AIM movers: Kibo Energy extends power purchasing agreement and EQTEC falls after cash call

Andrew Hore
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AIM movers: Kibo Energy extends power purchasing agreement and EQTEC falls after cash call

Kibo Energy (LON: KIBO) has extended a power purchasing agreement in Gauteng, South Africa from ten to 20 years. This is for a waste to energy plant held by the 65%-owned subsidiary Sustineri Energy. The internal rate of return for the project is increased from 11-14% to 15-18%. Construction will start in the first quarter of 2023, and it could take just over one year to complete.  The Kibo Energy share price has risen by one-quarter to 0.125p.

EQTEC (LON: EQT) shares have slumped following the £3.75m fundraising at 0.5p a share This was announced at the end of yesterday’s trading although the share price did fall from 0.725p to 0.65p. Today, it has fallen below the placing price and it is 26.9% lower at 0.475p. The cash is required to push ahead with clean energy generation projects.

Atalaya Mining (LON: ATYM) reported second quarter copper production below forecast at 13,400t. Guidance for the full year has been reduced by 4% to 52,000t-54,000t. Costs will be 5%-10% higher even though a Spanish energy price cap is in force. The share price slumped 12.9% to 247.5p.

Quieter trading conditions meant that first half figures from broking services provider Jarvis Investment Management (LON: JIM) were lower, although this is not a great surprise. Revenues fell 23% to £6.3m and pre-tax profit fell by one-third to £3.1m. Net cash has risen to £4.2m. WH Ireland has cut its 2022 pre-tax profit forecast from £7.3m to £7m. Jarvis Investment Management shares fell 16.7% to 161.5p. A second quarterly dividend of 3p a share had already been declared.

LifeSafe Holdings (LON: LIFS) joined AIM on 6 July and raised £3m in a placing at 75p. the share price went to a small premium, but it has fallen back, and it is down a further 13% to 60.5p today. All but one of today’s six trades are sells. The other is a deal that is worth less than £100 and classed as unknown. LifeSafe has developed fire safety products, using eco-friendly fluid.

TransGlobe Energy Corporation (LON: TGL) is merging with VAALCO Energy (LON: EGY) to create an Africa-focused exploration and production company. VAALCO is offering 0.6727 of one share for each TransGlobe share. TransGlobe shareholders will own 45.5% of the enlarged group. The transaction is valued at $307m. TransGlobe shares are 23.6% higher at 325p. VAALCO Energy shares have fallen by 4.32% to 498p.

Appreciate Group (LON: APP) chief executive Ian O’Doherty is leaving the board, which means that the redemption product provider does not have a permanent finance director or chief executive. The business has been reorganised since 2018 and the benefits are starting to show through. The share price has been relatively strong this year, but it fell 6.3% to 28.2p on the news.

Portmeirion Group (LON: PMP) remains cautious about the outcome for 2022, although analysts have maintained their full year forecasts. The share price indicates investor concerns and fell 10.4% to 367.5p. The first half trading statement of the homewares supplier states that interim revenues will be 5% higher at £45m. Shipping costs are reducing, although other costs have risen. Full year forecast revenues are 3110m and pre-tax profit is £10.1m, although this is dependent on fourth quarter trading.

Ex-dividends

Anpario (LON: ANP) is paying a 7p a share final dividend and the share price fell 5p to 525p.

Character Group (LON: CCT) is paying a 7p a share interim dividend and the share price is unchanged at 495p.

Caledonia Mining Corp (LON: CMCL) is paying a quarterly dividend of 14 cents a share and the share price fell 25p to 895p.

Crystal Amber Fund Ltd (LON: CRS) is paying a final dividend of 10p a share and the share price fell 4p to 112p.

D4T4 Solutions (LON: D4T4) is paying a final dividend of 2.07p a share and the share price fell 1p to 242.5p.

Elixirr International (LON: ELIX) is paying a final dividend of 4.1p a share and the share price fell is unchanged at 605p.

Oil and gas producer i3 Energy (LON: I3E) is paying a dividend of 0.1425p a share and the share price fell 0.275p to 23,875p.

Kitwave Group (LON: KITW) is paying an interim dividend of 2.5p a share and the share price fell 3.25p to 175.25p.

Marks Electrical (LON: MRK) is paying a final dividend of 0.67p a share and the share price fell 1p to 80.5p.

MS International (LON: MSI) is paying a final dividend of 7.5p a share and the share price fell 5p to 287p.

