Adam Davidson, CEO of Trident Royalties, discusses offtake milestones and catalysts to boost FY24. Watch the video here.
one concern about the improving capabilities of artificial intelligence (ai) is the potential for an increased volume of cyber attacks. to counter this, companies will need better defences, which should benefit cyber security company darktrace.
a year ago, it released research showing a 135 per cent increase in novel “social engineering attacks”. in other words, fraudsters are using generative ai products to write emails convincing people to share information and passwords.
it is not that darktrace is in desperate need of a tailwind. for the six months to december, revenue grew 27 per cent year on year to $330mn (£261mn), and adjusted operating profit rose 119 per cent to $71mn, due to increased “scale efficiencies”.
the theory with software companies is their margins expand as they grow. research and development costs should not increase as quickly as revenue because the product only needs tweaks once someone has designed it. that does not always play out because other bureaucratic and marketing costs stack up. the 105 per cent annual recurring revenue retention rate shows customers are generally happy with darktrace’s product.
alongside all this seemingly positive news, chief strategy officer nicole eagan decided to sell £3.9mn of shares across two transactions on march 15 and 19. on march 20, chief executive poppy gustafsson sold a further £701,000.
darktrace’s share price is still fighting to recover from a sell-off at the end of 2021, running through 2022. a combination of peel hunt’s ‘sell note”, “channel stuffing” accusations by *****essential capital management and rising interest rates meant the share price dropped 70 per cent between mid-2021 and mid-2023.
however, since then, an ey audit has cleared darktrace of *****essential’s accusations, and a series of positive results have shown profitability improving. the share price has risen 70 per cent in the last year, which could explain why the directors have cashed out.
this month, the company confirmed the deal with swisscom to sell its italian business for €8bn (£6.87bn). it then confirmed it would be halving its dividend and starting a buyback programme while being able to pay off some of its over €50bn debt pile.
an optimist might point to its organic service revenue which grew 4.7 per cent in the last quarter. in particular, the company highlighted its vodacom businesses in africa, where service revenue rose 8.8 per cent, while its cloud and “internet of things” service grew over 20 per cent.
in a vote of confidence for the direction of the business, chief financial officer luka mucic has just purchased £1.69mn worth of shares in the company.
after almost a decade of underperforming, history suggests a turnaround is not imminent. but at least, trading at just 10 times its forward earnings, vodafone’s valuation may look like an opportunity to some investors.
directors’ deals, march 15-22 2024
I agree George, optimism is good, hope is good but reality is that the SP is exactly where it was 1 year ago.
Obviously a lot has changed in the meantime, but I would not pop any prosecco yet.
I've seen things with this SP that are hard to forget (LTH here like iParsnip and Spammy, and I'm still 49% under).
The data leak was priced in ages ago, no impact imho.
HOWEVER, this piece of news could be more impactful:
https://m.uk.investing.com/news/stock-market-news/eu-antitrust-regulators-resume-probe-into-iags-air-europa-deal-3397061
I really hope señor Gallego comes back to his senses after having cashed in and after all his several dom perignons and calls it quits on Air Europa. No need for that airline at all, Luis! Reduce debt, improve fleet and IT, and pay us divis!
This could be good...or go fantastically wrong. Another thing that can impact SP to worry about:
https://www.independent.co.uk/travel/news-and-advice/british-airways-robot-baggage-carriers-gatwick-airport-b2514274.html
I think Microsoft won't buy it, they've already seen what Dark is capable of as early as 2021, and they've been partners ever since if they wanted the stuff they would've bought it already. Instead, I think maybe Nvidia or Google might want to buy to enhance their portfolio and/or remove it from Bill's greasy hands.
I wish Nvidia or Intel or Arm or Microsoft was to buy this over. Actually any other serious AI company should take DT out of LSE, out of ML, out of UK. If that were to happen we could be sitting on a mutibagger lottery ticket.
I think there's definitely a correlation. These are all AI stocks. Nvidia is clearly driving the AI development and the market is likely using it as a proxy for all other AI ventures out there. I would be curious to know if DT uses any Nvidia chips (most certainly imho). Apart from this DT is paying double being in LSE, it's as if it has a 2x leverage but only downwards, so when US AI market is a bit down DT crashes, but when US is up DT only goes even. Good example today, NVDA +13%c, DT 2.5%..
And ML is defo not helping, he must have completely gone mad to hire BoJo's barrister, the US is not the UK, they won't take BS and move on. We'll see his and wife's shares hitting LSE very soon I think.
I'm a bit confused with all this optimism with the MDAX move and the SP future overall. Surely if German investors were happy with the move (and anything that has happened in the last 2 years really) the SP divergence should have already happened. They should've been filling their boots even more now that they know all trading will be done in Frankfurt.
I do agree LSE is a horrible market with appalling management, however, it seems to me that it's just TUI fallen out of interest both in DE and in UK, and TUIs board is simply milking the shareholders left locked in. Or maybe I don't understand dual listings.
Clank, iParsnip, I'm with you on this since last RI. I don't think the de-listing has anything to do with the drop. Anyone that has a big stake or is a proper investor or real LTHs won't have any issue and won't care.
I really regret every day I pressed the buy button during pandemic, and again for all the following RIs..
Today's drop shows this stock is day traders/MM paradise. To me, this clearly shows noone cares about fundamentals anymore. Whoever thinks this will reach TERP this year (or ever?) is sorely deluded.
IIs and proper investors moved on from travel industry stocks. These are now just cannon fodder for a quick buck intraday and pay weekend dinners. GLA
LTH here, I've seen it all in the last 4 years from TUI, high uncertainty and lots of SP swings but one thing has always been clear unfortunately: SP trend was always on the downside. Now, all things considered, I can see why there could be reasons to expect the SP to recover a bit and maybe even get to TERP (Q4 maybe?).
