THG rejects takeover bids and shares fly 15%

Anshula Kumar
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THG rejects takeover bids and shares fly 15%

THG reported its annual earnings today and announced that it is receiving “numerous” takeover proposals over the last few weeks. The good start to 2022 has helped the E-commerce retailer’s shares gain 15% to 108p on Thursday after seeing a 50% decrease in share price YTD.

THG debuted on the London Stock Exchange in September 2020. Since then, the organisation’s life as a publicly-traded company has not been easy.

The shares were priced at 500p each when they went on the market. The stock was up 15% to 108p each on Thursday, meaning shares are trading down over 80% from the IPO price.

THG Share movement for the last 6 months

In October of 2021, a capital markets day intended to boost investor confidence instead scared traders. THG shares have been under selling pressure since then.

In October, Moulding, the company’s founder and CEO, stated that he will surrender his so-called ‘golden share,’ resolving a corporate governance issue that has been bothering investors and allowing the company to join the FTSE indices. The decision was made “in furtherance of good corporate governance”. 

For three years, Moulding could use the stake to veto any takeover bid. Investors dislike it, and it prevents THG from joining the FTSE 100 or FTSE 250 indices.

Moulding stepped down as executive chair in March, but he kept his CEO position. Charles Allen has been named as an independent non-executive chair of THG.

“We continue to focus on delivering our exciting growth strategy across a number of large global sectors, and prepare to step up to the premium segment of the LSE at the appropriate time,” said Chief Executive Matthew Moulding.

THG Takeover Proposals

THG has reportedly rejected all takeover proposals it has received in recent weeks due to the company believing the bids did not reflect the full value of the firm. The company confirmed that it is “not currently in receipt of any approaches”.

THG FY ’21 Results and Q1 ’22 Trading Update

During the first quarter of 2022, THG saw “very encouraging” consumer demand compared to a challenging period during the lockdowns in 2021, resulting in Q2 beginning in line with expectations.

THG’s revenue in the first quarter of 2022 increased 16% to £520.2m compared to 2021. The company expects revenue growth to be between 22%-25% at constant currency, however, THG faced a 1% hit from Russia and Ukraine. 

The company continues to have similar growth expectations in its adjusted earnings before interest, tax, depreciation and amortisation.

THG’s adjusted EBITDA is estimated to stay around £161.3m in 2021, a 7% increase from £150.8m in 2020. The group’s adjusted EBITDA margin fell to 7.4% in 2021 from 9.3%. Recent increases in inflationary pressure, according to THG, are “transitory in character.”

“The near-term environment has evolved significantly since January due to a number of global factors including the war in Ukraine, Covid-19 related lockdowns in Asia, and inflationary pressure across almost all cost lines,” said the company. 

“Given the continually evolving external considerations, the board anticipates FY 2022 adjusted Ebitda to be broadly in line with FY 2021, with a weighting to H2 2022.” 

In THG’s FY 21 results, the group reported revenue of £2.18bn in 2021, a 35% rise from £1.61bn in 2020. The company’s pre-tax loss, however, decreased from £534.6m to £186.3m in 2021.

CEO Moulding stated, “In our first full year as a public company, 2021 saw us scale revenue and expand our business model, well ahead of targets set at IPO.” 

Energy storage and pumped hydro with Stephen Crosher, CEO of RheEnergise

UK Investor Magazine
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Energy storage and pumped hydro with Stephen Crosher, CEO of RheEnergise

An Interview with Stephen Crosher, CEO of RheEnergise

Energy storage is set to be a trillion-dollar market, could you explain why?

Governments across the world have recognised the urgency to completely decarbonise over the next 30 years. The recent invasion of Ukraine has amplified the pressing issue of energy security.

To decarbonise, countries must redesign their power systems, switching from coal, oil and gas to renewables. Renewable power is generally more distributed, more local but it is intermittent. Energy storage is the solution to intermittency and will help keep power grids stable and reliable.

Industry experts across the world, including Bloomberg New Energy Finance, IRENA, The Long Duration Energy Storage Council, McKinsey, Jacobs, Accademia, and many others have predicted this trillion-dollar market.

Malcolm Turnbull, a former Australian Prime Minister said at the World Hydro Power conference last year “When we talk about the transition to a zero-emission energy system, we often overlook the crisis within the crisis, and that is long duration storage”

To put the scale of the challenge into perspective, the world needs in the order of 2,000GW of energy storage or at least ten times the current amount available. Batteries, despite their recent growth, still make up a tiny proportion.