Sanderson Design (LON: SDG) is paying a final dividend of 2.75p and the share price fell 3p to 113.5p.

Shoe Zone (LON: SHOE) is paying an interim dividend of 2.5p a share and the share price fell 5p to 165p.

The Mission Group (LON: TMG) is paying a final dividend of 1.6p a share and the share price fell 0.5p to 56.5p.

FTSE 100 dips on lower commodities prices

Natasha Doris
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FTSE 100 dips on lower commodities prices

The FTSE 100 was down 0.7% to 7,099.8 in midday trading on Thursday after commodities prices fell and dragged mining groups down.

Anglo American shares declined 3.5% to 2,590p, Antofagasta dropped 1.2% to 1,029p, Endeavor slid 0.7% to 1,643.5p, Fresnillo fell 1.5% to 673.8p, Glencore decreased 1.9% to 410.3p and Rio Tinto sank 3.1% to 4,640.2p.

Meanwhile, the price of Brent Crude fell below the $100 per barrel mark which it had been so tenaciously remaining ahead of, dropping to $97 per barrel.

Shell shares fell 2.1% to 1,959.4p and BP shares dipped 1.8% to 370.3p on the sinking oil prices.

The bad news for commodities marked a slight relief for other companies on the index, as the lowering prices in materials represented a lower cost base for firms which have been struggling to keep their heads above water among surging cost inflation.

“As Morrissey woefully sang, ‘Stop me if you think you’ve heard this one before’. Investors are getting sick of hearing about inflation, interest rates and falling stock markets. While that tune is still playing loudly, some of the pains we’ve seen over the past year are starting to fade,” said AJ Bell financial analyst Danni Hewson.

“Commodity prices are easing back, implying input cost pressure will relax slightly. Shipping rates are also starting to fall, albeit due to softening demand.”

“Although it will take time for these factors to feed through into the system, the end of sky-high inflation could be in sight. It will hopefully soon be time to change the record, but for now, The Smiths’ song looks like it is stuck on repeat for just a bit longer.”

Barratt Developments

Barratt Developments shares were down 0.4% to 463.3p after the housing group announced an expected FY 2022 profit slightly ahead of market expectations between £1.05 to £1.06 billion.

The company further mentioned a return to pre-pandemic levels of completion with 17,908 completions compared to 17,243 the last year.

However, cost inflation took a toll on Barratt’s, with the group confirming a 6% rate of build cost inflation and levels currently at around 9% to 10%.

“Britain’s largest housebuilder, Barratt Development’s latest update is indicative of both the opportunities and challenges facing the sector right now,” said Hewson.”

“House prices may have risen rapidly enough to cover these higher costs so far but Barratt, like its peers, is running just to stand still in terms of profitability and there is a significant risk that raw material and labour costs continue to grow.”

“At least, unlike Persimmon, it is not being forced to downscale its volume targets just yet, suggesting its relationships with suppliers, procurement strategy, simplified build process and attractiveness as an employer are paying off.”

Severn Trent projects £50m in ODI outperformance payments for FY 2023

Natasha Doris
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Severn Trent projects £50m in ODI outperformance payments for FY 2023

Severn Trent shares were down 0.3% to 2,827p in late morning trading on Thursday following an announcement that the group expected at least £50 million in customer ODI outperformance payments in FY 2023 in its trading update.

The utilities company reported a rise in operating costs outlined in its technical guidance, in particular for its energy and chemical expenses.

Severn Trent said its environmental performance remained on track to match or exceed its target on 100% of its ODIs for the financial year.

The group also noted its was confident in retaining its four-star Environmental Performance Assessment Rating for 2021, and expected confirmation from the Environment Agency in the near term.

The firm mentioned it was benefiting from its decade of investment in renewable energy, with 145 GWh in green energy generated in Q1, equating to over 50% of its consumption and representing a 4% growth against Q1 2021.

Severn Trent commented it expected to release its updated Sustainable Financing Framework on its website in July, detailing its environmental, social and governance performance and targets, enabling the utilities company to raise financing for sustainable investment and expenditure.

Barratt Developments expects FY 2022 profits slightly ahead of market expectations on higher house prices

Natasha Doris
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Barratt Developments expects FY 2022 profits slightly ahead of market expectations on higher house prices

Barratt Developments shares were down 0.9% to 460.9p in late morning trading on Thursday, after the company announced an underlying pre-tax profit slightly ahead of market expectations between £1.05 billion and £1.06 billion in its FY 2022 trading update.

