Daily Stock Market Report (Thur 23 Jan 2025) - GETB, IGG, RBN, GKP, LUCE, WJG, ABF, MAB1, KOO

23rd Jan by Graham Neary

82 comments 7332 reads

Good morning! We have another mammoth set of updates to digest.

Spreadsheet accompanying this report (updated to 17/1/2025)

Companies Reporting

Name (Mkt Cap)	RNS	Summary	Our view (Author)
Associated British Foods (LON:ABF) (£14.1bn)	TU	Revenue warning: Primark now targeting low-single digit growth in 2025 (prev: mid-single digit).	AMBER/GREEN (Graham) Profit forecasts are unchanged and Primark is growing internationally. Interesting at PER below 10x.
IG group (LON:IGG) (£3.8bn)	Interim Results	Adj. PBT +30% to £267m. Extends buyback. Confident of meeting consensus rev & PBT for FY25..	GREEN (Graham holds) Very impressive numbers even if only in line. New management team are interesting.
Spectris (LON:SXS) (£2.7bn)	TU	Adj. op profit above consensus (£197m) at upper end of the range (£183.3 - 201m).
MITIE (LON:MTO) (£1.4bn)	Q3 TU	Good Q3 performance “underpins confidence” in FY adj, op profit of £225m, FCF at least £100m.
CMC Markets (LON:CMCX) (£746m)	TU	NOI in line with previous guidance, costs in line.	AMBER/GREEN (Mark) Following today’s fall, the shares now trading at a similar P/E to peers, and cheaper on an EV/EBITDA basis, this is starting to look good value again.
THG (LON:THG) (£582m)	Q4 TU	FY 2024 in-line with expectations, Gross Debt £550m
Boku (LON:BOKU) (£566m)	TU	Rev +20%, adj. EBITDA +22%
Ashtead Technology Holdings (LON:AT.) (£444m)	TU	Full-year revenues c. £168m, adj. EBITDA ahead of consensus. Growth to continue in 2025 in line.
Gulf Keystone Petroleum (LON:GKP) (£352m)	Ops Update	2025 YTD gross production 47.9kbopd, 40-45kbopd guidance for 2025. Cash $102m.	AMBER (Mark) A good update on production. Some simple maths reveals that this is trading on a low EV/FCF multiple even if the export pipeline doesn’t re-open. However, it remains a very risk stock due to where it operates.
Team17 (LON:TM17) (£350m)	TU & Change of Name	Rev & adj. EBITDA slightly ahead of exps. New name “everyplay”, new ticker EVPL.
Mortgage Advice Bureau (Holdings) (LON:MAB1) (£368m)	TU	Rev +11%, adj. PBT +31% to £30.3m, ahead of consensus (£29.2m). Pent-up demand.	GREEN (Graham) Profits have beaten consensus with adj. PBT of £30.5m in a bad year. Mortgage applications are now rising at a solid rate (+15%) and I'm excited to see how MAB1 can perform in better market conditions.
Forterra (LON:FORT) (£344m)	TU	Adj. EBITDA £50m, in line. Net debt lower than expected at…

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Rusty2

23rd Jan

Do you mean IG group (LON:IGG) ?

If so, l use it. It is ok, cheap dealing on UK shares £3, but the support service is rubbish but is improving. Do have some issues trading, especially small caps, often no prices available. Even Relx (LON:REL) the other day, l could not sell. On profit warnings shares are often suspended at market opening, so unable to sell.

They are good for US shares, only 0.5% forex, no transaction fees (as long as 3 trades, on any shares, in prior month).

But poor for Europe, even French shares are not available. Fees quite high also.

No stop losses.

timarr

Hi N'n'G

Meanwhile Ashtead Technology Holdings (LON:AT.) announces vaguely that "full year adjusted EBITA expected to be ahead of consensus" and the share price goes up 12%.

I ignore daily movements and work out my own expectations. Sometimes you have to take the long view. Although in some cases I'm wondering whether value will out before I die ...

jamesalastair

I lost patience with the UK O&G sector 18 months ago and invested the lot in various Vaca Muerta plays - $YPG, $PAM, $VIST.

I think Canadian O&G is a no brainer as well despite Trump's tariff threats. I like TSX: ARC, TSX:TOU and TSX: PEY.