Most people think of batteries when they think of energy storage, can you explain how your High-Density Hydro® solution works and why is it better?

Batteries are an ideal solution for shorter durations of energy storage (2-3 hours) and are good at providing ancillary services such as frequency response. However, with batteries, for every MW of power one purchases, one gets a MWh of storage i.e. the storage lasts for 1 hour. This means that to get lots of MWhs, or long durations of storage, project sizes and costs increase.

Our solution at RheEnergise is different because the power component is decoupled from the storage component. The power is defined by the size of the pipes from the top to the bottom of the hill and the size of the turbines, whilst the energy or duration is defined by the size of the storage tanks and fluid volume. This means that one can set the power one requires and set the duration without oversizing any part of the project.

The lowest cost form of energy storage, for long durations, by far is pumped hydro. It is a very mature technology that has been around for over 100 years. What RheEnergise achieves with its High-Density Hydro® is the same low cost of storage as traditional pumped hydro, but it creates vastly more siting opportunities for projects. This is because HD Hydro uses a fluid that is 2.5 times the density of water (about the density of concrete). With High-Density Hydro® the same performance can be achieved on small hills rather than mountains, when compared to projects using water. This means that there are hundreds of thousands of sites available across the world and sites are close to where they are needed.

To summarise, High Density Hydro presents the ultra-low costs of storage associated with pumped hydro, while dramatically increasing the number of sites available and it also speeds up construction times, so that projects are built in the same sort of time scales as other energy projects – wind, solar, batteries etc.

The UK government has announced its decarbonisation and energy resilience strategy in recent days, does it go far enough? 

The short answer is No. Solutions need to be scalable and deployed quickly in the next 20 years. We need solutions that progressively deliver results and lower carbon emissions. Belching out the same level of giga-tonnes of CO2 for 30 years is not a good solution.

One of RheEnergise’s decision making strategies is to always ask whether our solution can deliver at scale, fast. High-Density Hydro can achieve this scaling because our supply chain already exists, companies make pipes and pumps and turbines. Plus, they can make them to our specification for HD Projects.

The German Government, like other European Governments, has also brought forward their decarbonisation plans by 10 years, specifically to get off Russian gas, oil and coal rapidly, how are they all going to achieve it? 

How is central Europe including Germany going to get off Russian gas in 13 years? I have absolutely no idea, but what is abundantly clear, is that in addition to rolling out more renewable energy systems and rebuilding large parts of their power grid, they will need to have an aggressive programme of long duration energy storage to manage the energy flows, manage the intermittency and to create a stable power grid from the renewable energy generated. RheEnergise can certainly be a major player in providing the solution.

You are currently submitting your first planning permission in the UK; can you explain the barriers you are experiencing? 

Remarkably few to be honest. We have questions about flora and fauna where we are building, ensuring habitat is preserved and that there is a habitat gain. We also receive questions about how we mitigate and manage any spills, in the unlikely event that they happen, and lastly the visual impact of the project. This is relatively easy to resolve as we plan to bury the pipes and screen the landscape.

You are in the final week of what appears to be a very successful fundraising campaign on CrowdCube, what you’re using the capital from the funding campaign for? 

We have several objectives over the next year, specifically to increase the commercial side of the business seeking early customers and key partnerships. We plan to continue to develop our engineering capabilities across key areas of engineering in particular our ability to process fluids at scale and the continued development of mechanical systems such as HD Hydro specific pumps, turbines, and valves.

Where are you targeting as your first markets? 

Energy markets across the world are transitioning. Australia is interesting as they have prenominal renewable energy resources and a power grid that already has challenges. Parts of the US could really do with our solution – California, New York, Texas, and Mexico have so many suitable project sites, as do places like Turkey or Saudi-Arabia. There is of course, as mentioned before, the whole of central Europe.

Early customers might be large energy consumers with 24/7 power demands, such as mines and quarries, that wish to both manage their energy costs and decarbonise.

Our challenge is actually very little to do with which market, but how to move fast enough to address the growing opportunities that exist across the world.

Card Factory shares jump 28% on refinancing news

Anshula Kumar
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Card Factory shares jump 28% on refinancing news

Card Factory announced earlier on Thursday that it has successfully completed a refinancing which removed a commitment to raise funds, leading to the 28% jump in the UK’s largest specialised retailer of greeting cards’ shares to 57p.

Card Factory YTD Shares Movement

Card Factory has reached an agreement with its current banking syndicate on refinancing conditions. The company has made considerable progress in reducing overall debt by utilising its positive cash flows.

