The Telegraph: A third runway at Heathrow will not be ready until 2050, the boss of Ryanair has said, throwing Rachel Reeves’s flagship plan to revive the economy into doubt. Michael O’Leary warned that the project would face decades of delays linked to the planning process, legal filings, climate protests and the engineering challenge of building it across the M25 motorway.
Comment: It would appear that a third runway at Heathrow, will be a move to kickstart economic growth by building a stable door 25 years after the horse (and 10,000 millionaire) has bolted.
Fevertree (FEVR), a supplier of premium carbonated mixers and Molson Coors, one of the world’s largest beverage companies, announced that they have entered into a long-term strategic partnership for the exclusive sales, distribution and production of the Fever-Tree brand in the US.
Comment: Anyone looking at the share price chart of FEVR over the past three years will know that the company has been looking for a fresh driver for its brand and sales. While Molson Coors may be the deal the fits the bill, it may simply be that Fevertree has now become the Schweppes it replaced.
Kromek Group (KMK), a developer of radiation and bio-detection technology solutions for the advanced imaging and CBRN detection segments, announces its interim results for the six months ended 31 October 2024. The company said that multi-year agreements signed with Siemens Healthineers post period will deliver profitability in the current financial year. Adjusted EBITDA loss of £2.3m (H1 2024: £0.1m loss). Cash and cash equivalents at 31 October 2024 were £0.6m (30 April 2024: £0.5m).
Comment: The cavalry may have arrived in the form of Siemens, but even so there is a lot of work to do to turn around the EDITDA loss, and for the company to bolster the £600k in the bank.
Corero (CNS), the DDoS protection specialists, updated on the Company’s strategic objective in expanding its sales capabilities and geographic reach. As part of its reinvigorated go-to-market strategy, Corero has focused increasingly on direct investment in its sales function, recognising the significant opportunity it has to broaden the Group’s sales footprint across previously unexplored territories, as well as generate additional cross and upsell revenues with existing customers in established geographies.
Comment: Shares of CNS were a 3x until October during 2024, something which underlines the expansion it has achieved and is on course to deliver going forward. At 18.5p and in the aftermath of today’s update, a resumption of the rally could be on its way for H1 2025.
Blencowe Resources (BRES) announced significant progress within Project SAFELOOP, a European Union-led initiative under the €100 billion Horizon Europe Programme focussed on the European Union’s renewable energy transition. SAFELOOP aims to deliver a Gen3 Lithium-ion battery for standardised EV buses, prioritising safety, recycling, and high performance. Blencowe is the exclusive supplier of natural flake graphite to the project. BRES said it was very pleased to see such remarkable results from Orom-Cross graphite, overlaid with AETC’s processing expertise and other SAFELOOP partners’ involvement. Achieving an ultra-pure 99.98% wt%C graphite and one of the highest natural graphite loadings ever recorded at 68.4 wt% underscores the high quality of its graphite deposit and validates the differentiated strategy it has pursued.
Comment: We already have BRES as a beneficiary of US Government funding, and have a reminder today that the EU is on the case too in terms of securing a reliable source of ultra-pure graphite. The market and the valuation of BRES continues to be behind the curve of the fundamentals.
Atlantic Lithium (ALL), the African-focused lithium exploration and development company announced an updated JORC (2012) of 36.8Mt at 41.9% feldspar for the Company’s flagship Ewoyaa Lithium Project in Ghana, West Africa. ALL said the increased Feldspar MRE incorporates all of the spodumene pegmatites drilled at Ewoyaa and, therefore, considers the mine plan for the Project over its entire 12-year mine life.
Comment: It may be that the market is not big on lithium at the moment, but it is still the case that ALL is moving forward well on its timelines at Ewoyaa, and is once again underlining the merits of the project.
Sovereign Metals (SVML) provided its quarterly report for the period ended 31 December 2024. SVML said that over the course of the next quarter, Sovereign will advance the Definitive Feasibility Study (DFS), provide updates on the rehabilitation component of the Pilot Phase, publish an upgrade to the MRE, continue with further graphite testwork to support potential offtake discussions and further its community and social development programs in Malawi.
Comment: There is a decent flow of constructive and material news from SVML, something which continues to drive the share price, currently on a market cap of £230m. But given the obvious merit of Kasiya, and the backing of Rio Tinto, we are surely only at the foothills of what the SVML’s rating should be.
