornerstone FS, Kefi, Tower Resources, ex-dividends

Poor sales progress and the need for more funding has hit the Shield Therapeutics (LON: STX) share price, which had already been plummeting. It fell a further 38.5% to 7.375p. Shield Therapeutics launched its Accrufer iron deficiency treatment in the US last July and sales are taking longer than initially indicated to build up. Having failed to raise money via a share issue, management has obtained a $10m loan from a major shareholder lasting until the end of 2023. This is secured on the US IP for Accrufer, which are the main attraction of the business. finnCap forecasts net debt of £20.9m by the end of 2023 and continuing cash outflows.

Cornerstone FS (LON: CSFS) is making progress with its strategy to consolidate and grow international payment businesses by using its own cloud technology. Gross margin has improved but the group is still loss-making. In fact, the interim underlying operating loss increased from £1m to £1.44m. The increase was greater if transaction costs and share-based payment charges are included. There was cash of £348,000 at the end of 2021. Cash outflows, including capitalised software development, should reduce with further growth but financing growth will be difficult with the share price slumping 46.8% to 10.25p.

Kefi Gold and Copper (LON: KEFI) says that the project finance syndicate for the Tulu Kapi gold mine has signed a funding umbrella agreement. The Ethiopian authorities have confirmed that the Tulu Kapi mining licence has not been cancelled. The plan is to launch the project at the start of the dry season in October. Kefi says that the intrinsic value of its assets, based on the net present values of the company’s three projects, is 9p a share. This does not appear to take account of any liabilities for the holding company. The share price jumped 43.2% to 0.7305p.

Oil and gas explorer Tower Resources (LON: TRP) shares have had a chance to react to last night’s news has secured a bank loan covering 40% of the $18m cost of the NJOM-3 well on the Thali block in Cameroon. The share price rose 17.7% to 0.3p. Estimates for the NJOM-1 well are slightly higher than previously announced. The NPV10 of the mean recoverable case for the whole structure is $305m.

Ex-dividends

Anglo Asian Mining (LON: AAZ) is paying a 3.5 cents a share final dividend and the share price was unchanged at 97.5p.

Insurance businesses investor BP Marsh (LON: BPM) is paying a 2.78p a share final dividend and the share price fell 6p to 301p.

Duke Royalty (LON: DUKE) is paying a 0.7p quarterly dividend and the share price was unchanged at 35p.

Fluid power products distributor Flowtech Fluidpower (LON: FLO) is paying a 2p a share final dividend and the share price fell 0.25p to 117.75p.

Ideagen (LON: IDEA) shareholders are receiving a 0.29p a share dividend before the completion of the takeover of the software company. The share price fell 0.5p to 349.5p. The bid is 350p a share.

iEnergizer Ltd (LON: IBPO) is paying a 13.8p a share final dividend and the share price fell 21.5p to 455p.

Medical technology company Inspiration Healthcare (LON: IHC) is paying a 0.41p a share final dividend and the share price fell 9p to 88.5p. At the AGM, it was warned that ordering patterns could be second half weighted.

Learning Technologies Group (LON: LTG) is paying a 0.7p a share final dividend and the share price fell 4.55p to 111.05p.

Property investor Panther Securities (LON: PNS) is paying a 6p a share final dividend and the share price is unchanged at 295p.

Leather processor Pittards (LON: PTD) is paying a 0.5p a share final dividend and the share price fell 2.5p to 54p.

Real Estate Investors (LON: RLE) is paying a 0.81p a share quarterly dividend and the share price fell 0.25p to 34.5p.

Packaging manufacturer Robinson (LON: RBN) is paying a 3p a share final dividend and the share price is unchanged at 87.5p.

Oil and gas producer Serica Energy (LON: SQZ) is paying a 9p a share final dividend and the share price fell 8p to 286p.

Skillcast (LON: SKL) is paying a maiden dividend of 0.28p a share and the share price is unchanged at 24p.

Smart Metering Systems (LON: SMS) is paying a 6.88p a share final dividend and the share price fell 21.5p to 826.5p.

Financial services business STM (LON: STM) is paying a 0.9p a share final dividend and the share price is unchanged at 24p.

Think Smart Ltd (LON: TSL) is paying a A$0.0414 a share dividend and the share price is unchanged at 24.5p.

Vertu Motors (LON: VTU) is paying a 1.05p a share final dividend and the share price fell 1.45p to 55.05p.

