Elliott Bernerd of international property developer Chelsfield is taking a significant stake in AIM-quoted chartered surveyor and property adviser Fletcher King (LON: FLK). He is buying the shares at a premium to the market price, which rose 5p to 50p (45p/55p) a share after the investment was announced. Elliott Bernerd can see the attractions of the business and its customer base at this share price.
The acquisition of the shares is conditional on FCA approval because the stake will be above 10%. This approval is expected before the end of 2021.
Elliott Bernerd has recommended Matthew Wise an...
The FTSE 100 gave up ground on Monday morning but outperformed more severe selling across Europe before a broad rally saw most major European indices turn positive.
The FTSE 100 was down 0.17% at 7,014 in early trading on Monday whilst the German DAX and French CAC were down 0.65% and 0.74% respectively.
By lunch time, the FTSE 100, DAX and CAC were all in positive territory.
“There may still be 27 days to go until Halloween, but the fear factors are out in force and investors are not in the mood to be spooked,” says Russ Mould, investment director at AJ Bell.
“Inflation, the energy crisis, supply chain issues, economic growth stuttering, concern that interest rates could go up sooner rather than later and China’s ongoing Evergrande debt problem remain at the forefront, clouding investment decisions and muddying the waters for anyone trying to make money on the market,” said Mould.
“The FTSE 100 fell 0.2% to 7,012, dragged down by weakness in banks and BT, the latter following media reports that it is set to face growing competition from Virgin Media which is reported to be in talks to receive investment from Sky for its full-fibre broadband rollout.”
Morrisons takeover
Morrisons shares eased slightly after the group received final offers from US parties. CD&R upped their offer to 287p which surpassed a final offer from Fortress of 286p.
“The lively bidding war for Morrisons has come to an end, with CD&R trumping Fortress at the final hurdle. The larger offer values Morrisons at a heady £7.1bn, and is the offer recommended by the Board. That price sounds steep but is a reflection of the significant growth opportunities ahead. In particular, the supply and delivery partnerships with Amazon will have caught the attention of potential buyers,” said Sophie Lund-Yates at Hargreaves Lansdown.
Sainsbury’s and Tesco shares were the FTSE 100 top risers on Monday as investors positioned for the possibility of further buyout activity in the sector.
Castillo Copper shares rose on Monday after the company unveiled the most recent progress at its Picasso Lithium Project.
Castillo said it has verified assay results as part of of its initial due diligence on the project. The project was found to have multiple pegmatite outcroppings after a consultant visit to the site.
Castillo Copper shares rose over 1% on Monday following the announcement.
Simon Paull, Managing Director of Castillo Copper, commented: “Straight out of the gates, the preliminary due diligence has hit a high note at the Picasso Project, with multiple historical surface occurrences being confirmed and photographic evidence there is significant pegmatite outcropping with the potential to host lithium mineralisation. The Board is delighted with these initial findings and looks forward to receiving the assays results back from the laboratory.”
finnCaps revenue grew by 55% in the first half as increased M&A activity led to higher revenues from their finnCap Cavendish unit.
Total revenu grew to £31.8m in the six months ending 30th September, up from £20.5m in the same period a year higher.
Institutional stockbroking revenue grew by 19% to £3.,7mm whilst transactions revenue fell 14% to £8.7m.
“We closed 4 further M&A deals between our AGM update on 23rd September and the end of the first half of the year and group revenue is up 55%,” said CEO Sam Smith.
In H1, we raised £243m of equity for clients, advised on 5 public company M&A transactions with an aggregate value of nearly £500m and on 13 private M&A transactions with an aggregate value of £1 billion.”
Our finnCap Capital Markets team performed well – in a comparatively quieter period – and revenue is in line with our expectations. finnCap Cavendish has clearly capitalised on a robust M&A market.
Our overall revenue growth shows the clear benefit of our strategy to diversify our products beyond ECM – undertaken over the past 3 years – to service the broader strategic and financial needs of ambitious growing companies. Our pipeline is healthy and we now feel confident in delivering a revenue outcome for the year within an upgraded range of £45-50m.
I look forward to announcing our interim results and updating investors on our current trading and dividend expectations for FY22 later in November.”
AIM-Listed Seed Innovations has announced a further investment in CBD company South West Brands.
South West Brands is a London-based female-led CBD company building a portfolio of CBD brands having recently launched LoveMeMeMe and FEWE.
The investment was made via 12-month 8% convertible loan and brings to the total amount invested by SEED in South West Brands to £450,000.
Ed McDermott, CEO of FastForward, commented: “South West Brands have made considerable progress since our last investment with the successful launches of two consumer brands which, from what I have seen, have received a very positive reception from users to date. These first brand launches, which are generating SWB’s early revenues, are testament to the hard work Rebekah Hall and her team have put in, and I am pleased SEED are able to support SWB in their growth and I look forward to further advances by the team in their quest to grow a credible, sustainable and scalable consumer CBD business.”
Bay Capital has been set up by two highly experienced small company directors and they were both involved in building up AIM-quoted aggregates business Breedon Group (LON:BREE). Bay Capital chairman Peter Tom was executive chairman when Breedon floated as AIM shell Marwyn Materials in 2008 and he stepped down in 2019. Prior to that he was boss of Aggregate Industries.
The other Bay Capital director David Williams was a founder of Marwyn Capital and also an early director of Marwyn Materials/ Breedon. He is a director of cyber security company Shearwater Group (LON: SWG), as well as Acceler8 Ve...
The launch of the new vehicle in July marked the start of a new type of space race.