Rome Resources (RMR), the DRC-focused tin explorer, announced further results from 10 of 17 diamond core drill holes at its Kalayi tin prospect located in North Kivu, the DRC. These assays confirm continuous tin mineralisation across multiple sub-parallel ore shoots, supporting the Company’s geological model and highlights the growing scale of the deposit. Drilling to date has covered only 30% of the 2,000m in situ tin-in-soil anomaly with mineralisation starting from surface, remaining open at depths exceeding 150m.
Comment: RMR reminds us that even as the company proves up Kalayi, it has only scratched the surface of what it is sitting on, only 30% drilled so far. This means that for those with at least a modicum of patience have plenty to look forward to.
Power Metal Resources (POW), the London listed exploration company with a global project portfolio, and its majority held subsidiary Power Arabia Ltd updated on exploration progress and the identification of new copper mineralisation on the Block 8 exploration concession in Oman. POW said it was very pleased to be able to report such meaningful progress at this flagship project for Power Arabia and continues to explore multiple avenues for a long-term funding solution for the Power Arabia business.
Comment: Saudi Arabia remains a key new asset for POW, and it should be the case that the nearer it gets to funding for this subsidiary, the more confident the market will be in terms of adding this notional value to the share price.
Bezant Resources (BZT) said it has continued to move the Hope & Gorob Project towards development-ready status pending the granting of an Environmental Clearance Certificate for which the Company is awaiting approval. BZT said development of a metallurgically simple copper – gold resource amenable to ore sorting and modest capex with a 5 – year open pit starter ore body would be an ideal asset for the Company at a time when my belief is that the copper price has the potential to fluctuate between US$8,500 and US$11,000 per tonne.
Comment: BZT, as the latest RNS reminds us, remains highly geared to the price of copper, something which in the new Trump environment should finally kick in for bulls of the green metal.
Polarean Imaging (POLX), a commercial-stage medical device leader in advanced MRI lung function, announces the issuance of Chinese patent ZL201980047729.5. The new patent covers the use of Xenon MRI to non-invasively visualise pulmonary gas exchange and vascular function.
Comment: It seems like all of a sudden POLX is achieving on a fundamental basis what it should have years ago. It will be interesting to see how much of this change filters through to the still beaten up share price.
Hollywood Bowl Group (BOWL), the UK and Canada’s largest ten-pin bowling operator, issued a trading update for the financial year starting 1 October 2024 to 12th January 2025 to coincide with the Company’s AGM taking place later today. Total UK revenue was up 8.0% with LFL revenues up 4.5% over the period. Total Canada revenue (on a constant currency basis) was up 40.8% (LFL revenues up 14.2% over the period), with Splitsville centres up 37.2% and Splitsville LFL centres revenue up 7.0% over the period. BOWL said it remains resilient to inflationary pressures with over 70 per cent of Group revenue not subject to cost-of-goods inflation. We are well positioned to mitigate the effects from the increases to National Insurance contributions and National Living and Minimum Wages, and with a family of four being able to enjoy a game of bowling with us for under £26.
Comment: What better place for the some 3m people on sickness benefit to go in their spare time than ten-pin bowling for under £26? It is notable that the company is moving to supress the idea that the government’s disastrous NIC, and minimum wage meddling with affect it negatively.
Tullow Oil (TLW) issued a statement in advance of the Group’s 2024 Full Year Results. TLW said that over the last four years, through our commitment to operational excellence and prudent implementation of efficiencies we have continued to generate free cash flow and have significantly reduced our net debt from c.$2.81 billion to c.$1.45 billion. Our improved balance sheet, alongside the extension of our revolving credit facility, positions us well as we look to manage our debt maturities and optimise the Group’s capital structure in 2025. Following the successful resolution of the Ghana Branch Profits Remittance Tax arbitration and a return to drilling at Jubilee, combined with production optimisation activities to reduce decline rates and further cost reductions, 2025 is set to be an exciting year for Tullow as we lay the foundations for capital returns and pan-African growth.
Comment: Full marks to TLW in cutting down its debt to such a remarkable degree. It is also noticeable that the company has managed to get its ducks in a row in Ghana to improve this year’s prospects.
Strix Group (KETL), the global leader in the design, manufacture and supply of kettle safety controls and other components and devices involving water heating and temperature control, steam management and water filtration, is pleased to provide an update on trading for the financial year ended 31 December 2024. Strix said it was pleased to confirm that it will report adjusted profit before tax for FY24 ahead of market consensus (as at close on 29 January 2025) and comfortably within the previously announced range of £18m to £19m.
Comment: Although we do not see shell companies change their business / name to kettle safety controls, they currently add AI to everything, KETL is able to please the market with its latest trading update. This is something which rather belies the recent share price fall.
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.
