Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
I neither agree nor disagree with this view:
Rolls-Royce still gaining altitude but dividend remains on hold
Rolls-Royce [LON:RR.] has full year numbers out today, noting underlying profits of £1.6bn and a margin of 10.3%, with guidance for 2024 being for further improvements to be seen. Critically however the dividend still remains on hold despite technical restrictions here now having been overcome. Given the strong run up in the share price of late, will this line end up dominating?
TATEMENT FROM JD.COM ("JD.COM")
RESPONSE TO RECENT PRESS SPECULATION
REGARDING CURRYS PLC ("CURRYS")
In response to the recent press speculation regarding Currys, JD.com confirms that it is in the very preliminary stages of evaluating a possible transaction that may include a cash offer for the entire issued share capital of Currys.
There can be no certainty that any offer will ultimately be made for Currys, nor as to the terms on which any offer might be made. A further announcement will be made if and when appropriate.
In accordance with Rule 2.6(a) of the Code, JD.com is required, by not later than 5.00 p.m. on 18 March 2024, to either announce a firm intention to make an offer for Currys in accordance with Rule 2.7 of the Code or announce that it does not intend to make an offer, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies. This deadline can be extended with the consent of the Takeover Panel in accordance with Rule 2.6(c) of the Code.
14 February 2024
Futura Medical plc
("Futura" or the "Company")
Eroxon to be available on prescription
as well as over the counter
Futura Medical plc (AIM: FUM), the consumer healthcare company behind Eroxon, that specialises in the development and global commercialisation of innovative and clinically proven sexual health products, confirms that its lead product, Eroxon, will be available on prescription in England and Wales for the treatment of Erectile Dysfunction ("ED") with effect from 1st March 2024. Eroxon is also available without a doctor's prescription having launched in the UK in March 2023.
James Barder, CEO of Futura, commented:
"This milestone builds on the strong progress the Company has made since the initial launch of Eroxon in the UK and is a further step in improving availability of Eroxon, providing access by prescription for men with ED as well as over the counter."
Just an extract:
In a recent interview with Proactive's Stephen Gunnion, Helium One Global Ltd (AIM:HE1, OTCQB:HLOGF)'s chief executive Lorna Blaisse shared an exciting breakthrough at the Itumbula West-1 well in Tanzania.
This discovery of helium concentrations up to 4.7% has not only propelled the company into the spotlight but also boosted its share price.
Blaisse detailed the strategic drilling adjustments that led to this discovery, emphasising the project's uniqueness due to its pure helium, nitrogen, and hydrogen mix.
Additionally, the unexpected find of a 2.2% hydrogen concentration adds another dimension of commercial potential, especially in today's clean energy-seeking world. Let's dive into the specifics of this groundbreaking discovery and its implications.
Stephen Gunnion (SG): Can you tell us about the significance of the helium concentration found at the Itumbula West-1 well?
Lorna Blaisse (LB): Absolutely, it's a game-changer. We're looking at helium concentrations up to 4.7%, which positions us as a world-class helium source. Considering commercial viability in other projects starts at just 0.5%, and ours is pure helium without hydrocarbons, it's a monumental achievement. This could potentially make us one of the largest primary helium sources globally.
As Jefferies analysts pointed out, Mondi’s factories are making “1.4 million tonnes” more containerboard — used for making boxes — than it needs. By contrast, Smith is “1.2 million tonnes short” of the stuff. On top, Mondi sees “substantial synergies”: €250 million to €400 million on Jefferies’ maths.
Still, much will now turn on valuations. Mondi is higher rated — a valuation of equity plus debt that’s 12.3 times forecast operating profits versus 9.5 times for Smith, on BNP Paribas estimates. And there’s no better time than merger negotiations for a board to try to close that gap. Potentially, though, there’s a deal to be done — at least on paper.
From The Times: Alistair Osborne Friday February 09 2024, 12.01am.
Will the £10 billion moment for the merger of Mondi and DS Smith finally arrive?
Who knows, but it does look closer?
No need here to think outside the box. Some potential tie-ups have long been on every bankers’ deal list. Take the packaging bunk-up between Mondi and DS Smith. It’s been talked about so much that one day it might actually happen.
Has that £10 billion moment finally arrived? Who yet knows but it’s already got further than a previous effort. Rewind to February 2021 and Mondi also made a merger overture to its rival, even if that one never got as far as stock exchange statements. Back then, it was the height of the Covid online shopping boom, with an incarcerated population maxing out on deliveries. Cardboard mountains sprouted up everywhere, not helped by the likes of Amazon packing a toothbrush or tin opener, say, in a box big enough to house a family of four.
