Bellway is confident it will return to growth in the 2025 financial year after sales rates picked up in early 2024, which were helped by improving affordability.

The group released a trading statement for the period 1 February to 2 June 2024 on Friday, revealing a 6.9% increase in the private reservation rate per outlet per week.

Bellway reiterated completion guidance of 7,500 homes in the full year. This is substantially below the 10,945 homes completed in the last year, but Bellway has suggested that this will form a base for growth in 2025.

Overall average selling price is now anticipated to be around £305,000 in 2024, a welcome increase from £295,000 in the las year, due to a change in its product mix.

“Bellway bosses expect the housebuilder to return to growth in 2025 and this morning’s trading update indicates that target is just about on track. The UK housebuilder recorded stronger trading through the spring selling season as customer confidence looks to be creeping back up in the housing market,” said Mark Crouch, analyst at investment platform eToro.

Bellway’s statement was released as Halifax said UK average house prices fell 0.1% in the month to May, rising 0.1% in April. There has been a stronger start to the year for the housing market, but concerns about high interest rates will be slow to diminish, and we now have the uncertainty of what measures Labour will take should they win the election.

“The company and its peers will be hoping for a return to the trifecta of attractive supply and demand dynamics (likely given housebuilding volumes have dropped markedly of late), state support and cheaper mortgages,” said AJ Bell investment director Russ Mould.

“Investors will certainly hope for the same given a healthy period for the industry through the course of the 2010s enabled Bellway to dole out plenty of cash to shareholders. 

“The Halifax house price index reading was a mixed bag – on a year-on-year view it was encouraging and came in ahead of expectations but month-on-month prices are largely static. However, after a rollercoaster ride coming out of the pandemic a steady period may be just what the market needs. There will be hope for an interest rate cut from the Bank of England sooner rather than later, too.”

Tekcapital portfolio company Guident has set out an industry framework for the wider adoption of autonomous vehicles and safety solutions at the US National Autonomous Vehicle Day Conference.

Guident led the visionary US National Autonomous Vehicle Day in Florida, further establishing its prominence as a market leader in AV safety solutions. The event was met with buying activity in Tekcapital shares as investors gained a deep insight into Guident’s vision for the future of the industry.

Many investors will be invested in Tekcapital solely for exposure to Guident, and the National Autonomous Vehicle Day event demonstrates why.

“The AV Day 2024 Conference crystallized the path forward for the autonomous vehicle industry: drive driverless somewhere before everywhere, and do it in collaboration with your co-founders, users, builders, and stakeholders in your ecosystem,” said Keynote Speaker at the conference, Prof. Paul Newman, Founder and CTO of Oxa.

Although still in the early stages, the autonomous vehicle market is making steady and assured strides forward, and Guident is delivering commercial innovations while gaining traction with strategic partners. Many of Guident’s partners were present at the event, not only for the applications of their safety solutions but also for the Deep Tech systems supporting connectivity.

Expansion

Guident recently launched the first remote monitoring and control centre (RMCC) of its kind in the United States as the industry gears up for wider adoption of autonomous urban mobility.

This RMCC will be integral in the expansion of a strategic partnership with Auve Tech to power the rollout of its MiCa autonomous shuttle in the United States.

In addition, Guident has demonstrated the broad range of applications with a partnership with Star Robotics’ and a solution for surveillance robots.

The National Autonomous Vehicle Day was held in Jacksonville – which happens to be one of the largest municipalities in the US by landmass and has extensive public transport networks. Guident is working with the Jacksonville Transportation Authority on the deployment of autonomous public transport systems for which Guident will provide safety connectivity.

These innovations are not just happening in Jacksonville and Guident’s Boca Raton routes; there is a global wave of urban mobility developments attracting the interest of investors and automobile companies.

The total urban mobility market is thought to be worth $660bn by 2030. Guident needs exposure to just a fraction of this market to be valued at many multiple of Tekcapital’s current market cap.

Tekcapital has alluded to Guident pursuing a private funding round this year to provide the growth capital required to accelerate commercial traction. And there is plentiful capital ready to be deployed in sector.

According to Dealroom, VC investors poured $22bn into Electric Mobility in 2023. This sector includes electric vehicles, electric vehicle charging and lithium battery technology.

“The presence of international leaders, speakers, and demonstrators underscored the fact that borders do not confine the future of mobility; rather, it is a shared vision that transcends them,” said Guident CEO Harald Braun when describing the momentum building in the sector.

One stock that performed very well yesterday was Strip Tinning Holdings (LON:STG),with its shares leaping from 51p overnight to a top of 84p, before closing at 70p, but still showing an impressive 37% gain on the day, following some 665,000 shares having been traded.

The Business

The Birmingham-based company manufactures specialist flexible electrical connectors related primarily to heating and antennae systems embedded within automotive glazing and to the connection of the cells within electric vehicle battery packs, increasingly using flexible and lightweight printed circuit technology.

The Glazing related products are used on vehicles of all types.

Driven by new technologies, this market is growing strongly with the group as a leading player.

In addition, the EV revolution is presenting valuable new growth opportunities for battery-related products and the group’s Battery Technologies division is a leader in the Mid-Market for such solutions.

Its strategy is to remain a leading supplier of specialist connectors for Glazing worldwide, while in the Battery Technologies market its aim is to become a leading supplier of Cell Contact Systems.