The housing developer reported a return to pre-pandemic completion levels, with 17,908 completions over the financial term against 17,243 the previous year.

The company noted total completions were impacted by the deferral into FY 2023 of a London apartment block comprised of 221 homes, reflecting resource delays in the construction process.

Barratt Developments highlighted an average selling price for private homes up to £341,000, rising to £375,400 for houses sold in the forward order book.

“Another housebuilder, another set of results pointing to resilient housing demand. Completions were slightly lower than expected but came in ahead of pre-pandemic levels,” said Hargreaves Lansdown equity analyst Matt Britzman.

“More crucially though, demand looks to be holding up in the forward order book despite rising house prices.”

“Testament to the ongoing resilience of the private house buyer, seemingly undeterred by a drop in real income as inflation and a cost-of-living crisis start to take their toll.”

The firm also mentioned build cost inflation of 6% across the period, although the level is currently at 9% to 10%.

“It almost feels inevitable that a broader easing of demand is on the cards given the wider conditions and news that build costs are running 9-10% higher at the minute is a little hard to stomach,” said Britzman.

“Nonetheless, Barratt’s doing all it can to make hay while the sun shines, with a significant increase in the value of land buying last year – propped up by a very healthy net cash position on the balance sheet.”

“Not for the first time, planning delays are being called out as a headwind – not something housebuilders want to battle with given everything else that’s going on.”

Barratt Developments commented it intended to declare an ordinary dividend based on FY 2022 dividend cover of 2.25 times its adjusted net income.

Experian Q1 revenues grow 7%, on track to meet FY revenue expectations

Natasha Doris
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0
Experian Q1 revenues grow 7%, on track to meet FY revenue expectations

Experian shares were up 1.5% in early morning trading on Thursday after the company reported a 7% revenue growth at actual exchange rates and a 9% rise in constant exchange rates in its Q1 2023 trading update.

“We grew strongly in Q1, in line with our expectations, underpinned by our portfolio diversity and growth initiatives,” said Experian CEO Brian Cassin.

“Total revenue growth was 7% at actual exchange rates and 9% at constant exchange rates. Organic revenue growth was 8%.”

Experian highlighted an 8% revenue climb in North America, 30% in Latin America, a 6% drop across the UK and Ireland, an 8% slide in Europe, the Middle-East, Africa and the Asia-Pacific, and a total global revenue growth of 7% at actual exchange rates.

The firm mentioned 65% of its revenue was linked to North America, with ongoing strength in bureau volumes, positive demand for analytics and software, expansion in health, targeting, automotive and verification services, alongside continued momentum from consumer services.

Experian noted 13% of its revenue came from Latin America and was driven by contributions from acquisitions in fraud and identity management, consumer services with an organic revenue of 42%, and from its new bureau in Chile.

It also reported strong performance in its Limpa Nome credit collection marketplace and credit comparison marketplace.

The company pointed out weakened macro-economic factors in its UK and Ireland business, yet drew attention to a 6% organic growth in its B2B operations reflecting new business traction and progress in consumer credit, business credit and fraud and identity management segments.

Meanwhile, Experian reported weak macro-economic conditions across the EMEA and Asia-Pacific regions, and commented it continued to focus on strategic markets where it could drive scale and enhance operating efficiency.

The information services group confirmed its expectations for FY 2022 remained unchanged, with an anticipated organic revenue increase of 7% to 9% and total revenue growth of 8% to 10% at constant exchange rates.

Anglo American launches steel decarbonisation partnership with Nippon Steel

Natasha Doris
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0
Anglo American launches steel decarbonisation partnership with Nippon Steel

Anglo American shares were down 1% to 2,657p in early morning trading on Thursday following its announced partnership with Nippon Steel to decarbonise the steelmaking process.

The two companies reportedly signed a Memorandum of Understanding (MoU) in a move to research methods to optimise premium lump ore produced by Anglo American’s mines to decrease emissions created using the traditional blast furnace steelmaking process.

Anglo American commented the partnership would study the use of its iron ore in a more carbon-efficient direct reduction iron (DRI) steelmaking method.

The mining firm claimed the DRI method was estimated to generate significantly lower emissions than the established way of blast furnaces and basic oxygen furnaces.

The partnership follows Anglo American’s October 2021 Climate Change Report, which included an aim to reduce Scope 3 emissions by 50% by 2040, building on previous commitments made earlier in the year.

