Avast shares were down 1.3% to 556.6p in early morning trading on Tuesday, following a 0.5% drop in revenue to $234.6 million from $237.1 million in the company’s Q1 2022 trading update.
Avast also reported a revenue excluding acquisitions, disposals and discontinued business rise of 3.6% to $230.8 from $223.9.
The company commented that its revenue fall was linked to the sale of its Family Safety Business in 2021, but said its billings enjoyed organic growth of 5.9%.
The group added that its newly released Avast One integrated solution gained traction over Q1, with the product release expanding into France and Germany, following a series of positive reviews.
Avast further highlighted its investment in its Digital Trust Services, which is set to provide the foundation for its future consumer products, including the acquisitions of US-based decentralised digital identity company Evernym in December 2021.
The group also listed the purchase of Canadian federated digital identity and bank-centric identity services firm SecureKey in March 2022, which completed on 1 April 2022.
Avast confirmed an expected low single-digit organic revenue growth and mid-single-digit billings growth across 2022, along with an adjusted EBITDA margin estimated slightly below 50%.
The company also said it had suspended its operations in Russia and Belarus in solidarity with Ukraine after the country’s invasion in late February this year.
Lift Global Ventures is a shell that plans to acquire a financial media business. This could be a financial news website, analyst research providers, financial PR or new technology platforms.
The mid-price was 2.75p (2p/3.5p) at the end of the first day of trading. There were nearly 724,000 shares traded across nine trades. The largest trade was worth less than £5,000.
The wide share price spread is unattractive, and it is best to wait and see the progress made by the company.
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Lift Global Ventures (LON: LFT)
Financial media-focused shell
www.liftgv.com
Market: Aquis / Access
Placing...
There were three companies that had their AIM quotations cancelled in April. All three were taken over or part of a merger deal through an unquoted holding company.
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5 April 2022
Clinigen Group
Pharma services provider Clinigen is the third company worth more than £1bn that has left AIM in the past three months and the second of these to be taken over - ASOS (LON:ASC) moved to the Main Market.
Triley Bidco succeeded when it increased the bid for Clinigenfrom 883p a share to 925p a share and that values the pharma services company at £1.2bn. Clinigen shareholders received a 5.46p a share d...
Corporate adviser VSA Capital has downgraded its forecasts for Aquis-quoted healthy snacks manufacturer S-Ventures (LON: SVEN) due to a reduction in the expected rate of sales growth.
At the recent AGM, S-Venturessaid headwinds in the economy have held back sales of its healthy snacks. Even so, like-for-like sales are currently 10% ahead of last year. Cost savings of £300,000 a year are being achieved at the Pulsin plant-based products business, where revenues are growing strongly.
S-Ventures has been highly acquisitive and last year’s revenues of £1.5m do not provide an indication of the curr...
The FTSE 250 was up 0.7% to 20,773.8 and the AIM was up 0.7% to 1,021.1 in late afternoon trading on Friday to finish what was a positive week for small and mid caps in London.
PureTech Health shares increased 3.5% to 180.2 p following the group’s presentation of research which suggested that its superabsorbent hydrogel, GEL-B, significantly shifted the composition of the microbiome to a profile linked to improved metabolic health, including improved weight loss and glucose control.
“We were excited to see that, along with weight loss and changes in gut permeability, we saw beneficial changes in the gut microbiota,” said Maria Rescigno, Group Leader of the Mucosal Immunology and Microbiota Unit at Humanitas University in Milan.
International Public Partnership shares gained 3.3% to 167.4p on the back of its completed placing, open offer, subscription offer and intermediaries offer, with strong demand bringing about an increased target raise from £250 million to the maximum new shares available.
“Thanks to the support of both existing and new investors, we have significantly increased the size of our initial target raise of £250 million, completing a total capital raise of £325 million,” said International Public Partnership chair Michael Gerrard.
“The over-subscribed issue firmly demonstrates the attractiveness of International Public Partnerships’ investment case.”
BMO Commercial Property Trust shares were up 3.1% to 118.4p after an unaudited net asset value increase rise of 6.6% to 144p per share from the company’s 135.1p NAV in December 2021, alongside a total return of 7.4% for Q1 2022.
