Today’s IPO of Tungsten West (TUN-LON) unlocks a valuable, long term revenue stream for Hargreaves. This comprises a £1m per annum fee (first payment next month) as well as a mining services contract once the mine recommences production. The resulting EPS upgrades are 6% and 7% in FY22 and FY23 respectively, followed by 9% in FY24 with the first partial contribution from the mining services contract. This continues Hargreaves’ impressive recent run of forecast upgrades and reinforces our convict
Companies: Hargreaves Services plc
Hargreaves’ FY21 results confirm a period of material profit growth and cash generation. It has been a transformational period, in which all direct coal related activities ceased, HRMS profits surged and net debt was eliminated. As expected, the first 12p additional dividend has been proposed (total FY21 DPS 19.2p) and we expect this to recur for a further three years, at least. As we wrote in our recent detailed note, Hargreaves has been wholly repositioned and now has genuine momentum. The sha
Yesterday’s positive trading update confirmed that recent momentum at HRMS, Hargreaves’ German JV, has continued into the early months of the new year. It is already clear that FY’22 results will be materially ahead of previous expectations (66% PBT upgrade). Moreover, FY’21 results will be even better than anticipated (18% PBT upgrade), reflecting the current strength of commodity market conditions. Our new forecasts prudently assume that these conditions normalise during FY’22 with no lasting
Having exited all coal related activities, Hargreaves Services has been wholly repositioned over recent years. The Group now comprises a growing Services business concentrated on the key markets of energy, environmental, industrial and infrastructure; a property and regeneration specialist (Hargreaves Land); and a trading operation with strong asset backing (HRMS) in Germany’s industrial heartland. Hargreaves performed resiliently in 2020 despite the COVID backdrop and now has significant moment
Following the recent flurry of significant forecast upgrades, Hargreaves has confirmed an in line conclusion to FY21. It has been a year of excellent progress across the Group, particularly for Hargreaves Land and HRMS, the two drivers of recent outperformance. Cash generation has been another highlight of the year with a year end net cash position of £16.3m (2020: net debt of £28.1m). The shares have responded well to recent newsflow but Hargreaves’ valuation remains undemanding in our view, tr
As announced yesterday afternoon, Hargreaves’ German JV, HRMS, has again outperformed expectations. With less than two weeks left of FY21, we upgrade our profit forecasts for the JV by £5.3m to £10.5m. This is more than double our previous forecast for HRMS, which had already been significantly upgraded in April. The FY21 EPS upgrade is as much as 46%. As we noted yesterday, this outperformance reflects positive market conditions (in terms of the strength of certain raw material commodity prices
Hargreaves has announced the early completion of the first significant land sale at its Unity JV. The sale of a 79 acre plot to a national retailer was originally expected to complete in the second half of FY22, but it has been brought forward at the purchaser’s request. The early completion results in a significant upgrade to FY21 earnings (EPS +26%) and a corresponding reduction in FY22 (-23%). The overall impact is net neutral but the news is indicative of the attractions of the Unity develop
Hargreaves has released an unscheduled and very positive update. The performance of the German JV has improved materially, prompting a 45% upgrade to FY21 EPS forecasts. Meanwhile, the Services and Land businesses in the UK are trading in line with expectations, whilst driving significant outperformance on cash. This has created a £26m positive swing versus previous FY21 cashflow forecasts, albeit with catch up investment to follow in FY22. In our view, the Hargreaves story has genuine momentum
Hargreaves’ specialist earthworks business, Blackwell, has been appointed by the EKFB JV to carry out earthworks on part of the HS2 project. The award is the largest in Blackwell’s history and provides firm underpinning for our existing specialist earthworks forecasts. This is the third notable piece of good news for Hargreaves since the half year-end, following the disposal of coal inventories in December and exchange of contracts on the third phase of land at Blindwells in February. The share
PensionBee, the online pensions provider, with a mission to make pensions simple, so that everyone can look forward to a happy retirement, considering an IPO on the High Growth Segment of the Main Market of the London Stock Exchange. PensionBee is a leading online pensions provider in the UK, with approximately 130,000 Active Customers and £1.5 billion of assets under administration , in each case as at 28 February 2020. Cornerstone FS to join AIM, an SME focused, cloud-based provider of inter