HOWEVER, I don't understand the optimism about the delisting. I do see why the news of this possibility put downward pressure once again but the EUR/GBP SPs were always moving in parallel. It's not like LSE was crashing all the time and FRA was going up. So a FRA-only listing won't change much.
With the FRA listing, EUR traders and GBP traders will still continue to buy/sell (mostly sell) as before. So I don't think LSE delisting is going to be a good reason to expect the SP to improve.
IF TUI is de-listed from LSE, it also means that Mordashov (still Tui’s largest single shareholder, with an almost 11 per cent stake) who has no access to his investment, would not be able to participate in any shareholder vote, and since he cannot sell or transfer his stake his DIs will then be effectively stripped and sold.
At least this is my understanding from the Circular, Page 17 "DI Holders who take no action": https://www.tuigroup.com/damfiles/default/tuigroup-15/en/investors/7_AGM/2024/TUI_FINAL_Circular_website.pdf-2562eea93ca1fefa435a3fe123381125.pdf
"In the event a DI Holder takes no action in respect of their DIs prior to the UK Delisting Date and so still holds
DIs as at the UK Delisting Date (the Residual DI Holders) then, in accordance with the terms of the Deed
Poll, the Depositary shall deliver the Shares to a Clearstream Account in the name of the DI Holder or its
German Share Depositary Account or its Custodian Account (but only to the extent the Depositary has
previously been notified of such details) or, in the event the DI Holder has not notified the Depositary of such
an account, shall cancel the remaining DIs and enact the sale of the Shares underlying any remaining DIs held
by the Residual DI Holders (the Residual Shares) in accordance with the terms of the Deed Poll."
Trying not to be the grinch here..BUT as of today's SP 613 we're still 40% down from Terp, in order to get there we need at least 15/20 days up 2% and little to no retracing..since TUI is great at retracing I feel like these 20 days will be more like 20 weeks..so yeah numbers are good, but LSE is what it is, and I feel we'll get to Terp maybe in May?
IParsnip while the meteoric rise of the last few days had me smile a little, I have to agree with you. My main thoughts were about the dread of seeing -20% in one day and the feeling of almost certainty of this happening.. it's a nice rise but like you, I assume from your posts in the last 2 years, I need it to be 13£ to get out clean and I don't see this ever happening. Damn me I should have ran away at the first RI!!!
Maybe I'm an idiotic optimist according to some here, but let me at least point you all out to TUI's graph.
I KNOW past performance is no guarantee of future results. But, the phrase contains a second meaning too: don't discount an investment simply because it's done poorly recently, it could also improve.
Open the charts and look at the past 2 years and then the past 5 years. You can clearly see that no doubt TUI was on the way down already after 2018 (trading at a whopping 70£ in Jul 2018, in today's money).
By Dec '19 TUI shares were around 45£ in today's money. Then, of course, Pandemic.
BUT then at the beginning of 2021 TUI shares were still above 10£ and going up as far as 20$ (Apr '21). That was still pandemic years! Then 3 RIs and a war after we are at 5£.
HOWEVER, in May 2023 the business is the same, the capacity is the same, the customers are the same, the debt is the same, and the economy is definitely better than it was in 2021.
Now why should I think TUI would not go back to at least 20£?
Mike Lynch, the billionaire founder of UK software group Autonomy, has used around $50mn worth of shares in British cyber security group Darktrace to pay for his bail as he awaits trial for fraud in the US.
The British entrepreneur, who was extradited to the US earlier this month, has posted around 14.6mn shares in Darktrace. This amount constitutes around half of his holding and is now frozen by the US court, according to court documents seen by the Financial Times. He also used around $15mn in cash as part of the bail agreement.
Lynch faces a criminal trial in California over 17 charges including conspiracy to commit wire fraud and securities fraud linked to the $11bn takeover of Autonomy by Hewlett Packard Enterprise in 2011. He faces a maximum 25 years in jail if found guilty of all charges. Lynch has always denied any wrongdoing and has entered a not guilty plea.
Darktrace has for years struggled to disentangle itself from ties with both Lynch and Autonomy, which have weighed on investor sentiment in the British start-up.
A number of hedge funds have accused the cyber security group of deploying similar sales tactics to Autonomy, though Darktrace has denied any irregularities in its accounting practices.
Darktrace’s chief executive Poppy Gustafsson was previously Autonomy’s corporate controller and helped set up Darktrace using funds in part from Lynch.
The criminal case Lynch faces centres on claims that the software group’s accounts were manipulated to flatter its book, leading HP to pay an extra $5bn when it acquired Autonomy in 2011. Autonomy’s former chief financial officer Sushovan Hussain was convicted in the US in 2018 and is serving five years in prison.
After almost four years fighting extradition in the British courts, Lynch lost his final appeal in April, arriving in California in early May on a commercial flight accompanied by US marshals.
A judge in California ordered Lynch to pay a $100mn bail bond secured by $50mn in cash or shares following a hearing shortly after his arrival in San Francisco. Lynch is currently under house arrest in California under 24-hour surveillance.
A spokesperson for Darktrace said: “Dr Lynch has no operational, advisory or any other role at Darktrace. His relationship with Darktrace is purely limited to his shareholding in the business. These are publicly traded shares and his decisions on how to use his shareholding remain his own.”
The 14.6mn shares that Lynch used as part of his bail, first reported by The Telegraph, constitute around half of his 4.5 per cent stake in the company, worth around $95mn.
Lynch’s wife, Angela Bacares, owns roughly 6.5 per cent of the company’s shares, worth around $136mn, but has gradually been sold down around half of her holding since late 2021.
The shares will be held by the US court until the court case ends.
Lynch’s spokesman did not respond to a request for comment.