Why companies left AIM in January and February

Andrew Hore
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Why companies left AIM in January and February

There were 14 companies that had their AIM quotations cancelled in January and February. Six were taken over, while four decided to leave the junior market, including one company that sold its business at the same time. One shell was forced to leave because it had not made an acquisition in the requisite time period, and another had been suspended for six months and not completed the potential deal that led to the suspension.
There was one company that left for the Main Market and another that dropped its AIM quotation to concentrate on its Nasdaq listing.
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7 January 2022
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Shell CEO rakes in £6m as energy prices soar

Natasha Doris
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Shell CEO rakes in £6m as energy prices soar

Shell CEO Ben van Beurden took a salary of £6m in 2021, a 25% increase on his previous salary.

The news broke this week at a time when the government and consumers have been calling for a windfall tax on the massive oil companies to help ease consumer suffering as oil prices spike.

The Russian assault on Ukraine has caused a tight shortage of oil and gas output from the country, which supplies 8% of UK oil and 18% of diesel for the country.

Shell enjoyed record profits for 2021, which drove calls for a one-off tax on the company and its competitors.

According to the company’s annual report, Van Beurden reportedly made 57 times the annual salary of the average Shell worker in 2021.

Shell has historically dragged its feet in matters of ethical company decisions.

The oil producer was forced to cut down on its CO2 emissions by 45% by 2030 only after an order of The Hague District Court last year.

The FTSE 100 giant further severed its ties with Russian energy company Gazprom following a reported 20 minute phone call with Business Secretary Kwasi Kwarteng, who allegedly pressured the company to end its business dealings in the country.

Avast suspends business in Russia and Belarus

Anshula Kumar
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Avast suspends business in Russia and Belarus

The Czech cybersecurity firm, Avast, has halted the accessibility to their products in Russia and Belarus just like McDonald’s and Starbucks.

The group’s marketing and sales operations have also been terminated with boiling geopolitical tensions.

In 2021, Ukraine, Russia, and Belarus generated around 1.5% of Avast’s total revenue.

Avast is continuing and expanding their offerings in Ukraine by providing free licence extensions to paying subscribers. Apart from the freemium products, users have free access to the premium products like the premium antivirus pack.

Avast has employees in both Russia and Ukraine and is actively working to protect and sustain them as a priority.

With fake tweets and misinformation being circulated, Avast believes that with fake tweets and misinformation being circulated, Ukraine should have access to an internet connection which is secure and unrestricted to share important updates about the war.

Even though Avast has suspended all business in Russia, the security of the employees in the distressed region remains a priority for the firm.

Avast has donated $800,000 through their employee donation matching program and Avast Foundation to organisations like People in Need.

Avast is assisting Ukrainian companies by collaborating with local charities for volunteer work to mitigate cyber risks.

Avast shares were trading at 640p practically unchanged following the news of suspended business in Russia.

FTSE 100 finishes turbulent week in the green

UK Investor Magazine
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FTSE 100 finishes turbulent week in the green

The FTSE 100 rose on Friday in a volatile week of trading that ultimately saw Londons leading index post strong gains for the week.

The FTSE 100 was up 1.3% at 7,191 going into the close on Friday. The FTSE 100 closed last week 6,987.

The Russia invasion of Ukraine, and subsequent sanctions on Russia, continued to drive volatility in commodity prices which was responsible for much of the swings in FTSE 100 shares.

The FTSE 100’s miners and oil majors were among this week’s top performers.

UK GDP

Although the strength of the UK economy has little impact on the earnings of FTSE 100 companies, investors would have been encouraged by a 0.8% increase in activity in January.

The economy enjoyed a boost at the start of 2022 as consumer spending in retail and dining increased as consumers emerged from an Omicron-induced slow down in December.

UK GDP grew 0.8% with growth across all sectors, with services up 0.8%, production up 0.7% and construction up by 1.1%.

Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown said, “The economy shook off the shackles of Omicron in January with sectors across the board bursting back to health, pushing output 0.8% above its pre-pandemic level.”

However, there were concerns the economy could slow as a result of higher inflation and energy prices due to the Ukraine conflict.

“The conflict in Ukraine has caused already hot commodity prices to heat up again, with households and businesses already feeling the temperature. As lockdown savings dwindle, and higher tax and energy bills are set to land, it’s set to put downward pressure on growth in the months to come,” said Streeter.

Pearson Takeover

Pearson shares soared on Friday, up almost 20% to 778.6p following a takeover approach by US Apollo for the education publishers. Pearson was the FTSE 100 top riser after they said the bid ‘significantly undervalued’ the company and planned to deliver their strategy.

Polymetal rose 12.3% to 169.4 as the beleagered stock continued to see interest from optimistic buyers hopeful for a comeback for the company as the war in Ukraine continues to cast doubt over the Russia-focussed gold miner.

