Simec Atlantis Energy (SAE) announced on Thursday that its Uskmouth site is transitioning into a sustainable energy park, leading the group’s shares to soar 15% to 2.65p.

SAE said that the Uskmouth site’s transformation into a sustainable energy park includes plans to provide a Battery Energy Storage System as a first step (BESS).

The Uskmouth site has a 230MW grid connection, as well as extensive land and infrastructure, making it an ideal location for the construction of a large-scale, commercially appealing BESS project.

BESS integration into transmission and distribution networks is widely acknowledged as a significant enabler of increased and faster integration of intermittent renewable energy into the UK electricity supply.

SAE has progressed the BESS development process by submitting a Modification Application to National Grid, requesting that the Uskmouth site’s connection agreement be changed to accommodate a BESS plant.

SAE has also filed a screening report to Newport City Council for the development of a 230MW BESS facility on the former coal stockyard and is working with an industry-leading partner to expedite the battery storage facility’s delivery.

SAE is no longer pursuing the previously stated plans for the Uskmouth Conversion Project due to the establishment of a BESS at the Uskmouth site and has notified Welsh Government and relevant stakeholders that it would be withdrawing the permission variation application.

SAE has entered into a deal to sell some parts of the plant that are no longer needed for the site’s future ambitions as a result of this decision.

Wye Valley Demolition, a local company, has been given £1.2m contracts to remove the redundant plant and equipment.

This deal provides immediate funding to SAE’s business, assisting in the achievement of SAE’s broader goals and providing value to shareholders.

While SAE will not move through with the Uskmouth Conversion Project, the need to repurpose coal-fired power plants has never been greater to decrease emissions, improve energy security, and reduce waste shipped to landfills and polluting our oceans.

Governments throughout the world are looking for projects that can provide energy security and independence rapidly, and our coal plant conversions can provide a speedy and cost-effective solution.

SAE is committed to expediting the transition of existing coal-fired power plants to lower-emissions fuels and is working with its partners to transfer key lessons learned to other nations where they may have the most impact.

Graham Reid, CEO of SAE commented, “The team and I are tremendously excited about this next step for the Uskmouth site, which will help deliver the UK’s net zero targets, release important value for the business and allow the team to build on the lessons learnt to help countries around the world to achieve the targets of reducing reliance on coal, increasing energy security, and finding long term solutions to the growing waste problem.”

London’s small and mid cap markets gained in early afternoon trade on Thursday as companies such as Lancashire Holdings, 888 and Hurricane Energy shared trading updates and results.

FTSE 250

Lancashire Holdings jumped 13% to 450p as the insurer said gross written premiums in the first quarter of 2022 rose 35% from 2021 to $477.9m. The company also estimated a hit between $20m to $30m due to the war in Ukraine. 

Telecom Plus shares gained 5.5% to 1,615p after the company announced an annualised H2 customer growth rate of 20% is expected to continue in FY23. The company said profits are expected to be in line with forecasts.

Inchcape shares rose 5.2% to 1,002p as the automotive retailer and distributor said revenue climbed 13% organically YoY in the first quarter of 2022. The group expects a 25% rise in pretax profit to £300m in 2022 on a Russia-adjusted basis.

Spectris shares increased 4.5% to 2,789p after the company announced a “strong” start to 2022 where trading and order book provides momentum for the full-year in its Q1 trading update. The group said organic sales growth was up 12% and order intake strengthened by 29%.

Hays share price gained 3.7% to 121p as the company announced that today it will launch a share buyback programme to purchase up to £75m of ordinary shares of 1p and is expected to commence on 29 April 2022.

Synthomer shares increased 3.4% to 295p following the announcement of the group’s FY expectations remaining unchanged in its Q1 trading update. It also addressed that NBR margins and volumes continue to stabilise in line with expectations as high inventory levels of medical gloves and reduced demand due to the easing of the COVID 19 pandemic take place.

