21/06/2023

Chill Brands (CHLL), the consumer packaged-goods distribution company, provided an update on the expansion of its Chill.com product marketplace. The company said it was delighted to be working with Valet Seller and is very enthusiastic about the future of the Chill.com marketplace. This partnership will enable it to bring a wealth of exciting new brands to our customers while enhancing the site’s commercial prospects. It is steadily putting in place the infrastructure that will better enable Chill Brands to generate revenues and deliver value for shareholders. The company will benefit from a diversified business model that encompasses sales of our own-brand CBD-based items and nicotine-free vapour products along with commissions earned from the sale of products from third-party brands.

Comment: Very interesting that the share price of Chill has been a firm market over the past couple of sessions, ahead of today’s news. It can now be seen how Chill Brands is now all set up for sales, with the added bonus being that the diversified offering de-risks the company in terms of what products fly off the shelves and what do not.

Hydrogen Utopia International (HUI), a company specialising in turning non-recyclable mixed waste plastic into hydrogen and other carbon-free fuels, announced that the company has signed conditional heads of terms to acquire a substantial minority stake in Carbon Capture and Sequestration Limited,  a company which it is anticipated will generate substantial future cashflows for its shareholders and which HUI would utilise in developing its pipeline of waste plastic to hydrogen plants. On 31 May 2023, CCS agreed to acquire 95% of a company, licensed and operating as a medical cannabis cultivator incorporated in and with operations in North Macedonia. The total consideration payable for the Medical Cannabis Cultivator by CCS is €9.5m, payable in instalments of between €1m – €2m on agreed dates between June 2023 and December 2029. HUI said it believed this option to acquire a major stake in the CCS business will give us access to much needed cashflow. This deal should help HUI move forward with its goal of building the first plastic to hydrogen facility.

Comment: This pivoting for HUI effectively de-risks the company as far as cashflow going forward, and allows it to deliver the rollout of waste plastic to hydrogen plants, with less reliance on third party funding. And of course, it has exposure to the burgeoning medical cannabis space, which should grow rapidly over the next few years.

CleanTech Lithium (CTL), an exploration and development company, announced the appointment of an Australian-based Independent Non-Executive Director and other changes to the Board and Board Committees structures with immediate effect. The company said that as it prepares to list on the ASX, having a presence in Australia will bring new opportunities for CTL as it advances towards commercial production.

Comment: A lot hinges on the forthcoming ASX listing for CTL, especially given the way that the Aussies are far more geared up to buying into companies like CTL, than their London counterparts. The board changes underline how aware CTL is in terms of getting the move down under right.

THG (THG) updated on trading ahead of its AGM later today. The Group said it has had a strong Q2 2023, with a continued successful focus on profitability and cash generation. A significant increase in H1 2023 profitability is expected, with Adjusted EBITDA in the range of £44m to £47m (H1 2022: £32.3m), and continuing Adjusted EBITDA in the range of £47m to £50m. Guidance for FY 2023 remains unchanged as disclosed at the time of the FY 2022 results in April, with Adjusted EBITDA expected to be in line with the company consensus. Free cash flow performance for the 12 months to 30 June 2023 is ahead of expectations and anticipated to be a c. £40m outflow. The Group remains well on track to deliver free cash flow neutrality for the full year.

Comment: “Cash flow neutrality” is certainly an interesting and perhaps novel concept. As far as the rest of THG’s outlook is concerned, the hope would be that the prediction of a strong H1 2023 performance, pushes the shares back towards the top of its recent volatile range.

Avacta Group (AVCT), a life sciences company, announced that the fifth dose escalation cohort in the ALS-6000-101 dose escalation Phase 1 clinical trial to evaluate the safety and tolerability of AVA6000 has been completed successfully. The data continue to show a very favourable safety profile for the tumour targeted chemotherapy and several patients in cohort 5 and earlier cohorts remain on treatment as their disease has not progressed. The company said the continued positive safety profile of AVA6000 at these dose levels compared with standard doxorubicin is remarkable.

Comment: It is noticeable that the bears have been huffing and puffing trying to get the AVCT share price down, especially as Monday did not deliver a fundraise. However, what is perhaps more important is the way that the company continues to advance on an operational basis, something which ultimately should see off the shorters.

Cerillion (CER), the billing, charging and customer relationship management software solutions provider, announced that it has signed a major new six-year contract worth a total of £15.1 million. All of the revenue is subscription income that will be recognised over the term of the contract, and will support current consensus market forecasts. CER said it was delighted to further extend and broaden its relationship with this customer. It is another demonstration of the clear operational and commercial benefits of its solutions.

Comment: Well done to Cerillion with its chunky contract, something which underlines how much of a dark horse the company is. The stock has been up strongly in each of the past three years, and one would expect a similar strong result for 2023.

Power Metal Resources (POW) the London listed exploration company announced key developments to its uranium business, which covers a combined 1,005km2 across 17 properties in and around the prolific Athabasca Basin in Saskatchewan, Canada. The company said it was pleased to be able to make this important announcement to demonstrate the value it expects to deliver to shareholders through the exploration of its uranium portfolio. This will be the company’s largest uranium focussed exploration programme to date, coming at a time when investor attention is increasingly focussed on the commodity and its upside potential as a clean energy alternative fuel.

Comment: Uranium really should be the 21^st century fuel, especially given the energy wars / blackmail that we have seen since the war in Ukraine began. Shares of POW have been in recovery mode over the next month, and the announcement today should only underpin this process.