Potential Hurricane Energy write-off

Andrew Hore
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Potential Hurricane Energy write-off

AIM-quoted oil and gas company Hurricane Energy (LON: HUR) could make a $54m write-off on its activities in the Greater Warwick area (GWA) of the North Sea.

There is an obligation for the GWA joint venture, which includes a Centrica subsidiary, to start to drill a well on the P1368(S) Lincoln licence by the end of June 2022. The joint venture wants the commencement date to be later, but the authorities do not want a deferral.

The partners, including Hurricane Energy, have decided to suspend funding of this potential well, although there will be spending on the area. An option is a third party could fund the drilling, but there is no formal interest.  

It is likely that the licence area will be relinquished because of the failure to drill a well.

NAV

Net assets were $110.6m at the end of June 2021. A lot has happened since then so this figure could have changed significantly since then. Even so, a $54m write-down is going to be significant in terms of assets even though it will not affect the cash in the business.

The repurchase of convertible bonds will reduce interest and debt repayments by $29.4m a year. There will be $79.8m of convertible bonds still in issue.

Hurricane Energy is generating cash from operations. Net free cash was $127m at the end of November 2021 and since then $72.2m of convertibles have been repurchased.  

The Lancaster field was producing 9,900 barrels of oil per day by the middle of December.

Last month Crystal Amber Fund (LON: CRS) increased its stake to 28.2%. At 4.2p a share, Hurricane Energy is capitalised at £83.7m.

Deepmatter cash requirement

Andrew Hore
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0
Deepmatter cash requirement

Deepmatter Group (LON: DMTR) needs more cash. The digital chemistry data company does have cash in the bank, but it requires more to progress the business. Any fundraising could be at a significant discount to the current share price.
Deepmatter has developed platforms that make it easier to discover and replicate chemical reactions. It is estimated that 50% of science is not reproducible. In 2018, global R&D was worth $179bn and if part of this research cannot be reproduced than much of this money is wasted.
Digital technology can help companies get better value from their R&D and err...

New AIM admission: Public Policy acquisitive plans

Andrew Hore
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0
New AIM admission: Public Policy acquisitive plans

Public Policy Holding Company Inc provides public affairs, crisis management and lobbying services in the US. The overall market is estimated to be worth $17.6bn with the core lobbying and public affairs market contributing $5.8bn to the figure.  
The share price opened at 140p and ended the first day at 139.5p. The next day it stayed at 139.5p. There were no trades listed on the either day of trading.
The flotation will help Public Policy Holding to grow organically and through acquisitions. Part of the reason for the flotation was to raise the company’s profile. That does not seem to be...

FTSE 100 dodges European equity bloodbath

UK Investor Magazine
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FTSE 100 dodges European equity bloodbath

The FTSE 100 flirted with gains on Friday despite sharp declines in other major European equity indices which sank in a broad risk-off move.

The outperformance in the FTSE 100 also came after a surprise rate hike by the Bank of England yesterday.

The FTSE 100 was up 0.1% at 7,268 just after 12pm on Friday whilst the German Dax and French CAC were deep in the red, both down over 1%.

“The Bank of England surprised everyone by hiking interest rates yesterday. In doing so it only confirmed new Governor Andrew Bailey’s reputation as an ‘unreliable boyfriend’ after he flirted with a widely expected rise back in November before thinking twice, but the market seems to be taking this latest development in its stride,” says AJ Bell investment director Russ Mould.

“While the decision to move now seems at odds with the uncertainty around the economic impact of the Omicron variant, and rising rates are not typically good news for stocks, businesses and markets don’t love uncontrolled inflation either so the Bank of England at least trying to get a handle on things isn’t all bad news.”

The early rise in the FTSE 100 coincided with declines in the pound as London’s leading index once again displayed an inverse relationship with the pound.

The pound rose sharply on Thursday following the surprise rate hike and the fade trade was played out in the FTSE 100 on Friday.

The weaker pound helped support exporting stocks with consumer shares and the miners making reasonable gains in early afternoon trade on Friday.

UK banks also gained as investors continued to cheer the prospect of better performance as a result of higher rates.

Barclays, Lloyds and NatWest crept higher after surging yesterday.

Strong UK retail sales also created a sense of optimism as November retail sales rose 1.4%. However, the jump in retail sales could prove to be short lived as the rise was largely down to people doing their Christmas shopping early over fears of shortages. 

This could set us up for a disappointing Christmas trading period, especially if Boohoo’s troubles are a reliable barometer.

Outperforming peers, Vietnam and producing alpha with Vietnam Holding

UK Investor Magazine
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0
Outperforming peers, Vietnam and producing alpha with Vietnam Holding

We were thrilled to once more welcome Craig Martin, the chairman of Dynam Capital, manager of the Vietnam Holding Investment Trust to the UK Investor Magazine Podcast.