The company said it recognised the steel value chain as key to hitting its goals due to the bulk of its Scope 3 emissions coming from the process.

Anglo American noted its report outlined a holistic approach to achieving its target, and involved working with customers to accelerate the decarbonisation programme across multiple layers to develop high quality products to lower rates of emissions.

“This agreement is an important component of Anglo American’s approach to collaborating with our customers and helping to shape a greener future for the backbone of global infrastructure – steel,” said Anglo American marketing business CEO Puter Whitcutt.

“By working together, we can drive towards system-level decarbonisation and pave the way for sustainable steelmaking, underpinning the steel industry’s full potential as an enabler of society’s wider economic prosperity and social development.”

“We look forward to collaborating on this important work with Nippon Steel, with whom we have a relationship that spans more than five decades, combining our expertise for more efficient and less carbon intensive production processes.” 

ValiRx plans to in-licence potential breast cancer treatment

Andrew Hore
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ValiRx plans to in-licence potential breast cancer treatment

Cancer treatments developer ValiRx (LON: VAL) says that it wants to in-licence a triple negative breast cancer project undertaken by King’s College London following a successful evaluation.

The share price jumped by 20.9% to 13p, although the share price is still 64.1% lower than at the start of the year. At the turn of the month, ValiRx raised £2.5m at 10p a share.

The evaluation confirmed the impact of a peptide drug candidate against triple negative breast cancer. This took nine months and “there is good evidence of biological activity. There are also signs that it could work for ovarian cancer cells.

Commercial terms have been pre-negotiated, and the project will be put into a new subsidiary. The evaluation cost around £75,000. Pre-clinical work on the project could cost around £500,000.

Cenkos expected ValiRx to have net cash of £817,000 at the end of 2022, but that was before an additional £1m was raised. That should be enough to fund the pre-clinical trial and to finance the rest of the business well into 2023. Although, it may depend on how other projects progress.

There are three potential treatments for cancer and sepsis that have partners or where one is being sought. A potential endometriosis treatment (VAL301) will be starting pre-clinical studies. This is a re-purposed version of the molecule used in the VAL201 potential prostate cancer treatment, where there is a letter of intent with TheoremRx.

There are two other potential assets. There is an agreement with the University of Barcelona concerning the investigation of drugs that can be used against Kirsten Rat Sarcoma Virus dependent cancers, such as uterine or pancreatic. There is around eight months to go on this programme and it will cost up to £100,000. There is also an agreement with Hokkaido University in Japan to evaluate a drug candidate for endometrial, pancreatic and bile duct cancers. There is another six months to go and it will also cost up to £100,000.

Loungers hits record 203% revenue surge to £237.2m, celebrates 200th site opening

Natasha Doris
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Loungers hits record 203% revenue surge to £237.2m, celebrates 200th site opening

Loungers shares gained 3.2% to 188.5p in late afternoon trading on Wednesday after the group announced a record revenue surge of 203% to £237.2 million compared to £78.3 million in FY 2022.

The company reported an adjusted EBITDA rise to £53.6 million against £13.9 million, along with an adjusted EBITDA margin of 22.6% from 17.8%.

Loungers swung back to an operating profit £28.4 million compared to a loss of £7.7 million and an adjusted operating profit of £34 million from a loss of £3.9 million in the previous year.

The group further highlighted cash generated from operating activities of £69.6 million from £12 million.

The firm also reduced its non-property debt by £33.2 million to £1 million, significantly shoring up its balance sheet.

The company opened a new record of 27 sites across the UK, with its 200th site recently opened for the public.

Loungers grew its build teams to five, marking the capacity to open approximately 32 sites per year.

The company added it was optimistic regarding its outlook, with no observed change in customer behaviour despite macro-economic headwinds, and the group said it was on track to hold at least 500 sites across the UK, alongside its strong pipeline of developments in the future.

“These results demonstrate the extent to which Loungers has thrived over the past year, achieving a record number of openings, record underlying like for like sales growth and a record level of profits,” said Lounger CEO Nick Collins.

“We are benefitting from changes in consumer behaviour, with more people staying local, working from home, and supporting their local community and high street. We are delighted to have just opened our 200th site, and to be announcing today that we are increasing our roll-out target for site openings to 30 for this year.”

“Whilst the short-term economic outlook is challenging, we are in an excellent position to weather the storm and to take advantage of growth opportunities coming out of it. We have a strong balance sheet, a very capable and highly motivated team and an affordable, value for money all-day offer with enormous scope for further expansion across the UK.”

