Microsoft shares were down 5% despite the group beating analyst expectations with profits of $18.8bn for the final three months of 2021.
The group reported revenues of $51.7bn, which is 20% higher than a year earlier.
Satya Nadella, chairman and chief executive officer, said: “Digital technology is the most malleable resource at the world’s disposal to overcome constraints and reimagine everyday work and life.”
“As tech as a percentage of global GDP continues to increase, we are innovating and investing across diverse and growing markets, with a common underlying technology stack and an operating model that reinforces a common strategy, culture and sense of purpose.”
Microsoft is the first big tech group to announce the latest reports. Still to come this year are Apple, Amazon, Alphabet and Meta.
Wizz Air has reported wider losses in the three months to 31 December as travel was disrupted by Omicron and the group carried out expansion plans.
The airline hired new employees and bought new airplanes causing losses to deepen from £223.6m to €267.5m, which is a difference of 129.8%.
The number of passengers in he period jumped from 2.2m to 7.8m, however, rising fuel costs also dented profits. Fuel rose 22.9% compared to the same period a year earlier.
Chief executive József Váradi said: “Wizz Air continued its recovery during the third quarter of F22 and well exceeded 2019 passenger and capacity levels in the peak holiday traveling period, despite the emergence of the Omicron variant.”
“Our operating loss was €213.6 million as travel restrictions continued to affect demand as we continued to ramp up our workforce, fleet, bases and routes to support our path to full utilisation and pre-Covid 19 cost structure by late Spring 2022. Our liquidity remained strong and closed at €1.4 billion at the end of December 2021,” he added.
Wizz Air remains “cautiously optimistic for a continued recovery” into 2022.
Architectural and construction software supplier Eleco (LON: ELCO) beat expectations in 2021. The facilities management software had a particularly good year.
The 2021 revenues are expected to be 8% higher at £27.3m, which includes recurring revenues of £15.4m. Last summer, full year pre-tax profit was thought likely to dip from £4.9m to £4.5m in 2021. The outcome will be around £4.8m. Total dividends of 0.6p a share are forecast.
Net cash has increased from £6.2m to £10m and that figure could rise to £11.5m by the end of this year. This is despite the continued capitalised development spendin...
Originally recommended here at 17.6p, as Ironridge Resources its gold interests have since been demerged. Inits new structure as Atlantic Lithium (AIM:ALL) it announced that the fully-funded African focused lithium exploration and development project is on track to become West Africa’s first producing Lithium Mine.
The worlds demand for Lithium is growing due to its role in stored energy the recently the scoping study increased JOC resource to 21.3MT@1.31%Li2O resulting in a significant improvement in project economic and life of mine. Piedmonth Lithium is a £billion Nasdaq...
The FTSE 100 staged a recovery on Tuesday as it bounced back from severe selling on Monday sparked by concerns over Ukraine and inflation.
The recovery in the FTSE 100 – and other European indices – started in the US session overnight where major US equity indices staged a remarkable recovery.
Having been 4% down on the session yesterday, the S&P 500 rallied to finish the session positive.
Such a dramatic turn around provided the FTSE 100 with the impetus to open higher to trade as high as 7,376, before falling back.
“Highly unusual movements on the US stock market yesterday are difficult to explain. While it is easy to say that the S&P 500 going from a 4% decline to a 0.3% gain in a single session was investors simply buying on the dip, nothing has changed in terms of the market headwinds. Therefore, we could be looking at a dead cat bounce rather than the start of a market recovery,” said Russ Mould, investment director at AJ Bell.
However, evidence from the US futures market highlights the concerns that drove yesterday’s selling are far from over.
S&P 500 futures were pointing to a lower open on Tuesday as the market faded yesterday afternoon’s sharp rally ahead of the Federal Reserve meeting tomorrow.
One of the key causes of recent volatility is the move away from easy monetary and back to normalisation which is causing problems similar to drug addicts suffering withdrawal symptoms.