Berkeley Group shares were up nearly 2% to 3,822p after the group restored confidence by addressing the impact of inflationary pressures. The group said that they were experiencing rising input costs due to inflation, however the increase sales price of their developments and business overseas has kept them on track to meet their annual guidance.

The top fallers included Fresnillo, which dropped 3.7% to 737p as the company’s shares continue to suffer following new labour laws in Mexico and a drop in gold and silver prices.

Berkeley Group comforts investors with trading update

Anshula Kumar
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Berkeley Group comforts investors with trading update

British housing developer, Berkeley Group, shares were up 1.7% to 3,825p after reconfirming annual earnings are on track.

Berkeley Group provided a trading update from November 2021 to 28 February 2022, which confirmed the firm is ‘trading robustly’.

The developer stated cancellations rates are normal and sales are just better than pre-pandemic levels.

The group mentioned that inflationary costs associated with the developments are being curbed by the gains from higher selling prices.

The group is on track to meet their earning goals for April 2022 with the results so far.

Net cash is expected to increase from £846m in October ’21 to £900m in April ’22 due to land payments, however, cash due from exchanged private sales will see a marginal increase from £1.7bn for this period.

The group is supplying around 28,000 jobs in the UK and continues to develop the plans regarding their long-term brownfield sites.

The company has increased their total gross debt facilities to £1.2 billion due to refinancing new bank facilities giving them £800m expiring in February 2027 with the option of two one-year extensions.

Additional £226m of capital returns expected in April 2023 will be used for further development projects like finishing near-term pipeline sites into the land holdings.

Steve Clayton, fund manager at HL Select said, “All looks under control at Berkeley for now. The group’s cash position, projected to be some £900m by financial year end and newly renegotiated bank facilities leave Berkeley in a comfortable position.”

“Berkeley say that the environment is volatile, with the inflationary pressures currently being felt perhaps the greatest of these.”

“For now selling prices are going up faster than Berkeley’s budgeted predictions, so all is working out in the wash. But the group will be well aware that if home prices stutter whilst costs keep surging, the current “Goldilocks” scenario could come to an abrupt end.”

“Will the events in Ukraine deter Berkeley’s overseas buyers, or will London’s safe haven reputation work in the group’s favour?”

“The situation surrounding the group has become more uncertain in recent weeks, but Berkeley is financially strong and on top of its game.”

“Its ability to turn complex, often challenging brownfield sites into premium developments that earn the group strong margins and cash flow has stood it in good stead in the past, as Berkeley’s own confidence in the future is evidenced by their upping of the pace of land buying,” said Clayton.

UK GDP bounces back from Omicron to rise 0.8% in January

Natasha Doris
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UK GDP bounces back from Omicron to rise 0.8% in January

The UK’s Gross domestic product (GDP) rose 0.8% over January this year, following a drop of 0.2% in December 2021.

A report by the Office of National Statistics (ONS) noted that all sectors grew in January, with a 0.8% increase in services, a 0.7% increase in production and a 1.1% rise in construction.

Food and beverage growth achieved a 6.8% boost, leading to a 1.7% output in consumer-facing services after the economy recovered from the shock of the Omicron variant.

Wholesale and retail trade also enjoyed a rise of 2.5% and proved the major contributor to January’s rise in services.

However, analysts warned that the Ukraine conflict will place households under pressure, with higher energy bills imminent and set to eat into consumer budgets.

The higher bills are predicted to see a downturn in growth as household savings are put towards rising gas and oil costs.

The Bank of England will be under scrutiny as it attempts to mitigate the spiralling effects of inflation under the combined weight of Covid-19 and Russia’s assault on Ukraine.

“The Bank of England’s main task is to maintain stable prices and oversee financial stability, and rip-roaring inflation risks undermining that and overall economic health,” said Hargreaves Lansdown senior analyst Susannah Streeter.

“So steering inflation back to the target of 2% is still set to be its priority and it’s still highly likely a rate rise will be on the cards when policy makers meet next week.”

“But given the escalating situation, with fresh sanctions being placed on Russian oil exports and severe disruptions to other commodities, which is set to weigh on businesses and consumers, policymakers are expected to limit the rise to 0.25%, pushing the bank rate to 0.75%.”

“The aim will be to try and dampen demand but not squeeze this new spurt life out of the economy, at a time of increased uncertainty.”

Russia may be removed as ‘most favoured nation’ among US and G7

Anshula Kumar
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Russia may be removed as ‘most favoured nation’ among US and G7

President Biden is in talks with G7 to discuss the removal of Russia from the WTO as ‘most favoured nation.’

The rest of the world is trying to stunt Russia’s growth in any way possible as the assault on Ukraine continues, including stripping Russia of its trade status.

Biden is reportedly on a mission to hold Russia accountable for their unjustified attacks on its neighbour state.

If Russia’s trade status is stripped, the US and its allies will be able to impose tariffs on the imports from Russia.

