Trifast - Q3 trading update: poor December lowers FY24 expectations

The Q3 update highlights December was significantly affected by lower volumes at its Asian operations and global distribution sales channel. Both had been expected to recover. Markets generally continue to give low visibility and volatile demand in a number of end markets, with recent geopolitical events also a contributory factor. As a result, FY24 is now expected to be significantly below previous expectations, with revenues of £230m and EBIT margin of c5%. We cut FY24E EPS by 38% to 3.7p and

Morning Note – 22 January 2024

Trifast (TRI LN) - Market demand weakens in December

Trifast has released a trading update indicating that demand in Asia and global distribution sales channels has been weak in December leading to a decline in volumes. Zeus revise FY24 forecasts in line with guidance provided in the statement, with revenue of £230.0m (prev. £253.3m), EBIT of £11.5m (prev. £16.0m) leading to PBT of £6.0m (prev. £11.2m). FY25 and FY26 estimates are reduced accordingly (full details of changes to Zeus forecasts can been seen on page 2). Despite the weakening in the

Morning Note – 21 November 2023

Trifast - Interims – margin gains on track but with higher interest costs

Interims highlight a resilient performance in challenging market conditions. Some decent margin gains have already been delivered from internal actions, with more expected. Adj PBT has been affected by higher interest charges. A strong focus on cash generation has resulted in a £10.2m reduction in net debt to £27.8m, driven by a reduction in working capital. We reduce FY24E EPS by 12.3% and FY25E by 20%. We shave our TP to 100p, offering significant upside from currently attractive levels, being

Trifast (TRI LN) - Interim results show strategic progress

Trifast has announced an encouraging set of interim results both operationally and financially. The operational improvements being made under the new management team are starting to be reflected in the financial performance of the business, particularly in terms of working capital. Despite the operating environment remaining challenging, it is on course to broadly hit ZC FY24 profit estimates. Importantly the working capital commitment of the business continues to fall improving cash generation

Morning Note – 24 October 2023

Trifast (TRI LN) - Trading in line, strong progress on its strategic initiatives

Trifast has released a trading update ahead of its interim results next month (21st November) confirming trading remains in line with management expectations despite a tough macroeconomic backdrop. Revenue for H1 is down c. 2% yoy (AER) as strength in its Light and Heavy vehicle end markets (c. 35% of FY23 revenue) was more than offset by weakness in its Health & Home and Distribution channels (c. 35% of FY23 revenue). Importantly, however, the Group’s strategic initiatives are bearing fruit as

Morning Note – 11 July 2023

Trifast - FY23 results in line: a refined strategy to focus on delivery

FY23 results were in line with reduced forecasts, with the group experiencing a tough year. The new management team have got to grips with several initiatives to refine strategy and sharpen focus on profit and cash generation. The pricing reviews have started to recoup inflationary pressures and have restored gross margins in H2 to more normal levels. Inventories have been cut by £10m in H2, while the UK restructuring should yield annualised cost savings of £5m. The new year has started well, su

Trifast (TRI LN) - Fundamentally undervalued

In this note Zeus look at the current valuation of the Trifast business and the potential to unlock equity value in a relatively short space of time. On this basis, Trifast shares appear fundamentally undervalued. We derive a price target of 102p (+33% upside) based solely on returning the working capital commitment of the business back in line with historic levels. Factoring in a conservative DCF and peer group analysis gives an average valuation of 103p. Our medium term, Blue Sky analysis, ass

Morning Note – 26 April 2023

NextSource Materials - Initiation

NextSource is uniquely positioned to build a leading vertically integrated position, ex China, in the supply of Lithium-ion battery anode material which is essential for the Energy Transition. The company is commissioning phase 1 of its world-class Molo graphite mine in Madagascar and is in the final permitting process for its first Battery Anode Facility (BAF) to be located in Mauritius. The company is backed by Vision Blue, established by Sir Mick Davis, former CEO of Xstrata. On our calculat