Card Factory’s group net debt excluding lease liabilities was £79m as of 31 March 2022.

Card Factory’s results of the revised facilities include a £100m revolving credit facility (RCF), available through September 2025, on virtually the same terms as the previous RCF, subject to enhanced financial restrictions.

The conditions of the revised facility for Card Factory also entail an £11.25m term loan facility that will be repaid between January 31, 2023, and January 31, 2024, and an £18.75m term loan facility that will be repaid in six £1.75 million quarterly instalments starting in April 2024 and ending with a final repayment of the balance amount in September 2025

As a result, revised agreements on decreased facilities of £150m which was originally £225m, have been reached by the company. Card Factory will cut its government-backed Coronavirus Large Business Interruption Loan Scheme (CLBILS) component from £50m to £20m because of the revised agreements which are due for repayment in September 2023.

Dividend restrictions will remain in place until the CLBILS facilities and the GBP11.25m term loan are paid off, which is due in January 2024, if the leverage ratio stays below 1.5 times.

The revised facilities have withdrawn Card Factory’s best efforts commitment to its banks to obtain net equity proceeds of £70 million by 30 July 2022. The Board has no plans to complete an equity raising at this time said the company.

Card Factory’s preliminary results for the financial year ended 31 January 2022 will be released in May 2022.

Darcy Willson-Rymer, Card Factory CEO said, “I am pleased to be able to announce the successful completion of Card Factory’s refinancing today.”

“This is an important milestone for our business, ensuring we have the financial foundations in place to capitalise on the opportunities ahead.”

“We are now well positioned to continue our strategic transition from a store-led card retailer to a market leading omnichannel retailer of cards and gifts. I look forward to updating you on our progress at our full year results next month.”    

UK Government’s green energy strategy is not fit for purpose

Natasha Doris
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UK Government’s green energy strategy is not fit for purpose

The UK Government’s green energy proposal released earlier in April caused a great deal of excitement across the market, with investors gearing up for the potential change in the energy landscape laid out in the administration’s ambitious plans.

However, the weighty proposal has come under scrutiny due to a perceived oversight of the wind energy sector. Scientists have pointed out that the Government has not yet taken advantage of the level of power which the country is capable of generating for consumers, adequately capable of meeting household electricity needs.

Experts have also pointed out that the UK appears to have accelerated its investment in nuclear power, which is a far lengthier and more expensive process than its breezy counterpart for energy production requirements.

So, what exactly is going on behind the scenes, and are we actually overlooking a far easier, more cost-friendly option to power the UK to the detriment of consumers?

The Benefits of Wind Power

Despite the comments from Transport Secretary Grant Shapps that wind turbines are an “eyesore” to behold, the renewable energy alternative has been backed by scientists as the possible saviour of UK power.

According to a study from researchers at the University of Sussex and Aarhus University in Denmark, onshore wind turbines have the capacity to match 140% of the UK and Ireland’s energy demand if wind farms were established on prime territory for the maximisation of energy potential.

“Our study revealed that the UK and Ireland had the potential to generate 2,150 TWh of energy from onshore wind, assuming a realistic capacity factor of 28%, which means was the mean capacity factor of onshore wind turbines in the UK in 2020,” said Professor Peter Enevoldsen, who conducted research on the report.

The current rate of onshore wind farm energy generation so far accounts for a mere 4% of the UK’s onshore wind potential.

Experts have also highlighted the fact that introducing further onshore wind farms would empower local communities by lowering energy costs and giving them a say in their power infrastructure on the ground.

“If we are going to reintroduce onshore wind, how can the host community benefit?” said Communities for Renewables managing director Jake Burnyeat.

“We think local communities should have a right to buy a meaningful share of any windfarm – maybe 20% or one in five turbines.”

“The community could then use surplus income (after operating and finance costs) to fund net zero transition and fuel poverty projects in the surround locality.”

With energy costs skyrocketing and the 54% rise in the energy price cap tacking on an additional £700 per year to households already struggling under the burden of 7% inflation, it seems that accelerated investment in wind power should be the road to take in the looming energy crisis.

“[Even] without accounting for developments in wind turbine technology in the upcoming decades, onshore wind power is the cheapest mature source of renewable energy, and utilizing the different wind regions in Europe is the key to meet the demand for a 100% renewable and fully decarbonized energy system,” said Enevoldsen.

Potential Opposition from Backbenchers

Shadow Energy Secretary Ed Miliband recently claimed that Boris Johnson was being “held to random” by backbenchers opposed to windfarm developments in the UK.

