London Stock Exchange Group (LSEG) announced a placing and directed buyback in respect of approximately 21.5 million shares. Led by a consortium of Blackrock, GIC, Thomson Reuters, Canada Pension Plan and a group referred to as York Entities the 1.4 bn pounds trade at 89.90 per share represents one of the largest market offerings in recent memory. Further to the announcement of its preliminary results for the year ended 31 December 2023, including its plan to execute up to £1 billion of share buybacks during 2024, LSEG has separately made an off-market purchase of, in aggregate, approximately 5.6 million Voting Shares and limited-voting ordinary shares (“Limited-voting Ordinary Shares”) in the capital of LSEG (the “Off-market Purchase”). This Off-market Purchase has been executed in accordance with the terms of the directed buyback contract entered into by LSEG and the Consortium in May 2023, as approved by the shareholders of LSEG at the annual general meeting held on 27 April 2023.LSEG is not party to the Placing and will not receive any proceeds from the Placing.
Commentary: After coming under scrutiny in recent years about directions of travel for the group, this seismic transaction will no doubt raise eyebrows, not least to its timing and scale. The oldest breathing stock exchange, bears its teeth and avid viewers need not look away. Given the now infamous lack of liquidity on the LSE for listed companies, it is ironic that the exchange operator is moving to boost its own liquidity. Perhaps some of this could be used to help some of its customers.
Breedon Aggregates: the construction materials group announced audited annual results for the year ended 31 December 2023 and announced the acquisition of BMC Enterprises Inc. for an enterprise value of US$300m (£238.1m1). Reporting a record Underlying EBIT due to disciplined focus on cost recovery and keynote in-house undertakings, the industry stalwart has delivered a robust outlook in an industry plagued with recent difficulties. Full year results have come in ahead of upgraded expectations , whilst underlying revenue increased 7%; pricing contributed 9ppt, offset by 2ppt volume reduction reflecting challenging macroeconomic conditions. Furthermore, shareholders are to receive an increased full-year yield of 29% to 13.5%, cementing a healthy cash position for the company. Increased earnings from revenue have paved the way for the cash- heavy takeover of Missouri Based BMC, a seemingly US parallel to Breedon, who will drawdown from their revolving credit facility to complete the acqusition, with a not insignificant issue of $15m in Breedons shares the cherry on top for the deal.
Comment: It should provide comfort for a raft of UK construction firms at the tight end of the market, where margins have been squeezed for so long that balance sheets such as Breedons can hold such sway across the pond and provide appetite for further consolidation post Barratt and Redrow’s recent partnership. Shareholders of Breedon will no doubt be rubbing their hands together today.
Ibstock (IBST), the UK manufacturer of a diverse range of building products, provided less than dazzling preliminary results for the year ended 31 December 2023. Revenues have decreased 21% Year on year, whilst pre-tax profits shrank 70% came in 23% lighter. The companies CEO, Joe Hudson, referenced the prevailing headwinds facing the industry, reducing headcount and the introduction of a sustainable platform as the countries post brexit hangover continues to filter into bricks and mortar, notwithstanding the lack of government housebuilding of affordable housing.
Comment: No doubt the increasing inflationary environment has stunted the companies growth, yet it would seem as in the words of a 90s No1 hit ‘ Things can only get better’, harkening back a time when profit margins for such companies soared and should start to do so again in the near future underpinned by ‘significant unmet demand for new build housing in the UK’.
Red Rock Resources (RRR), a natural resource development company, updated in relation to (a) the Company’s arbitration in the Democratic Republic of Congo with respect to the US$10m claim the Company is pursuing in country for its interest in the VUP copper-cobalt joint venture, and (b) certain of the Company’s gold assets and opportunities. RRR said other gold assets or prospects, for example in Australia and Burkina Faso, have been dealt with in recent announcements, but Kenya and Ivory Coast are among the best projects for substantial sized Resources. In the DRC it has made considerable progress but it considers that co-ordination of the final steps requires its presence in Kinshasa. What should have been the simplest of matters, obtaining its share of the sales proceeds of an asset bought and paid for in 2018, has taken far too long but it is confident that it will prevail and receive the monies owed.
Comment: It is good to see that Chairman Andrew Bell is proving age is just a number, and with shares of RRR at new lows, so is the company’s now £2.4m. A lot rides on the $10m arbitration.
Audioboom (BOOM), the podcast company, announced the extension of partnerships with top-tier podcasts The Tim Dillon Show, Crime Weekly, True Crime Obsessed, Real Ghost Stories and I Think Not. BOOM said it was pleased to continue its work with five of our favourite podcasts. These shows trust Audioboom to deliver their technology, distribution and monetisation, and it looks forward to a successful future together.
Comment: Despite all the huffing and puffing of recent comms from the company, most shareholders would expect to see the stock not at £2.50p, but £22.50 currently, if BOOM really is a world leading podcast company, with associated revenues.
ImmuPharma (IMM), the specialist drug discovery and development company, announced a positive and comprehensive financial, business and portfolio development update. IMM said it has a unique portfolio, including two late-stage assets that now have overwhelming evidence to be potential first line treatments in debilitating auto-immune diseases such as Lupus and CIDP, markets of high unmet medical need and multi-billion-dollar revenues.
Comment: Hidden within the RNS is a mention of Incanthera (AQSE:ICA) where IMM has a 10% stake worth nearly £1m. Ironically, this holding may provide a boost for IMM later this year.