Oil and gas company Wentworth Resources (LON: WEN) is paying a 1.16p a share final dividend and the share price fell 1p to 23.5p.  

Wynnstay Properties (LON: WSP) is paying a 14p a share final dividend and the share price fell 5p to 690p.

FTSE 100 tumbles as housing market cools and recession alarm rings

Natasha Doris
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FTSE 100 tumbles as housing market cools and recession alarm rings

The FTSE 100 tumbled on Thursday as stocks across Europe tanked and the gloomy macroeconomic forecast seemed to finally sink in for investors as recession alarms rang.

“Stock markets were in a terrible mood across Europe, with the FTSE 100 down 1.7%, the CAC 40 dropping by 2.3% and the Dax falling 2.5%,” said AJ Bell investment director Russ Mould.

“There really is a lack of good news for investors to cling onto, and the near-term outlook looks bleak which is shattering confidence.”

Meanwhile, the US markets spiralled, with NASDAQ pre-open trading down 1.8% to 11,479 and the Dow Jones down 1.2% to 30,625.

BAE Systems and Bunzl

At the time of writing, the only two risers on the FTSE 100 were BAE Systems, with a 0.4% climb to 830.4p, and Bunzl with a 0.3% uptick to 2,681p.

BAE Systems is no doubt raking in the cash after G7 leaders renewed their commitment to Ukraine as Putin’s war escalates, sending demand for heavy arms soaring.

Meanwhile, Bunzl increased its forecast revenues guidance on the back of higher than expected HY1 revenues growth of 16% as a result of higher inflation levels and a series of acquisitions.

“The list of risers on the FTSE 100 won’t take investors long to read. [Bunzl], the provider of products that companies need to do business but not actually sell to customers nudged ahead … after upgrading its guidance for the year,” said Mould.

Bunzl CEO Frank van Zanten added: “Bunzl has delivered another period of strong growth. We continue to demonstrate the strength of our business model, supported by the depth and resilience of our supply chains and the agility of our people who have responded to the inflationary environment so successfully.”

“Our acquisition momentum remains strong, with our active pipeline supported by a strong balance sheet.”

Housing cooldown knocks housebuilders down

Housing stocks were hit particularly hard, as the latest figures from Nationwide revealed a slowed housing price growth of 0.3% compared to 0.9% the last month.

“The price of a typical UK home climbed to a new record high of £271,613, with average prices increasing by over £26,000 in the past year,” said Nationwide chief economist Robert Gardner.

“There are tentative signs of a slowdown, with the number of mortgages approved for house purchases falling back towards pre-pandemic levels in April and surveyors reporting some softening in new buyer enquiries.”

“The market is expected to slow further as pressure on household finances intensifies in the coming quarters, with inflation expected to reach double digits towards the end of the year. Moreover, the Bank of England is widely expected to raise interest rates further, which will also exert a cooling impact on the market if this feeds through to mortgage rates.”

Barratt Developments shares tumbled 4.3% to 455.4p, Berkeley Group fell 3.1% to 3,659p, Persimmon dropped 3.8% to 1,841.7p and Taylor Wimpey slid 3.8% to 1,841.7p.

Greatland Gold commences Scallywag exploration programme

Natasha Doris
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Greatland Gold commences Scallywag exploration programme

Greatland Gold shares were up 1% to 9.9p in late morning trading on Thursday following the commencement of its exploration programme at the Scallywag project, leveraging its understanding of geological information and knowledge of the area to drill a series of promising new conductor targets.

Greatland Gold commented the drill programme was designed to test ground electro-magnetic (EM) conductors for Telfer-style mineralisation at the Pearl, Swan and Swan East targets.

“We are excited to accelerate Greatland’s exploration programme and commence on the ground activities at our 100% owned projects in the Paterson province of Western Australia, regarded as one of the world’s most prospective frontiers for the discovery of multi-cycle, tier-one gold-copper deposits,” said Greatland Gold managing director Shaun Day.

The company noted that its Ultra Fine Fraction soil sampling geochemistry results were currently being integrated into its regional geological interpretation and targeting framework.

The firm also mentioned its ongoing review of ground EM geophysics data and its 2020 airborne EM to enhance targeting and and identify further aerial anomalies for ground EM follow-up, alongside further analysis of the drilling results from 2021 and 2020 and their integration into ongoing basin-wide geophysical and geological modelling to drive further targeting.

Greatland Gold confirmed heritage clearances had been completed, and access and drill pad clearing had kicked off ahead of the Scallywag drill programme.