Onshore wind has been backed by experts as the cheapest alternative means of energy for a struggling number of households in the millions, and so it seems odd that it would not have been further prioritised.

The Government’s energy rollout guidelines set the target of raising offshore wind generation from 40GW to 50GW by 2030, but reports from the Guardian cite a leaked earlier edition of the plan which aimed to increase onshore wind capacity from 15GW to 45GW.

However, that earlier ambition was nowhere to be found in the final draft of the Government’s agenda.

Miliband said that onshore wind could actually have replaced Russian oil imports within 24 months, filling a much-needed reliance gap in a mere two years, less than half the amount of time required to develop a small nuclear reactor.

He also added that the administration’s refusal was “not because of the national interest but because some Tory backbenchers said they didn’t want it to happen.”

So far, the Government has been hauled over the coals by everyone from Ed Miliband to Greenpeace, who labelled the energy transition plans “completely inadequate”, while the Association for Renewable Energy & Clean Technology heaped insult to injury with their accusation that the party had “failed to rise to the challenge facing the country.”

Energy and Business Secretary Kwasi Kwarteng released a statement this week which said that the Government would “double-down on every available technology” in support of his comment that cheap renewables were the UK’s “best defence against fluctuations in global gas prices.”

However, despite reiterating offshore wind ambitions to 50GW by 2030, his extensive renewable energy reach did not tap into onshore wind by even a mere passing comment.

It seems odd that the Government has left something so valuable to the taxpayer on the table, picking up the heftier and more time-consuming nuclear option instead.

Nuclear Option

There has been a lot of excitement over the upcoming nuclear investment, with the Government committing to up to 24GW of nuclear power by 2050, triple the current amount.

The administration estimates that the nuclear alternative will represent 25% of the UK’s projected energy demand.

The investment will go towards Small Modular Reactors (SMR), which have been developed by Rolls-Royce, who received a £210 grant from the Government on top of a £195 investment from private firms in 2021.

The Reactors are a form of nuclear fission reactor in a miniaturised edition of the conventional version.

Experts criticised the move and emphasised last year that the focus should be on renewable energy and not nuclear.

The Reactors would be the size of around two football pitches and cost approximately £2 billion per project, providing a more expensive and less efficient means of energy compared to the established wind power potential.

CBI chief economist Rain Newton-Smith said that while he supported the investment in nuclear reactors, the scale of investment in nuclear should be replicated across other renewable energy options.

“Big bets on nuclear will provide clean and stable power for consumers and businesses.”

“This scale of ambition should be replicated for other renewable technologies like onshore wind. Commitment to planning reforms and rapid approvals is what will really make the difference now.”

However, the time frame will mean that households are unlikely to see results from the UK’s nuclear investment until around 2030.

The first SMR is currently on a projected schedule to receive regulatory approval by the middle of 2024, with the Reactor estimated to generate power by 2029.

The five-year time frame from start to finish is more than double the timespan required to develop an onshore wind farm, which means that despite the lofty ambitions of the Government to kickstart Britain’s flailing nuclear industry, it does nothing for the millions of consumers who need cheap energy right now.

Small & Mid-Cap Roundup: Ibstock, AJ Bell, Jangada Mines, Gear4music

Natasha Doris
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Small & Mid-Cap Roundup: Ibstock, AJ Bell, Jangada Mines, Gear4music

The FTSE 250 was up 0.5% to 21,192.2 and the AIM was flat at 1,056.7 in late morning trading on Thursday.

Ibstock shares were up 9.5% to 182.2p after the group announced a Q1 2022 performance ahead of management expectations despite climbing inflation, with strong demand across all its end markets.

“Brickmaker Ibstock is plagued by soaring input costs and ballooning energy bills, but the group appears to be coping well,” said Hargreaves Lansdown equity analyst Laura Hoy.

“A focus on increasing capacity and efficiency at its factories has allowed it to jump on booming post-pandemic demand.”

Rank Group shares fell 8.8% to 117.1p after the gambling company cut its full year guidance on the back of poorer performance in March and climbing inflationary pressures.

AJ Bell shares took a dip of 4.3% to 278.3p following lower customer investment reported in its trading update for Q2 2022.

Ferrexpo shares fell 2% to 176.1p as the company was pulled into the tide of falling commodities stocks today, despite its report of an increase to its humanitarian fund to $12.5 million in a move to assist relief efforts in Ukraine.