Sondrel (SND) announced that it has entered into a £874,600 secured 15% convertible loan agreement with ROX Equity Partners Limited, a UK-based private equity firm and long term investor specialising in emerging technology companies. SND said this agreement and convertible loan note with ROX provides the Group with immediately available funds with which to meet the balance of the Group’s February 2023 payroll and certain overdue supplier obligations. It looks forward to working with ROX and the Company’s shareholders in advancing the wider fundraise which would give the Group sufficient funds to support it through to a positive trading cash flow position by the end of the year to 31 December 2024.
Comment: Boosted by rumours of a NeuraLink connection, shares of SND spiked recently. Interestingly enough, one would presume most of us would have been happy to lend the company cash at a 15% interest rate: well done to ROX.
Avacta Group (AVCT), a life sciences company, announced updated clinical data from the First-in-Human Phase 1 trial of the peptide drug conjugate, AVA6000 will be presented at the 2024 American Association for Cancer Research (AACR) Annual Meeting, taking place in San Diego, California from 5-10 April 2024.
Comment: AVCT gets on with its clinical data day job, as if it had not delivered a bolt from the blue with its recent, massive, low ball fundraise, which delighted the bears. Never explain, never complain, may work for the Royal Family, but this strategy may see shares of AVCT at least temporarily dip below the key 50p level before they recover.
Eco (Atlantic) Oil & Gas Ltd. (ECO), the oil and gas exploration company, announced it has signed a Farmout Agreement pursuant to which Azinam Limited, its wholly owned subsidiary, will farm out a 13.75% Participating Interest in Block 3B/4B, offshore the Republic of South Africa as part of an aggregate 57% farm down transaction along with its JV Partners Africa Oil SA Corp. ECO said it was delighted to have signed this agreement with TotalEnergies and QatarEnergy. The decision by two of the largest energy companies globally to farm into this licence is strengthened by their significant understanding of the Orange basin, having made the Venus large light oil discovery just recently north of the basin in Namibia.
Comment: A very solid update from ECO, but it is the case that the company has not been great at plying its wares, and therefore apart from a mention here, any share price rise may be less than the company deserves.
Harland & Wolff Group Holdings (HARL), the UK quoted company focused on strategic infrastructure projects and physical asset lifecycle management, announced that it has signed a five-year Master Services Agreement for the fabrication of large structures with a global oil services company supplying subsea infrastructure across the major hydrocarbon basins around the globe. HARL said it was delighted that Arnish is recognised as a centre of excellence to deliver critical subsea infrastructure. This contract marks a significant step for the Company and builds on the highly technical work the yard has already undertaken on suction anchors, piles and the work it is currently performing for the Sea Rose FPSO Contract.
Comment: HARL has actually been delivering decent, significant contracts of late, and one would expect the share price to at least get back on the right side of 15p and the higher end of the range well below Q1 2024 is over.
Kavango Resources (KAV), the Southern Africa focussed metals explorer, announced that it has received a maiden Resource Estimate for the largest tailings dump at the Nara Gold Project in Zimbabwe. KAV said the company intends to investigate potential upside in the Mineral Resource Estimate identified by Dr. Arthur’s work. Multiple holes stopped short due to intersecting items such as past concrete infrastructure, meaning there is potential for the tonnage to increase.
Comment: The market seems to have missed the way KAV is well funded, and therefore unlike many of its under-funded explorer peers, can execute on its strategy of proving up decent assets such as Nara.
MicroSalt (SALT) a company producing full-flavour, low-sodium salt for food manufacturers and consumers, announced that it has received a Notice of Allowance from the United States Patent and Trademark Office for Patent Application No. 18/175,028. SALT said this Notice of Allowance further strengthens its IP position in the global low sodium market whilst providing additional evidence of our thought leadership position in the battle to lower sodium consumption worldwide.
Comment: Shares of SALT seem to have settled down after their eyebrow raising initial surge to 120p. One would expect the shares to build from the recent 90p consolidation range.
Jubilee (JLP), a diversified metals processor in Africa, announced the formation of dedicated executive subsidiary boards to better reflect the current levels of business maturity attained by the SA and Zambia Operations and capture and implement the various growth opportunities. JLP said it has reached an exciting inflection point in its business journey with the ability to significantly further grow its SA Operations as a recognised processor of choice, while rapidly stepping up its copper production on the back of the rollout of its secured Zambian copper projects.
Comment: The inflection point that most JLP shareholders would like to see would be in the share price, which despite the solid newsflow of late has been below the key 10p level for a year now. It really should be back above that level given the efforts being made by the company.
Netcall (NET), the provider of intelligent automation and customer engagement software, announced its unaudited interim results for the six months ended 31 December 2023. Cloud subscriptions remain the primary driver of growth, with cloud services revenue growing by 18% to £9.28m and accounting for 88% of new bookings. NET said these results reflect a good start to the year, with strong uptake of its Cloud offering from new and existing customers. This growing base of cloud subscriptions is providing increased visibility and cash flows, supporting continued investment into its business.
Comment: We have heard from other companies that the cloud is one of the places to be as far as the tech space, and this is what we are being treated to at NET. If one assumes that this is a scalable, then the shares could respond in kind.
Artemis Resources (ARV) updated on its recent lithium focused ground reconnaissance program. ARV his second round of rock chip assay results provides further evidence of the potential scale and grade of the Artemis lithium discovery. These results from the Mt Marie prospect and the new zone identified at Osborne East, are opening up the lithium mineralised region considerably and suggests that a greater portion of the tenement area is now prospective for lithium mineralisation.
Comment: ARV managed a two day wonder rally towards 2p last month, and it may be that in the wake of today’s news there is another positive flurry. We have another company here which could do far better if it delivered a smidgeon of more comms.
Author
