Strong underlying demand; on track for FY

Castings plc (CGS LN) - HGV market keeps on trucking

Castings interim results confirm revenues for H1 23 are up 22.7% YoY at £85.6m (H1 FY22: £69.7m) with PBT up 37.8% at £7.5m (H1 FY22: £5.4m). This comes from a resilience in the end customer market of commercial and heavy goods vehicles where demand has remained strong throughout 2022 across the major OEMs. This positive HGV backdrop and strong forward order books provides confidence in Castings achieving Zeus’s full year revenue estimates of £180.0m (FY22A: £148.6m) and PBT of £15.5m (FY22A: £1

Trading in line with strong demand outlook

Castings plc (CGS LN) - Commercial vehicle customer demand remains firm

Demand from Commercial vehicle customers (c. 70% of Group revenue) remains firm, continuing the trend reported in the AGM statement (16th August), with a more consistent conversion of forward schedules. With the positive demand dynamic having continued during H1 ’23, confidence can be taken that the business remains on track to hit the Zeus estimates of £180.0m (FY22A: £148.6m) revenue and £15.5m (FY22A: £12.1m) PBT in FY23. However, cost input inflation and, to a lesser extent, currency movemen

Castings Plc (CGS LN) - AGM Update: Strong trading maintained

Trading in the first four months of the year has remained strong with the improving levels of demand seen in Q4 FY22 being maintained into the early part of FY23. Commercial vehicle customers (c. 70% of revenue) have sustained the higher levels of demand with little disruption from the supply chain issues that had been experienced in FY21 and the early part of FY22, suggesting that these have eased. As indicated in the FY22 results back in June, input cost pressures have continued to rise but, t

Improving confidence triggers special dividend

Castings Plc (CGS LN) - Initiation of coverage: Strong recovery in FY22

FY22 results show a marked recovery on the pandemic impacted FY21 numbers with volumes broadly in line with pre-Covid levels, albeit c.5% below FY19 peak. Revenue increased 29.5% to £148.6m (FY21: £114.7m) with adj operating profit of £12.0m (FY21: £4.3m), a 180% increase yoy as the margin more than doubled to 8.1% (FY21: 3.7%) benefitting from the recovery in volume and with prices increasing 4.7%. Despite the strong recovery in FY22, several important KPIs remain below pre-pandemic levels with

FY22E beat

Strong OEM demand supports compelling value case

Castings* - Interim Results – OEM and Supply Chain Disruption

Castings has released FY22 interim results which highlight the supply chain challenges in the truck OEM industry. The headlines figures and trends had already been flagged at the recent trading update so the trends are largely known. The Group is well positioned to grow earnings as supply chain conditions normalise. Buy

Castings* - Interim Trading Update – OEM Disruption

Castings has released an interim trading update that chimes with much of the recent sector news flow in that supply chain challenges and resulting truck OEM disruption are impacting the sales and margins at Castings. Industry demand remains high which cushions part of the story but near term issues are likely to impact trading through the second half.

Castings* - AGM Trading Update

Castings has issued an AGM trading update indicating that output in the first fiscal quarter was in line with pre-COVID years but with some scheduling and supply chain challenges which create some uncertainty through the balance of the year. However, truck demand has proven very strong and we anticipate high production at the Group should support growth and margins through FY22. Buy.

LIBERUM: Sylvania Platinum* - Raising guidance on strong half

Alkaid #2 test - follow-on potential project economics

Chariot Limited (AIM: CHAR): Bringing water desalination capabilities in house is important for the green hydrogen business

• Chariot is acquiring ENEO Water PTE for US$0.5-1.0 mm in Chariot shares. • ENEO utilises an efficient, modular and scalable reverse osmosis technology that can be entirely powered by solar energy to produce desalinated water. ENEO is developing a proof of concept at a windfarm on the Red Sea in Djibouti that is under construction and is intended to provide local communities with access to potable water for the next 20 years. The capex of the project is very small (a few hundred thousand US dol