“Commodity producers have enjoyed soaring prices in the past year but their moment in the sun might be coming to an end,” said AJ Bell investment director Russ Mould.

“The cracks in the latest round of trading updates from the sector are a reminder that mining operations don’t always run smoothly, commodity prices rarely go up in a straight line on a sustained basis, and earnings are volatile.”

Solid State shares enjoyed an uptick of 13.3% to 11,500p, after the firm announced expected FY2022 results ahead of management expectations.

The company confirmed a 28% rise in revenue to £85 million compared to £66.3 million in 2021, alongside an adjusted pre-tax profit increase of 33% to £7.2 million against £5.4 million.

Churchill China share rose 8.9% to 15,250p following a strong slate of preliminary results for 2021, including an operating profit before exceptional items of £6.1 million, against £0.9 million in 2020.

The company also reported a re-instated final dividend of 17.3p per share after no dividends last year.

“The second half of 2021 saw a strong recovery in our sales to the Hospitality market such that the full year results are ahead of our expectations,” said Churchhill China CEO Alan McWalter.

GB Group shares were up 9.2% to 623p after the firm announced a pre-close trading statement with revenue ahead of management expectation at £242 million for FY2021.

Jangada Mines shares plummeted 27.8% to 7.4p following the release of an updated technical report for its Pitombeiras Vanadium Titano-Magnetite (VTM) project in Brazil, which provided and underwhelming $96.5m post-tax Net Present Value (NPV) and 9-year mine life.

Gear4music shares dropped 27.7% to 260p after the company announced a 6% decrease in total sales in its annual trading update, with higher inflation and weaker consumer demand across February and March predicted to impact the group’s HY1 2023 sales.

“Short-term inflation-linked overhead cost pressures and weaker consumer confidence across the broader retail landscape will mean the best opportunities for stronger growth during FY23 are likely to be in H2,” said Gear4music CEO Andrew Wass.

“We are, accordingly, moderating our overall growth expectations for the new financial year, which we believe is the prudent approach in the current environment.”

Tungsten West shares dropped 17.9% to 52.5p on the back of the group’s suspended operations across its Hemerdon Projects in light of adverse market conditions.

The company reported that it would continue to evaluate alternative approached to reigniting mining operations while it considers it next steps.

Osirium Technologies shares fell 16.6% to 12.5p after the firm reported a widened pre-tax loss of £3.43 million in its 2021 results against a loss of £3.10 million in 2020.

FTSE 100 dragged by weaker miners

Anshula Kumar
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FTSE 100 dragged by weaker miners

FTSE 100 was trading marginally down on Thursday with mining companies’ underwhelming updates dragging the index down.

Mining stocks were the FTSE 100 biggest fallers Thursday after Anglo American and Antofagasta provided updates on a Covid interrupted the first quarter of 2022.

Despite broad weakness in mining companies, the FTSE 100 was trading mostly flat as strong gains elsewhere offset the impact of weaker metals and mining stocks.

“It’s been a bad start to the year operationally for the big mining companies and their latest updates have served to act as a drag on the FTSE 100,” said Russ Mould, Investment Director at AJ Bell. 

“The cracks in the latest round of trading updates from the sector are a reminder that mining operations don’t always run smoothly, commodity prices rarely go up in a straight line on a sustained basis, and earnings are volatile.”

FTSE 100 Miners

Antofagasta

Antofagasta shares tanked 8% to 1,498p after the company reportedly produced less copper, gold and molybdenum in its first quarter of 2022 update.

Antofagasta’s production of copper fell 24% to 138,800 tonnes compared to 183,000 tonnes in Q1 2022, and 22% lower than Q4 2021.

The group’s gold production dropped by 41% from Q4 2021 to 38,400 ounces in Q1 2022, which is also 35% lower than Q1 2021 when Antofagasta produced 59,100 ounces.

Antofagasta produced 2,000 tonnes of Molybdenum in Q1 2022 which is 33% lower than 2021’s first quarter where the group produced 3,000 tonnes.

A continuing drought at the Los Pelambres mine along with lower grades hampered production, according to Antofagasta.

The net cash cost per pound of copper produced increased to $1.75 from $1.16 in Q1. 

For the full year of 2022, the company expects to generate 660,000 to 690,000 tonnes of copper at a net cash cost of $1.55 per pound of copper produced. Antofagasta also expects a total Capex of $1.9bn, which is “at the top end of the previously guided range of $1.7bn to $1.9bn,” the firm said.