888 Holdings said revenue declined 18% to $224m in the first quarter, with the gambling firm’s exit from the Netherlands hitting monthly punter numbers. 888 said average monthly active users fell 8% yearly “reflecting the temporary exit from the Netherlands” and the timing of any licence award in the Netherlands “remains unclear”. However, 888 Holdings’ shares rose 3% to 190p.

Weir Group shares fell 5.6% to 1,519p when the group said that the loss of sales from Russia in 2022 is expected to have an impact on the group’s underlying operating profit of up to £20m. However, Jon Stanton said, “the group has had an excellent start to the year”, as Weir’s aftermarket saw strong demands with orders up 28% and 3% sequentially.

AIM

Simec Atlantis Energy shares soared 23% to 2.85p following the company’s announcement of the transition of the Uskmouth site into a sustainable energy park. The group said the Uskmouth site has a 230MW grid connection along with substantial land and infrastructure that make it a prime location for the delivery of a “large-scale, commercially attractive, BESS facility”.

Empyrean Energy shares leapt 18.4% to 3p as shares rebounded from the 77% plunge on Wednesday after the group announced that the Jade prospect reached final total depth but logging indicated no oil pay in the target reservoir in offshore China.

Angle shares jumped 12.6% to 102p after the company group reported a £0.2m increase in revenue and a £3.2m increase in cash and cash equivalents. The liquid biopsy company said that its Prostate cancer study design was completed and it began discussions with a major group of United States urology clinics to partner in the study and provide access to a patient base for the group.

Corcel shares gained 9% to 1.47p as the natural resource exploration company signed a Heads of Terms with a UK investment fund to fund its current and future UK energy storage and generation projects.

Hurricane Energy reported its full-year results in which the company generated revenues of $240.5m from seven liftings of Lancaster crude compared to $180.1m from 12 liftings in 2021 which lead the group’s shares to rise 7% to 9.9p.

Hurricane Energy noted a profit after tax of $18.2m compared to a loss after tax of $625.3m in 2021.

Live Company shares tanked 10.2% to 11p despite the company announcing a new contract for Bricklive Paddington with Paddington Now BID which will be based in Norfolk Square Gardens, London from July 23 to July 31.

Empire Metal shares sunk 9% to 2p after the group announced that its placing to raise £1.7m to accelerate exploration at the group’s Eclipse and Gindalbie Projects.

BP Exploration Operating Co, a subsidiary of oil company BP sold its 5% stake in Serica Energy sending Serica’s shares to fall 7.7% to 362p. The group raised £49.3m by selling 13.5m shares in Serica at a price of 365p and Serica will not receive any of the proceeds.

Oilex shares dropped 3.8% to 0.19p as the group said in its quarterly report that it has received permits from the Gujurat state government to commence production at its Cambay Fields, however, the process took too long and resulted in no production from the region as the group waited to recommence operations.

The FTSE 100 was up convincingly on Thursday after a range of top companies boosted the index with a raft of glowing results.

However, rising inflation cast a pall over a slate of boosted profits and rising revenues, and Sainsbury’s warned of a tough year ahead as customers cut down on grocery spending and name brand supermarket products.

Meanwhile, tech stocks in America surged on the back of good news from Meta, which saw an uptick in Facebook users and sent shares upwards in morning trading.

“If you were looking for candidate to come to the tech sector’s rescue it might not have been Meta Platforms given its reputation has taken a real battering of late,” said AJ Bell investment director Russ Mould.

“Apparently though, expectations for the company behind Facebook, Instagram and Whatsapp were pitched at such a level that merely doing OK was enough to send the shares surging higher.”

Standard Chartered shares were up 16.5% to 558.9p following a 6% year-on-year increase in Q1 2022 pre-tax profits to $1.5 billion against $1.4 billion, alongside an increased guidance slightly ahead of its previous estimate of 5-7% for the year.