SHORE CAPITAL - SAVANNAH ENERGY+ (SAVE, Suspended, Under Review) - Sylvie Rucar appointed as independent NED

Cadence Minerals - Developing Amapá iron ore mine and strategic new technology metal interests

Cadence has secured a 30% stake in the Amapá iron ore mine, Brazil, for $9.3m, a project valued by Anglo American in 2012 at over $600m. With established infrastructure, Amapá is a company-making opportunity. Cadence has recently published a PFS on Amapá, which highlights the obvious value in the project. With equity interests in European Metals Holdings (Cinovec lithium-tin project in Czech Republic), Hastings Technology Metals (Yangibana REE project in Australia) and Evergreen (lithi

Union Jack Oil (UJO LN) - Wressle update

Ongoing strong production from Wressle. Union Jack has released an update on revenues from its Wressle field (Union Jack 40%). Wressle has now achieved US$13m of cumulative net revenues from the field since mid-August 2021, from US$12m as of early January 2023. The field continues to produce under natural flow and with zero water cut (most recently reported at a gross rate of 825-850bbl/d, and with current production described as being at “record” levels). These Wressle revenues continue to help

FY22 Trading Update

Diversified Energy has released a positive FY22 Trading Update and we increase our EBITDA forecasts by +3% in FY22 and 2023.

Record production achieved in trying circumstances

Higher production at Vanchem coupled with another stable year at Vametco saw Bushveld deliver record annual vanadium production in 2022, though the adverse impact of electricity load shedding on the ramp up of Vanchem meant that the full-year total narrowly missed the group’s target. We still anticipate a return to positive EBITDA for 2022 and further earnings growth this year as Vanchem continues to gather pace. However, evidence of positive progress on load-shedding mitigation measures at Vanc

Arrow Exploration Corp. (AIM: AXL): High 3Q22 production in Colombia and US$4 mm free cashflow

• 3Q23 production of 1,503 boe/d was above our expectation of 1,262 boe/d on higher production at Rio Cravo (860 bbbl/d) and Ombu (215 bbl/d). This suggests a continued strong performance of the RCE-2 well. • Corporate production in November has ranged between 1,900-2,000 boe/d with current net production of 887 bbl/d at Rio Cravo (up from 760 bbl/d on 01 November). While the RCS-1 well is still cleaning up, the newly perforated C-7A zone is already adding 165 bbl/d net (330 bbl/d gross) produc

Enhancing Ewoyaa: to extend or expand?

This Week's AIM Highlights 20th January 2023

LIBERUM: Atlantic Lithium* - Latest resources in-line; valuation upped to 57p on higher throughput

IOG (IOG LN) - Trading update

IOG has released a trading update. This reports that operations at the Southwark A2 development well continue, with new plans to isolate three of the six stimulated zones, reperforate two other zones and then flow test the well again. IOG reported last week a disappointing 4.2mmcf/d maximum gross flow rate achieved at A2, and we would hope to see a much higher number, perhaps over 20mmcf/d based on original expectations, once the remediations are in place. The experience on A2 is also being used

IOG (IOG LN) - Southwark update – flow rate not improved

Flow rates from Southwark A2 continue to be poor. IOG has released an update on activities at its Southwark A2 well. In mid-January, IOG reported initial stabilised flow test rates from its Southwark A2 well of 4.2mmcf/d gross of gas and also 1.6mbbld/d of water. This gas rate was not likely to be commercial. The company has since progressed a programme to isolate several of the producing zones, aiming to achieve higher gas flow rates and lower water cut. This programme has now been completed, a

Tungsten West: Revised plan to optimise Hemerdon for higher energy prices & other costs - amended note

Tungsten West (“TUN”) has published an updated Bankable Feasibility Study (“BFS”) post its re-optimisation of the Hemerdon project in light of higher energy prices and other key input costs. The revised plan reduces capex by ~£20m and cuts energy intensity, trading this off against slightly reduced tungsten output and lower payabilities. The completion of the BFS is a key milestone on the path to securing project financing. Site refurbishment and staff recruitment activities have continued since