Computacenter shares decreased 4.1% to 26,310p as a result of the company announced an estimated decline in H1 2022 profits year-on-year from its £118.9 million profits in 2021.
The firm said that despite wage inflation concerns, it remained on track to deliver its goals for the year as a whole.
Rotork shares experienced a fall of 2.5% to 294.5p following a mid-single digits decline in revenue year-on-year.
The group noted a series of disruptions to the company’s operations, including component availability issues, suspension of deliveries from Russia and falling deliveries from its Shanghai facility due to Covid-19 lockdowns.
MC Mining shares increased 9% to 9p after the company announced it was exploring methods to raise funds after an increase in production over Q3, with the group looking to take advantage of the high commodities prices.
The Western-Australia-based coal producer reported a 15% increase in coal sales to 71,361 tonnes from 62,301 tonnes over the quarter.
Xeros Technology shares fell 13.1% to 39.5p after the company announced its failure to reach its profit goals for 2023, with the group shifting its timeframe to an estimate of 2024 until it broke even.
The firm added that it was evaluating funding options to sustain its operations after its supply of cash depleted after Q3 2023.
FTSE 100 gained Friday with strong corporate update and positive mining stocks offsetting the losses on the index from banking shares provoked by investor concerns over the Bank of England’s meeting next week.
The Ukraine conflict, China’s COVID restrictions, and rising inflation have all weighed on the global economy, causing uncertainty ahead of the Bank of England’s widely anticipated meeting next week, that could see interest rates rise for the fourth time in a row.
“The UK stock market continued its recovery from the big falls seen at the end of last week and beginning of this week amid some solid corporate updates and strong trading in Asia and on Wall Street,” said Russ Mould, Investment Director, AJ Bell.
Mining stocks continued to support the FTSE 100 with gains across the sector during times of volatility caused by China’s lockdown and Russia’s invasion.
Mining stocks such as Anglo American, Glencore, Antofagasta and Rio Tinto saw shares climb between 0.8% to 1.9%, where Anglo American, Glencore, Antofagasta and Rio Tinto shares rose to 3,517p, 489p, 1,548p and 5,677p respectively.
Smurfit Kappa shares rose 4.2% to 3,411p after the company reported YoY revenue growth of 33% to €3.02bn and EBITDA at €514m despite headwinds at the start of the year, in the first quarter of 2022.
Pearson also announced the acquisition of Mondly on Friday which is expected to deliver mid-teens margins for the English Language Learning division by 2025.
Reckitt Benckiser shares rose 0.5% to 6,235 despite the company reporting a slip in revenue of 2.3% to £3.4bn from £3.51bn in the first quarter of 2022. However, the group’s expectations of net revenue growth remaining at the upper end of its guidance supported the stock.
Hikma Pharmaceutical shares tumbled 6% to 1,903p after the group announced that its Generics business has experienced some headwinds due to increased competition and a challenging pricing environment, resulting in a “slow” start to the year. However, the group expects full-year Generics revenue growth between 8% to 10% for 2022.
NatWest shares dropped 3.8% to 214p as the company reportedly booked a £38m credit provision release in the first quarter, down from a £98m in 2021, in times when peers are beginning to prepare for potentially slowing economic growth.
However, the banking group is confident in securing income above £11bn in 2022 from its core operations.
NatWest noted a 41% surge in operating pretax profit to £1.25bn from £885m in Q1 2022, and attributable profit rose 36% to £841m from £620m.
“Like several of its rivals NatWest smashed forecasts but for investors the focus is much more on the outlook, which despite the boost to profit implied by rising interest rates, is heavily clouded by the risk of an increase in bad debts linked to the cost-of-living crisis,” added Mould.
AstraZeneca shares fell 1% to 10,462p after the company reported a decrease of 66% to £553m from £1.6bn in pretax profit in 2022. The company however did record a rise in revenue of 56% to £11.39bn from £7.32bn in 2021 due to the 21% contribution from its oncology arm.
Travis Perkins shares were trading down 1.5% to 1,248p despite the company posting a 14% rise YoY in sales during its Q1 trading update. However, an uncertain outlook for 2022 due to material inflation hindered the stock.
Russ Mould stated, “The most encouraging takeaway from building materials supplier Travis Perkins was its apparent ability to pass on an increase in raw material costs amid strong demand for housing.”