Loungers mentioned an EPS of 17p after a loss per share of 10.9p in FY 2021.

FTSE 100 falls as US inflation hits 9.1%

Natasha Doris
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FTSE 100 falls as US inflation hits 9.1%

The FTSE 100 was down going into the close Wednesday despite a reported 0.5% growth in the UK economy over May, according to figures released by the ONS today.

However, the real driver of markets of Wednesday was the higher than expected US CPI reading that rose to 9.1%.

“If anyone had been harbouring hopes that US inflation had topped out at 8.6% those hopes have been dashed today. A potent mix of soaring prices both at the pump and at food stores has created a situation that no-one can hide from,” said Danni Hewson AJ Bell financial analyst.

“Markets will now have to lock in the expectation that the Fed will deal out another 75 basis point hike later this month as it seeks to push the lid down on the pot that just keeps bubbling over. There’s been plenty of volatility as investors consider how fast the economy will slow once the brakes are tapped again.”

US Inflation hits 9.1%

The spike marked the highest yearly gain in inflation since 1981 and the highest monthly gain since 2005.

The NASDAQ fell 0.6% to 11,189, the Dow Jones dropped 0.7% to 30,739.6 and the S&P 500 was down 0.7% to 3,790.

UK economy

Despite the positive news after two consecutive months of GDP contraction in March and April, the sectors behind the growth displayed less reason for optimism.

The GDP climb was predominantly on the back of a 0.4% rise in services, linked to a 1.2% increase in human health and social activities due to a higher level of GP appointments.

Meanwhile, output in consumer-facing services dropped by 0.1% as a result of a 0.5% fall in the retail sector, demonstrating a lack of household retail spending and sending recession alarms ringing.

“Households are strategically cutting back on their spending, which is a particular blow to the consumer services which still haven’t been able to get anywhere near their pre-pandemic glory days,” said AJ Bell financial analyst Danni Hewson.

Fashion groups felt the cold chill of the cost of living crisis, with JD Sports Fashion falling 1.9% to 122.8p and Next dipping 0.1% to 6,296p as consumers cut back on retail expenses.

Supermarkets also felt the effects of consumers paring back on shopping, with Tesco dropping 0.9% to 257.3p, Ocado falling 4.5% to 793.6p and Sainsbury’s sliding 0.1% to 214.9p.

Euro falls below parity against Dollar

Meanwhile, the Euro fell below parity against the Dollar for the first time in two decades, after the US inflation statistics served to strengthen the Dollar.

The Dollar was worth 0.997 Euro at the time of reporting, marking the first time since 2002 that the Dollar was listed as the stronger currency against the Euro.

European markets fell across the board, with the German DAX down 1.2% to 12,740, the French CAC 40 sliding 1% to 5,980.2 and the Italian FTSE MIB dropping 1.1% to 21,241.3.

Renold rebounds from Covid-19 with £195.2m revenues

Natasha Doris
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0
Renold rebounds from Covid-19 with £195.2m revenues

Renold shares were down 3.1% to 27.2p in late afternoon trading on Wednesday following a reported revenue of £195.2 million in FY 2022 against £160.8 million in FY 2021.

The industrial components company announced an adjusted operating profit of £15.3 million compared to £10.9 million the last year, alongside a 7.8% return on sales from 6.8%.

Renold lowered its net debt over the financial term to £13.8 million from £18.4 million after the group rebounded from the Covid-19 pandemic.

The firm highlighted a 31.7% growth in order intake to £223.9 million compared to £170 million and a closing order book increase of 57% to £84.1 million.

The company pointed out record revenue, order intake and closing order book in its chain Europe and Americas segments.

Renold also mentioned a £11 million long-term military contract among its operational highlights and a successful bolt-on acquisition in its chain sector, with payback of less than two years.

The firm noted an adjusted EPS rise of 87% to 4.3p compared to 2.3p year-on-year and a basic EPS of 4.7p against 2p.

Renolds added it believed the company would remain in a good position going forward in FY 2023, despite macro-economic headwinds and supply chain problems.

“Throughout the reported period the business performance has been on an improving trend and our order books have continued to grow in the early part of the new financial year,” said Renold CEO Robert Purcell.

“We are cognisant that there remain considerable Covid-19-related challenges in some parts of the world; supply chain issues are still prevalent and inflation is high.”

“However, we have entered the new financial year with good momentum and a belief in the excellent fundamentals of the Renold business upon which we are building.”

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