Sovereign Metals have signed an offtake MOU for their world class Kasiya titanium rutile project in Malawi.

Sovereign Metals said they have signed a memorandum of understanding with Hascor, a market leading global processor and distributor of rutile products for the welding industry.

The MOU would see a supply of 25,000 tonnes of natural rutile per annum delivered to Hascor which has processing plants across five continents.

Rutile prices of offtake destined for the welding industry generally demand a premium when compared to rutile used in pigments.

The MOU is non-exclusive and non-binding and is subject to ongoing negotiations. The MoU will expire on 31 December 2023 but has the option to be extended.

“We are very excited to have signed this MoU with a major rutile supplier like Hascor about a future offtake agreement and to provide input on marketing for our premium rutile products from Kasiya,” said Sovereign’s Managing Director Dr Julian Stephens.

“Hascor is a market leader in natural rutile product development and distribution for the welding industry across five continents. The offtake MoU with Hascor points to the quality and strategic nature of our world-class Kasiya Rutile Project.”

The global rutile market currently demands 2.8mt per annum and Sovereign Metals is well placed to serve this market with the Kasiya project, the world’s largest undeveloped Rutile resource.

Investors might want to consider Croda shares after the stock dropped to 7,138p from its high of 10,100p at the beginning of the year.   

This is a significant drop for a company that has consistently posted increased dividends over the past ten years and recently said they enjoyed a 46.6% increase in operating profit in 2021.

Croda International Share Price 

Croda shares are currently trading at 7,138p – the lowest level since 24 February 2022 – having fallen from recent highs of approximately 7,484p. The stock is down 30% year-to-date.

“This is not the company’s fault. It’s just the result of the stock’s lofty valuation and investors’ ongoing switch away from highly-rated growth stocks at a time of rising interest rates and toward commodity and raw materials plays at a time of rising prices and inflation,” said AJ Bell Investment Director Russ Mould.

The drop in price potentially represents an interesting opportunity for investors who see value in the company’s strong financial results. 

Croda International saw an increase in operating profit of 46.6% to £468.6 million against a 2020 figure of £319.6 million.   

The Group’s profit before tax was £445.2 million in 2021 against a result of £300.6 million in 2020.   

The company reported that all its businesses were trading ahead of pre-Covid-19 pandemic levels, and saw growth in areas including life sciences and from its recent acquisitions. 

However, Croda International shares have experienced a decline due to its pipeline of 150 Covid-19 related projects, in addition to a further 90 throughout 2021 falling in relevancy as the rates of international vaccination increased.

Expectations for 2022

The company’s growth is predicted to continue in line with its medium-term expectations.  

Croda International expects strong consumer demand, inflation cost recovery and the benefit of its recent investments to offset moderation in customer restocking.  

Following the sale of Croda’s performance technologies and industrial chemicals businesses (PTIC) to agricultural production company Cargill for £778 million, the Group is apparently set to streamline its business and give the company an increased level of capital to reinvest in its upcoming growth.  

“[The deal] will release more capital to reinvest in faster growth, higher return markets, positioning us to deliver more consistent sales growth and an even stronger profit margin,” said Croda International CEO Steve Foots.  

Croda International’s dividend  

Croda International’s statutory basic earnings per share in 2021 saw an increase of 48.3% to 230p compared to 155p in 2020.  

The company’s ordinary dividend per share increased 9.9% to 100p against a figure of 91p in 2020.  

The Group has seen a healthy dividend progression over the past two years, with increased returns to shareholders year on year.  

the Croda share price currently provides a dividend yield 1.4%.

ITV reported a 28% increase in revenue of £1.76 billion against a 2020 figure of £1.37 billion as it released a wave of strong financial results.

The entertainment company saw an adjusted EBITA of £813 million against a £573 million result in 2020.

ITV further reported an operating profit of £519 million compared to £356 million in 2020.

“ITV Studios has enjoyed both ratings and critical success and currently has around 500 programmes in production in the UK and internationally,” said ITV CEO Carolyn McCall.

“Media and Entertainment kept viewers and advertisers alike happy with a compelling slate of entertainment shows and dramas and must watch sport across ITV’s channels and streaming.”

The company also highlighted its 2022 target launch of its new ITVX, the first integrated AVOD/SVOD streaming platform across the UK.

“With the success of ITV Hub, ITV Hub+, Planet V and BritBox we see an exciting opportunity to at least double our digital revenues to £750m by 2026,” said McCall.

“At its heart will be ITVX – the first integrated AVOD/SVOD streaming platform in the UK.  It will be a seamless viewer experience with a digital first content and windowing strategy and significant content investment providing weekly premieres and over 15,000 hours of content at launch.”

“This will enable ITV to double streaming viewing, double monthly active users, double subscribers and deliver valuable addressable advertising inventory at scale.”

ITV said that the launch of its ITVX service in 2022 is estimated to help double the company’s digital revenues to £750 million by 2026.

However, analysts pointed to the costs associated with the new service and lack of innovation as reason for investor concerns on Thursday.

“ITVX is not as revolutionary as the company might like you to believe. It is effectively offering viewers a chance to see some of its programmes before they are broadcast on linear TV as well as its back catalogue of shows,” said AJ Bell investment director Russ Mould.

ITV’s share price dropped 13.7% to 95.4p on Thursday morning trading despite the strong financial results.

Mondi’s profit before tax grew 28% to €983m in 2021 as growth accelerated for their sustainable packaging offering.

The group’s revenue saw a rise of 16% from €6.6bn in 2020 to €7.7bn in 2021. Underlying EBITDA increased to €1.5bn from €1.3bn YoY.