Meanwhile, the company said its maiden exploration programme had been planned for identified targets at the recently acquired Rudall and Pascalle licenses.

Greatland Gold reported heritage approvals had been completed, with access planning underway. The Rudall operation is set to be co-funded by a government grant.

According to Greatland, both licences sit in prime locations, with Rudall located 20 kilometres south-southeast of the Haverion gold-copper resources and Pascalle based between Haverion and the Newcrest Mining Telfer gold mine.

“The 2022 campaign at Scallywag follows encouraging exploration results reported last year, where four of seven holes intercepted gold mineralisation,” said Day.

“The maiden drill programme at our newly acquired Pascalle and Rudall tenements is equally significant with Rudall considered to be prospective for Havieron and Telfer style gold-copper occurrences, while Pascalle sits directly between the two world class discoveries of Havieron and Telfer.”

“We look forward to unlocking value by systematically progressing exploration through these Havieron and Telfer like priority targets to take advantage of our strong position in this prospective region.”

WPP to acquire Australian marketing firm Bower House Digital

Natasha Doris
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WPP to acquire Australian marketing firm Bower House Digital

WPP shares were down 0.6% to 814.4p in early morning trading on Thursday following the company’s reported acquisition of marketing technology firm Bower House Digital for an unspecified consideration.

WPP confirmed it had agreed to acquire the Australian company in a move to strengthen its technology-driven marketing solutions for its clients.

The group highlighted that Bower House Digital’s specialisation in Salesforce Marketing Cloud Solutions aligned with WPP’s accelerated growth strategy and M&A approach to build on existing digital experience capabilities.

The firm designs, builds and deploys digital experiences for clients including Aesop, Bunnings, Bupa, Target and Myer.

“Companies are seeking one integrated communications solution that combines creativity, technology and data,” said WPP Australia and New Zealand president Rose Herceg.

“Bower House Digital’s knowledge in marketing technology will further strengthen our digital expertise in Australia and New Zealand. I’m excited to welcome the Bower House Digital team and clients to WPP.”

https://twitter.com/WPP/status/1542395866346037249

Bower House Digital currently operates across Australia and the Asia-Pacific sector with 80 employees and was founded in 2017 by Bryan Dobson and Meg Quinn.

“Joining WPP and Ogilvy’s global network represents the next stage in our growth. We are so proud of what our company has achieved, the culture we have created and the team we have assembled over the past five years,” said Dobson and Quinn.

“Fusing our digital marketing knowledge with the creative powers of Ogilvy will build even bigger and better opportunities for our people and clients.”

Ocado extends partnership with French retailer Groupe Casino

Natasha Doris
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Ocado extends partnership with French retailer Groupe Casino

Ocado shares were down 4.6% to 763.8p after the group confirmed its extended partnership with French retailer Groupe Casino.

The extension is consistent with the terms of the Memorandum of Understanding announced by the firm on 17 February 2022.

Ocado highlighted the extension included the creation of a joint venture to provide logistics services to OSP-powered Customer Fulfilment Centres (CFCs) in France, which will be available to all grocery retailers.

The agreement also notes a partnership for the online retailer to integrate Octopia’s marketplace platform into the OSP (Ocado Smart Platform) and allow OSP partners across the world to launch their own marketplace offering.

The transaction further includes the deployment by Groupe Casino of the OSP In-Store Fulfilment solution by Ocado across its Monoprix stores.

“This is a great milestone for our relationship with Groupe Casino as we extend the partnership in a number of exciting directions,” said Ocado Solutions CEO Luke Jensen.

“Our partnership demonstrates what can be achieved when a major retailer introduces a world-class quality of service online, enabled by unique efficiencies, to French consumers.”

“I’m excited that Ocado Group’s cutting-edge technologies are now available to all grocery retailers in France, with the new joint venture leveraging our combined expertise to provide key logistics services for future CFCs.”

Bunzl upgrades FY 2022 revenue expectations on 16% HY1 revenue climb

Natasha Doris
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0
Bunzl upgrades FY 2022 revenue expectations on 16% HY1 revenue climb

Bunzl shares were up 1.7% to 2,717p in early morning trading on Thursday after the group reported an expected 16% rise in revenue at actual rates and a 12% to 13% increase at constant exchange rates in HY1 2022 compared to HY1 2021.

The company noted inflation continued to drive underlying revenue, with its acquisitions providing supplemental growth.

Bunzl also mentioned its adjusted operating margin was projected to be slightly higher than historical annual levels over the term.