Mondi’s brief courtship got nowhere, since when things have got rather more “challenging”, as both companies have been at pains to point out in their most recent updates — similarly moaning about the “macroeconomic environment” and “soft” or “weak” demand. Any merger now would look far more defensive. But Mondi’s timing has another cue: the retirement of Miles Roberts, the Smith boss of 13 years.
Yes, December’s exit news made it a long goodbye: he’s off “no later than November 30, 2025”. But his opposite number at Mondi, Andrew King, may not get a better chance in what’s already a consolidating sector. A bigger rival, Ireland’s Smurfit Kappa, is carting off America’s WestRock for $11 billion. And, as Barclays analysts put it, “paper and packaging is a very fragmented industry, especially in Europe, and consolidation is inevitable”.
Hence, maybe, Mondi’s latest takeover tilt: an effort Smith called “highly preliminary”. Mondi’s shooting for an “all-share” deal, saying it “represents an exciting opportunity to create an industry leader in European paper-based sustainable packaging solutions”, which could even be more exciting than it sounds. And, of course, the bit that’s missing is the terms. Smith shares rose 10 per cent to 308½p, valuing the group at £4.3 billion. Mondi slipped 3 per cent to £13.36 for a market cap of £5.9 billion.
No way would the Smith board, chaired by Geoff Drabble, roll over without a premium: a bigger share of any combo than implied by the duo’s market values, say, or even a bit of cash. But it can probably spot the strategic logic. Mondi’s factories are skewed to eastern Europe, Smith’s the west.
Mondi has a broader client base, also making bags for cement and printer paper, while Smith is more focused on consumer groups. And while both are big in corrugated packaging, Mondi is right that a deal could bring “a balanced paper position”.
As Jefferies
... there's no better place:
https://www.atlasobscura.com/places/the-rock-zanzibar
Not cross-ramping... just pointing out the attraction of helium and hydrogen:
08:42 02 Feb 2024 GMT
Mosman Oil and Gas Ltd - Mosman Oil and Gas raises £300,000, eyes helium and hydrogen programmes
Mosman Oil and Gas Ltd (AIM:MSMN) has bolstered its capital position, raising £300,000 before expenses through a placing of shares.
The junior energy firm, in a statement, said proceeds from this placing will support Mosman's helium and hydrogen exploration projects (EP145 and EPA155), in Australia.
It comes as a farm-out process is being progressed, and the company expects that ongoing costs at the projects will be reimbursed upon the completion of the agreement with incoming partner Greenvale Energy Ltd.
In the field, Mosman is planning a programme of seismic data acquisition slated for the first half of 2024, to identify well locations for programmes before the end of ‘Permit Year 3’, which is in August 2024.
A total of 2.4 billion new shares are being issued for 0.0125p.
https://www.proactiveinvestors.co.uk/companies/news/1040032/mosman-oil-and-gas-raises-300-000-eyes-helium-and-hydrogen-programmes-1040032.html
... and here's another view:
MONDAY 22 JANUARY 2024 12:20 PM:
An increasing number of companies listed on the London Stock Exchange are deciding they’re being undervalued and that their futures lie in private hands.
It’s a narrative that has developed over the last couple of years, fuelled by high-profile examples, and it’s a trend that appears to be showing no signs of slowing down.
But while some businesses are concluding that their shareholders will benefit from exiting the London Stock Exchange, others seem to have been finding the experience of being a listed company a more positive one.
Iconic manufacturer Rolls-Royce is undoubtedly one of the LSE’s major success stories over the last year or so.
With its shares now trading higher than 300p, the Derby-headquartered group has seen its valuation more than treble since January 2023 to now stand at over £25.6bn.
After hitting an all-time low of nearly 39p during the worst months of the Covid-19 pandemic, Rolls-Royce’s share price is now as high as it was during the middle of 2019.
While its full-year results for 2023 are yet to be revealed, in the first half of the year Rolls-Royce’s statutory revenue increased from £5.6bn to £7.5bn while it went from a pre-tax loss of £1.7bn to a profit of £1.4bn.
