Castings has released a trading update highlighting that output levels have, in general, been strong and inline with previous trajectory noted at the interim results in November. The Group indicates that results for FY21 are anticipated to be in line with market expectations. Following on from this, we believe upside risk to forecasts for FY22 could result in meaningful share price returns. Buy
Companies: Castings PLC
As expected, Castings' interim results highlighted a tough period with customer shutdowns and lockdown measures causing a 43% decline in revenue. Pent-up demand, a recovering trucking industry and strong new truck orders supports activity levels that have now reached 100% of pre-COVID levels and likely to exceed this in short order. Reinstate buy rating.
FY20 results – Well Positioned for Recovery
Year-end trading update
US & German manufacturing PMI hits lowest readings since 2009, UK manufacturing PMI heads below 50, BorgWarner expects material financial impact from customer production halts
Companies: AVON CGS HAYD HEAD HILS JHD RNO SCPA TWD TRI ZTF SOM GHH
Japanese PMI falls to lowest level since 2009, GE Aviation cuts 10% of workforce, Kone downgrades 2020 outlook
Companies: CGS HAYD HEAD HILS JHD OXIG RSW RNO TWD ZTF SOM GHH
Airbus secures €15bn credit facility but partially restarts production in France & Spain, Cummins suspends production and FY20 guidance as customers shutdown
Companies: CGS HAYD HEAD HTG OXIG RSW RNO ROR TWD TRI ZTF GHH
US building permits fall in Feb missing estimates, Scania to temporarily stop European production from next week, JCB halts production across 9 UK plants
Companies: CGS HEAD HILS JHD OXIG RSW SCPA TRI SOM GHH
German sentiment posts largest fall since 1991, US non-residential construction backlog rose in Jan, Daimler suspends European production for (initial) 2 weeks
Companies: CGS JHD OXIG RSW RNO SCPA TRI ZTF SOM GHH
New York Empire State Manufacturing Index falls to lowest reading since 2009, Boeing reports need for short-term funding as S&P downgrades rating to BBB
Companies: CGS HAYD HILS RNO SCPA TWD TRI ZTF SOM GHH
China's industrial production falls 13.5% y/y across Jan-Feb, UK manufacturing body expects 2.1% fall in output in 2020, Fiat Chrysler & Ferrari suspend production
Companies: CGS HAYD HEAD HTG OXIG RSW RNO SCPA TWD TRI ZTF GHH
UK GDP flat in Jan missing estimates, Japan's machine tool orders fall 30% y/y in Feb, Boeing falls 18% yesterday as draws down loan
Companies: CGS HAYD HEAD HILS HTG JHD OXIG RSW RNO ROR SCPA TWD TRI ZTF SOM GHH
German industrial production rose above expectations in Jan, Taiwan's exports rise in Feb but expect March decline, US machine tool orders fall 34% in Jan
Companies: CGS HAYD HEAD HILS HTG JHD OXIG RSW RNO SCPA TWD TRI ZTF GHH
Oil price falls 30%, Chinese exports fall 17% in Jan-Feb, Japan's Q4 GDP revised down to 7% fall, Continental forecasts 2020 decline in global car production
Companies: AVON CGS HAYD HEAD HILS HTG JHD OXIG RSW RNO ROR SCPA TRI ZTF SOM GHH
US durable goods falls less than expected in Jan, Japan and South Korean industrial production beat Jan estimates, CRH sees growth in US construction markets
Companies: AVON CGS HAYD HEAD HILS JHD OXIG RSW RNO SCPA TWD TRI ZTF SOM GHH
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Wickes to demerge from Travis Perkins and list on the Main Market. Expected 28 April. Advance Energy to complete an RTO on AIM indirectly acquiring up to 50% of Carnarvon Petroleum Timor which holds a 100 per cent. working interest and is the contractor under the Buffalo PSC, offshore Timor-Leste. Carnarvon Petroleum Timor is a subsidiary of ASX listed company, Carnarvon Petroleum Limited. The net proceeds of the Placing of approximately £20.01m (approximately US$27.51mm) will be used to fund the Acquisition. Due 19 April. NFT Investments plc is an investment company that specialises in non-fungible tokens (NFT). Has applied for admission to the Access segment of the AQSE Growth Market. No funds being raised. Due 16 April. Thor Explorations (TSXV:THX) seeking a secondary listing on AIM. The Company is targeting Admission during Q2 2021. Segun Lawson, President & CEO, stated: “Thor Explorations has advanced significantly, in both project development and capitalisation since the acquisition of Segilola in 2016. This year, the Company is well positioned to achieve two major milestones