The firm added its North American business continued to expand on rising inflation, and that negotiations with its largest customer were “constructive and ongoing.”

The group mentioned strong performances across Europe, along with year-on-year improvement in operating margins for the UK and Republic of Ireland and positive base recovery.

Bunzl commented its revenue growth throughout the rest of the world had been moderate, with high revenue jumps in the Asia-Pacific region offset by a Covid-linked decline in sales in Latin America.

The distribution company confirmed an upgraded guidance as a result of its higher revenue climb and recent acquisitions, with new expectations of strong revenue growth across FY 2022, however the firm did not provide a projection of its estimated figures.

The group said it estimated its business expansions to be marginally offset by the further normalisation of sales of Covid-19 products, although sales are expected to remain ahead of 2019 volumes.

Bunzl also reported a projected FY 2022 group operating margin at slightly higher than historical levels.

“Bunzl has delivered another period of strong growth. We continue to demonstrate the strength of our business model, supported by the depth and resilience of our supply chains and the agility of our people who have responded to the inflationary environment so successfully,” said Bunzl CEO Frank van Zanten.

“Our acquisition momentum remains strong, with our active pipeline supported by a strong balance sheet.”

Ironveld hit by general meeting requisition

Andrew Hore
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Ironveld hit by general meeting requisition

Ironveld (LON: IRON) has received a requisition notice from a shareholder that wants to remove chairman Giles Clarke and chief executive Martin Eales from the board.

Ironveld has a high purity iron, vanadium and titanium project on the Northern Limb of the Bushveld Complex. Last year, Grosvenor Resources agreed to subscribe £5.6m at 1p a share, but this has still not been completed.

Richard Jennings of Align Research is behind the general meeting requisition. Richard Jennings and related interests own 9.03% of Ironveld. The share register is dominated by nominees and individuals.  

The board believes that the requisition is linked to commercial proposals that Richard Jennings has put to the company.

Richard Jennings says that it would not be part of a fundraising below 1p a share and it put forward a way of raising cash that would not be as dilutive. Richard Jennings is sceptical that the Grosvenor subscription will happen.

Last month, Ironveld agreed terms for a smelter acquisition. It is acquiring Ferrochrome Furnaces, which is currently in business rescue and owns a mothballed smelter complex in Rustenberg, South Africa. This could provide a pathway to production for the company’s project.

The initial payment is £750,000 with a further £5m payable over ten years based on a percentage of profit from the smelter, capped at 13.5% per annum. A refurbishment of the smelter could cost up to £3.2m. A hybrid power plant could be installed to provide renewable energy.

Funding

Bridge funding of £300,000 has been received from investors and £40,000 from the chief executive, but a share issue is required to finance the deal and refurbishment.

Ironveld says that Richard Jennings is aware of a potential placing, and he has previously said he would “hold his corner” in a fundraising of up to £5m at a price of up to 1.25p a share. Ironveld suggests that it is keen for other shareholders to have the opportunity to participate in the placing.

Ironveld will provide a formal response in due course. Ironveld shares fell 12.1% to 0.615p, which values the company at £8.2m.

Shepherd Neame continues recovery

Andrew Hore
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Shepherd Neame continues recovery

Kent-based brewer and pubs operator Shepherd Neame (LON: SHEP) like-for-like revenues from pubs and brewing volumes continue to recover, but trading remains tough for the Aquis-quoted company because of rising costs.

Last year’s overall trading was in line with expectations. Like-for-like sales of managed pubs were 11% higher in the year just ended. In the most recent six-week trading period sales were still down 4.1% when compared with pre-pandemic levels. That reflects an improving trend. Coastal pubs are trading strongly but London pubs are taking longer to rebuild sales.

Tenanted pubs income is improving but volumes are still below pre-pandemic levels. Brewing volumes have held up well.

Net debt was reduced from £93.2m to £75.3m by the end of June 2022. Disposals have helped with the reduction. They have been achieved at prices above book value, which means that NAV could be higher than the last reported figure of 1419p a share. That is well above the share price of 812.5p.

Expectations

Peel Hunt expects a return to profit in 2021-22. The estimated 2021-22 pre-tax profit of £7.2m is expected to improve to £9.6m this year, which is a £900,000 reduction on the previous forecast.  

The shares are trading on 16 times prospective 2022-23 earnings. The dividend is being rebuilt and the forecast yield is 3%.