“Our first quarter performance was strong despite the volatile macro environment,” said Standard Chartered CEO Bill Winters.

“Our profit before tax grew 4% year on year, with strong underlying business momentum.”

Whitbread shares gained 3.9% to 28,645p after the company announced its swing back to a £472.6 million profit compared to a £194.9 million loss in 2020 and the reinstatement of dividends payouts to shareholders.

“With [dividends] back on the table, it sends a clear message to markets that sentiment is vastly improved and the return to profitability plus beat on top and bottom-line estimates adds weight,” said Hargreaves Lansdown equity analyst Matt Britzman.

However, the company warned of rising cost inflation in the range of 8-9%, and said it would be raising prices, growing its estate and slashing group costs to mitigate inflation hurdles.

Barclays shares enjoyed a rise of 2.5% to 145.5p after the financial institution reported a 10% rise to £6.5 billion in group income for Q1 2022, however the firm suffered a £540 million conduct charge following the over-issuance of securities in the US in March, resulting in the second suspension of its $1 billion share buyback programme.

“If it hadn’t been for a monumental mess of its own making Barclays could have been really riding high off the back of its first quarter showing,” said Russ Mould.

“Underlying performance was way better than expected … However, when you take a more than half a billion-pound hit over a clerical error relating to structured products it rather detracts from this positive picture.”

“Particularly when it means a previously planned programme of buying back shares must be shelved.”

Smith and Nephew shares were up 2.9% to 13,055p after the medical devices group reported a 3.3% boost in revenue to $1.31 billion compared to $1.26 billion the previous year.

“Sports Medicine & ENT and Advanced Wound Management continued to deliver strong growth and Orthopaedics produced an improved performance as elective procedure volumes rebounded across our segments,” said Smith and Nephew CEO Depak Nath.

Sainsbury’s shares suffered a fall of 3% to 231.7p despite the company’s swing to a pre-tax profit of £854 million in 2021 from a pre-tax loss of £164 million in 2020.

The supermarket’s stock declined in light of the Big 4 grocer’s stark warnings of lower profits as accelerating inflation and cost of living pressures impacted disposable income, projecting a pre-tax profit fall up to 14% to £630-£690 million in the next financial year.

“The year ahead will be impacted by significant external pressures and uncertainties, including higher operating cost inflation and cost of living pressures impacting customers’ disposable incomes,” said the company in a statement.

Unilever announced that its facing inflationary pressure resulting in the group predicting that costs will be higher than expected in H2 2022 and may hamper annual margins on Thursday.

Unilever’s revenue climbed 11.8% year over year to €13.8bn from €12.33bn in the first quarter of 2022 as currency had a positive impact of 3.5% and acquisitions net of disposals contributed 0.6%.

The group’s underlying sales increased by 7.3%, with prices up 8.3% but volumes down 1.0% as Unilever said “all divisions grew strongly”.

Unilever’s Board has declared and maintained a quarterly interim dividend for Q1 2022 of €0.43.

Unilever Performance

Beauty & Personal Care

Beauty & Personal Care’s underlying sales increased 7.1% to €5.7bn, with 7.4% from price and offset by 0.3% from volume as Unilever continued strong growth in Prestige Beauty and vitamins, minerals, and supplements.

Deodorants grew by double digits, thanks to Dove and Rexona’s technology-driven developments, as well as Axe’s excellent start to the year. Skin cleaning saw double-digit growth, with Dove, Lux, and Lifebuoy leading the way, although volumes fell in a shrinking market.

When the health and beauty channel reopened, Prestige Beauty enjoyed another quarter of double-digit growth, on top of a very strong prior year comparative.

Hourglass and Living Proof had a solid start to the year, helped by a rebound in the luxury hair and make-up segments.

Home Care

In the wake of a very strong prior year comparative, market volumes are decreasing which impacted Unilever’s Home Care division’s where underlying sales rose 9.2% to €3bn, with 12.5% from price, however, it was offset by 2.9% from the volume,

Fabric cleaning had a good start to the year, with double-digit, price-driven growth in most regions and very minor volume declines.

