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It appears a note by Goldman suggests that the earnings uplift to European defence companies is all but priced in. All major players are down today. Maybe, just maybe they suggested switching from the overpriced big caps into the neglected small cap players...one can hope!

As this article from the DT highlights, many companies feel that their true value and or potential is not being recognised on AIM or the other small companies market.

We are all blame our BoD for the appaling SP but to an extent, the wider issue of the UK investment market as a whole is to blame.

Overseas takeovers of UK companies continues as does share buybacks. I cannot believe I am writing this after 14 years of conservative government. They have always professed to be pro business.

Unless something is done soon, the City could rapidly decline even further with significant implications for the economy as a whole but more acutely, London. Property prices could collapse with unemployment and poverty resembling that of a mining town in the mid 80s...food for thought.

Let's get the finance deal done, secure the companies future, then build some bloody ships.

The sun has finally come out over old London town and the thermometer is at 18°...yeehaa.

To add to this sunny disposition, HW has significantly outperformed the FTSE this week by nearly 10%. I know this is a laughable gauge but it is still remarkable. Despite many of us expecting a sell off when no finance deal was announced, end Q1...we made it through the week with a smile and a lovely story about a steam ship company (who never intended to give a contract to a UK yard) lieing to the very people they are duty bound to serve...delicious.

Have a great weekend, 70° and wall to wall sunshine darn surf!

*their criteria...

I know this article is from Feb but it just goes to show the biggest global investor still thinks there is room for more to play in the defence sector. 2024 has seen a 30% gain in the European and FTSE indices, with a near 80% uplift over 12 months.

Yes, there criteria is minimum a 300m mkt cap but it will not stop the eventual rising tide lifting even the smallest tenders languishing on the shoreline. Stay with it. Northern hemisphere yards are more in demand than since the end of the cold war decades ago.

https://www.etfstrategy.com/blackrock-launches-global-aerospace-defence-etf-in-europe-10339/

Forestperson. In the last 2 years, oil has averaged this level, peaking around $135 and a low of $70. It is exactly where it was 12 months ago. More importantly, gas is 50% lower. Not sure what you are concerned about. Chill for easter

It is looking more than likely the ECB will bring forward the first rate cut from the highly forecast, June 6th meet. Comments from the French central bank gvnor yday highlighted the potential for economic decline being greater than the threat of a resurgent inflation.

This morning, French inflation data has backed that up. It came in at 2.4% vs 3.2% the previous month. It was much better than expectation of 2.8%. It is possible that Italian inflation, due later, will come in at 1.5%.

I expect the £/€ rate to improve as expectations for earlier ECB rate cuts than BoE take hold.

French manufacturing inflation was 0.1% mom and goes some way to confirm the picture that China is exporting industrial deflation at an increasing rate.

Falls in the pricing of Iron ore, steel and nickel confirm the collapsing real estate market there and the country is trying to hold up the economy with exports industries. China accounts for 31% of global supply but only 13% of consumption.

UK inflation is and will continue to fall and should sterling rise strongly in the next month, the BoE may consider bringing their first rate cut forward to May.

The umbilical between big caps and minnows always gets stretched in high interest rate environments and should this opinion become entrenched, I am hoping that the significant discount of small caps vs big caps starts to compress. We can only hope.

New 12 month high close and not far from an all time high.

Happy easter everyone and how many expected a positive HW close today after no finance announcement? Not many I guess so horraaahhh

If you listen to the presentation from the steam ship company at the recent council meeting, you will hear them say that they were boosting reserves (by not paying dividends) for several years previous, to save sufficient for the upfront payment. If they were of a mindset to build in the UK with government backed funding, that would not have been necessary. The whole island depends on the goodwill of the UK, its governance, financial backing and seasonal customers...why would the sole, monopoly transport provider not be happy to support, on whatever terms, the county it depends on. I know the steamship company is independent but is it? Without the UK it and the island would not survive...in my opinion.

LSE03. Liam speaks total sense and anyone outside the Westminster buble knows that. Both Labour and Conservatives have steered this ship onto the rocks and keep thinking the rocks will move. With an uncompetitive energy cost, UK industry has shed around 3 million manufacturing and engineering jobs. Leveling up will never be achieved with these numpties in power....Reform is needed!

JPMorgan have issued a note on the European defence sector. They see the re-arming process (following the 30 year cold war peace dividend) lasting for another decade. They expect further strong earnings growth, upside risk to consensus and the possibility for stocks to re-rate as the visability of earnings improves.