There is always jurisdictional risk with energy and commodities. Try prospecting for U in Northern BC, or O&G in the North Sea, or U and Au in West Africa. Mali have arrested mining executives in Mali, the junta in Burkina Faso is threatening to strip permits from existing operators and the nutters in Niger have seized French U assets

Give me Javier Milei or the likely new conservative government in Canada now Trudeau has departed than Reeves or some dodgy West African "country". The jurisdictional risk in Argentina is less than the UK in my view. The undoubted jurisdictional risk with Gulf Keystone Petroleum (LON:GKP) is arguably in the price, but a bit too risky for me, but probably less of a jurisdicitonal risk than say Serica Energy (LON:SQZ) (and I am not risk averse).

john2

I think there is a lot to be said for Ed’s NAPS strategy Tim. The annual rebalancing gets rid of those stocks which you are certain are undervalued but never reach their potential.

Hi john2

That's true if capital gain / protection is your main aim. As I approach retirement persistance of income is a critical consideration, especially as I don't wish to be forced into selling shares for income at inconvenient times.

Income is less volatile than share prices so you can see significant variation in capital values over a portfolio while income streams are stable.

In terms of capital appreciation I think NAPS has shown its worth. Mentally there's a huge step to move from an active approach to a passive one, but it's now hard to argue with Ed's numbers which have been tested over a range of market conditions, and while the UK markets have been in the doldrums.

Graham Neary

MAB1 is in the report, Threepeat! Cheers. G

I have been retired for 15 years. My investments are currently approx one third in safe shares with a high dividend e.g. Legal & General (LON:LGEN) and Aviva (LON:AV.) , one third in NAPS and one third in American tech. Don’t forget that many of the NAPS stocks pay a dividend.

Interesting.

I certainly don't include Legal & General (LON:LGEN)'s dividend in the safe shares bucket. Aviva (LON:AV.) looks good value, especially if the Direct Line Insurance (LON:DLG) deal goes through.

American technology shares come in all sizes and shapes, but there's clearly a bubble in kit form in some parts of the market. I hold a fair range of these, but it's like picking my way through a minefield. I am uncomfortably reminded of 1998-1999. I also remind myself that I sat on the sidelines then because I knew many of the companies being pumped to the skies from the inside while friends made fortunes (they all lost them, too, but that's another story). While the music plays ...

NAPS - yes but dividends are incidental to the approach, not central. However, it's under consideration.

I well remember the dot com crash. I wish I had gone into the US earlier, but it’s still where the big gains can be made. Yiannos has been very helpful. As for L&G, it gives a better return than bank account interest.

rmillaree

LGEN And av.

i think timarrs' point is that these insurance type companies can be complicated blck box type investments where there can be many unknown unknowns at play and if they ever get it wrong ref their risk taking then .......

so what you may view as a safe dependable plodder - other may view as being akin to a ship like the titanic setting sail on its maiden voyage - i am sure everyone on board the titanic would have been highly confident they may have been on one of the safest ships on the seas.

I have shares in l&g and have invested in Aviva in the last - and i have alwasy viewed them as punt type investments due to the fact i dont have clue whats beneath the bonnet and how safe it is. pe look cheap and propsects look cheap but the reality is i know i know didly squat aref eberything that matters ref valuing this company.

would like to think we have learned our lessons over time and these may be fairly low risk nowadays - i suspect though at some stage sometime then theer will be another wave of finacials getting hammered due to some random future event.

l&g seem to mostly have positive outlook but looking at net prfoit at 2022 and 2023 the profits are waay lower than i would have expected - if they should be delivering £1.5 billion per year profits - why is the final result so poor for these years ?

I though l&g looked better long temr prospect than Aviva so soel Aviva and kept l&g - that decision doesnt look great sigh

JimMcLad

Angle (LON:AGL) Yes, I still hold !

Broker paper today from Trinity Delta gives a good description of the current situation.

https://www.voxmarkets.co.uk/a...

davidjhill

Oddly KevinS1 I disagree on Serica Energy (LON:SQZ) - I’m actually more inclined to buy them at these levels than I was previously. Their $60 hedges have rolled off and now the only hedges they have left on are at around $92 so making a lot on oil. For gas prices up at 125p therm and not looking likely to recede given current policy they will be throwing off cash but at the same time have loads of losses available to be utilised. Apparently they are in active discussions with the government about current policy so it will only take a small tweak to have a material impact.

Anyway can’t argue with Afentra (LON:AET) or Gulf Keystone Petroleum (LON:GKP) either to be honest which both generate prodigious cashflows. Personally I hold neither but do have Petrotal (LON:PTAL) which also generates me c. 15% dividend/buy back returns. I don’t really buy the high/low country risk arguments - In the O&G space I think they are more or less equal. You only have to look at the UK governments approach - would you rather invest in the North Sea or Kurdistan? I’d say Kurdistan is marginally lower risk given how important Oil is to them and how cheap it is to extract versus a government that is prone to taxing industries out of sight.

ken mitchell

KevinS1

fwiw I’m very happy continuing to hold prodigious dividend payer Serica Energy (LON:SQZ) including for reasons covered here today.