In the end-April issued 2023 Report & Accounts CEO Richard Barton, who owns 47.54% of the group’s equity, gave a strong hint of better news to come when he stated that:

“We believe that 2024 will be a formative year for the business with a strong focus on preparing for profitable delivery of the nominations already received as they ramp up in in 2025 and maintaining the investment needed to maximise our success in converting the strong Battery Technologies and Glazing sales pipeline we have before us to secure the nominations that will return us to significant growth from 2025.”

Major Battery Technologies Nomination

Yesterday the £12m capitalised company announced the receipt of a major high volume strategic nomination in the Battery Technologies market, from a leading German automotive motion technology Tier 1 manufacturer.

This production nomination is the group’s fourth in the Battery Technologies market and marks a major step forward towards high volume manufacture. 

This state-of-the-art Cell Contract System is the largest yet supplied by Strip Tinning, measuring 800 mm x 400 mm and combines a laminated busbar laser welded to a flexible printed circuit that measures temperature and charge across the battery module.

Executive Chairman Adam Robson stated that:

“Momentum continues to build in the business and our positioning in the Battery Technologies market goes from strength to strength.

Our nominations order book in the last four months alone has nearly tripled, underpinning our medium-term ambitions and providing a very solid platform from which to grow.

We are delighted to be accelerating our recruitment drive and creating employment opportunities and remain confident in securing further sales progress.”

Analyst View

Caroline de La Soujeole, at Singer Capital Markets, rates the group’s shares as a Buy.

Her current year estimates to end December show £10.9m (£10.8m) of sales, with an adjusted pre-tax loss of £2.2m (£1.5m loss).

However, for the 2025 year she is predicting a £15.0m revenue and a reduced loss of just £1.0m but paying out an uncovered 1.00p (est. Nil) per share in dividend.

Jumping forward into 2026 the analyst estimates £20.8m of sales will help to turn the loss-making group into a £0.7m profit maker, generating earnings of 5.4p and covering a 2.00p dividend per share.

My View

Expectations are for the company to comment further on its first half performance and outlook for FY 24 and beyond in its H1 30 June pre close update which is due to be announced on 16^thJuly.

Despite the company’s small cap status, this stock is beginning to garner a lot more investor interest, as can be seen by yesterday’s frenetic dealings.

More such Nominations, I feel, can be expected in due course, certainly enough to spur spasmodic punter participation sufficient to rekindle further attempts at the 84p High achieved yesterday.

The FTSE 100 started the session off in the front foot and the day got better for equity bulls after the ECB announced its first interest rate cut since 2019 on Thursday.

The reduction in European interest rates to 3.75% had been widely predicted by economists, so it was no surprise to markets. That, said a major central bank cutting interest rates will go a long way to improving sentiment given the growth outlook has become increasingly cloudy in recent went weeks. 

“The European Central Bank has, as widely predicted, cut the eurozone’s key interest rate to 3.75%, moving faster than the Bank of England and the Federal Reserve. The reduction will come as a relief for many consumers and companies, whose finances have been stretched to breaking point by the rapid ratcheting up of interest rates,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.

“But ECB policymakers are expected to hit the pause button now, as sticky inflation has returned as a worry. While rates went straight up like a rocket, they look likely to descend in bumpy fashion.”

The FTSE 100 gained 0.4% on Thursday amid a clear move to the downside in gilt yields with the 10-year falling below 4.18% as markets priced in the prospect of rate cuts by the Bank of England.

Today’s ECB interest rate decision is fascinating prelude to the Bank of England and Federal interest rate decisions next week. Although the ECB’s decision will have little bearing on what either do with rates, they will face increasing scrutiny if they hold off cutting rates when many other western central banks are starting to ease monetary policy.

“The Bank of England and Federal Reserve might give the impression they aren’t swayed by what the ECB and other countries do, but the greater the number of central banks cutting, the more pressure they will be under to do the same,” said Russ Mould, investment director at AJ Bell.

There was a notable risk-on trade on Friday, with cyclical sectors leading the way higher. Miners enjoyed a wave of buying and UK banks has a good showing.

Antofagasta was the top riser with a 3% gain.

ITM Power shares rose on Thursday after the Green Hydrogen specialist announced that it expected a tripling of profits and halving of losses in the full year.

Ahead of its preliminary results scheduled for release on August 15th, 2024, ITM Power PLC has provided a summary of its financial performance for the 12 months ending April 30th, 2024. The company’s revenue is expected to be in the range of £16.0m to £16.5m, which falls within the guidance range of £10m to £18m and represents a remarkable threefold increase compared to the previous year.

The expected financial results, subject to audit, also indicate an adjusted EBITDA loss between £39.0m to £44.0m. While this figure is better than the guidance of £45m to £50m, it still represents a year-on-year reduction of more than 50%, reflecting the company’s ongoing efforts to improve its financial performance.

Furthermore, ITM Power PLC reported a net cash position of £230m at the year-end, surpassing the guidance range of £200m to £220m. This positive result is attributed to the stringent cost and capital disciplines that have now become ingrained in the company’s DNA, demonstrating its commitment to financial prudence and sustainability.

“During the year, we completed our 12-month plan, transforming ITM into a credible delivery organisation, and we have attained a positive operating rhythm of deploying products to our customers,” said Dennis Schulz, CEO of ITM.

“We grew revenue more than threefold and halved our losses, and in line with our strategic priorities, we managed our cash carefully. I am pleased with our progress, and look forward to providing further details, including guidance for the current year, at the time of our preliminary results announcement in August.”