“Crucially while prices are still high, the supply chain issues which affected the sector throughout 2021 are beginning to ease.”
BP gained 0.2% to 388p after the oil and gas company announced the strategic partnership with Volkswagen AG to “boost” the adoption of electric vehicles across Europe. The pair plans to “rapidly” build a fast-charging EV network across Europe by 2024.
However, BP’s peer Shell saw its shares dip 0.8% to 2,167p on Friday despite oil prices rising 1.8% to $109 a barrel.
Price Targets
Smith & Nephew shares were trading up 0.4% to 1,316p after UBS and Citigroup raised the company’s rating to ‘neutral’ and increased its price target to 1,295p and 1,430p respectively.
Glencore’s price target was raised by Barclays and Goldman Sachs to 730p, however, JPMorgan cut it to 630p.
Barclays also raised the price target of other miners such as Anglo American, Antofagasta, Endeavour Mining and Fresnillo to 3,400p; 1,645p; 3,000p; and 880p respectively, however, cut Rio Tinto to 4,800p.
Standard Chartered shares dipped 0.8% to 543p despite Goldman Sachs, Berenberg and Barclays raising their price target to 945p, 750p and 700p respectively, and upgrading it to a ‘buy’ rating.
Barclays shares rose 1.4% to 148p after Credit Suisse raised its price target to 240p from 205p.
Aveva shares gained 4.6% to 2,149p despite facing cuts in its price target from Deutsche Bank and Bank of America to 2,400p and 3,000p.
GlaxoSmithKline shares dropped 1% to 1,791p despite Barclays raising its price target to 1,800p from 1,775p and giving it an ‘equal weight’ rating.
Dechra Pharmaceuticals shares gained 2.5% to 3,664p despite Jefferies cuttin its target from 4,600p to 3,630p.
AB Foods gained 0.3% to 1,620p despite facing price cuts from Deutsche Bank and Credit Suisse to 1,900p and 2,410p respectively.
Sovereign Metals announced its Q1 2022 report on Friday where the company said their recent Mineral Resource Estimate (MRE) upgrade confirmed Kasiya in Malawi is the largest rutile deposit ever discovered,
Sovereign Metals shares rose as much as 4% on Friday following the release of their Q1 update.
Kasiya is now a Tier 1 mineral project, with the world’s largest natural rutile deposit and second-largest flake graphite deposit, according to the updated MRE.
The project’s good economics was reaffirmed in the initial Scoping Study, which was based on a prior resource estimate issued in December 2021.
In the quarterly results, Sovereign reported finding 1.8bn tonnes @ 1.01% rutile and 1.32% graphite (Indicated + Inferred) equating to 18m tonnes contained rutile and 23m tonnes contained graphite.
A total of 662m tonnes which was 37% of the total MRE reports to the Indicated category @ 1.05% rutile and 1.43% TGC, with a recovered grade of 1.73% RutEq and the high global resource grade was @ 1.64% RutEq.
An updated Scoping Study to expand on the earlier study and analyse the influence of higher grades, larger production volumes, and increased mine life on the MRE scale is underway.
Rutile Market
The rutile market remains robust and current rutile spot prices, according to Iluka Resources, are at ten-year highs.
Demand for high-grade TiO2 feedstocks climbed during the quarter, according to major producers Base Resources and Iluka Resources, as western TiO2 pigment makers raised their production volumes and the welding consumable and titanium metal industries continued to expand.
A lack of titanium feedstock is restricting production rates and hampering the ability of major western pigment producers to meet demand from their end clients, according to reports.
Rutile prices grew dramatically during the quarter, and price increases for the June quarter have been negotiated.
The conflict in Ukraine has wreaked havoc on the titanium feedstock and finished goods supply chains, with bulk exports of ilmenite for pigment production and rutile for welding consumables being particularly hard hit. Ukrainian rutile producers in aggregate supply the world’s welding market with the most rutile.
Titanium metal manufacturing and export have also been harmed as continued disruptions to “mining and processing of titanium feedstock and finished goods” would further restrain supply in an already competitive industry.
Sovereign Metals Life Cycle Assessment
Sovereign’s potential to reduce carbon footprint is demonstrated by industry-leading independent Life Cycle Assessment (LCA).