with the commencement of gold production at Segilola in Nigeria and a maiden resource at Douta in Senegal, as well as continuing to progress our highly prospective Nigerian exploration portfolio on the Ilesha Schist belt.” MAST Energy Developments (MED) is to IPO on the Standard List on 14th April 2021 under the ticker MAST. The company has raised £5m giving a market capitalisation on listing of c. £23m. MED is currently a 100% subsidiary company of AIM quoted, Kibo Energy*. MED was established to acquire and develop a portfolio of flexible power plants in the UK and become a multi-asset operator in the rapidly growing Reserve Power market. PensionBee has confirmed its intention to float on the High Growth Segment of the Main Market of LSE. The online pension provider had approximately 130,000 Active Customers and £1.5bn of assets under administration, in each case as at 28 February 2021. The Offer will comprise new Shares raising gross proceeds of approximately £55m and existing Shares to be sold by certain existing small minority shareholders of up to £5m. None of the founders, directors or members of senior management of PensionBee are selling any existing Shares. Expected in April. Imperial X (AQSE:IMPP) to join the Main Market (standard). It is also proposed that on Admission to the Official List, the Company will change its name to Cloudbreak Discovery Plc. With effect from Admission, Imperial X will hold equity positions and royalties in a variety of projects in the natural resources sector across multiple jurisdictions, primarily in the Americas and Africa. The Company is proposing to raise up to £1.5m by way of placing of new Ordinary Shares to support further prospect acquisitions. Current Mkt cap £4.7m Expected April 2021. Proposed move to AIM from the main market (standard) by Emmerson (EML.L) to provide Emmerson with access to a market and environment which is more suited, in the Board's view, to the Company's current size and strategy ahead of pivotal period for the Company with the commencement of mine construction at the Khemisset Potash Project expected by end of 2021. Follows recent award of Mining Licence granting Emmerson exclusive right to develop and mine the potash deposit and £5.5m raise to fund ongoing project development work. NextEnergy Renewables to launch an IPO on the Main Market. NREN is a differentiated renewables investment Company that aims to capture the most attractive private renewables and energy transition infrastructure investment opportunities globally. Targeting a £300m raise. NREN is targeting total returns of 9-11 per cent. per annum (net of all fees and expenses but including the Target Dividend and capital appreciation) . The Company's target dividend yield for the first full financial year to 31 December 2022 is 5.5 pence. Due Early March 2021. Digital 9 Infrastructure launch an initial public offering on the Specialist Fund Segment of the Main Market of the London Stock Exchange, by way of an initial placing and offer for subscription for a target issue £400m. Digital 9 Infrastructure plc is a newly established, externally managed investment trust. The Company will invest in a range of digital infrastructure assets which deliver a reliable, functioning internet. The IPO Prospectus is expected to be published in March 2021. Fix Price announces its intention to float on the Main Market of the London Stock Exchange. Fix Price is one of the leading variety value retailers globally and the largest in Russia, with more than 4,200 stores. Fix Price has revenues of RUB 190.1bn, RUB 142.9bn and RUB 108.7bn for 2020, 2019 and 2018, respectively. Adjusted EBITDA for the same years was RUB 36.8bn, RUB 27.2bn and RUB 14.2bn, respectively. The Offer would consist of an offering of GDRs by certain existing shareholders of the Company. Great Point Entertainment Income Trust PLC announced its prospectus has been approved by the FCA. Great Point Entertainment Income Trust PLC is a newly established, externally managed closed-ended investment company. The Company will provide project finance to content makers and commissioners in the global television and film production industry via senior loans secured against pre-sold intellectual property (IP) rights. GPEIT's investment objective is to provide Shareholders with dividend income and modest capital growth through exposure to media content finance.