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Cellular Goods a UK-based provider of premium consumer products based on biosynthetic cannabinoids announced its intention to join the main market (standard) this spring. Target valuation £20m raising c. £8m “to finalise the development and launch of a range of the Company's premium-quality consumer products based on biosynthetic cannabinoids, which is fully compliant under UK law.” Kanabo Group (RTO by Spinnaker Opportunities SOP.L) on the main market (standard). Raising £6m, enlarged mkt cap £
Companies: KIBO HSP MIL SAVE AQX DFCH TEK AST SLN WHR
Hargreaves Land has conditionally sold a further phase of land of Blindwells, another positive development following the recent completion of the first sale to Bellway. Phase 3 has been conditionally sold to Persimmon, demonstrating strong interest in the site amongst national housebuilders with multiple phases to be sold over coming years. The sale is expected to complete next year, providing good underpinning for Hargreaves Land forecasts for FY22. The shares have responded well to recent news
Hargreaves has confirmed a resilient H1 performance and reiterated full year expectations. December’s speciality coal disposal was an important strategic step, which moves the Group into a net cash position (ex. leases). There is also news today of the first completion at Blindwells, a notable milestone for the development and for Hargreaves Land. The shares have recovered from their recent lows but, in our view, still do not reflect the progress of the past year or our expectations of earnings
Looking Ahead At The Next Week
Hargreaves has announced the sale of its entire speciality coal inventory to its German JV, HRMS, for a cash consideration of c.£24m. This accelerates the Group’s exit from coal related activities in the UK and releases the capital tied up in the coal business. The impact on PBT is neutral but the balance sheet benefit is immediate, eliminating net bank debt by the May year end (a £15m reduction compared to previous forecasts). The recent (9th Dec) trading update reiterated full year expectation
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Companies: Sylvania Platinum Ltd.
Phoenix copper today provides an update on its ground geophysical survey over the Red Star prospect near its Empire copper project in Idaho. The Red Star skarn mineralisation (lead and silver ± copper, zinc) is associated with magnetite; the survey just undertaken was to better understand the distribution and orientation of magnetite to find potential mineralisation and to inform the location and direction of a further drilling programme.
Companies: Phoenix Copper Ltd. (United Kingdom)
We see the UK Government’s Net Zero Strategy as being overall helpful but not especially definitive. Amongst our coverage group, Drax Group (DRX LN) and Velocys (VLS LN) benefit from the Humberside CCS cluster prioritisation and Velocys from SAF support. The amount of renewables is likely to boost the need for flexibility solutions where Drax, Gore Street (GSF LN) and SIMEC Atlantis (SAE LN) can benefit. Hydrogen companies ITM (ITM LN) and Powerhouse Energy (PHE LN) are likely to find support. T
Companies: ADN DRX GSF ITM NESF PHE SAE SIT STRLNG TLG VLS
Companies: Shanta Gold Limited
We are initiating coverage of VAST Resources (VAST), which has wholly-owned Baita Plai and Manaila polymetallic mines plus an interest in two exploration projects, all located in Romania. At this stage, Baita Plai is the main driver for our valuation as it is currently being ramped up to 14kt per month. As such, we expect Baita Plai’s Cu eq output to reach c 2.4ktpa in FY23F followed by 3.3ktpa in FY24F. This, coupled with Manaila’s potential re-start of an additional 3ktpa of Cu eq over the sho
Companies: Vast Resources plc
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Devolver Digital to join AIM, an award-winning digital video games publisher and developer in the indie games space. Recently awarded indie 'Publisher of the Year 2021' by GamesIndustry.biz. Offer TBA. Due early Nov.
Life Science REIT to join AIM raising up to £100m. This will be the first London listed real estate investment trust (REIT) focused on UK life science properties providing investors with exposure
Companies: SYS1 ARE SO4 SNG TMG TMT OHG IDE KIBO MRL
Shanta Gold (AIM: SHG) has, this morning, announced its production and operational results for the quarter ended 30th September 2021 – see Fig 1. Operationally this was a slightly weaker than expected quarter but very promising from the corporate side with a new five-year plan announced, an 0.10cps interim dividend announced and a resource update at the West Kenya Project (WKP).