Vietnam Holding has had a storming year with 12-month share price performance standing at 95% at the time of recording.

This made Vietnam Holding one of the best performing Investment Trusts listed in London this year and has significantly outperformed its peers.

We discuss the key driving factors behind the trust’s success including the strength of the Vietnamese economy and the increasing number of retail investors in Vietnam.

There is a deep dive into the investment themes Craig and the team are focusing on, and an exploration of the companies held within the trust.

For more information on Vietnam Holding, please visit their website and watch their latest investor presentation on-demand.

One Planet Capital targets zero-emmisions business Zedify for EIS deployment

UK Investor Magazine
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One Planet Capital targets zero-emmisions business Zedify for EIS deployment

The One Planet Capital EIS Fund is lining up an investment into Zedify, a zero-emissions delivery company utilising electric cargo bikes.

The One Planet Capital EIS focuses on companies in the emerging green economy and Zedify’s solution to urban deliveries will compliment existing holdings in the portfolio.

Zedify are providing a measurable positive impact on the environment by reducing the use of polluting diesel vans and improving the air quality in urban centres.

Expanding market

According to One Planet Capital, Zedify are operating in a market worth £3.9 billion that will welcome such solutions as councils push to reduce traffic and congestion.

New delivery services have popped up during the pandemic but the ‘cargo’ tends to be food, either groceries or takeways.

Zedify are applying this concept to larger deliver of goods offering an alternative to couriers with services such as next day delivery and collections from businesses.

The company is currently operating in the UK, however, there will be the opportunity to expand into Europe in the future.

Zedify are raising £1.2m in total with a pre-money valuation of £5m.

Just Eat partners with Asda

Safiya Bashir
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Just Eat partners with Asda

Just Eat has partnered with Asda, where from January customers will be able to order supermarket items.

Andrew Kenny, the UK managing director of Just Eat, said: “We live in an on-demand world. We want to make sure we are getting our customers the food they want, when they want, when they want it. Our tie-up with Asda means we can help people access everything from store cupboard essentials to fresh groceries in a matter of minutes.”

Just Eat has said that 1,000 items will be available from the supermarket. The locations that Asda items will be available for Just Eat customers will be announced early next year.

Simon Gregg, the vice-president of online grocery at Asda, said: “We’re always looking for new ways to offer customers more choice and extend the number of delivery options available. The trial will also see Asda become more accessible to a wider customer base through Just Eat’s significant presence in the on-demand food delivery space.”

Halifax’s house price predictions for 2022

Safiya Bashir
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1
Halifax’s house price predictions for 2022

The UK house price boom is set to end next year, Halifax has predicted.

In its predictions, the mortgage lender said that house prices might only increase by 1% in 2022 after surging 8% in 2021.

“Looking ahead, with the prospect that interest rates may rise further in 2022 to subdue rising inflation, and with government support measures phased out, greater pressure on household budgets suggests house price growth will slow considerably,” said Russell Galley, managing director of Halifax.

“We expect that house prices will maintain their current strong levels but that growth will be broadly flat during 2022… There is still a large degree of uncertainty around this forecast, particularly the extent to which savings accrued during the pandemic continue to boost housing transactions and prices, and how lasting the recent shifts in housing preferences prove to be.”

UK retail sales jump in November

Safiya Bashir
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0
UK retail sales jump in November

UK retail sales jumped 1.4% in November. Retail sales are 4.7% higher than the same period a year earlier.

The latest figures show that clothing sales are up by 2.9% and other non-food stores saw growth increase by 2.8%.

Commenting on the figures, Danni Hewson, AJ Bell financial analyst, said: “It looked like Santa had got the memo from retailers and was on track to deliver them the kind of Christmas they could only dream about in 2020.  With the exception of food, sales were up across the board in November as people shopped early and shopped hard.

“More cash was spent on clothing as people got their glam ready to socialise in the run up to Christmas, sales actually soared above pre pandemic levels for the first time as people grew more and more confident about their festive plans. 

“Omicron was an unexpected gift and one most retailers wish they could return.  Despite a surge in spend on the high street in November which did take cash away from those online behemoths, December’s already shaping up to be a very different story.  Footfall is down dramatically and there will be some consumers deciding what they don’t have now they won’t be buying, or they’ll resort back to their virtual baskets.”

New AIM admission: DSW Capital licensing success

Andrew Hore
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0
New AIM admission: DSW Capital licensing success

DSW Capital licences its brand to professionals involved in corporate finance and accounting services and provides them with back office support. There is limited capital investment required. At the end of October 2021, there were 82 professionals in the network.
Acquiring an existing business and converting it to the DSW brand could help the acquired business to access better quality work.
Warrington-based DSW believes that the flotation will boost the profile of the business and enable it to grow geographically and widening the services provided. There will be £800,000 used to pay off borrow...

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