Antofagasta faced a difficult first three months of 2022 which led to the group stating that “spending will be at the top end of previous guidance,” according to Russ Mould.

Anglo American

Anglo American shares dropped 8% to 3,707p after the company reported a 10% decline in output during what they describe as a “normally slower” first quarter. 

The group’s decrease in output was due to Covid-related absences, high rainfall in South Africa and Brazil, and operational challenges at metallurgical coal and iron ore operations.

Anglo American’s copper production was down 13% YoY, platinum group metals production was down 6%, metallurgical coal production was down 32%, and iron ore production was down 19%.

However, the group’s Diamond output increased by 25%, making it the only category to show a rise.

Anglo American’s cost forecast for the whole year has climbed by 9%, with a 4% hit from stronger producer currencies and a 3% hit from inflationary pressures. Anglo America also lowered its output forecasts for its PGM, iron ore, and metallurgical coal businesses.

Mould says that “shareholders in Anglo American can’t really grumble” about the Q1 results as they have seen 24% gains in share price in the last 12 months, which is “more than double the FTSE 100’s 10.4% gain.”

Mining weakness

Glencore shares lost 5% to 492p despite the company advocating “responsible stewardship” of its coal assets to meet its green ambitions. Glencore said its revised emissions targets are a 15% reduction by 2026 and a 50% cut by 2035.

Rio Tinto shares are trading down 2.5% to 5,701p after the company reported a poor performance yesterday. 

Berenberg, JP Morgan and RBC all cut Rio’s price target from 6,500p, 5,730p, and to 5,500p respectively.

“Commodity producers have enjoyed soaring prices in the past year but their moment in the sun might be coming to an end,” said Russ Mould.

“The key question now is whether commodity prices are close to their peak for this cycle as a reduction in selling prices together with rising costs will put a squeeze on profit margins.”

FTSE 100 fallers

FTSE 100 fallers included National Grid, HSBC and Ocado whose price targets were altered.

National Grid’s shares fell 1.4% to 1,164p after Berenberg downgraded its view to hold from buy and amended price target to 1,210p.

HSBC Holdings were trading down to 537p despite Jefferies raising its price target to 574p from 473p and BoA raising its price target to 645p from 620p.

Credit Suisse cut Ocado’s price target to 1,600p from 1,650p as Ocado shares dropped 0.25% to 1,079p.

Rentokil

Amongst the risers of the FTSE 100 was Rentokil whose shares gained almost 3% to 528p after the pest control company released an optimistic first-quarter trading update where the company managed to weather the inflation storm.

Meggitt, the defence tech company, reported a 116% rise in its civil order book which lead the company’s stocks to gain 0.03% to 769p.

Rolls-Royce’s shares seem to be enjoying a wave of optimism following its latest update on nuclear reactors. The shares of the company gained 2.6% to 95.9p.

The completion of a financing round saw Ferguson shares rise 1.8% to 10,802p.

Segro shares gained 1.6% to 1,387p asthe company announced a positive growth outlook for 2022 in its results on Thursday.

Segro said it sees “continued demand from a broad range of customers enabling us to capture further rental growth through rent reviews and the re-letting of space,” according to its CEO, David Sleath.

Aviva shares increased 0.11% to 444p after Jefferies raised Aviva’s price target to 460p from 435p.

Shell and BP shares helped support the FTSE 100 after the companies gained 0.33% and 0.24% to 2,215p and 402p respectively after oil prices hiked 1% to $108 a barrel.

Gains in AstraZeneca, Diageo and Unilever also helped the FTSE 100 counteract the damage caused by mining companies today.

AstraZeneca shares were trading up 0.6% to 10,529p, followed by Diageo up 1.4% to 3,926p and Unilever shares increasing 0.9% to 3,498p.

ITV was among FTSE 100 top risers after content-creating rival Netflix signalled they would start to reign spending on Netflix Originals and other forms of content that could possible see budgets flow into ITV Studios.

US Stocks

Tesla shares fell 5% to $977 despite the company reporting a sharp rise in first-quarter earnings as demand for electric vehicles continued in its first quarter. Tesla noted an 81% increase in total revenue to $18.7bn in Q1 2022 compared to $10.4bn in 2021.

While all eyes are on Tesla’s founder’s bid to take over Twitter, “Tesla shares unsurprisingly charged up after market hours in the US yesterday,” handily above quarterly expectations, commented Mould.

Netflix shares plummeted 35% to $226 after the company announced a few days ago that it’s losing subscribers as the cost of living hurts consumer pockets.

