The Telegraph reported that the Treasury has been forced to intervene to stabilise financial markets amid growing concern over the impact of Rachel Reeves’s Budget and a surge in borrowing costs. In the first such statement since the mini-Budget crisis of 2022, the Treasury attempted to dismiss as “pure speculation” suggestions that rising debt costs had wiped out all of Ms Reeves’s headroom and put her in breach of her own fiscal rules.
Comment: Perhaps not surprisingly The Telegraph is getting on the UK sinking ship narrative. The Budget for growth has become a Budget for recession, with the denial of fiscal breach rules presumably suggesting this is what has already happened.
Blencowe Resources (BRES) announced that drilling has now commenced on the Phase 7 exploration programme at its Orom-Cross graphite project in Uganda. This 6,750 metre campaign will be the final drilling programme for the purposes of completing the DFS and establishing an updated JORC Resource to support the expanded mining operations at Orom-Cross. BRES said it remains on track to complete the DFS in H1 2025 and it expects to begin reporting drilling results during the current quarter.
Comment: Given that we are in the run up to drilling results and DFS completion, it would appear that the market is behaving in a rather churlish manner to have shares of BRES near the low end of the range. This is particularly the case given that November already saw the company raise £1.9m for Orom-Cross.
Coro Energy (CORO), the South East Asian energy company, announced a proposed recapitalisation of the business to be implemented by way of an equity fundraising, a share capital reorganisation and the deemed redemption of part of the Company’s existing secured listed bonds with the balance being converted into equity. Once completed, it is proposed that the convertible loan notes of the Company be repaid in full and accordingly, this Recapitalisation will position Coro as a corporate debt-free regional clean energy developer with a blended renewables and gas portfolio. CORO is proposing to raise gross proceeds of approximately £2 million by way of an equity fundraising of which £1.9 million has already been conditionally committed by investors.
Comment: CORO comes up with a bold recapitalisation move, all the more bold given the way that ahead of it the market cap was £0.7m, versus the near £2m which has already been raised. Ideally, the newly debt free company will have the chance to finally prove its mettle.
Poolbeg Pharma (POLB) revealed that Alan Rankin is new on the shareholder register at 3.24%.
Comment: It is good to see a positive TR1 for POLB, given that the rug was certainly pulled from the company’s share price last month, despite a US focused deal that the market should have embraced with both arms in terms of the combo with HOOKIPA, and NASDAQ move.
Corero (CNS), the DDoS protection specialists, announce a major new customer and strategic regional partner Forte Telecom, one of the largest telecommunications providers in the state of Rio de Janeiro, Brazil. This DDoS protection as-a-service Contract, worth $1.2 million across three years, marks a significant win for Corero and reinforces the Company’s position as a trusted provider of DDoS protection solutions in the region.
Comment: The contract wins keep coming for CNS, underlining the company’s promise to post earnings growth for 2024, just earlier this week. The shares have nearby 200 day moving average support at 18p, within the one year uptrend.
Good Life Plus Plc (AQSE: GDLF), an innovator in the luxury prize draw and rewards sector, announced the creation of a CLN for up to £2 million, with an initial subscription of £1 million already made by Boatside Investments, a private investment vehicle owned by Mark Blandford and family. Mark Blandford, the founder of SportingBet Plc, owns 21.1% of the Company via his beneficial ownership of Winforton Investments.
Comment: Although with a decent market cap so far of £18m, it is so far the case that the market has missed the potential and pedigree of GDLF, a point underlined by the company having a “celebrity” investor in the form of Mark Blandford. Hopefully, the latest CLN move will allow the company to take itself to the next level fundamentally.
Ferrexpo plc (FXPO), a producer and exporter of premium iron ore pellets, is pleased to report production results for the fourth quarter and full year to the end of December 2024. FXPO said that in the challenging circumstances, it is pleasing to report a strong increase in production for 2024. The higher production reflects its ability to access Ukrainian Black Sea ports again and resume exports to customers in MENA and Asia.
Comment: FXPO worked wonders for those using it as a Trump Trade. But with that out of the way we are now looking at the operational side, and how much the company could benefit once the President Elect gets his feet under the desk. Back in the 90p’s the risk/reward here is starting to improve.
Marks and Spencer Gp (MKS) revealed its Christmas Trading Results. MKS said this was another good Christmas for M&S, building on a strong performance in the prior year. We sustained trading momentum with like-for-like sales up 8.9% for Food and 1.9% for Clothing, Home & Beauty. Sales records were broken across the business, with Food recording its biggest day and Clothing, Home & Beauty online its biggest week, but we’re not complacent – as a growth business it’s our job to break records.