The groups financial performance was a reflection of higher sales volumes due to growth in demand for corrugated packing and flexible packing. Selling prices of the products were also increased to compete with inflationary cost burdens. The highest result in new selling prices came from corrugated packaging.

To encourage the growth trend in the packaging markets, a significant lineup for capital investments have been set up, including €1 billion in expansionary projects that have been authorised or are being evaluated.

Strong financials of the group lead the board to recommend an increase in full year dividends grew 8% from €0.60 to €0.65 YoY.

ESG

ESG measures launched Mondi Action Plan 2030, which is a sustainability roadmap. The company will continue to focus on climate resilience, zero deforestation in its wood supply, procuring wood sustainably from healthy and resilient forests, and protecting biodiversity and water resources in its activities and beyond as part of the MAP2030 strategy.

The group has committed to working towards the 1.5°C event with the goal of Net-Zero by 2050.

Sale of Business

Divestment of their business, personal care components (PCC), created an enterprise value of €615m. Due to Mondi’s strategic approach on packaging and PCC’s low overlap with the rest of the company, they felt that the next phase of PCC’s development will be best carried out from outside the Group.

The group has major activities in Russia, which will account for roughly 12% of Mondi’s sales in 2021. They also have a plant in Syktyvkar, which is a high-margin, cost-competitive integrated pulp, packaging paper, and uncoated fine paper mill. Russia accounts for 20% of group EBITDA.

“Mondi delivered strongly in 2021 and we see good opportunity to accelerate growth in sustainable packaging. Underlying EBITDA of €1,503 million was up 11% and ROCE up at 16.9%. We grew our packaging businesses and saw a recovery in uncoated fine paper markets. Our vertical integration, the agility of our operations and collaboration with our customers ensured we met surging demand at a time when supply chains were under pressure around the world. We implemented price increases across all our businesses and, against a backdrop of rising commodity input costs, we exhibited good cost control. Our focus on safety and protecting the wellbeing of our people remains our priority,” commented Andrew King, Chief Executive Officer, Mondi Group.

Mondi shares are trading down 1.9% at 1491p post the open on Thursday morning.

Tyman plc saw its share price rise 3.4% to 365p after it reported strong financial results on Thursday morning.

The company enjoyed a 17% increase in revenue to £635.7 million against a figure of £572.8 million in 2020.

Tyman reported an adjusted operating profit of £90 million against an £80.3 million result in 2020, alongside a pre-tax profit of £64 million compared to its £47.6 million figure in 2020.

The home products company said an increase in market share and strengthen demand helped boost revenue.

Investors also saw a record dividend per share of 12.9p against a payment of 4p in 2020.

Tyman commented that it had achieved its performance goals despite industry-wide challenges to its supply chain, alongside labour restrictions and input cost inflation.

“The Group’s performance was robust, with strong market momentum and share gains delivering growth in spite of well-publicised supply chain challenges, labour constraints and input cost inflation,” said Tyman CEO Jo Hallas.

“We expect underlying demand in 2022 to remain strong, driven by favourable housing market fundamentals, albeit set against rising macroeconomic and geopolitical pressures.”

“We continue to take actions as necessary to mitigate ongoing industry-wide supply chain challenges and cost inflation.”

“The Group is well positioned for growth in 2022 and beyond, benefiting from long-term structural industry growth drivers, our strategic initiatives and building on our portfolio of differentiated products, market-leading brands and deep customer relationships. “

The Lloyds share price has provided investors with an opportunity to enter the UK banks following a sharp decline from highs of 56p.

For long-term investors, the recent pull back in Lloyds shares, coupled with their recent market update, may create the perfect scenario for those considering a purchase of the bank’s shares.

Lloyds share price

Lloyds shares are currently trading just above 45p – the lowest level since December 2021 – having dropped nearly 20% from recent highs around 55p.

This dip will provide a great opportunity for investors who have digested Lloyds recent report and are optimitic about their outlook.

Lloyds reported a 9% increase in Net Income to £15.8bn and enjoyed a rise in return on tangible equity to 13.8%.

This reflected an improvement in trading conditions in 2021 as the bank recovered from the pandemic.

Lloyds reported a statutory profit before tax of £6.9 billion and statutory profit after tax of £5.9 billion which was helped by increased income and the reversal of bad debt provisions made during the pandemic.

Lloyds also said they were hoping to put the HBOS issues to bed by making provisions for the total estimated cost of charges.

However, Lloyds shares have since plummeted, not solely because of disappointment around their earnings, but the impact of geopolitics on markets and interest rate expectations.

Lloyds Net Interest Margin

Lloyds saw Net Interest Income rise 4% to £11.2 billion in 2021 and there will be expectations this increases further in 2022.

This argument can be justified by the expectations of higher interest rates, and because of recent strong performance in their lending business.

Lloyds saw their Net Interest Margin rise to 2.54% in 2021 from 2.52% in the year prior.

Although the crisis in Ukraine may dampen the Bank of England’s enthusiasm for the number of interest hikes in 2022, Lloyds will already be enjoying the impact of two rates hikes in recent months.

Lloyds dividend

Notwithstanding hopes for increased earnings, an important attraction for long-term holders of Lloyds shares is the banks progressive dividend policy.

Lloyds paid a dividend of 2p for 2021 which would equate to a 4.4% yield with Lloyds share price at 45p.

Given Lloyds are once more embarking on a progressive dividend policy as the impact of the pandemic diminishes, buyers at 45p will likely see their yield increase as dividend payouts rise.

Lloyds Shares Valuation

With a Lloyds share price of 45p, the bank is trading at just 5.9x historical earning and 7.1x forward earnings.

Although UK banks are increasingly valued on their price-to-book multiples, the potential for Lloyds PE Ratio to move back inline with historical averages suggests Lloyds shares have plenty of upside.