Companies: GOOD FIH SRT NFC RFX ARCM ACRL EQLS ORPH VRS
NFT Investments plc is an investment company that specialises in non-fungible tokens (NFT). Has applied for admission to the Access segment of the AQSE Growth Market. No funds being raised. Due 16 April. Thor Explorations (TSXV:THX) seeking a secondary listing on AIM. The Company is targeting Admission during Q2 2021. Segun Lawson, President & CEO, stated: “Thor Explorations has advanced significantly, in both project development and capitalisation since the acquisition of Segilola in 2016. This year, the Company is well positioned to achieve two major milestones with the commencement of gold production at Segilola in Nigeria and a maiden resource at Douta in Senegal, as well as continuing to progress our highly prospective Nigerian exploration portfolio on the Ilesha Schist belt.” MAST Energy Developments (MED) is to IPO on the Standard List on 14th April 2021 under the ticker MAST. The company has raised £5m giving a market capitalisation on listing of c. £23m. MED is currently a 100% subsidiary company of AIM quoted, Kibo Energy*. MED was established to acquire and develop a portfolio of flexible power plants in the UK and become a multi-asset operator in the rapidly growing Reserve Power market. PensionBee has confirmed its intention to float on the High Growth Segment of the Main Market of LSE. The online pension provider had approximately 130,000 Active Customers and £1.5bn of assets under administration, in each case as at 28 February 2021. The Offer will comprise new Shares raising gross proceeds of approximately £55m and existing Shares to be sold by certain existing small minority shareholders of up to £5m. None of the founders, directors or members of senior management of PensionBee are selling any existing Shares. Expected in April. Imperial X (AQSE:IMPP) to join the Main Market (standard). It is also proposed that on Admission to the Official List, the Company will change its name to Cloudbreak Discovery Plc. With effect from Admission, Imperial X will hold equity positions and royalties in a variety of projects in the natural resources sector across multiple jurisdictions, primarily in the Americas and Africa. The Company is proposing to raise up to £1.5m by way of placing of new Ordinary Shares to support further prospect acquisitions. Current Mkt cap £4.7m Expected April 2021. Proposed move to AIM from the main market (standard) by Emmerson (EML.L) to provide Emmerson with access to a market and environment which is more suited, in the Board's view, to the Company's current size and strategy ahead of pivotal period for the Company with the commencement of mine construction at the Khemisset Potash Project expected by end of 2021. Follows recent award of Mining Licence granting Emmerson exclusive right to develop and mine the potash deposit and £5.5m raise to fund ongoing project development work. NextEnergy Renewables to launch an IPO on the Main Market. NREN is a differentiated renewables investment Company that aims to capture the most attractive private renewables and energy transition infrastructure investment opportunities globally. Targeting a £300m raise. NREN is targeting total returns of 9-11 per cent. per annum (net of all fees and expenses but including the Target Dividend and capital appreciation) . The Company's target dividend yield for the first full financial year to 31 December 2022 is 5.5 pence. Due Early March 2021. Digital 9 Infrastructure launch an initial public offering on the Specialist Fund Segment of the Main Market of the London Stock Exchange, by way of an initial placing and offer for subscription for a target issue £400m. Digital 9 Infrastructure plc is a newly established, externally managed investment trust. The Company will invest in a range of digital infrastructure assets which deliver a reliable, functioning internet. The IPO Prospectus is expected to be published in March 2021. Fix Price announces its intention to float on the Main Market of the London Stock Exchange. Fix Price is one of the leading variety value retailers globally and the largest in Russia, with more than 4,200 stores. Fix Price has revenues of RUB 190.1bn, RUB 142.9bn and RUB 108.7bn for 2020, 2019 and 2018, respectively. Adjusted EBITDA for the same years was RUB 36.8bn, RUB 27.2bn and RUB 14.2bn, respectively. The Offer would consist of an offering of GDRs by certain existing shareholders of the Company. Great Point Entertainment Income Trust PLC announced its prospectus has been approved by the FCA. Great Point Entertainment Income Trust PLC is a newly established, externally managed closed-ended investment company. The Company will provide project finance to content makers and commissioners in the global television and film production industry via senior loans secured against pre-sold intellectual property (IP) rights. GPEIT's investment objective is to provide Shareholders with dividend income and modest capital growth through exposure to media content finance.