Comment: Given the lay of the land, one would have to say that the MKS performance was nothing less than excellent. This is particularly the case given that in a cost of living crisis, consumers only choose to pay more for quality when the difference is cut and dried over the competition.
Tiger Royalties and Investments (TIR) announced that Jonathan Bixby and Brian Stockbridge have today joined its Board which will allow the Company to execute its new broadened Investing Policy approved at the Company’s general meeting on 6 January 2025. Jonathan Bixby has joined the Board as an Executive Director Head of Technology Projects, Brian Stockbridge has been appointed as an additional independent non-executive director to support both the new technology investment strategy and governance with effect from Admission. TIR said it looks forward to working with Jonathan to enhance shareholder value as he and his team develop Bixby Technology as a tech incubator within the scope of Tiger’s broadened investing policy.
Comment: TIR has made a decent rabbit out of a hat move in terms of its broadened investing policy, and brought in two strong new board members to carry out the new strategy in the tech incubator space. This should be enough to excite the market given the potential for shareholder upside from current levels.
Zephyr Energy (ZPHR), the Rocky Mountain oil and gas company focused on responsible resource development and carbon-neutral operations, confirmed that, further to its announcement on 23 December 2024, the Nabors Drilling USA B29 rig is now being mobilised to site where it will drill an extended lateral on the State 36-2 LNW-CC-R well. ZPHR said it remains on target to start drilling the extended lateral in mid-January 2025, following which it will complete and production test the extended reservoir interval. The well has the potential to be a major catalyst in the development of the Paradox project.
Comment: Shares of ZPHR finally managed to turn around at the end of 2024, something which may be investors looking forward to imminent progress at Paradox.
Cirata (CRTA) announced an unaudited trading update for the quarter ended 31 December 2024. For FY24 overall, the Company delivered total bookings of $7.1m (FY23 $7.2m) representing broadly flat growth YoY but with a mix shift to DI. DI bookings were $4.7m growing of 81% YoY. DI accounted for 66% of bookings and DevOps software accounted for 34% (FY23: DI 36% and DevOps 64%).The Company’s cash balance was $9.7m as of 31 December 2024.
Comment: Although cynics may quite rightly be haunted by the ghosts of the past at CRTA, there does seem to be enough in terms of the oil tanker finally turning around, and getting cash burn under control. Near 20p could be at least an intermediate floor for the shares.
Cohort (CHRT), the independent technology group, announced that its German subsidiary ELAC has been awarded a contract amendment with a value of €16.4 million following the activation of a contractual option. Under the amended contract, ELAC will deliver the sonar system for an additional unit of a new build submarine program for the Italian Navy. The amendment brings the total value of the contract, which was awarded in 2021, to over €100 million and covers the supply of sonar systems for a total of four submarines.
Comment: €16.4 million is certainly nothing to be sniffed at, and is something which adds to the comments by the company last month regarding conflict fuelling defence spending. CHRT is certainly in expansion mode after November’s Australian acquisition.
ImmuPharma (IMM), the specialist drug discovery and development company, announced innovative groundbreaking advancements in its preclinical research program focused on P140 and the pathogenesis of autoimmune diseases. This new discovery, conducted by the Company’s R&D subsidiary ImmuPharma Biotech, has yielded data that provides novel insights into autoimmune disease mechanisms. Importantly for its autoimmune therapy P140, especially for its ead indication in SLE. IMM said it was delighted to share these significant findings from ImmuPharma Biotech. This breakthrough research confirms its confidence in P140, its future therapeutic success and also creates potential new opportunities to strengthen our intellectual property portfolio, positioning its at the forefront of innovation in autoimmune disease therapies.
Comment: At long last, and perhaps when few were expecting it, IMM has pulled a decent rabbit out of the hat, something which by definition is all the more difficult to achieve in the biotech space. It will be interesting to see how much of today’s initial 75% plus share price gain will be sustained.
Disclaimer & Declaration of Interest:
The information, investment views, and recommendations in this Zaks Traders Cafe interview are provided for general information purposes only. Nothing in this interview should be construed as a promotion or solicitation to buy or sell any financial product relating to any companies under discussion or referred to or to engage in or refrain from doing so or engage in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the commentator but no responsibility is accepted for actions based on such opinions or comments. The commentators may or may not hold investments in the companies under discussion.