QoQ production was flat at 14,194 oz and AISC rose to $1,480/oz caused by a temporary drop in grade as well as hig
Oil posted the longest stretch of weekly advances since 2015 as OPEC+ producers only modestly supply the market and as US crude supplies shrink.
Crude futures rose 1.5% Friday in New York, up for a ninth straight week. President Joe Biden said Thursday night that Americans should expect high gasoline prices to continue into next year because of supply being withheld by OPEC and other foreign oil producers. Stockpiles at the biggest US storage hub are draining to levels last seen when crude pr
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Trifast has released a good interim trading update ahead of its interim results due on 23 November. Overall trading has been in line with management expectations at “both revenue and profit levels” since the AGM update in July although this belies the strength of the Group's top line performance in our view. We remain buyers.
Companies: Trifast plc
Rio’s investors day was focused on two of the most critical mining industry thematics in today’s times, i.e. green and growth. The announced measures couldn’t have materialised at a better time, given the (recent) woes pertaining to governance and the iron ore market sell-off. Remember, considering Rio’s enviable balance sheet strength, it has the flexibility to pursue the targeted plans with rigorously and, at the same time, maintain ‘relative’ shareholder reward attractiveness. Hence, we reite
Companies: Rio Tinto plc
Tungsten West (TUN.L) has joined AIM. Tungsten West is the 100% owner and operator of the historical Hemerdon tungsten and tin mine located near Plymouth in southern Devon. Hemerdon represents the world's third largest tungsten mineral resource, with a JORC (2012) compliant Mineral Resource Estimate of approximately 325Mt at 0.12 WO3. Capital raised on Admission: £39m. Anticipated Mkt Cap: £106.2m.
Future Metals NL (ASX:FME, FME.L) (formerly named Red Emperor Resources NL) had joined AIM
Companies: SOLI RBD ALU ATQT BBI CWR DRV ORCP WATR
i3 Energy indicated that Q3 2021 production amounted to 13,740 boe/d (WHIe: 13,742 boe/d) and that production in September amounted to 18,985 boe/d (WHIe: 18,834 boe/d). The company indicated that it now forecasts net operating income (“NOI” = revenue minus royalties, opex, transportation and processing) to be $US 65.7m for 2021 and $US 119.1m for the next twelve months starting 1 October 2021 – in line with our assessment that i3 Energy is on the cusp of generating more than $US 100m of cash fl
Companies: i3 Energy Plc
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ATOM headquartered in Leeds, focussed on the large-scale production of green hydrogen and ammonia intends to join AIM towards the end of the year. ATOME intends to be spun-out from AIM-listed President Energy Plc, an oil and gas company which has incubated and financially supported ATOME to date, by way of a dividend in specie and flotation.
Devolver Digital to join AIM, an award-winning digital video games pu
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Botswana Diamonds (BOD LN) – £550,000 fund-raising
Castillo Copper (CCZ LN) – IP Survey identifies potential drill targets at Luanshya
KEFI Gold and Copper* (KEFI LN) – Security incident resolved
Kore Potash (KP2 LN) – Quarterly operations update
Petropavlovsk (POG LN) – Q3 update highlights recovering production at own mines with increasing POX Hub utilisation
Sibanye-Stillwater (SSW JSE) – In talks to buy Brazilian projects for $1bn
Strategic Minerals* (SML LN) – £400,000 fund-raising
Companies: BOD KEFI KP2 POG SML CCZ SSW
WRES reported quarterly production numbers for Q3-2021 from the company’s La Parrilla tungsten-tin mine in Spain. The numbers indicate another record quarter for tungsten production with all tungsten metrics recording further increases. This is largely driven by a further increase in tungsten metallurgical recovery, sitting at 58% for the quarter. This translated to the highest quarterly production of tungsten concentrate since mine start-up. The final remedial work required to prevent further w
Companies: W Resources Plc