I took the profit on Harbour Energy (LON:HBR) which I’ve held for about 3 years after their trading update today which saw a 15p share price fall. Tucked away in an otherwise bullish update was this short section which might mean dividend cut ahead:-

”Anticipated to be broadly free cash flow neutral in 2024, excluding one-off acquisition related costs and distributions. This reflects a material negative working capital movement and an unplanned outage at East Irish Sea in the UK in Q4”

I also hold Ithaca Energy (LON:ITH) and averaged down ahead of the recent ex dividend date at 116p. The share rose to 140p recently but fell again today. Buying the dips for the likes of Ithaca Energy (LON:ITH) , Serica Energy (LON:SQZ) and Gulf Keystone Petroleum (LON:GKP) coukd work very well.

As for Gulf Keystone Petroleum (LON:GKP) despite agreeing with yiannos that it might be ages before the pipeline reopens, GKP is managing very well despite that. So a surprise opening of the pipeline would probably see a big share price gain. And without that happening just look at the dividend history including in 2024.

2021. 33p which gave 14% yield.

2022. 80p! 30.5% yield.

2023. Just 9.6p reflecting the pipeline closure. 7% yield.

2024. 12.45p and 8.4% yield, despite the pipeline still being closed.

Finally and in case anyone hasn’t seen it, this superb article by Ed Croft on trading updates/profits warnings/better than expected updates is a must read:-

https://www.stockopedia.com/co...

Gari

I wouldn't think so they're quite different companies supplying different sectors. On the other hand Pod Point group (LON:PODP) , which exist solely for ev chargers have done badly recently

The Phoenix

I also hold a few of the life insurers as you say no real idea how to value them, remember when dear old Liz nearly brought them down through their ldi debacles, well I met one of the best strategic bond managers in the sector who works for one of the big insurance houses and even he completely missed ldi as a possible issue so you kind of think if best in class who work for these firms miss these things we have no chance.

abtan

IG group (LON:IGG)

I thought today's results were excellent and I was impressed with management during today's call.

I particular liked how they called out areas where they were not doing well and indicated what they will focus on going forward. Fingers crossed their actions from this drive the business forward.

2 things in particular that I found interesting in the detail:

1 - previously adjusted costs are now being expensed as normal operating expenditure:

"In H1 FY25 our approach to cost adjustments was reviewed, and as a result we have not made any adjustments in the period for one-off restructuring costs. Costs incurred in the period, including the costs of the Spectrum closure, have been included as BAU costs."

Hopefully this implies elevated operating expenses this year that won't make an appearance next year.

2 - This slide in the invstor presentation.

As probably the only person who thought that the TastyTrade acquisition was a good one (albeit luckily, due to unexpected interest income over the last few years) I thought the 65% growth in open customer positions over the last 12 months has been excellent ($2.3b ---> $3.8b.)

Bronstein

IG group (LON:IGG) down over 6% after revenues up 30% in line with expectations. Does anyone have any idea why?

One problem that Legal & General (LON:LGEN) had was that they invested a substantial amount of money in a factory which built pre-assembled houses. The idea was that the plumbing pipes and electrical cables would be installed in the factory and it would be a simple job to assemble the house on site. This lost them a lot of money because the demand was not there, whether because people wanted bespoke houses or because mortgages were not available.

Strewth - how much of my money did they lose on that hair brained scheme ? - sounds like some sucker sold em that good and proper.

ISAallowance

"Revenue streams: I’m pleased to see continued growth from the “Stock
trading and investments” segment, but it remains a minnow in comparison
to the others:"

Graham, personally I'm not convinced there's any growth in Stock trading and investments, outside of net interest income. Looking at the HY figures, it looks to me as though trading revenue has flatlined since 2021, with client numbers in gentle decline since 2022. It's a shame, since back in 2021/22 I was hoping they could really take off as a stock trading provider in order to de-risk the leveraged side somewhat, but that doesn't seem to have happened. On the other hand, one could regard the Tasty Trade acquisition as de-risking the traditional leveraged side, since it's unlikely to be exposed to the same regulation as UK SB and CFDs for example.

Daily Stock Market Report (Thur 23 Jan 2025) - GETB, IGG, RBN, GKP, LUCE, WJG, ABF, MAB1, KOO

Companies Reporting

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Graham Neary

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