With its chief executive, who is behind a major new vision for the group, marking 12 months in the job, Rolls-Royce can certainly look back at 2023 as a job well done.
https://www.cityam.com/why-rolls-royce-has-bucked-london-stock-exchange-trend-after-value-more-than-trebles/
Not saying I agree... but:
Edward Sheldon, CFA
Tue, 23 January 2024 at 10:24 am
Most brokers are bullish on Rolls-Royce (LSE: RR.) shares right now. However, there’s one that isn’t. Berenberg downgraded the shares to a ‘sell’ rating last week, citing an unfavourable risk/reward setup.
Is selling the right move here? Let’s discuss.
Berenberg’s ‘sell’ rating
In its research note on Rolls-Royce, Berenberg made several interesting points. One was that, for Rolls-Royce to achieve its medium-term profit margin guidance, the company will need to simultaneously improve its pricing structure, reliability, and costs.
The issue here is that history suggests this is easier said than done. In the jet engine business, there can be lots of complications and setbacks.
For example, in November, Rolls-Royce received some criticism from Emirates in relation to the durability of its XWB-97 engines. As a result, the airline pushed back on Rolls-Royce’s maintenance pricing actions.
Another point made by Berenberg was that, after a 220% rally in the shares last year, the valuation discount to the company’s peers has narrowed significantly. This changes the risk/reward proposition.
Berenberg also noted that Rolls-Royce’s not-quite-so-new CEO Tufan Erginbilgiç is often presented in an ‘Elon Musk-like aura’. The broker said that, so far, it has been impressed by the CEO. However, it’s still early days in terms of the company’s transformation programme.
It’s worth pointing out that Berenberg’s share price target for Rolls-Royce is 240p (it lifted its target from 100p to 240p). That implies a potential fall of around 22%.
The right call?
Should investors listen to Berenberg and take their profits here? Well, I do think the broker makes some good points.
For Rolls-Royce to achieve its medium-term guidance (£2.8bn of operating profit versus £0.9bn in 2022), a lot will have to go right.
Meanwhile, after the huge jump in the share price in 2023, the valuation is now quite high. With analysts forecasting earnings per share of 12.6p for 2024, the forward-looking price-to-earnings (P/E) ratio is 24.5. That’s a tech stock-type earnings multiple.
Having said all that, Rolls-Royce shares are in a strong uptrend right now and sentiment is generally very bullish (some brokers have price targets near £4). So, there’s every chance they could continue rising.
What I’d do
I don’t own shares in the engine maker so I’m not in a position to sell them.
However, if I had bought them near their lows (i.e. 70p-£1) and I was sitting on a huge profit right now, I would probably take some money off the table at current levels. That’s generally the prudent thing to do after a massive share price rise.
I don’t think I’d sell my entire holding though. As I said, the trend here is definitely up right now. So, I want to be in a position to capitalise if the shares were to continue moving higher.
ht
The spot price for uranium, vital for fueling nuclear reactors, climbed to just over $103/pound on Monday, a level not seen since 2007, according to a chart from Numerco, a U.K.-based spot price for uranium.
That follows a roughly 90% price gain for the metal in 2023 in a market that has struggled to keep up with fresh demand.
https://www.morningstar.com/news/marketwatch/20240115172/the-squeeze-is-on-uranium-prices-hit-new-record-and-industry-watchers-see-further-to-go
From the armchair trader this morning:
Vistry Group [LON:VTY] has this morning published a full year trading update which is eye-catching amongst the sector owing to the very modest 5% reduction in completions that has been reported.
That’s ahead of guidance and as a result, adjusted pre-tax profits are expected to be in line with FY22’s numbers.
Management are lauding the company’s unique partnership model as being the winning formula here and forward sales are up 12.4% on the position of a year ago.
From a Zimbabwe newspaper this morning:
https://www.chronicle.co.zw/more-equipment-for-zulu-lithium/
Decade-long supply crunch fears grow as miners fail to access the metal quickly enough.
Already stretched uranium supplies are set to come under further pressure as dozens of new nuclear power plants come online globally.
Britain’s long-promised nuclear renaissance edged forward this month, as a crane swung a gigantic domed roof into place on a reactor building at Hinkley Point C in Somerset.
Emblazoned across it, a large banner declares: “Helping Britain achieve net zero”.
The site’s two reactors, which are expected to come online in 2027, are among 61 being built around the world, as more countries turn to nuclear to help cut their carbon emissions.
Yet with hundreds more planned, experts are now asking where all the uranium to fuel them will come from. There is a worrying lack of answers.
The uncertainty has driven the price of the radioactive metal to heights not seen in more than a decade.
https://www.telegraph.co.uk/business/2023/12/23/scramble-uranium-supplies-new-nuclear-silk-road/