Distil turnover falls 19% to £2.9m, raises £3.2m to invest in Ardgowan Distillery Company

Natasha Doris
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Distil turnover falls 19% to £2.9m, raises £3.2m to invest in Ardgowan Distillery Company

Distil shares dropped 3.8% to 1.3p in late afternoon trading on Monday, following a reported turnover fall of 19% to £2.9 million against £3.6 million in the previous year.

The drinks producer confirmed a 19% slide in gross profit to £1.6 million in FY 2022 compared to £2 million in FY 2021, alongside a broadly flat rate of margins at 55.4% from 55.6% year-on-year.

Distil highlighted a decline in advertising and promotional spend of 17% to £890,000 compared to £1 million, and an adjusted administrative expenses climb of 15% to £746,000 from £651,000.

The company also noted an adjusted EBITDA of £9,000 against £303,000, and an operating loss of £132,000 from an operating profit of £254,000 in the last year.

Distil mentioned a successful equity fundraise of £3.2 million before expenses to invest in Ardgowan Distillery Company Limited, with an initial advance of £2.8 million made to the firm.

The drinks group also highlighted its appointment of Michael Keiller as non-executive director in its high points for the financial year.

“Distil brands continued to perform well in a volatile market recovering post-Covid. The reopening and return of consumer confidence in the hospitality sector has contributed to growth in-line with our forecasts pre-pandemic,” said Distil executive chairman Don Goulding.

“Continued challenges to costs have accelerated the consolidation of our production, which has allowed us to benefit from greater efficiencies and economies of scale.”

“In addition, we are building our sales and marketing departments internally to allow us to react quickly to market challenges, increase our distribution footprint and drive marketing reach.”

Proton Motor Power Systems order intake falls to £2.8m in FY 2021

Natasha Doris
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Proton Motor Power Systems order intake falls to £2.8m in FY 2021

Proton Motor Power Systems shares were down 3.6% to 10p in early afternoon trading on Monday, after the group reported a dramatic fall in total order intake to £2,800,000 in FY 2021 against £7,300,000 in FY 2020.

The company announced that 49% of its order intake was derived from its stationary segment, compared to 76% the last year, with other orders spread across its mobile, maritime, rail and engineering segments.

Proton Motor Power Systems mentioned several notable orders over the year, including multiple orders from GKN Hydrogen for its S8 Fuel System, an agreement with Torqeedo GmbH for its Marine sector, and a memorandum of understanding signed with Electra Commercial Vehicles Limited to operate as a system integrator to integrate Proton Motor fuel cells into the Electra truck portfolio, followed by an initial order.

The group noted sales of £2,771,000 against £1,893,000 the year before, representing an annual climb of 46%.

The firm reported a gross profit of £425,000 from £83,000 year-on-year, with an operating loss of £9,121,000 against £7,128,000 in FY 2020, which reportedly fell in line with the company’s budgeted expectations.

According to the group, its widened loss was on the back of additional investment in the technical development sector, in support staff to the firm, and infrastructure-related costs.

Proton Motor Power Systems commented that its outlook would focus on ramping up its production capacity, progressing its group technology offer and exploiting the current potential sales pipeline, with the current outlook for FY 2022 looking more optimistic than FY 2021.

“Although faced with highly challenging trading conditions in 2021, the Company has made significant progress,” said Proton Motor Power Systems CEO Dr. Nahab.

“In the year ahead, we are focused on further progressing the maturity of the Group’s technology offer, ramping up production capacity and exploiting the current potential order intake and sales pipeline.”

“Furthermore, it is anticipated that the significant strengthening of political commitment to hydrogen, as evident in 2021, will contribute to further accentuating the demand for hydrogen related products, such as the fuel cell.”

FTSE 100 falls as global markets struggle ahead of key central bank decisions

Natasha Doris
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FTSE 100 falls as global markets struggle ahead of key central bank decisions

The FTSE 100 fell on Monday amidst a global equity selloff following a 0.3% contraction in UK GDP reported by the ONS today, and ahead of key central bank meetings this week.

The UK markets were faring slightly better than other international markets, however the difference was credited to slide in the Sterling rather than any market strength.