Falcon Oil & Gas - Funding a Multi TCF Resource

Falcon has raised gross proceeds of US$8.9m via a placing and subscription at a price of 6p/share and the granting of overriding royalty interests. The net proceeds, together with Falcon’s existing cash resources (cUS$4.3m) will be used to fund Falcon’s net share of 2024 capex (cUS$9m) associated with the 40MMscf/d Shenandoah South Pilot Project, including the drilling, stimulation, and flow testing of two 10,000ft horizontal wells. The funds will also enable Falcon to fund its share of the cost

Initiation of Coverage - Critical raw materials for Europe’s green transition

Beowulf is advancing a portfolio of projects in Europe focussed on metals and minerals that are critical to enabling the continent’s transition to a greener economy. Awareness of Europe’s over-reliance on external supply sources for such vital raw materials is driving growing political support for ‘home-grown’ projects. Beowulf is strategically positioned to leverage this fast-evolving trend – its Kallak project in Sweden holds potential to deliver high-quality iron ore to lower the carbon-inten

Morning Note – 22 April 2024

Sintana Energy Inc. (TSX-V: SEI): Constrained test rate of 14 mboe/d at Mopane-1X. 10+ bn boe in place confirmed.

• Multiple tests over multiple zones in multiple horizons were run at the Mopane-1X exploration well. The flows achieved during the well test reached the maximum allowed limits of 14 mboe/d. The flow rate was constrained by the size of the available surface facilities. • The AVO-1 horizon encountered at Mopane-1X and Mopane-2X are in the same pressure regime, suggesting that the entire area (8 km diameter) between the two wells is connected. Overall, in the Mopane complex alone, and before dril

Touchstone Exploration+ (TXP, House Stock at 44p) - Closing of expanded bank facilities

LIBERUM: Ferrexpo: Production triples

Jubilee Metals - Operational Update Q3 FY2024

Jubilee today reports its Q3 and third quarter operational results from its expanding operations in Zambia (copper) and South Africa (chrome and PGM). South Africa is on a growth trajectory with record chrome production of 409kt in the quarter (Q2 FY2024 381kt) and a monthly record in March of 145kt and production YTD of 1.13Mt (0.94Mt). Jubilee is well underway to its annual target capacity of 2,1Mt/yr especially with the new 300kt/yr chrome plant at Thutse expected to be operational in August

SP Angel Morning View: Copper prices hit $9,700/t as China smelts concentrates for zero charge Tc/Rc

Alien Metals - Hancock Project, Mining Lease Granted

Alien today reports intraday that the Western Australian Government has granted a mining licence for the Hancock iron ore project for a 21-year term. The granting of the mining licence is the latest milestone delivered by Alien as it advances the project towards development and production.

SP Angel Morning View: Gold prices slide following profit taking as traders look to US data

Transition to Mining Operator

Adriatic Metals has announced their transition from mining contractor to mining operator at Rupice. The transition is expected to continue to benefit the development and productivity rates being achieved at Rupice mine, as well as result in cost efficiencies and improved HSE standards. The company has also announced a short-term loan facility with Orion of $25m, that is drawable at the option of the company in Q3/4 this year.

I3 Energy (I3E LN) - Canada royalty assets sale

I3 has announced the sale of the majority of its royalty interests in Canada, for US$24.8m cash. This allows the company to fully repay amounts drawn on its debt facility and create a working capital surplus, giving I3 significant additional funding flexibility going forward

Jersey Oil & Gas (JOG LN) - Share price fall creates opportunity

Since November, the JOG share price has moderated from a high of 250p to current levels of 149.5p. This is despite JOG having now made significant progress towards FID on its c.70mmboe Buchan project, with FID upcoming later this year. In our view this share price move is unjustified, with current levels further enhancing the value on offer, and making an attractive opportunity for investors.

Trinity Exploration and Production - Reserves Reduction but Solid Core Business

Trinity has announced a c28% reduction to its 2P reserves following a YE23 review. Despite the decrease in the Company’s 2P reserves, Trinity’s core business remains robust, with a reserves/production ratio of >12.5 years at YE23. Whilst there is significant potential for growth within the current portfolio, this will be difficult to unlock from the current balance sheet and we believe further financing will be required. We update our target price to 76p (from 202p), a c85% premium to the curren