Companies: RCN NCCL PRIM ORR AVCT TLY RENX CMCL ARO
The UK market showed a continued recovery in the first quarter albeit the indices are still well short of their all-time peaks, unlike many of their international peers. The FTSE 100 has risen by 1,186 points (21.4%) since the end of October and the FTSE 250 by 4,304 points (25.0%). The comparable performance since the start of the year is less spectacular- the FTSE 100 has risen by 253 points (3.9%) and the FTSE 250 has risen by 1,070 points (5.0%). The factors behind the sustained rally are familiar. The belief that the roll-out of the vaccine and some relaxation of lockdown limitations will lead to a significant economic recovery, compared to the collapse seen in the first half of 2020, due to lockdowns. Indeed, the recent economic picture is becoming more optimistic than previous expectations. According to the ONS, the economy grew a little more than initially estimated in Q4 last year. This means GDP for 2020 as a whole contracted by 9.8%, revised up marginally but still the worst contraction on record. Markets, in general, have focused upon the potential scope and extent of the recovery. The sectors and stocks that have outperformed have been seen as ‘recovery’ plays with a rotation from stocks seen as ‘lockdown’ winners into those set to benefit from the ‘unlocking of society’ and/or exposed to the consumer. We expect 2021 will continue to be a “stock-picker’s” market. The sharp increase in the household savings ratio in Q4 highlights the scope for a recovery driven by expenditure. As further lockdown limitations are lifted, evidence of this growth will help to underpin the more optimistic outlook for Q2 and beyond.
Companies: AMYT ARBB BPC BAG BVC BEG BONH BLVN BRSD CML CWK CRPR EYE ECHO FDM FAR FA/ GPH GSF HUW INSE JDG KAPE KP2 MACF MPAC MNZS NESF NBI OTMP OBD PREM QFI RUA SCS SEN SOS SUR TON TOU TXP TGL TCN UEM VLS WYN
Pantheon Resources indicated that the Talitha #A well is flaring gas from the Kuparuk section as the well cleans up. Key operational data: That gas is being flared is highly encouraging. This is an early indicator that the well's completion operations have been effective. It is also absolutely necessary for these wells to have a high gas content because it is the expansion of gas that will provide energy that will push the oil up the wellbore to the surface. It also critical that the gas has sufficient energy to “clear up” the well, which involves clearing it of relatively heavy drilling and completion fluid. The previously announced over pressure of the Kuparuk formation created drilling challenges because it was unexpected. However, that overpressure will, in our opinion, favour well productivity.
Companies: Pantheon Resources plc
Companies: ARG ADT UKOG PHAR UNG CYAN FA/ SNX VRE SHED
2020 brought a new chapter in the corporate development of Shanta in our view. The company still produced 83koz at an AISC of US$841/oz as per guidance for the third year in the row and did it with a best-in-class safety record. However, they also resolved for growth through the commissioning of Singida and the delivery of a scoping study for the West Kenya Project. They added 14% to the capacity of the flagship NLGM operations (which we believe the market has missed), restored the balance sheet and removed the hedge book. Finally, a maiden dividend was declared. We prosecute the investment case whilst adjusting our forecasts to take into account company guidance and a gold price forecast of $1750/oz. We maintain our Target Price at 30p.
Companies: Shanta Gold Limited
EQTEC provides engineering and design services and sells its EQTEC Advanced Gasification Technology to waste-to-value operators and enterprise partners. Its solutions are proven to process a wide variety of feedstock, including municipal waste, agricultural waste, biomass and plastics, with no hazardous waste or toxic emissions. EQTEC’s solutions produce a pure high-quality synthesis gas (syngas), capable of being used for the widest applications in the creation of energy, hydrogen and biofuels The company works together with multiple parties involved in projects including developers, waste owners, building contractors and funders with a view to ultimately providing its advanced gasification technology, associated engineering & design services and O&M services.