In India, OMO continued to lead the liquids industry, while novel forms such as capsules saw considerable growth in both China and Europe.

Fabric enhancers grew in the low single digits, boosted by a strong start to the year in India, China, and Turkey, but hampered by reductions in the United Kingdom and Southeast Asia.

With a strong prior year comparative, home and hygiene witnessed a modest increase, with high pricing being offset by negative volumes.

Foods & Refreshment

Foods & Refreshment underlying sales grew 6.5% to €5.1bn, with 7.1% from price and (0.6)% from volume said Unilever.

In all key geographies, Foods produced high single-digit growth with strong pricing. Hellmann’s grew by double digits against a solid baseline in the previous two years, thanks to a successful “Superbowl” marketing.

In the first quarter, ice cream sales grew by double digits in the out-of-home channel, while in-home sales fell marginally. The loosening of limitations in Europe and the sell-in ahead of an expected greater ice cream season, as well as a solid performance in China, boosted out-of-home sales. Magnum’s strong growth momentum was aided by the introduction of its fundamental “Remix” innovation, a spin on the iconic Magnum stick.

Performance by Geography

With volumes slightly negative, emerging markets climbed by 9.5% to €8.3bn, with a 10.1% contribution from pricing whereas developed markets rose 4.1% to €5.5bn and a 5.7% contribution from pricing.

Latin America’s pricing was particularly strong, at 16.4%, despite a 5.7% drop in volume. Developed markets climbed by 4.1%, with prices up 5.7% and volume down 1.5%.

The Americas sales increased by 9% to €4.5bn due to price and volume increases, while European sales increased by 0.7% to €2.7bn due to price gains offset by volume declines and Asis sales rose 9.1% to €6.6bn in the first quarter for Unilever.

Outlook

Input cost inflation is expected to be roughly €2.1bn in the first half of 2022, but the commencement of the war in Ukraine and the resulting increase in raw material inflation has elevated Unilever’s cost prediction for the second half.

Input cost inflation is expected to be roughly €2.7bn in H2 said the group. 

As a result of this unprecedented period of inflation, the group will have to take additional pricing action, which will have an impact on volume.

In 2022, Unilever expects underlying sales growth to be in the upper half of the previously advised range of 4.5% to 6.5%.

For the first half, Unilever estimates the underlying operating margin to be in the 16% to 17% range that the group had forecasted for 2022.

Unilever presently expects the full-year underlying operating margin to be at the lower end of that range as a result of the expected rise in costs in the second half as costs are unknown and volatile.

As market conditions normalise, Unilever plans to restore margin through pricing, mix, and savings delivery in 2023 and 2024.

Russ Mould, Investment Director, AJ Bell said, “The true definition of a company with pricing power is one which can push up its selling prices without dampening demand. Unilever has managed the first bit but not the second. Each of its three core divisions has seen a drop in sales volumes in its first quarter as a result of raising prices.”

“While Unilever talks about another solid quarter of sales growth, pressure on costs means its profit margins aren’t suddenly going to fatten up because people are paying more for a jar of Marmite or a box of Magnum ice creams. In fact, it is guiding for operating margins to be at the bottom end of its previously guided range.”

“In the UK, consumers are starting to trade down to supermarkets’ own-label products because they are cheaper. That presents a real threat to Unilever’s earnings in the near-term if people shun its higher priced items. There is a risk this trend spreads to other geographies.”

“The inflationary pressures have taken the spotlight off chief executive Alan Jope for a while, but a resumption of normal trading conditions will inevitably revitalise the debate over whether he is the right man to keep running the business, given poor returns for shareholders under his leadership.”

Unilever shares were trading down 0.2% to 3,569p after the group warned investors of increasing costs in the second half of 2022 which will impact margins.