Francesca Morgan
Market Report
16:25, 1st December 2020

Hochschild Mining (LON:HOC) FOLLOW shares ticked up 8.66% to 231.3p as mine closure not expected to affect full year guidance

Shares in the precious metals company gained over 10% since yesterday’s opening price despite the South America-focused company announcing that it has closed its mine in the Santa Cruz province in Argentina due to ‘a significant rise’ in Covid-19 infections in the area.

Hochschild said the Company's San Jose operation has therefore been mandated to halt operations and is currently undertaking a deep-clean of the site's facilities and equipment.Subject to authoritative permission, it is expecting to restart limited operations on Friday.

It added that the stoppage is ‘not expected to affect the company’s revised full year guidance’ of between 280,000-290,000 gold equivalent ounces or 24-25 million silver equivalent ounces.

In fact, the company resumed its dividend payments last week, declaring an interim dividend of four cents per share, with CEO Ignacio Bustamante highlighting to investors that the group has continued to “recover well operationally” from the region’s Covid-19 related stoppages.

At the same time, Hochschild lowered its consensus estimates by around 10% with 2021 production forecasts predicted at 360,000-372,000 ounces of gold equivalent next year.

HOC price chart

Tri-Star Resources (AIM:TSTR) FOLLOW shares soars 72.73% to 4.75p as it awaits delisting decision

Shares in the mining and minerals processing company soared this afternoon despite having plummeted by over 90% in value since the company resumed trading on AIM last month after the group’s shares were suspended at the end of September following a delay in publishing.

Shares in the company, which has had problems trying to get its metals-processing plant in Oman up and running, sank 17½p, or 58.3%, to 12½p on their return from suspension, the Times reported. In fact, the group is set to delist from AIM later this month on 10 December.

The company outlined its decision to delist from AIM last month following significant delays, costs increases and an uncertain funding position at its principal asset and focus of activities is its interest in SPMP, an Omani company developing the Oman Antimony Roaster Project.

Implementation of the cancellation is conditional on the cancellation resolution being passed at the Annual General Meeting to be held on 2 December 2020, the group told investors.

TSTR price chart
TruFin Group (AIM:TRU) FOLLOW rises 28.79% to 42.5p as shares heads towards pre-pandemic value

Shares in the FinTech and banking group continue to edge their way back to their pre-pandemic worth, with the stock having increased by over 100% since June 2020.

Shares have risen steadily since the group posted a first-half revenue rise and slashed its losses during the six months ended 30 June 2020 despite the effects of the pandemic.

Revenue in the six months to June 30 was 34% higher year-on-year at £4.2m from £3.1 million while the group narrowed its losses from the 2H19 to £5.5m (2H19: £8.1m).

The company hailed its unit Playstack, its first foray into the mobile game lending space. The company wrote at the time that it expects "significant growth in 2020" from Playstack due to the increased levels of demand for gaming as a result of people having to stay at home.

The group described Playstack as its entry point into this ‘highly attractive growth market’. Looking into 2H20, the group said Playstack had signed two significant contracts with global technology platforms, underpinning ‘potentially significant growth’ in the second half of 2020.

The Board said these contracts mean the company  is likely to deliver full year revenue ahead of market expectations. ‘This, in combination with tight cost control, means we also expect the net loss for the full year to be lower than market expectations,’ the company told investors.

TRU price chart

Tekmar Group (AIM:TGP) FOLLOW shares jumped 14.49% to 79p after the group tells investors that it is ‘best-placed’ to weather short-term Covid-19 disruption 

The offshore energy market technology provider said in its half-year results for 1H21 that it is now best-placed to weather the short-term disruption to its markets and performance caused by the Covid-19 pandemic after the business saw significant disruption during the period.

Revenues over the period for Tekmar was mostly impacted by the Covid-19 related delays in order placement.  Despite these challenges, however, the group said the market remains ‘a vastly exciting one and that its financial performance this year is not an accurate reflection.

While Tekmar reported that its order book had fallen to £10m from £15.9m in 1H20, the size of the company’s enquiry book has increased by 21% to a ‘healthy’ £225m (1H20: £186m).

The long-term outlook for growth in global offshore wind ‘remains strong’, it said, with the installed base of 28.9GW forecast to rise to 233GW by 20306 while the short term outlook is also strong at c.18.6% CAGR for new global offshore wind capacity forecast to 2024.

Commenting on emerging from the pandemic, Ally MacDonald CEO of Tekmar Group said:

“We will shortly commence the next stage of the internal review, where we will lay out our plans for the strategic direction of the business to widen our presence in the offshore wind market, creating a roadmap for growth and the delivery of sustainable shareholder value.” 

TGP price chart

AO World (LON:AO.) FOLLOW shares dipped 2.01% to 342.25p despite resilient trading 

Shares in the online electrical retailer dipped today despite the group reporting a 53.2% rise in total revenue to £717m in its half-year results for the six month period to September 30.

Last month, the group posted pre-tax profit at £18.3m, up substantially from a loss of £5.9m in the previous year. As a result, the company hailed its “resilient operation performance”.

The group added that AO Germany is now on track to achieving monthly profitability on an adjusted EBITDA basis during its peak trading period and expects to be profitable from FY22.

Sales momentum continued throughout the half despite the competitor physical stores reopening as customers turned to buying online goods due to concerns regarding COVID-19.    

“We believe we have seen a lasting step change in online penetration,” AO World said, further acknowledging that lockdowns have triggered a huge shift in consumer habits. Looking ahead, the group predicts that it is on track for its biggest ever peak trading period.    

Russ Mould, investment director at AJ Bell, said, “Anyone working or furloughed at home only has to look out of their window to see delivery vans going up and down the road all day long.”   

“Years ago, buying a new cooker would have involved a visit to a showroom and lots of chit chat. Now it's a simple check of the reviews and an order online in minutes,” he added.   

“We have grown share across all categories and the results we're announcing today give huge confidence that our business is well set for the future to cement the changes. Our growth rates have increased from Q2 to Q3 as we unlock capacity constraints.
We have taken huge strides forward on our commitment to fix all the fundamentals of our European business and we now have a profitable platform from which to accelerate our growth in Germany and beyond,” said John Roberts, AO Founder and Chief Executive.

AO. price chart

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