Companies: EQTEC PLC
JOG has completed the acquisition of a 12% interest in UK licence P2170, announced in Q4. This transaction includes minimal upfront payment and raises JOG’s stake in the Verbier discovery and a number of high-impact exploration prospects to 100%, consolidating its Greater Buchan Area position and simplifying the recently launched farm-out process. This process should complete by year-end and is critical to unlocking the major upside potential that exists from the GBA development. No change to our 570p risked-NAV and price target.
Companies: Jersey Oil & Gas PLC
Today's news & views, plus announcements from AAL, BLND, JMAT, SGRO, DNLM, OSB, SNN, ASC, BGO, EMAN, PMI, SOLG
Companies: Bango plc (BGO:LON)SolGold Plc (SOLG:LON)
In the past few weeks, all the listed multi-national pharmaceutical companies have reported results for 2020, which has given us the opportunity to update our industry statistics and drug database. This report provides the first, snapshot publication of global and US rankings of the top 20 drug companies for 2020. Comparisons are made with historical data to show how different company strategies have evolved. In addition, summary analysis has been provided for the sales evolution of therapeutic biopharmaceutical drugs, which saw sales rise 5.6% to $245bn, representing 26% of the market, driven by antibody-derived drugs.
Companies: AVO ARIX BBGI CLIG DNL FLTA ICGT OCI PCA PIN PXC RECI STX SCE TRX VTA YEW
• 1Q21 production was 7.3 mbbl/d, in line with guidance of 7-8 mbbl/d, with production negatively impacted by downtime at the 4H well. A pump has been replaced at the 4H well that has since been producing ~2,300 bbl/d vs 1,872 bbl/dd prior to the pump failure. Production at the end of March had been restored to 8,275 bbl/d. • The 7D deviated well has already been spudded and is expected to take approximately 35 days to drill. • The company continues to expect production to reach 18-19 mbbl/d by YE21. • Following the repayment of US$7 mm payables since YE20 and US$16 mm to Petroperu to settle the derivative liability, the company has ~US$76 mm in cash (in line with our expectations). Of this amount, US$23 mm have been set aside for acquisitions (US$20 mm) and for the hedges that have been put in place (US$3 mm), leaving US$53 mm of “unrestricted liquidity”. • Payables at the end of March are US$37 mm. • PetroTal expects to receive ~US$36 mm from Petroperu as true-up payments for 2019/2020 sales. Delivery on plan is not yet reflected in the share price The company is delivering on its plans and the spudding of the first well of the 2021 programme should send a strong message that production materially increasing again. The shares continue to trade at less than half our estimate of the value of the company based on its 2P reserves only (£0.41 per share @ Brent of US$60/bbl flat). Our Core NAV represents 3.5x the current share price. The shares now trade at EV/DACF multiples of 2.0x in 2021 and 0.8x in 2022.
Companies: PetroTal Corp.