“Investors are still bracing for a fresh bout of volatility this week, following the rollercoaster ride on Wall Street and fresh falls in Asia. Although indices lurched haphazardly back into positive territory on the Nasdaq and S&P 500, a heightened sense of nervousness remains about just how tough the Federal Reserve will talk and act to try and get increasingly troublesome inflation under control,” said Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown.
Streeter also underlined the importance of geopolitical tensions around Ukraine on market confidence.
“The deteriorating situation in Ukraine with the stand-off continuing as diplomats moves falter, is adding to heightened tensions on the markets, with fears a conflict could unleash a fresh front of chaos, including making the energy crisis facing Europe even worse.”
The FTSE 100’s rally was driven by cyclical sector including banks and miners – Standard Chartered was the FTSE 100’s top riser.
Marston’s reported a drop in Christmas trading, however, remains confident that trading will strengthen.
In the 16 weeks to 12 January 2022, sales were down 3.9% amid the Omicron wave. In the last eight weeks, sales were down 8.8% as the government advised people to work from home.
Andrew Andrea, Marston’s boss, said he was confident that trading will return to normal. He said: “While the emergence of the Omicron variant and subsequent Government guidance temporarily impacted consumer sentiment, we remain confident that the strong trading momentum which we were experiencing prior to that will resume.”
“Indeed, there is growing evidence over the most recent of weeks of the New Year that consumer confidence is rebuilding, and guests are returning to our pubs in greater numbers, which is encouraging.”
The UK government borrowed almost £17 billion in December, making it the fourth highest December total on record.
After the sharp rise in inflation, debt interest payments increased to a six-month high.
“We are supporting the British people as we recover from the pandemic through our plan for jobs and business grants, loans and tax reliefs,” said Rishi Sunak.
“Risks to the public finances, including from inflation, make it even more important that we avoid burdening future generations with high debt repayments.”
“Our fiscal rules mean we will reduce our debt burden while continuing to invest in the future of the UK.”
Bethany Beckett, UK economist at Capital Economics, commented: “As it stands, cumulative borrowing in 2021-22 is still on track to hit the OBR’s forecast of £183 billion.
“But we doubt that this will last: we expect RPI inflation to average 2.8 percentage points higher than the OBR’s forecast in 2022-23, which will push up total borrowing in 2022-23 to £105 billion, well above the OBR’s forecast of £83 billion.”
Royal Mail has announced plans to cut 700 manager roles.
As part of a restructure, the group will let go of 700 managers which will lead to savings of £40 million per year.
The cost of restructuring will be an initial cost of £70 million, which will lead to lower profits from the year. Profits will fall from £500 million to £430 million.
“We intend to further simplify and streamline our operational structures to ensure an improved focus on local performance, and devolve more accountability and flexibility to frontline operational managers,” said the group.
Since Covid, there has been a dramatic increase in domestic parcels. According to the Royal Mail, there was a 33% increase in domestic parcels for the last quarter of 2021 compared to 2019 levels.
Aquis-quoted NFT Investments (LON: NFT) is on course to acquire Pluto Digital Assets. Other quoted companies already have stakes in Pluto and those investments are set to increase in value with this deal, although that depends on the NFT Investments share price.
NFT Investments has a non-binding letter of intent relating to the acquisition, which is valued at £96m – based on the issue of 2.4 billion NFT Investments shares at a nominal valuation of 4p each. That is equivalent to 11.5p per Pluto share. Due diligence is being undertaken.
Trading in NFT Investments shares has been suspended at 2.4...
Lithium is one of metals at the forefront of the Electric Vehicle revolution and is set to experience booming demand in the coming years. With Lithium prices soaring alongside metals such as Nickel, positioning in lithium shares will provide exposure to increasing adoption of EVs.
According to the International Energy Agency, 8.9kg of Lithium is required in the manufacturer of the average Electric Vehicle. The increased Lithium demand is integral to forecasts by S&P Global Market Intelligence that point to a 5,000 mt deficit in Lithium production in 2022.
This deficit is set to support Lithium prices through 2022 and beyond, presenting a significant opportunity for Lithium shares involved in the exploration and production of the metal.
