London stocks closed the week positively after domestic inflation fell to the Bank of England’s 2% target earlier this week, increasing the likelihood of an interest rate cut in August. However, a strong retail sales report tempered some of that optimism.
The FTSE 100 dropped 0.4% on the day but recorded a 1% gain for the week, ending a five-week losing streak.
British retail sales rose by 2.9% in May, a sharp rebound from a revised 1.8% decline in April. Economists had forecasted a 1.5% increase in sales volumes. Meanwhile, British businesses are expanding at the slowest pace since last year’s recession, as some companies delay significant decisions until after the July 4 election.
Investor sentiment in Britain is gradually improving following comments from the Bank of England on Thursday that brought an August rate cut into consideration, as inflation hit its 2% target for the first time in nearly three years in May. Markets are currently pricing in a 47% chance of a rate cut in August.
Pennant International (LON: PEN) reported full-year results that met expectations, with a recovery in 2023 pre-tax profit to £1.3m, driven by higher software income improving margins. The launch of their Gen 3.0 software has already secured a major contract. Despite strong activity in the defence sector, the timing of business remains uncertain, leading to a forecasted dip in pre-tax profit to £1.2m for this year. The share price rose by 4.17% to 25p.
Ondine Biomedical (LON: OBI) announced that its nasal photo disinfection product, Steriwave, is now available through the NHS Supply Chain. This availability simplifies the procurement process for hospitals in England and Wales, following its initial use at Pontefract Hospital. As a result, the share price increased by 10% to 8.25p.
Market research company YouGov (LON: YOU) has rebounded by 2.95% to 453p following this week’s trading statement, though it remains 45% down for the week. Sales bookings have been disappointing since the interim results were reported. Additionally, a change in revenue recognition for consumer panel services will defer some revenue into the next fiscal year. Full-year revenues are projected to be around £324m-£327m, with an underlying operating profit estimated between £41m and £44m.
Fevertree Drinks (LON: FEVR) saw a share price increase due to bid interest in Britvic (LON: BVIC). Britvic’s board rejected Carlsberg’s increased bid of 1,250p per share, which is approximately 18 times the forecasted earnings. Fevertree Drinks is trading at 33 times the forecast earnings, with its share price rising 3.37% to 10575p.
FALLERS
Active Energy Group (LON: AEG) continues its decline as it plans to leave AIM and enter liquidation. Despite ongoing discussions, no suitable offers have been made for the CoalSwitch assets, making it unlikely that shareholders will receive any returns from the liquidation. Trading in the shares will be suspended on 1 July due to the unavailability of the 2023 accounts. If the general meeting approves the proposals, the AIM listing will end on 23 July. The share price has fallen by 25% to 0.075p.
Shares in geological information publisher Getech (LON: GTC) continue to decline. On Thursday, the company reported an increase in its loss from £3.1m to £3.6m for 2024. Despite refocusing on its core business and achieving a 17% improvement in trading during the first four months of 2024, the share price has plummeted by another one-third to 3.05p. Although Cavendish suggests that Getech could break even this year, investor confidence remains low.
Braveheart Investment (LON: BRH) experienced a swing from a profit of £2.36m to a loss of £8.19m in 2023, primarily due to asset write-downs that reduced NAV from £10.5m to £3.4m, including £1.74m in cash. The share price fell by 6% to 4.7p, giving the company a market capitalization of £3m.
Strategic Minerals (LON: SML) reported a loss for 2023, impacted by an $8.9m impairment charge for the Leigh Creek copper mine, which requires a higher copper price to be viable, resulting in a total loss of $9.08m. The loss of a client at the Cobre magnetite tailings project contributed to a revenue decline, although revenues are expected to rise this year. The company had $112,000 in cash at the end of 2023. The share price dropped by 16.7% to 0.15p.
Andrada Mining (LON: ATM) reported that the Uis mine in Namibia produced 364 tonnes of tin concentrate containing 223 tonnes of tin in the period up to May 2024. Sustaining costs rose by 35% year-on-year to $28,700 per tonne due to plant outages, while the achieved tin price was $30,800 per tonne. The company had £12m in cash at the end of May 2024 and is negotiating a funding agreement. The share price decreased by 12% to 4.05%.