• FY21 production guidance has been set at 9.2-10.6 mboe/d (below our initial forecast of 11.5 mboe/d) as Pharos’ guidance assumes minimum investment in Egypt with no rig (US$8 mm vs our forecast of US$23 mm with one rig for six month) pending conclusion of the farm out. Pharos’ production guidance for Egypt is therefore only 4.0-4.4 mbbl/d vs our expectations of 5 mbbl/d. • The new fiscal terms in Egypt are expected to be ratified in 3Q21 and a farm in partner is expected to be announced in 2Q21 (with completion of the transaction in 2H21). These are key milestones triggering the return to drilling in Egypt and allowing production in Egypt to triple to 12 mbbl/d. We are very confident Pharos will secure a partner given the renewed interest of the industry for Egypt (Cairn being the latest entrant with the acquisition of onshore assets from Shell). • Once ratified the new terms are expected to be back dated to Nov. 2020, resulting in a material positive impact on Pharos balance sheet on ratification. The company has put in place a working capital facility with the National Bank of Egypt the size of which would immediately increase on ratification. At current oil price, we believe that Pharos would likely have enough financial resources to start a two rig drilling programme until the farm out transaction completes. • As we roll forward our DCF to YE21 and incorporate lower G&A (following salary reduction and ongoing head office headcount reduction), we are increasing our target price from £0.50 to £0.60 per share. More details on the FY20 results • The FY20 financials were as expected as production, cash and net debt had already been reported. • YE20 2P reserves and 2C resources were broadly in line with expectations with a large reserves increase in Egypt more than offsetting a minor reserves reduction in Vietnam on a redetermination of the share of the reserves located on Pharos’ licences (from 30.1% down to 29.6%). • Hedges for 39% of the 2H21 production have been put in place at US$50.8/bbl. • Overall the negative impact of lower production in Egypt and 2H21 hedges are offset by the very low capex. Deep value. Upside. Newsflow. Our Core NAV of £0.36 per share (£0.28 per share) reflects our view of what the company could fund with its own balance sheet once the new terms in Egypt are ratified. Securing a farm in partner would unlock £0.18 per share of value in Egypt, increasing recovery factor a further £0.11 per share. Including the contingent resources in Vietnam, our unrisked NAV for the company’s reserves plus contingent resources is >£0.80 per share. Any exploration success would be additive. Our ReNAV is £0.56 per share.
Companies: Pharos Energy PLC
Diversified Gas & Oil (DGO) has announced that the Company's bank lending group has completed the semi-annual redetermination of the Company's senior secured credit facility and reaffirmed the existing US$425m borrowing base with no changes to pricing, covenants or other material terms. Despite a challenging market and a backdrop of many borrowing base reductions, DGO has once again proved the strength of its production-led long-life, low-decline business model. Elsewhere, the US Energy Information Administration (EIA), in its Short-Term Energy Outlook has forecast Henry Hub natural gas prices to average US$3.04/MMBtu for full-year 2021, a 50% increase on 2020, with gas prices forecast to further increase to US$3.11/MMBtu in 2022. We update our price target to 129p and reiterate our BUY recommendation.
Companies: Diversified Gas & Oil PLC
The Budget offered a clear picture of the state of the economy. Put simply, the economy will be 3% smaller in three years’ time than it would have been without the impact of the pandemic. However, it is forecast to return to pre-pandemic levels by mid-2022, six months earlier than previously thought. The OBR forecasts that the UK economy will grow by 4.1% in 2021, (lower than the 5.5% outlined in November 2020). It has set its GDP forecasts in 2022, 2023 and 2024 at 7.3%, 1.7% and 1.6%. Positively, we have a continuation of substantial support for various parts of the economy – totalling £350bn. The market may focus on two elements. Under the so-called “super-deduction scheme, businesses which invest in the next two years will be able to claim 130% of the cost against their tax bill. This is significant but also significant is the proposed increase in corporation tax on profits from 19% to 25% in 2023. This has material consequences. Looking that far ahead is not straightforward. The increased tax charge will inevitably impact ratings. This may not be a consideration currently but may become one as more FY2023 estimates are introduced. Closer to home, we have continued to see most results/updates in line with expectations. An increasing number of companies have restored dividends. M&A across a broad range of sectors also looks set to continue.
Companies: AMYT ARBB BPC BVC BEG BRSD BWNG CBOX CTG CLG CML CWK EYE ECHO EML ESC FBD FA/ GSF HTWS INSE JDG MACF MTW NESF NAVF NSF NBI OTMP PCF PPC QFI SAVE SEN SNX TGL UTL VLS WYN
West Texas Intermediate (WTI) and Brent crude oil futures posted solid increases Thursday. WTI for May delivery gained $2.29 to settle at $61.45 per barrel. The benchmark traded within a range from $58.86 to $61.75. The June Brent futures price closed at $64.86 per barrel, reflecting a gain of $2.12. Oil futures received a boost from the OPEC+ group of major producers' decision to ease output from May to July. The May reformulated gasoline (RBOB) contract price added less than a penny to end the day at $2.02 per gallon. Henry Hub natural gas futures also rose Thursday, with the May contract settling at $2.64 – a three-cent increase from the previous day. Rigzone.
Companies: FO 88E DGOC EME GTC TRIN UOG