The Seraphim Space Investment Trust (LON: SSIT) invests in a portfolio of early and growth stage private space tech businesses. According to Morgan Stanley, this new and fast growing sector could be generating more than $1.1 trillion in annual revenue by 2040.
Demand for the new shares was so high that the applications had to be scaled back with the IPO raising £150m of fresh capital. There was also a further £28.4m invested via direct subscriptions in connection with the acquisition of the initial seed portfolio.
This consisted of stakes in 15 unlisted companies held in the Seraphim Space Fund. These included businesses such as: LeoLabs, which provides a visualisation of objects in low Earth orbit; AST SpaceMobile that fills in the gaps for existing mobile phone networks; and Altitude Angel, an aviation company that develops unmanned aircraft.
Four other stakes in unlisted companies worth around £70m were also due to be acquired from the same source by the end of the year. This process is now well underway with the investments in Spire Global, a pioneer of the nanosatellite market, and quantum encryption specialist Arqit now complete.
Once fully invested the new vehicle is expected to have a portfolio of 20-50 holdings spread across the US, UK and Europe. It will target NAV total returns of at least 20% per annum over the long-term.
Manager Seraphim Space has been operating in this area since 2016. It’s Seraphim Space Fund, the world’s first venture capital fund focused on new space technologies, is currently demonstrating an internal rate of return of 31%.
There is no doubt that the types of unlisted businesses that the investment trust is targeting have a lot of potential, but with such a concentrated portfolio the performance will depend entirely on whether the managers can identify which companies will go on and succeed.
Seraphim is currently trading on a massive estimated 28% premium to NAV, whereas many well-diversified global private equity investment trusts are available on wide double digit discounts and offer far better value.
Pub group J D Wetherspoon posted a record loss on Friday as the impact of the pandemic sent revenue spiralling and operating profits down 274%.
Revenue declined from £1,262m in 2020 to £772.6m in 2021.
“How much sympathy Wetherspoons will get for its complaints about the backdrop for the pubs industry is open to question as it serves up a set of results which look so unappetising most investors would probably want to send them back to the kitchen,’ said Russ Mould of AJ Bell.
Coronavirus meant Wetherspoons had to close their pubs for a large proportion of 2021FY and offer a limited service for most of the remainder of the year.
Tim Martin, the Chairman of J D Wetherspoon plc, said:
“Like-for-like sales in the first nine weeks of the current financial year were 8.7% lower than the same weeks in August and September 2019, before the pandemic started. In the last four weeks of the period, like-for-like sales were minus 6.4%.
“Excluding airport pubs, where like-for-like sales declined by 47.3%, like-for-like sales declined by 7.1% in the first nine weeks, and by 4.9% in the last four.
“Total employee numbers averaged 39,025 in the financial year, which increased to 42,003 for the week ending 20 September 2021.
“On average, Wetherspoon has received a reasonable number of applications for vacancies, as indicated by the increase in employee numbers, but some areas of the country, especially “staycation” areas in the West Country and elsewhere, have found it hard to attract staff.”
Martin went on to outline the severe impact the pandemic had on the business:
“During the pandemic, the pressure on pub managers and staff has been particularly acute, with a number of nationwide and regional pub closures and reopenings, often with very little warning, each of which resulted in different regulations.
“In the last year, the country moved, in succession, from lockdown, to ‘Eat Out to Help Out’, to curfews, to firebreaks, to pints with a substantial meal only, to different tier systems and to further lockdowns.
“Pub management teams, and indeed the entire hospitality industry, had an almost impossible burden in trying to communicate often conflicting and arbitrary rules to customers.
“One of the most surprising statistics has been the apparent low level of transmission of the virus in pubs.”
The FTSE 100 starting the week on the back foot as poor Asian data sapped optimism from the market.
“On Friday they fell off the wire as the FTSE 100 started October down more than 1%. This followed a weak session on Wall Street overnight and new factory data from Asia which only added to concern that economic growth is slowing,” said AJ Bell investment director Russ Mould.
The FTSE 100 was trading at 7,028, down 0.58% in mid morning trade of Friday.
Business Confidence drops
Business confidence in the UK added to the dour mood on Friday as the fuel crisis destroyed confidence and the fear of stagflation began to become visible in market participants,
“In the UK there has been an alarming drop in business confidence in the space of a month with the optimism engendered by the vaccine roll-out feeling like a distant memory amid a fuel, supply chain and cost of living crisis,’ Mould said.
“Markets must hope that the current shortage of everything from energy and skilled staff to shipping containers and raw materials eases before stagflation becomes too entrenched and/or central banks are forced into drastic action to tackle rising prices.”
FTSE 100 Top Risers and Fallers
Lloyds share were the top faller early on Friday as investors dumped shares in the lender which is closely aligned to the strength of the UK economy.
Evraz and Hikma accelerated losses through the session and were down 4% and 3.3% respectively.
JD Sports felt the heat of potential stagflation eroding consumer spending power and were over 2% weaker.
Travel shares gained later in the session as they rebounded from recent losses. IAG was the top riser going into the close on Friday, up 4.5%. InterContinental Hotels was up 3.5%.
Made Tech Group is a rapidly growing provider of digital transformation services to the UK public sector, including healthcare and defence. The growth has accelerated since management took the decision to focus on the public sector.
Overhead costs have increased ahead of revenues and Made Tech fell into loss last year. New services, such as cyber security, are being added and there have already been £11m worth of sales bookings gained in the quarter to August 2021.
There are currently four offices in England and Wales and Made Tech plans to open additional ones in Scotland, the Midlands and no...
