It has just been announced that inflation has fallen from 3.2% to 2.3%, versus the 5.25% mortgage rate. Historically, mortgage rates have been either at or below the inflation rate. Currently the cost of borrowing is nearly 3% above inflation, even if we do not really believe prices are only rising at 2%. Answers on a postcard as to when such a differential has been in place, and why an “independent” Bank of England would entertain such a situation. A strongly plausibly explanation is that mortgage rates have been politicized and will be kept as high as possible so as to adversely affect the Government’s re-election prospects.
Following the announcement by Raspberry Pi on 15 May 2024 of its expected intention to float, Raspberry Pi confirmed its intention to undertake an initial public offering and certain details of the Offer. New shares are to be issued by the Company to raise $40 million, the net proceeds of which will be used by the Company for engineering capital expenditure, to enhance its supply chain resilience and for other general corporate purposes. The company said Raspberry Pi is a British computing success story, and this marks the next stage in the evolution of the company. Through the team’s dedication to excellence in high-performance, low-cost, general-purpose computing, Raspberry Pi has been transforming the global computing landscape since its first product was launched in 2012, successfully marrying a social agenda with commercial focus.
Comment: $40m appears a decent raise for Raspberry Pi, (as compared to the notional £500m reported valuation) less than the $50m the company has given to the Raspberry Pi Foundation. Well done to Alma PR for getting the gig, one looks forward to seeing what it will do for this gratefully received new listing.
Polarean Imaging (POLX), a commercial-stage medical device company announced the successful completion of a Placing, which together with the Subscription, has raised gross proceeds of US$10 million (£8 million) at a price of 1p. The net proceeds of the Placing and Subscription, which are estimated to be approximately $9 million will be used to accelerate commercialisation of XENOVIEWTM, to support the continued investment in research and development including, amongst other developments, finalisation of the FDA plan.
Comment: Although the fundraise may be taken by some as a kick in the cojones for shareholders whatever their gender, rather like our friends at Helium One (HE1), only if the company cannot get over the line with £8m would one rally want to stick the knife in. After all, shares of HE1 were 10x after its low ball raise in December.
Orcadian Energy (ORCA) announced that it has agreed a non-binding Heads of Agreement with a potential farm-in partner on its recently awarded SNS Licence. The company outlined a potential farm-in to Orcadian’s proposed SNS licence; which provides the partner with a period of commercial exclusivity – Orcadian announced the offer of award of the SNS Licence on 7 May 2024. It also detailed the key terms of a proposed long-term loan of $1.4m, payable to Orcadian, from an affiliate of the Partner.
Comment: Orcadian has not only moved a step forward with the latest news, but has also de-risked itself in the wake of the long term loan. There is every reason for the shares to be back towards the top of their recent trading range.
Phoenix Digital Assets PLC (AQSE: PNIX), an investment firm, previously announced that it intended to return value to shareholders through a tender offer at an amount equal to the NAV per share. PNIX said it has consistently endeavoured to maximise shareholder value, and it has been highly successful, correctly predicting the fall in cryptocurrency prices in November 2022, then redeploying its capital to fully capture the buoyant cryptocurrency prices in early 2024. This Tender Offer is a means of returning this value to shareholders and safeguarding the future of Phoenix as it continues its strategic aim of becoming the premier large cap crypto currency fund in the UK.
Comment: For many companies on the London market getting their share price anywhere near the NAV is akin to raising the Titanic. To paraphrase the late Lord Lew Grade, PNIX’s tender offer seems to be the equivalent of lowering the Atlantic.
Sovereign Metals (SVML) announced that the Company has initiated a Pilot Mining and Land Rehabilitation Program at its Kasiya Rutile-Graphite Project (Kasiya or Project) in Malawi. SVML said the results will allow it to determine optimal excavation, backfill and land rehabilitation approaches. The Pilot Phase will be a demonstration to local communities of the successful rehabilitation of land for agricultural use post-mining. Results will also provide critical information for the upcoming Definitive Feasibility Study (DFS) and once commenced, it will shorten the time to its completion.
Comment: One senses that the oil tanker of the SVML share price is finally catching up with progress being made by the company, especially in the run up to the DFS.
Marks and Spencer (MKS) announced Full Year Results for 52 Weeks Ended 30 March 2024. Profit before tax and adjusting items of £716.4m (2022/23: £453.3m). Statutory profit before tax of £672.5m (2022/23: £475.7m). MKS said that two years into our plan to Reshape for Growth we can see the beginnings of a new M&S. Food and Clothing & Home grew volume and value share ahead of the market and sales increased across stores and online. Both businesses have now delivered 12 consecutive quarters of sales growth and this trading momentum gives it wind in its sails, and confidence that its plan is working.
Comment: The performance of MKS has been so impressive, despite the cost of living crisis that one feels that CEO Stuart Machin should be conscripted to deliver the Reshape for Growth to UK PLC as well.
Bens Creek Group (BEN), the owner of a metallurgical coal mine in North America supplying the steel industry, announces that the Board of the Company has, on 21 May 2024, resolved to file a notice to appoint administrators of the Company.
Comment: Having been aware of the BEN story from the early stages to today, the line judging a company by the company it keeps may be appropriate. Very sad for shareholders.
Zenova Group (ZED), the fire suppression Company, announced that it has secured its first order to two hospitals in the Epsom and St Helier Trust Hospital group in Surrey. As of this writing, the Company has already delivered a small batch of FX500 units for use in sensitive areas of the hospitals. ZED said this is a major contract win for Zenova and with the largest single institution in the UK, the NHS. This breakthrough for the Group comes as a result of a long period of their testing of our FX extinguishers, as well as the growing concerns around lithium-ion battery fires.
Comment: Getting an NHS gig is clearly an important step for ZED. We are all waiting on the edge of our seats as to how much money will emanate from the major contract win.
Powerhouse Energy Group (PHE), a company pioneering integrated technology that converts non-recyclable waste into low carbon energy, announced that the claim originally issued on 6 October 2023 by GetGo Recycling Limited against its European patent and patent applications has been resolved.
Comment: While it may be easy to say this in the wake of today’s resolution, those familiar with PHE were probably not that concerned about the patent claim, so the result is not a surprise. But in the wake of yesterday’s GB patent news this should be enough to allow the share price jump to continue.
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