FTSE 100 down as cost of living crisis bites

Natasha Doris
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FTSE 100 down as cost of living crisis bites

The FTSE 100 was down in afternoon trading on Wednesday as the markets felt the cost of living crisis bite with consumer brands dragging down the index.

Drinks producer Diageo fell 3.7% to 3,540.5p and consumer goods brand Unilever dropped 0.7% to 3,712.5p as customers pared back on less essential retail purchases.

Mining and telecoms also suffered in morning trading, with the commodities surge from yesterday’s $600 billion G7 infrastructure fund gold rush dying down and resulting in a poor session for the sector.

Anglo American dropped 1.6% to 3,104.7p, Antofagasta fell 1.4% to 1,201.7p, Croda tumbled 2.3% to 6,276p, Endeavor slid 1.5% to 1,717.5p, Fresnillo declined 2.5% to 777.9p and Rio Tinto dipped 0.1% to 5,140p.

Meanwhile, Airtel Africa fell 1.2% to 137.3p and Vodafone slid 2% to 125.9p.

“So much for the big stock market comeback. Another day, another sea of red on the market,” said AJ Bell investment director Russ Mould.

“The FTSE 100 fell … dragged down by weakness in big consumer names such as Diageo and Unilever, while some of the miners and telecom stocks were also out of favour.”

Utilities price controls

Utilities groups balked at Ofgem price controls, as the institution eyed the sector’s bumper profits and dividends against the cost of living crisis and batted back the industry’s complaints in a move to bring some measure of control to the spiralling energy price chaos.

“Utility companies are not exactly jumping with joy at Ofgem’s new electricity distribution price control proposals, with SSE calling them ‘tough and stretching’,” said Mould.

“Energy providers would argue they are under pressure to invest heavily to improve infrastructure, make sure the supply network is resilient, and that everything is being done to hit net zero targets.”

“On the other hand, the regulator has long had its eye on the amount of money these companies make, and whether their profits and dividends should be so high.”

The new price controls are reportedly set to regulate the revenue that the UK’s network operators can earn from consumer payments towards local grid operation, which currently average £100 per year in addition to electricity costs.

Ofgem have also introduced a proposal for a £20.9 billion fund to build greener grids sourced from investors, sparing vulnerable consumers the expense as the cost of living continues to weigh on households across the country.

https://twitter.com/ofgem/status/1542092126598619137

Centrica shares decreased 1.4% to 82.6p and SSE shares fell 1.8% to 1,634.5p, however National Grid, Severn Trent and United Utilities shares gained 0.7% to 1,077.5p, 1.1% to 2,773p and 0.8% to 1,034p, respectively.

B&M

B&M shares rose 1.7% to 386.2p as the discounter projected an optimistic outlook for FY 2023 despite a 9.1% drop in UK revenue over Q1.

The company reported an expected EBITDA of £550 million to £600 million in FY 2023, however group revenue for the Q1 period fell 2.2% on a constant currency basis to £1.16 billion against £1.18 billion year-on-year.

“Value retailer B&M should have been in its elements as the country faces a stalling economy,” said Mould.

“Its cheap prices appeal to cash-strapped individuals who are watching every penny and people looking to trade down from more expensive retailers. However, a drop in sales would suggest this tailwind is not as strong as previously thought.”

However, B&M also noted its recently launched its online trial across the UK, with 1,000 SKUs available for home delivery to customers.

“A home delivery trial has begun to see if there is enough demand for online purchases of bulkier and higher ticket items,” said Mould.

“That presents an opportunity to increase sales, yet whether such a service would contribute to profits near-term is unknown.”

“Typically, online services need to run on a large scale to make money so even if B&M moves from a trial to a national rollout, there is no guarantee the service will put cash in its pocket after paying for costs anytime soon.”

Moonpig, B&M European, and oil with Alan Green

UK Investor Magazine
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Moonpig, B&M European, and oil with Alan Green

Alan Green joins the Podcast as delve into Uk equites and the major factors moving markets.

The Podcast is recorded with a backdrop of falling equites and we focus on a supporting factor for the FTSE 100 in oil. There is a lack of capacity at OPEC producers meaning there isn’t the option for increasing supply to help keep a lid on prices. We look at what this means for UK investors, as well as UK households.

We run through B&M’s latest trading statement and how they could benefit from an economic downturn. B&M have opened new stores which bodes well for future revenue growth.

Moonpig posted a huge jump in profits for the last year and we drill down into the figures and the outlook for a UK tech success.

We finish by summarises the recent developments at Tertiary Minerals and Botswana Diamonds.

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