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Beaufort Securities Breakfast Alert - Betting firms to stop 'unfair' promotions

Beaufort Securities Breakfast Alert - Betting firms to stop 'unfair' promotions

Markets

Europe
The FTSE-100 finished yesterday's session 0.72% lower at 7,533.55, whilst the FTSE AIM All-Share index was up 0.12% at 1,069.00. In continental Europe, the CAC-40 finished 0.12% higher at 1,069.00 whilst the DAX was down 0.06% at 13,189.48.

Wall Street
Last night in New York, the Dow ended 72.5 points higher at 26,149.39, the S&P 500 added 1.38 points to close at 2,823.81 and NASDAQ finished the session 9 points stronger at 7,411.48.

Asia
In Asian markets this morning, the Nikkei 225 was 384.78 points higher at 23,483.07 heading into the close. Meanwhile, the Hang Seng was down 124.7 points at 32,762.57 and the Shanghai Composite was 44.15 points lower at 3,436.69.

 

Oil
In early trade today, WTI crude was 0.2% higher at $63.86 per barrel and Brent was up by a similar amount at $69.04 per barrel.

 

 Headlines

Betting firms to stop 'unfair' promotions
Betting firms Ladbrokes, William Hill, and PT Entertainment have agreed to change online games promotions after Pressure from the regulator. The Competition and Markets Authority (CMA) said punters must be able to cash out when they want, and not have to play more to release winnings. It said that "gambling firms must now stop unfair online promotions that trap players' money". The changes will apply to all promotions. Players will not be required to play multiple times before they can withdraw their own money, gambling firms must ensure that any restrictions on gameplay are made clear to players, and cannot rely on vague terms to take players' money. Gambling firms must not make players take part in publicity to collect winnings".

Source: BBC News

 

Company news

 

Altus Strategies (LON:ALS) 8.50p – Speculative Buy
Altus Strategies announced that exploration has commenced on three of its recently acquired gold projects in Mali. Following the acquisition of Legend Gold (LGN.V), Altus is targeting near surface and oxide gold mineralisation within the world renown Kenieba Window of western Mali and home of IAMGOLD’s 13Moz Sadiola gold mine. Altus’ Diba and Lakanfla deposits are located 13km and 6km, respectively from Sadiola gold mine and have historic drill results of 20.66g/t Au over 12m (at Diba), 9.78g/t Au over 12m (at Lakanfla) and 5.20g/t Au over 16m (at Lakanfla). Altus’ western Mali licences cover some 18km of strike and 2.5km of width along the prolific Senegal/Mali shear zone.

Our view: Altus’ strategy is to develop joint venture partnerships under its project generation model. With the recent acquisition of several exploration licences in western and southern Mali Altus is in the right postal code to potentially discover significant gold oxide deposits. The historical drill results from Diba and Lakanfla are very encouraging indeed with Diba having a current mineral resource estimate of 307.5koz of contained gold. As such, we look forward to further updates from the western Mali exploration programme. In the meantime, we maintain a Speculative Buy recommendation.

Beaufort Securities acts as corporate broker to Altus Strategies plc

 Ariana Resources (LON:AAU) 1.55p – Speculative Buy

Ariana Resources, the gold-silver exploration and development company, announced its quarterly operational update from its Kiziltepe gold mine in Western Turkey for the period ended 31 December 2017. Total production for the period was 4,501oz of gold (3,762oz in Q3 2017) and 35,095oz of silver (15,985oz in Q3 2017), recovered gold is 38% higher then the feasibility forecast on as annualised basis. Estimated cash costs for the period are US$585/oz (US$570/oz in Q3 2017). Since start-up, 10,191oz of Au and 65,600oz of silver have been sold. The processing plant is operating to design specifications, operational mill availability at 98% and utilisation at 95%. Weighted average grade for the period is 3.40g/t Au and 33.5g/t Ag which is in line with reserve expectations. Process recoveries were 89% for gold and 67% for silver at the end of the period. Ore production achieved an average rate of 16,600t per month with a peak rate of over 19,000t in December. Loan repayments continue to be made on a scheduled basis with over US$7.7m in payments made as at 31 December 2017, of which US$1.9m was repaid during Q4 2017. After repayment of all loans, profits from operations will be shared on a 51:49 basis between Ariana and Proccea respectively.

Our view: The above results reveal another solid quarter for Arianna, reporting its second quarterly operational results from Kiziltepe after achieving commercial production. We are encouraged with the weighted average ore grades (3.40g/t Au and 33.5g/t Ag) and recovery rates which are in line with expectations expected. With JV cash costs coming in at US$585/oz and the recent increase in gold prices, the Group should be able to repay its loan relatively quickly. As such, we maintain a Speculative Buy on the stock.

Beaufort Securities acts as corporate broker to Ariana Resources plc

 Nuformix (LON:NFX) 3.90p – Speculative Buy

Nuformix (NFX.L), the Cambridge based pharmaceutical development company which specialises in cocrystal technology to unlock new and improved therapeutic uses for already known and safe drugs, has announced positive results from a pilot study in human tissue in the Liver and Lung Fibrosis treatment area. The key points are that the study into Lung and Liver Fibrosis demonstrates that NFX’s programme (NXP002) inhibits fibrosis in functional human tissue via a dual- action, significantly addressing both the inflammation and fibrosis components responsible for the disease progression. The proven safety and tolerability offers significant advantages over competitor products, in a rapidly growing market already valued in multiple billions.
Click here to see Beaufort's research note on Nuformix published on yesterday

Beaufort Securities acts as corporate broker to Nuformix plc

 Joules Group (LON:JOUL) 328.00p– Buy

Joules yesterday announced its interim results for the 26 weeks ended 26 November 2017 (‘H1 FY18’). During the period, revenue advanced by +18.2% to £96.2m (+17.5% on a constant currency basis), EBITDA rose +22.5% to £13.3m and underlying PBT grew +24.3% to £9.3m, leading to underlying basic EPS of 8.5p, up +25.8%, against comparative period (H1 FY17). Net cash at the period end stood at £3m (end FY17: £6.3m). On the operational front, the company opened net 10 stores, taking total number of stores to 118 with a further 3 franchise stores. It also completed the transition of US independent retailer accounts from third-party distributor to in-house. The company declared an interim dividend of 0.7p, up 17%, to be paid on 10 April 2018.

Our view: Joules’ Interim results showed good financial and operational performances. Continued strong revenue growth was generated across Retail (+14.2%) and Wholesale (+23%) division, helped by new stores opening, e-commerce and wholesale momentum. Gross margin improved slightly to 55.6% (H1 FY17: 55.5%) while EBITDA margin grew +40bps to 13.4%, resulted in higher profit growth in the period. Post the period, the company previously announced the strong Retail sales growth (+19.2%) for the 7 weeks to 7 January 2018. Altogether, the company said it now anticipates full year profit to be slightly ahead of the market expectations. We believe Joules’ strong brand footprint and expanding loyal and highly engaged active customer base (up +18% to 1.09m at H1 FY18) will continue to drive its momentum forward. The shares are currently valued at FY18E and FY19E P/E multiple of 28.0x and 23.8x, along with dividend yield of 0.7% and 0.9%, respectively. We reiterate our Buy rating on the shares with a target price of 340p

Important Risk Warnings and Disclaimers 

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