HW will be a lagard until revenues hit at least £300m in my opinion but at the current SP it is extreemly ignored with all the focus on large caps. The big guns will eventually train on the minnows as capacity constraints begin to bite. Hang on in there! Circle the wagons, Custer is coming!

This DT article lays bare the total incompetence of our political masters. A bunch on numpties from head to toe. It spells out what is needed to keep the lights on...including salt cavern storage.

Despite a broad indices decline today, the European defence sector racked up its tenth gain in a row (0.8%) to help bring up a 30% rise in 2024 to date.

Shares of Hensoldt, Dasssult, Rheinmetall and Leonardo were all positive.

The UK index has registered a similar showing. This sector performance will, at some point, float all boats as investors look for smaller players. It will not happen for HW until the sword of damacles (financing) is removed. Keep the faith and continue to load up, the direction of travel, of revenues, is good/stable. I am sure a whirly gig based order(s) will be forthcoming given the billions of investment in and around the British Isles.

Yes, that is a view through rose tinted glasses but to sell at a 10p is crazy as it just represents option money.

Romford. I guess i might get a bitnof flack now im outed. Third time in a general election.

Yougov announced ReformUK at 15% in the polls vs 19% for Conservatives.

Butonedup.

I promise not to turn this to a political LSE board but "disgraced politician"...Lee Anderson????

The disgrace is the two parties allowing the UK to wallow in the mire whilst he was the only MP with the cahonas to say what the majority of hard working people feel.

Finding. Your review is quite correct. The FTSE started the millennium around 7,000. The Dow at around 11,500. As we can see, the FTSE is still struggling to reach 8,000 whilst the Dow is nearing 40,000.

You are totally correct in your assumption that governance has a big part to play. The avalanche of EU beauracracy weighed heavily on corporate growth. Couple this with energy costs up to 300% higher...got to love Net Zero...and the disconnected from the can do, high investment US becomes clear.

UK institutions have avoided the UK like the plague since 1997 as we have been under the rule of anti-business, socalist governments.

To break free there is only one soloution and that is a total rejection of the two party politics which has led to voter apathy but total dominance by Labour and Consocalist...for me, Voting ReformUK is only route out of this mess. They offer a new, radical alternative to the dumb and dumber rule.

So looking around, what do i see?

The FTSE making new 10 month high not far from all time high but grossly undervalued vs international markets.

BaE, Bab willey and other defence companies hitting multi year or all time highs.

Energy prices down sharly from highs with gas and electricity due to fall next month.

Inflation to hit 2% by late May.

Interest rates likeky to fall several times in 2024.

Politicians under intense pressure to raise defence spending.

Green energy spending on the cusp of an explosion in investment.

Eight continuous years of negative investment flows into UK market...unlikely to have much more to run.

UK companies being picked off by international competitors due to value.

UK companies increasingly activating share buybacks.

Given the above, once the funding is agreed...10p will look like a strange level for HW to be trading at.

As a side issue, i am fully expecting the cost of funding to be 5% above whatever base rate you care to use. Anything below that would be a bonus.

Sometime, as long term shareholders, we blame the management for the poor performance of our investment. However, it can be a bigger picture of macro economics that is at play.

Scroll down on the article below and you will find a chart whicĥ shows how the UK market has seen 8 years of negative investment flows. This is unprecedented and explains why UK markets are languishing vs international competitors. This is a trend and at some point, will snap back. Given the election year and the liklihood of a Labour victory, i guess the most recent outflows are not surprising.

For now, hold fast and if you can afford it, keep loading up at these crazy discounts.

https://www.standard.co.uk/business/london-stock-exchange-shares-ftse-100-crisis-equities-fund-outflows-b1145526.html

Stock buybacks continue at pace this week. Companies such as BAT, Balfour Beatty, Vodafone and Bodycote have announced further action to return money to shareholders by buying stock in the market, thus enhancing the return on capital. The significant discount of UK markets (vs major global indices) ensures this trend is likely to continue as the spectre of lower interest rates and a rebound of economic fortunes looms.

If only HW had money to do likewise. Given the constant management talk of sunlit uplands, you would have thought the return on such a move would be far greater than throwing money at ferry wars...hey ho

They are putting in extra shifts, more resources...simples really, its not rocket science. They are throwing money at it.