“Once again in 2022 the FTSE 100 is doing a smidge better than other global markets but, before UK investors get too excited, a big slide in sterling is a significant contributing factor to the outperformance,” said AJ Bell investment director Russ Mould.

Meanwhile, markets across the globe continued to slide after US inflation hit a 40-year record of 8.6% in May and all but confirmed a hawkish US Federal Reserve move on interest rates at its next meeting.

The NASDAQ dropped 3.5% to 11,340, the NYSE was down 2.4% to 15,096.6, the French CAC decreased 2.1% to 6051.9 and the German DAX fell 2% to 13,479.9.

“The hangover from a higher than expected US inflation reading is continuing to cause scissoring pain throughout the markets, as it extinguishes the hope the US Federal Reserve might be able to take its foot off the pedal on interest rate rises,” said Russ Mould.

“The mood out there is pretty grim, with the relief rally seen in late May starting to feel like a distant memory,” said Mould.

Risk off trade

Gold miner Fresnillo was one of the only stocks to experience a boost in the market, with a 5.1% gain to 786.7p as investors flocked to safe havens.

“You know things are bad when the best performer among the UK’s top stocks is precious metal producer Fresnillo as investors reach for traditional safe havens,” said Mould.

Industrial metals stocks took a nosedive, as China went back into lockdown shortly after announcing its end as cases kicked off again last week.

Mining groups saw their shares dip as fears sparked over a slowed rate of production in the factory of the global economy, with Glencore dropping 5.3% to 477.9p, Antofagasta falling 4.9% to 1,362p, Anglo American sliding 4.4% to 3,455p and Rio Tinto losing 3.2% to 5,504p.

The Hang Seng declined 3.3% to 21,067.5 and Scottish Mortgage Investment Trust suffered a hit of 4.3% to 3,455p as a result of its shares in Asia-focused companies including Alibaba and Tencent tumbling on the back of China’s lockdowns, along with sharper interest rate fears from the US Federal Reserve.

With interest rates predicted to rise from the Fed on Wednesday, and the Bank of England expected to hike its interest rates an additional 0.25% to 1.25%, companies are feeling the pressure of being between a rock and a hard place in expenses and a drop off in consumer demand.

“Investors are likely to remain jittery at least until the Fed has delivers its verdict on rates on Wednesday, with the Bank of England following suit a day later,” said Mould.

Crypocurrency crash

Bitcoin and Ether fell 10% and 13% respectively as Cryptocurrencies fell in line with global equities.

‘’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. They are prime victims of the flight away from risky assets as investors fret about spiralling consumer prices around the world,” said Susannah Streeter, analyst at Hargreaves Lansdown.

Power Metal Resources to carry out further investigation at Selta Project

Natasha Doris
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Power Metal Resources to carry out further investigation at Selta Project

Power Metal Resources announced an update for its lithium-focused exploration at the Selta project in Northern Territory, Australia today.

The project, which is currently held by Power Metal Resources’ 82.7%-owned subsidiary First Development Resources, was subject to a lithium-specific review based initially on further desktop analysis, following on from a recent in-depth data review covering the operation.

The company commented that the review specifically focused on the potential of pegmatite geology across the Selta project, and its capacity to host lithium mineralisation.

The mining firm said the desktop work included a review of lithium-specific publicly available data, with a review of satellite imagery and hyperspectral analysis to find high-priority targets for additional field investigation.

According to Power Metal Resources, its multi-layered approach to the target definition process has so far identified several hundred coincident anomalies, which are potentially indicative of pegmatite geology.

The company added that 65 initial primary and secondary targets had been singled out for more in-depth investigation.

First Development Resources have assembled a field investigation team which is scheduled to arrive on-site in the coming days to conduct mapping and surface sampling of the prospective targets identified.

“During our recent site visit to the Northern Territory, pegmatite style outcrop was observed within the Selta Project area, further adding weight to the findings from the original in-depth review of the Project,” said First Development Resources CEO Tristan Pottas.

“Given the potential for lithium mineralisation, we commissioned a remote sensing study to look at the pegmatite specific potential and following the identification of 65 prospective targets we have expedited a field-based work programme to test whether the identified targets host lithium bearing mineralisation.”

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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0
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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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.

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