Today's edition features:
• Mineral & Financial Investments (LON:MAFL)
The FTSE-100 finished yesterday's session 0.05% lower at 7,271.95 whilst the FTSE AIM All-Share index was down 0.10% at 993.30. In continental Europe, the CAC-40 finished 0.08% higher at 5,241.66 whilst the DAX was up 0.06% at 12,569.17.
In New York last night, the Dow Jones closed 0.19% higher at 22,412.59, the S&P-500 rose 0.06% to 2,508.24, whilst the Nasdaq fell by 0.08% to finish the session at 6,456.04.
In Asian markets this morning, the Hang Seng was recently up 0.1% at 28,155 and the Nikkei 225 was 0.4% higher at 20,391.07.
In early trade today, WTI crude oil was 0.06% lower at $50.66 per barrel and Brent was down 0.2% at $56.18 per barrel.
Ryanair pilots reject bonus to work through cancellation crisis
A group of Ryanair pilots has rejected a cash bonus to work extra days after the airline cancelled 2,100 flights because it "messed up" crew holidays. In a letter seen by the BBC, pilot representatives from 17 of the company's 80 or so European bases have told bosses that most are not enthused. They want new contracts and better working conditions instead. Ryanair had offered captains a one-off payment of £12,000 or 12,000 euros, and first officers £6,000 or 6,000 euros. But the letter said: "The pilot market is changing, and Ryanair will need to change the ways which the pilots and management work together to ensure a stable and common future for everyone". New contracts, it says, "should help stop the large number of colleagues who are leaving for "greener pastures". It also asks to bring in professional negotiators to help broker a deal. They have given the airline until tomorrow to respond.
Source: BBC News
On Wednesday, 20th September 2017 Mick Billing, Chairman & CEO of Thor Mining answered questions posed by private investors at the Beaufort offices.
Beaufort Securities acts as corporate broker to Thor Mining PLC
Mineral & Financial Investments (LON:MAFL, 11.75p) - Speculative Buy
Mineral & Financial Investment (MAFL), the metals and mining focused investment company, announced today that TH Crestgate, a private investment company in which MAFL holds a 49% interest, has released assay results from step-out hole LS-MS-04 at the Lagoa Salgada project in Portugal. Mineralisation was intersected from 146m to the end of hole at 345m grading 1.49% Zn eq., including 3m grading 8.75% Zn eq. from 300m. Of note is that the grades increase gradually with depth, mineralisation remains open down-dip and at depth. The 13,400ha Lagoa Salgada project is a polymetallic deposit with a preliminary resource estimate of 4.5Mt grading 2.79% Pb, 2.85% Zn, 0.34% Cu, 53.43g/t Ag and 0.81g/t Au for the LS-1 Zone. LS-MS-04 is the fourth of six drill holes and taken together have expanded the mineralised footprint. TH Crestgate has an exploration target of between 8.0Mt and 10.0Mt on the LS-1 Zone. In addition to the LS-1 Zone, Lagoa Salgada hosts at least 16 other gravimetric anomalies which have yet to be fully tested.
Our View: Whilst LS-MS-04 intersected weak mineralisation, this occurred over a wide intercept (199m) with grades increasing gradually with depth. Overall, the current drill campaign has expanded the dimensions of the mineralised zone, which bodes well for an expanded resource. Moreover, drill results indicate that mineralisation extends towards the east and remains open at depth. We look forward to drill results from the final two holes of the current drill programme and the subsequent resource update for the LS-1 Zone. In the meantime, we maintain a Speculative Buy on the Stock.
Beaufort Securities acts as a corporate broker to Mineral & Financial Investment Limited
Pathfinder Minerals (LON:PFP, 1.02p) - Speculative Buy
Pathfinder published an update to say that it hasn't yet received a decision from the Mozambican Supreme Court and "has no visibility over the timing of which Mozambique court decisions will be forthcoming". Meanwhile, Pathfinder is seeking an alternative solution which involves a new agreement with Jacinto Veloso. Negotiations are ongoing and would "if successful, result in the restoration of the Licences to Pathfinder's control". Also note that today Pathfinder announced that it has raised circa £200,000 through the issue of new shares.