Investing in the future of energy storage with RheEnergise

UK Investor Magazine
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Investing in the future of energy storage with RheEnergise

The UK Investor Magazine Podcast was thrilled to welcome Stephen Crosher, CEO and Co-Founder of RheEnergise, for an exploration of hydro energy storage and RheEnergise’s innovative high-density solutions.

According to Stephen, 95% of the world’s power storage is facilitated by Pumped Hydro Storage, compared to just 2.5% storage using batteries.

RheEnergise is setting about the development of low-cost and globally scalable solution which will provide power storage solutions in a far shorter time-frame than alternatives.

We discuss the benefits and practicalities of hydro energy storage compared to batteries including how EVs will dominate lithium consumption, piling pressure on other forms of power storage.

Stephen provides fascinating insights on the global clean energy market including European government policy and possible scenarios for meeting climate change targets.

Find out more on the RheEnergise website and their crowdfunding page on Crowdcube.

Anglo American shares tumble on lowered production guidance

Natasha Doris
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Anglo American shares tumble on lowered production guidance

Anglo American shares tumbled 7.9% to 3,712.5p in late morning trading on Thursday, following a 10% drop in production over the quarter compared to the same period last year.

The mining giant blamed its lower production on high rates of Covid-19 absences, high rainfall impacting operations in South Africa and Brazil and a series of safety and operational hurdles at metallurgical coal and iron ore projects.

Anglo American confirmed a full cost guidance increase of 9%, reflecting a 4% knock-on effect from stronger producer currencies and 3% from inflationary pressures, especially diesel costs.

The group’s metallurgical coal production dropped by 32% as a result of a delayed longwall move and a fatal underground incident at Moranbah, with full-year guidance revised to 17-19 million tonnes, down from 20-22 million tonnes.

The firm also blamed the end of production at its Grasstree operation and the suspension of its Grosvenor and Aquila life-extension projects, which restarted operations in mid-February, as contributing factors to production decline.

Anglo American’s iron ore production decreased by 19% as a result of high rainfall and plant issues in Kumba and Minas-Rio, with full-year guidance scaled down to 60-64 million tonnes from 63-67 million tonnes.

The mining company also reported a 13% decrease in copper production due to planned lower grades, along with a 6% fall in metal in concentrate production from its Platinum Group Metals operation due to high rainfall in Mogalakwena, and reported a full-year guidance drop to 3.9-4.3 million ounces compared to 4.1-4.5 million ounces.

It wasn’t all bad news for the group, however, with a reported 25% increase in rough diamond production reflecting a high operational performance and lower rainfall impact, especially across its Botswana projects.

“This challenging start to the year highlights the importance of adhering to our Operating Model to stabilise performance after the necessary disruptions of the last two years as we adapted to – and now learn to live with – Covid,” said Anglo American CEO Mark Cutifani.

“As a result, we are updating our platinum group metals, iron ore and metallurgical coal volume guidance for the full year, and our unit cost guidance for most product groups to also reflect up to date exchange rates and the inflationary pressure on many input prices, particularly diesel.”

Ibstock curbs inflation leading shares to gain 7.5%

Anshula Kumar
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0
Ibstock curbs inflation leading shares to gain 7.5%

Ibstock announced Q1 2022 performance is ahead of expectations whilst curbing inflationary pressure early on Thursday which boosted the brickmaker’s shares 7.5% to 179p.

Ibstock YTD Share Movement

Ibstock released full-year results for 2021 in March 2022 which were reportedly strong. The momentum from those results has carried on to the Q1 trading update on Thursday for the group.

Ibstock noted in all of its end markets, demand is still strong. The group’s clay plant network is working well, with production volumes slightly ahead of its estimates and a full recovery of input cost inflation thanks to its innovative marketing approach.

Despite some ongoing supply chain problems, the Concrete division performed in line with expectations due to solid operational execution for Ibstock.

Ibstock saw significant input cost inflation, which continued to characterise the operating environment, particularly in energy, freight, carbon, and materials. In the case of energy, the company’s hedging technique has helped it to stay afloat in the face of rising prices.

Ibstock has now covered nearly all of its power needs for the first half of the year, over 75% of its requirements for the second half, and more than a third of its requirements for 2023.

Ibstock is dedicated to take the steps necessary to safeguard and maintain margins in the future.

“Brickmaker Ibstock is plagued by soaring input costs and ballooning energy bills, but the group appears to be coping well,” said Laura Hoy, Equity Analyst, Hargreaves Lansdown.