With higher tariffs coming and sanctions already imposed, the Russian economy is facing a “deep recession”, said Kristalina Georgieva, Managing Director and Chair, IMF.

Russia is currently facing sanctions, oil and gas bans and removal from the SWIFT.

CNN reported that Biden would need Congress to support the removal of Russia’s ‘Permanent Normal Trade Relations’, which Congress has already signalled.

Every country in agreement would have to review their own processes regarding their trade status with Russia.

Russia and US Trade

In 2021, the trade deficit for the US was $23bn, according to the United States census.

In 2022, the US has so far imported $1.9bn worth of Russian goods and exported $397m.

Russian imports were heavily hit by the recent ban of oil and coal. In 2021, $16bn was spent on the import of the oil, gas, coal and petrol.

Endeavour Mining completes sale of 90% stake in Burkina Faso mine

Natasha Doris
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Endeavour Mining completes sale of 90% stake in Burkina Faso mine

Endeavor Mining closed the sale of its 90% stake in its non-core Karma mine in Burkina Faso to Nere Mining for a $25 million total consideration.

The agreement further included a 2.5% Net Smelter Return royalty.

The company predominantly mines gold in a selection of regions including Mali, Burkina Faso and the Cote de Ivoire.

The terms of the agreement included a $10 million reimbursement of historical shareholder loans before the deal closed and a $5 million deferred cash payment which is scheduled for payment six months after closing.

The deal also included a contingent payment up to $10 million, payable one year after closing and based on a sliding scale in correlation with the average price of spot gold.

“The sale of our non-core Karma mine to Néré Mining is in line with our strategy of actively managing our portfolio to focus management efforts on high margin, long-life and low all-in sustaining cost, core assets,” said Endeavor Mining CEO and President Sebastien de Montessus.

“A key consideration in the sale process, was the selection of a party that will maintain our trusted partnerships in Burkina Faso, by committing to operate the mine in the best interest’s of our employees and local stakeholders.”

“We are very pleased to sell Karma to Néré Mining as we have confidence that they can leverage their experience and knowledge gained from their local investments to maximise Karma’s future prospects.”

Endeavor Mining’s share price rose 1.5% to 1,995p in early morning trading on Friday following the news.

Consumers suffer as diesel hits record high 165.2p

Natasha Doris
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0
Consumers suffer as diesel hits record high 165.2p

The price of diesel rose 3p to 165.2p on Thursday, representing the highest overnight spike in over two decades.

The price of petrol increased 2p to 158.2p as Russia’s war on Ukraine continued to strangle oil supplies.

Brent Crude was trading at $112.2 per barrel on Friday morning.

The RAC group noted that the Ukraine conflict is having a significant impact on consumers across the UK.

Although the UK only sources 8% of its oil from Russia, its diesel consumption relies on the embattled country for 18% of its supplies.

Business Secretary Kwasi Kwarteng mentioned in a tweet that the UK aims to end its imports of Russian oil by the close of 2022.

“The diesel daily increase was the second largest on record since 2000,” said RAC fuel spokesperson Simon Williams.

“The cost of a filling a 55-litre family car with petrol is now £87 – £7 more than it was at the start of the year.”

“Diesel drivers are even worse off with a tank now costing more than £90 for the first time ever – £8 more than in early January.”

“Petrol is now certain to top an average of £1.60 a litre this week while diesel will progress very quickly towards £1.70.”

Live Company gains two more contracts for Bricklive

Anshula Kumar
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Live Company gains two more contracts for Bricklive

Live Company Group signs contracts with Animal Paradise and Supersized for Bricklive.

Bricklive is one of the divisions for the live events company which creates interactive brick-based toys for their touring trails.

Bricklive Contracts

One of the contracts is for Animal Paradise with the Oklahoma Zoological Society.

The Oklahoma Zoological Society was established to increase footfall for the city zoo which supports endangered wildlife.

The touring trails will display the models at Oklahoma City Zoo and Botanical Gardens.

The event will run from 7th May to 30th October, 2022.

David Ciclitira, Chairman, Live Company said, “I am delighted to add another new contract from the US with Oklahoma Zoological Society. My team continue to deliver new customers in new cities.”

The second contract for Supersized is with Zoo New England, in Boston, USA.

The 40+ models displayed will be inspired from the 26 acre Stone Zoo, with models of various animals including American Kestrel, Assassin Bug and the Blue Ringed Octopus.

The 115 years old Stone Zoo was established to support Zoo New England’s goal of sustaining the natural world.

The trailing tour will run from 30th April to 8th September 2022.

“This significant contract for Stone Zoo is a real signal that our tours are in massive demand in the US and globally. Investors should remember the large tours form an integral part of the BRICKLIVE division revenue generation,” stated Ciclitira.

Live Company shares were up 3.9% to 5.1p on Friday morning’s open, following the announcement of the partnerships with American zoos.

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