Our View: Pathfinder has been through a protracted legal process in its attempt to win back its mineral sands licences in Mozambique. This appears to have reached a stage where the Mozambican courts slowness/inactivity means the alternative solution of a new agreement is now top of the agenda. Although a favourable court decision would be best, our opinion is that Pathfinder shareholders have waited long enough for a conclusion to this saga. And the prospect of a solution should be viewed as a positive. The terms of the potential agreement will determine the upside to Pathfinder shares from current levels.
Beaufort Securities acts as corporate broker to Pathfinder Minerals plc
Kingfisher (LON:KGF, 313.00p) – Hold
Kingfisher, an operator of nearly 1,200 home improvement stores across 10 countries in Europe, including B&Q and Screwfix in the UK & Ireland, yesterday announced its interim results for the 6 months ended 31 July 2017 ('H1 FY2018'). During the period, sales advanced by +4.5% to £6,008m on a reported but fell by -1.3% on a constant currency basis, whilst on a like-for-like ('LFL') basis, sales fell by -1.3%, against the comparative period (H1 FY2017). Retail profit grew by +0.5% to £467m on a reported basis (down -4.6% on a constant currency basis). On an underlying basis, pre-tax profit rose +0.9% to £440m, leading to basic earnings per share of 14.5p, up +2.1%. On an adjusted basis, pre-tax profit fell by -5.7% to £394m, leading to basic earnings per share of 13.0p, down -4.4%. The both measures excludes the impact of exceptional items, FFVR and prior year tax items, whilst underlying measure further excludes the impact of transformation costs. Free cash flow generated amounts to £327m (H1 FY2017: £533m) due to lower working capital inflow during the period, while net cash at the period-end stood at £650m (31 January 2017: £641m). On the operational front, the Group said rollout of unified IT platform remains on track, which has been completed in all Castorama France stores with back office underway. The Group said it is on track to deliver strategic milestones for the second year of its 5 year 'ONE Kingfisher' transformation plan (to deliver a £500m "sustainable" annual profit uplift by the end of FY2021). The company has returned £200m during the period, completing £400m of the c.£600m share buyback programme. The Group said next tranche of up to £60m share buyback will commence shortly. Kingfisher's CEO, Véronique Laury, commented "As planned, this first half has seen a significant increase in the level of transformation activity. For the full year, we have self-help plans in place to support our overall performance and remain comfortable with full year profit expectations, though we remain cautious on the second half backdrop in the UK and France". The Group declared an interim dividend of 3.33p per share, up +2.5%, to be paid on 10 November 2017 (ex-dividend: 5 October 2017).
Our View: There was no big surprise in the Kingfisher's H1 results having provided its Q2 trading update just a month ago. The LFL sales declined by -1.3% in the H1 (Q1: -0.6%, Q2: -1.9%) due to stronger comparatives for B&Q (weather-related), continued weaker sales in France and ongoing business disruption arising from ONE Kingfisher plan, which altogether impacted c.2% of LFL. This was partially offset by continued strong growth at Screwfix and Poland, and self-help initiatives, including £10m Goods Not for Resale ('GNFR') benefits. In the UK & Ireland, sales fell -0.4% while LFL sale grew +1.1%. B&Q suffered from a -6.3% decline in sales (LFL-2.3%), which was partially offset by continuing strong growth in Screwfix (sales +18.7%, LFL +11.7%). In France, after slight ease in LFL decline in Q2, the business recorded -4.1% drop in sales and -4.6% decline in LFL sale, remain underperforming the underlying French home improvement market which fell by -0.2% during the period, according to the data from Banque de France. Elsewhere the Group's other international total sales grew by +2.7% (LFL +0.3%) led by strong sales in Poland up +5.7% (LFL +3.8%). Looking ahead, the Group once again confirmed that the business disruption is in "overall improving trend" and it remains "comfortable" to achieve current market expectation, which indicates underlying earnings per share of 26.2p for FY2018, although this time noted that it remains "cautious" on H2 backdrop. The management also stated that it is on track to deliver its Year 2 strategic milestones and as announced previously to deliver operational efficiency of c.£25m (before: £20m). Beside this, the consensus is currently forecasting revenue of £11.7bn, underlying pre-tax profit of £777m, profit after tax of £465m and LFL sales growth of +1.2% for the FY2018E. The Shares have fallen by -14% year-to-date, leading to P/E multiple valuation for FY2018E and FY2019E of 14.8x and 12.3x respectively, along with dividend yields of 3.3% and 3.7%. On this basis, Beaufort reiterates its Hold rating on the Share while continue to monitor market environment and delivery of ONE Kingfisher plan.