If Jadar was to come online in 2029 a previously planned, it would make Rio Tinto one of the world’s largest Lithium miners and would supply around a third of Europe’s demand for Lithium batteries.
Rio Tinto’s inclusion within this selection of Lithium shares may have a giant question market over it with the Serbian government’s decision. However, Rio Tinto’s dividend reliability and exposure to copper makes it a solid choice for more conservative investors seeking EV demand boom exposure.
Cadence Minerals
Cadence Minerals has built a portfolio of metals and mining assets with a significant exposure to Lithium. This includes the Cinovec Lithium mine operated by European Metal Holdings, the Sanora project operated by Bacanora Minerals, and a series of projects operated by Lithium Technologies & Lithium Supplies in Australia.
The Cinovec project in has just received ‘outstanding’ results that saw its output estimate rise from 25,267 tpa to 29,386 tpa. The improvement in output forecasts combined with an upgrade to the quality of the resources meant the NPV of the project increased from $1.108B to $1.938B.
The Cinovec mine is operated by European Metal Holdings which has a 49% stake in the mine. Cadence Minerals holds 8.7% of the equity in European Metal Holdings.
Cadence’s investment in Lithium Technologies & Lithium Supplies in Australia is currently subject to an option granted to Castillo Copper who are undertaking studies of the projects with a view to acquire 100% of the assets.
Trident Royalties is a mining streaming and royalties company with a diversified portfolio of metals including gold, lithium, copper and iron ore.
Trident Royalties listed on the AIM in 2020 and set about the acquisition of a series of mining royalties that will provide Trident Royalties, and their shareholders, with a source of income long into the future.
After the initial outlay by Trident Royalties, mining royalties provide an attractive benefit of capturing the upside in the price of metals, or increased production, without the need for additional capex.
One of Trident’s most advanced royalties is the Thacker Pass Lithium which is one of the largest Lithium resources in North America.
Trident holds a 60% interest in a 1.75% gross royalty on the asset which is set to produce 80,000 tpa Li2CO3 in Phase 2 of the mine.
Although Trident’s Lithium exposure set within a highly diversified portfolio, the exposure to a range of metals spreads the risk in a fast growing royalties company, and makes Trident one of the most unique Lithium shares on London’s exchanges.
Kodal Minerals
Kodal Minerals operates in West Africa and are currently exploring a raft of gold projects, as well as the Bougouni Lithium Project in southern Mali which Kodal highlight as their primary focus.
The Bougouni Lithium Project is comprised of three prospects with a mineral resource breakdown of:
Sogola-Baoulé: 12.2Mt at 1.1% Li2O
Ngoualana: 5.1Mt at 1.2% Li2O
Boumou: 4Mt at 1.02% Li2O
Having conducted a feasibility study in Q1 2020, Kodal identified the potential for a mining operation with a minimum 8.5-year mine life and a payback period of 1.7 years, and an IRR of 58%.
Kodal have recently received a mining licence and are working towards a final investment decision for the development and construction at the mine.
The #KOD team have been spending the last few days of the successful site visit on the ground in the sun at Bougouni; including CEO, Bernard Aylward and the technical team who are discussing future plans for the lithium development project. #Mining#lithiumpic.twitter.com/w91tHzcExe
Given the strong move higher in Lithium prices, Kodal are reviewing their 2020 feasibility study which is eagerly awaited by the market.
One must not discount Kodal’s gold projects as they provide the necessary diversification to reduce the risk of highly protective miners.
Cornish Lithium
Not to be confused with Cornish Metals, Cornish Lithium is still privately held and is yet to IPO.
However, having conducted a number of funding rounds – including a £12m raise on Crowdcube – the company has a significant number of shareholders that would welcome a liquidity event such as an IPO or trade sale.
Cornish Lithium was the first company to identify a significant Lithium deposit in the UK and has formulated to extract the metal.
The company has a number projects focusing on geothermal and granite deposits in Cornwall and recently closed an investment package worth up to £18m in December.
One to watch for a listing in the future, if its not snapped up privately beforehand.