When compared to other titanium feedstocks and flake graphite products on the market, Scope 1, 2 and 3 benchmark LCA studies for natural rutile and graphite produced from Kasiya offer the potential for a significantly reduced carbon footprint.
The LCA study found that each tonne of natural rutile produced at Kasiya is predicted to have a Global Warming Potential (GWP) of only 0.1 tonnes CO2 eq., which corresponds to a 95% to 97% decrease in total greenhouse gas emissions.
The total greenhouse gas emissions produced at Kasiya are 20 to 33 times less than that of titania slag and synthetic rutile, which are both alternative titanium pigment feedstocks produced by upgrading ilmenite using energy and carbon-intensive processes.
When compared to natural graphite produced in China, each tonne of graphite produced from Kasiya is predicted to have a GWP of only 0.2 tonnes of CO2e, representing an 80% reduction in greenhouse gas emissions.
MoU with Hascor
Sovereign Metals and international ferroalloy and metal powder supplier Hascor signed a non-binding memorandum of understanding in March for the possible supply of 25,000 tonnes of natural rutile per annum from Kasiya to Hascor’s processing units and clients on five continents.
Volumes can be increased or decreased by mutual agreement. Pricing will be based on market rates in the welding sector at the start, with agreed-upon price fluctuations over the supply period.
With production and distribution centres on five continents, the company is a major processor and global distributor of natural rutile products for the welding industry.
This first MoU is part of Sovereign’s product marketing strategy, as natural rutile demand and pricing are both high, and the global structural supply shortage continues to increase.
Kasiya’s natural rutile has superior chemical properties, indicating that it is suited for all main end-use markets, including welding, TiO2 pigment feedstock, and titanium metal.
Sovereign Metals appointment
Mr Nigel Jones, a well-known international mining executive, has been named Non-Executive Director of Sovereign Metals and Chairman of the ESG Committee.
Mr Jones has over 30 years of mining industry expertise, including 22 years in senior management roles such as the Managing Director of Rio Tinto’s Simandou iron ore project, amongst the world’s largest projected mining developments.
UK’s Critical Minerals Association
During the quarter, Sovereign joined the Critical Minerals Association in the UK, which aims to improve supply chain self-sufficiency in support of the UK’s industrial policy.
Sovereign Metals made a presentation before the UK Houses of Parliament about its potential to become a major producer of low-carbon natural graphite.
The Q3 Trading Update from this fast-expanding bar-owning group has shown continued growth.
It reported that the 14 weeks to 3 April experienced sales 27.7% ahead on a like-for-like basis, even more impressively it was 52.7% better than the similar period in 2019.
The strong returns from the November 2021 acquired Barrio Familia group helped to boost the whole group’s growth trajectory.
Sales revenues were well up at £9.6m for the Q3, against £7.9m in Q2 and £7.6m in Q1.
The group has seen its two recently opened bar sites in Cardiff and Exeter already trading profitably within their first week of opening.
More sites are due to open before the end of next month – at Bristol, Liverpool, Cardiff, and with a ‘flagship’ The Cocktail Club in Birmingham.
There are another 23 sites currently under negotiation or offer that are due to be progressed before the group’s June year-end. The company reported that its Q3 cash at bank position was a healthy £7.6m.
The number of operating bars in situ at the year-end is likely to be 30 against just 19 previously.
We are expecting the group to see revenues rise to £34.5m for the current year against just £5.9m in 2021, enabling a significant turnaround from operating losses of £5.3m to a pre-tax profit of £2.1m. That should see earnings coming out at about 1.45p per share.
Looking into the coming year analyst Matt Butlin, at the group’s brokers Allenby Capital, has estimated that group revenues will jump to over £54m and that it will catapult its pre-tax profits by another 150% to around £5m, worth 2.5p in earnings.
Sarah Willingham, Chief Executive Officer, is obviously very confident and delighted about her group’s progress.
“We continue to deliver on our promise to build the leading premium bar group in the UK. As seen from our Q3 revenue numbers, our run rate revenue is developing nicely.”
“We are mid-build on several new openings, we continue to negotiate on a string of new attractive leases and we have the cash required for our incredible teams to deliver on the strategy for their individual brands.”
Looking ahead the group could well repeat the announcement of a Trading Update just ahead of the year-end, early next month.