“A focus on increasing capacity and efficiency at its factories has allowed it to jump on booming post-pandemic demand. Rising raw material costs have passed on to consumers and energy hedges have offered some protection.” 

“You can’t fault Ibstock’s deft management through an increasingly thorny environment. It’s no mean feat to beat expectations despite these challenges.”

The group’s growth plans are moving well, with the Atlas, Aldridge, and Nostell capital investment projects all on track, and Ibstock Futures has made significant progress in integrating the recently acquired glass-reinforced concrete (GRC) assets into its operations.

The board now anticipates full-year 2022 performance to be modestly ahead of its earlier predictions, even though Ibstock wants to remain cautious of broader macroeconomic challenges.

Ibstock outlined a defined route for growth and value formation over the following five years, based on a combination of investment within its core business and diverse growth possibilities, supported by a set of medium-term financial targets, at the time of its 2021 results announcement in March 2022.

Ibstock stated its intention to launch a share buyback programme of up to £30m as part of its rigorous approach to capital allocation and with estimated group leverage below the target range on Thursday.

The capital return is in addition to the £100m in committed growth investments, and the group expects strong financial capacity to sustain more growth investment and additional shareholder returns in the medium term beyond this repurchase programme.

Hoy added, “Efforts to shore up the balance sheet are also paying off—the group’s £30m buyback is evidence. This is in addition to investment in the group’s growth initiatives, including growth in Ibstock Futures, its sustainable construction arm.” 

“This part of the business holds a great deal of promise in our eyes, and we look forward to seeing how its latest addition of glass reinforced concrete assets will fit into the existing business.”

AJ Bell announces lower customer investment and Dodl app launch

Natasha Doris
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AJ Bell announces lower customer investment and Dodl app launch

AJ Bell shares were down 3.5% to 280.7p in early morning trading on Thursday after the company reported slowing rates of investor activity in Q1 as markets dipped and the impact of the pandemic began to fade.

The investing group said that the Q2 term in 2021 was comparatively stronger as a result of consumers investing excess savings built up over the Covid-19 lockdown period.

However, the upheaval caused by surging inflation and increased market uncertainty left the firm with a weaker Q2 in 2022 as investors became less risk-happy in light of Russia’s war in Ukraine and the skyrocketing cost of living.

AJ Bell still reported decent numbers, with a total customer increase of 21% to 418,309 over the past year and a 5% uptick in Q2, bringing in total net inflows of £1.5 billion over the period.

The company reported total assets under administration at close of £74.1 billion, a 14% increase across the last year, but a 2% dip over the quarter due to an adverse market and additional movements of 4%.

The group pointed out that the FTSE All-Share index fell by 0.5% and the MSCI World Index fell by 5.5% during the poorly-performing term.

The investment platform noted additional highlights, with over 75% of new accounts listed as tax-advantaged pensions or ISAs, and a customer retention rate at 95%.

AJ Bell reported a slight fall in gross inflows to £2.7 billion compared to £2.8 billion in Q2 2021, and a net inflows drop to £1.6 billion against £1.8 billion.

The group confirmed a et inflows decline to £223 million over Q2 2022 compared to £311 million in Q2 2021.

“Although our D2C customers invested slightly less via our platform than in the comparative period as they assess the impact of the rising cost of living, net inflows to our advised platform remained on par with last year, which was a strong comparative. Net platform inflows of £1.6 billion is an encouraging result given the uncertain market backdrop,” said AJ Bell CEO Andy Bell.

“Our first five multi-asset funds recently passed their fifth anniversary, an important performance milestone particularly for advisers. Performance of all five funds was in the top 30% when compared against their peer groups, with four being in the top quintile.”

“Since launching these funds in 2017 we have shared the benefits of our increasing scale with customers, reducing the Ongoing Charges Figure from 50bps to 31bps during that time.”

The company also announced the launch of its new Dodl by AJ Bell investing app, which is set to expand the platform’s offerings to DIY investors with all the central tax wrappers and a streamlined investment range to help consumers pick funds and shares for their portfolios.

“This week we launched a new investing app called Dodl by AJ Bell which expands our offering to DIY investors. With an annual charge of just 0.15% and no commission for buying or selling investments, Dodl is a low-cost proposition perfectly suited to individuals who want an easy way to invest for their future,” said Bell.

“We believe it will be particularly attractive to the 8.6m adults in the UK who hold more than £10,000 of investible assets in cash, especially in the current climate of rising inflation where cash savings are being eroded in real terms due to the low interest rates available.”

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