Strong H1; an H2 repeat offers upgrade potential

Castings plc (CGS LN) - Interims show robust demand

Castings has released an exceptionally strong set of interims for the six months to the end of September. Revenue growth of 30% was driven largely by increases in price per tonne from the Foundry business due to cost surcharges and customers taking higher value products. As a result, operating profit increased 31% to £9.6m and we lift our FY24 estimates by 3.7% to £19.2m. We also factor in the impact of a new £17m planned production line that is expected to come on stream in FY26 to help meet fo

On track and mispriced

Castings plc (CGS LN) - Strong demand in H1

Castings has released a trading update ahead of its H1 24 interim results next month (10th November). It confirms the strong trading seen in the first four months of the year (AGM trading update) has continued through August and September and revenue is ahead YoY. Underlying demand for heavy trucks (c. 75% of Group revenue) remains at elevated levels and continues to be reflected in the schedules of OEM customers. In fact, Castings notes that current and forecast demand is in excess of capacity.

Value anomaly despite resilient trading

Right here, right now

Castings plc (CGS LN) - Strong demand dynamics continuing into H1 ‘24

Castings has released a brief trading update ahead of the AGM today. The strong demand from commercial vehicle customers reported for the year to March has, encouragingly, continued into the first four months of FY24.

Double-digit upgrades and special dividend

Castings plc (CGS LN) - Strong FY23 feeds into positive outlook for FY24

Castings has released its FY23 results confirming strong performance across the year with revenue increasing 35% to £201.0m and operating profit up 36% to £16.4m. The FY23 dividend of 17.4p plus a supplemental special of 15.0p equals a total of payout of 32.4p. Despatched weight was the highest since 2014 and the foundry operations increased output 6.6%. Pricing was firm across the Group as surcharges were implemented to offset input cost inflation, particularly energy. Importantly the Machining

Trading ahead of expectations

Castings plc (CGS LN) - Year-end trading update

Today’s FY23 trading update confirms a continuation of the strong performance achieved by Castings in HY23, despite broader macro-economic difficulties, due to the resilience of and strong end-customer demand in the HGV market. Zeus update headline forecasts for FY23, increasing revenue expectations by 11.1% to £200m and adjusted PBT by 8.4% to £16.8m. The strong operating environment has continued to support good trading in the first month of the new financial year and the order book remains at

i3 Energy (I3E LN) - Canada site visit review

Last week we attended a site visit to i3’s assets in central Alberta in Canada – the company’s largest producing area. We were left with a favourable impression of the magnitude of the company’s operations in the region, of the professional operational running of these, and of the overall level of opportunity in this well-established oil and gas province.

Reabold Resources - Payment received from Shell

Good news for Reabold, which is set to receive £5.2m of the second tranche payment from Shell imminently for the Victory gas field it acquired last year. The final £4.4m payment is due once the development approval for the field is received from the NSTA in the coming months. These funds will allow RBD to progress its two onshore gas developments in the UK and Italy and consider further distributions to shareholders. Partner funding of these projects remains an issue, but RBD’s risk/reward profi

Oil & Gas - Cavendish sector note

88 Energy, Falcon Oil & Gas, Trinity Exploration & Production, Plexus Holdings, Baron Oil, Harbour Energy, EnQuest, Capricorn Energy, Arrow Exploration, Southern Energy, Serinus Energy, SDX Energy, Panoro Energy, Eco (Atlantic) Oil & Gas, OKEA ASA, Equinor Source: FactSet, weekly change 27/11/23-1/12/23 Oil extended declines, closing out a sixth straight weekly drop, as the OPEC+ output cuts announced Thursday failed to dispel the market’s gloom over swelling global supplies. West Texas Intermed

Tower Resources (TRP LN) - Initiation Report (SPECULATIVE BUY, 0.12p/sh TP)

Cameroon: Ready for the Rig

Pan African Resources - Valuation up 22.2% with new gold price forecasts

On 22 November, Pan African Resources (PAF) announced that operations to date in FY24 had performed in line with, or better than, expected, with gold production for H124 anticipated to be in the range 94,000–98,000oz (cf 92,307oz in H123). As a result, it increased its production guidance for FY24 to 180,000–190,000oz, which caused us to increase our production estimate in turn by 1.9% (or 3,575oz) to 189,725oz. The change made only a modest difference to our EPS forecasts for FY24 (see Exhibit

Morning Note – 4 December 2023

New Debt Facility – Lowering TRR Cost of Capital

We have been roadshowing Trident Royalties all week during which time the company released an announcement that they have entered into a commitment letter with BMO and CIBC for a new $40m revolving credit facility (RCF), with the potential to increase the facility to $60m via an accordion feature. The proceeds from the $40m are going to be used to repay the existing secured debt facility of $40m with Macquire in Q1 next year.

Baron Oil - Chuditch PSC – Six-Month Extension

Baron has been granted a further six-month extension to the Chuditch PSC. The end of Contract Year Two will now be 18 June 2024, at which time Baron will need to make a decision on entering Year Three. In the Third and final phase of the PSC, a final investment decision (FID) will be required on an appraisal well targeting the Chuditch discovery (Chuditch-2). Baron continues to make good progress in its discussions with potential funding partners, having previously announced that it is in “advan

Hartshead Resources - Fully Funded Solution

Hartshead has secured a funding solution with partner Rockrose Energy to fund 100% of the Phase I development costs. Under the agreement, Hartshead has the option to exchange an additional 20% licence interest for an uncapped free carry, thereby covering the total cost of the Phase I development project (financing backstop). Importantly, Hartshead maintains at its election the option not to proceed with the RockRose financing solution, and introduce other financing solutions (eg project debt, pr

SP Angel Morning View: Ford takes 8.5% stake in Indonesian nickel project as Automakers swim upstream

Southern Energy - 3Q Results and Comprehensive Update Note

Southern Energy delivered solid 3Q results with the focus of attention now turned towards the completion of 4 drilled uncompleted wells (“DUCs”). We see our investment thesis for Southern Energy – premised on the scale, location, quality, deliverability, low-cost nature of the company's Gwinville gas field in Mississippi, USA – very much strengthening based on our structural commodity price outlook and our growing confidence in the highly prolific Gwinville gas field, sharpening our interest in

SP Angel Morning View: Gold powers through $2,100/oz on outlook for Fed rate cuts

UK-Listed Energy Sector: Review of the UK oil and gas landscape – why the country needs it, current policy and tax

The front of this note takes a look at the UK oil and gas sector, why domestic production is advantageous, what the main political parties think, and what could happen going forward. The latter part contains a review of the companies in our coverage – some that are UK centric, which give exposure to the note’s wider theme, and others that are focused elsewhere.

SP Angel Morning View: China lithium stocks rally on prospects for market rebound

Andrada Mining: Lab-scale Spodumene concentrate results further advance Andrada’s lithium strategy

Andrada Mining (“Andrada”; “ATM”) has produced its first laboratory scale high-grade spodumene concentrate from mineralised pegmatite at Lithium Ridge (ML133). The material was sourced from the drill core of three holes through two separate pegmatite ore bodies drilled earlier this year. The weighted average feed grade was 1.69% Li2O (15.2% Spodumene), with a 76% Li2O recovery, producing a 6.8% Li2O high-grade spodumene concentrate suitable for lithium carbonate production. A second drill progra