The company’s next trading year is getting ever closer upon which its shares will be trading on prospective earnings based upon a 2.5p estimate.
That would see them well undervalued at just 19.25p.
Online retail sales declined 3% in light of sliding consumer interest in online shopping as inflation rates started to burn a hole in consumer wallets.
The e-commerce giant added that a significant portion of its loss was linked to its investment in electric car manufacturer Rivian.
Amazon commented that it estimated a sales growth as low as 3% in the next several months, representing a severe downhill slide from its booming pandemic heights.
Amazon Inflation Concerns
“Amazon’s update was worrying as it not only put the company into its first quarterly loss since 2015, but it also painted a gloomy picture for the retail market in general,” said AJ Bell investment director Russ Mould.
Analysts highlighted the knock-on effect of rising inflationary pressures on consumer spending habits, with customers likely to keep a tighter grip on their wallets going into the remainder of the year.
“A drop in online retail sales no doubt reflects a more cost-conscious consumer. Whereas during the pandemic people were happy to browse and click with little care about the cost, now purchases will be more considered,” said Mould.
“It’s far too early to say we’ve lost our love of online shopping. It’s merely that people are more hesitant when it comes to pressing the ‘buy’ button after filling up their virtual basket.”
The company mentioned a 6% decline in international business, alongside a growth in expenses, with $2 billion in costs from inflation delivering a blow to Amazon’s results.
The retail firm raised its prices for Amazon Prime shipping and video in a bid to offset its spiking costs, including a rise in staff pay and climbing fuel prices bringing an increase in delivery expenses.
“Amazon has put up the price of its Prime delivery and streaming service in the US to try and get additional income to offset rising costs across the group including staff and delivery. That’s likely to be replicated in other parts of the world,” said Mould.
Amazon Remains Optimistic
“We’ve also seen Amazon increase fees for merchants using its platform. Yet Amazon has never been one to worry too much about short-term profit or loss,” continued Mould.
“It has an eye on the longer-term prize and would always prioritise user experience and value for money over jacking up prices big time simply to give its earnings as big a boost as possible.”
The group also reported a 37% increase in its Amazon Web Services cloud computing division and a 23% uptick advertising, with overall sales rising 7% year-on-year to $116.4 billion resulting from the company’s strong Amazon Web Services development.
“Apple appears to be surviving the cost-of-living crisis better than most,” said Mould.
“Its latest update shows strong sales and, importantly, more people hooked into its network of services such as streaming and digital storage.”
China supply concerns
However, the iPhone developer issued dire warnings that its sales could suffer an $8 billion hit from supply chain problems as a result of Chinese lockdowns. The country’s zero-Covid policy sent Chinese capital Beijing into lockdown, flinging the markets into turbulence as investor fears surged.
“We are not immune to these challenges but we have great confidence in our teams, in our products and service and in our strategy,” said Apple CEO Tim Cook.
The company said the majority of its chip operations were based in Shanghai, where cases have fallen and most of the group’s operations had kicked off again.
“Almost all of [the] affected final assembly factories have now restarted,” said Cook.
Covid-19 lockdown remained a concern for Apple, and Cook confirmed that he was more concerned about factory disruptions than a decrease in consumer spending over the coming months.
“In the earnings call with investors, chief executive Tim Cook said he was more focused on supply rather than demand,” said Mould.
“Covid-related disruption in China and industry-wide chip shortages present a risk that Apple cannot create enough products to meet demand.”
“That might not be such an issue if demand weakens in line with many other parts of the retail sector, particularly as big-ticket items like tablets are tough purchase decisions to make if you’re under financial pressure.”
The UK Investor Magazine Podcast was delighted to welcome Alasdair Haynes, CEO of the AQUIS Exchange, for a broad conversation around providing growth capital for UK companies and improving outcomes for investors.
The AQUIS Stock Exchange is setting about improving the listing experience for both companies and investors, while broadening the scope for high-quality UK growth companies to raise capital.
Alasdair outlines how AQUIS is providing both private and institutional investors with the opportunity to invest in exciting growth companies that may have previously only been accessible to a small pool of private equity investors.
We explore how AQUIS is making it easier for companies to list on their exchange, including heavily reduced costs compared to AIM, the removal of red tape and increasing liquidity.
