Metro Bank Needs Scale, Capital to Realize Its Potential

Metro Bank Needs Scale, Capital to Realize Its Potential

1142 GMT - Metro Bank Holdings' investment case appears uninteresting until the capital constraints it currently operates under are loosened, Peel Hunt writes in a note. More capital and better efficiency are needed for the lender to exploit its transformation into a profit-generator from a loss-maker on the back of higher interest rates. "Metro Bank has the potential to build an attractive, fast-growing bank but needs scale and capital to realize this," analysts write. The broker starts coverage of the stock with a hold rating and 100 pence target price, noting there is substantial speculative upside if the business model can be mobilized. Shares are down 16% year to date. ([e-mail])

COMPANIES NEWS:

Restaurant Group Sells Leisure Business for GBP1

Restaurant Group agreed to sell its loss-making leisure business to Big Table Group for one pound and will pay a 7.5 million pound ($9.4 million) cash contribution to the buyer.

---

Sportech Plans Stock Delisting; 1H Pretax Loss Narrows

Sportech plans to seek shareholder approval to delist its shares from London's junior AIM given the significant burdens of maintaining its listing.

---

Barkby Group Exploring Options for Cambridge Sleep Sciences

Barkby Group is exploring options to maximize shareholder value from its subsidiary, Cambridge Sleep Sciences, the science-based sleep technology business behind SleepEngine, it said Monday.

---

Vistry Backs Full-Year View After Pretax Profit Rose; Launches GBP55 Mln Buyback

Vistry Group backed full-year profit guidance after its pretax profit and revenue rose in the first half of the year despite challenging market conditions, and said it would revise its shareholder payout strategy.

---

WANdisco Expects Better 2H After First-Half Loss Widened

WANdisco expects to report a better second half after it reported that its pretax loss widened for the first half of 2023 given the interruption of normal commercial activities following the discovery of irregularities.

---

Engage XR Pretax Loss Narrowed on Revenue Increase

Engage XR Holdings said its first-half pretax loss narrowed as revenue rose boosted by its Engage platform, and that the second half could potentially deliver additional revenue opportunities for the platform.

---

Various Eateries CEO Yishay Malkov Steps Down

Various Eateries's Chief Executive Yishay Malkov has resigned from the role and from all directorships of the group's companies with immediate effect.

---

Mears Group Interim Chair Jim Clarke Becomes Permanent

Mears Group has named Jim Clarke as its permanent chair.

---

M.P. Evans Extends Buyback Program's Budget, Date; Pretax Profit Hurt by Lower Prices

M.P. Evans Group said it was extending its share buyback program to Dec. 14 from Sept. 14 and increasing the budget by a further 2 million pounds ($2.5 million), as it reported a fall in first-half pretax profit due to a lower price environment.

---

Union Jack Oil's Pretax Profit, Revenue Fell on Foreign Exchange Movements

Union Jack Oil said pretax profit and revenue fell in the first half on foreign exchange movements, but that its cash balance remains solid for the next 12 months.

---

Seed Innovations Shares Rise After Avextra Stake Sale for EUR2.9 Mln

Seed Innovations shares rose after it sold part of its stake in German medical cannabis company Avextra for 2.9 million euros ($3.1 million).

---

Bushveld Minerals Shares Soar on Receiving Investment Up to $77.5Mln

Shares in Bushveld Minerals rose as much as 21% after the company said investment fund Southern Point Resources will invest up to $77.5 million in the company.

---

Scotgold Resources Needs Significant Investment to Avoid Default; Shares Suspended

Scotgold Resources said a review of its Cononish mine has shown significant investment is needed for the company to avoid default, and that its shares have been suspended as a result.

---

Vistry Backs Full-Year View and Launches Buyback Amid Pivot to Affordable Homes -- Update

Vistry Group backed its full-year profit guidance and said it would revise its shareholder payout plan, as it refocuses its business strategy to focus on its high-return partnerships model.

MARKET TALK:

Vistry's Major Strategy Shift Allows Focus on Less Volatiles Areas

1129 GMT - Vistry has delivered an in-line set of interim results, but the much bigger news was the outline of a shift in strategy to focus wholly on its capital light Partnership's business, Peel Hunt says. The house builder's new strategy focuses the group on a less volatile part of the housing market where need is high--at the same time, exposure to fluctuating mortgage rates is lower while the need for large land banks is cut, leading to surplus capital being released, Peel Hunt analysts say in a research note. "A further GBP25 million of operating synergies are the cherry on the cake," the brokerage says. Peel Hunt retains its buy rating and raises its target price to 1,300 pence, from 985 pence. Shares are up 15% at 916.5 pence. ([e-mail])

---

Bridgepoint's ECP Deal Transforms Its Growth Profile

1108 GMT - Bridgepoint Group's strategically and financially sensible deal transforms its growth profile, Bank of America Global Research says in a note after the private-equity firm agreed to acquire infrastructure investor Energy Capital Partners Holdings. "This solves [Bridgepoint]'s immediate scalability problem and brings it closer to the industry's gold standard for more diversified firms," analysts Alexandre Tissieres and Hubert Lam write. They add that the company looks attractively priced at a 20% discount to the sector. There is room for more upside if synergies--such as increased geographical footprint, increased limited partner penetration and private credit synergies--are realized. Bofa raises its rating to buy from neutral and its target price to 240 pence from 204 pence. ([e-mail])

---

Rainbow Rare Earths' Supply Deal Adds Value Due To Geopolitical Angle

1058 GMT - Rainbow Rare Earths' strategic supply deal is a very positive move, providing the company full cradle-to-gate lifecycle analysis for its products, Berenberg analysts Richard Hatch and William Dalby write in a research note. The rare earth minerals miner's supply agreement with Less Common Metals will enable its Phalaborwa project in South Africa to deliver a fully-tracked rare earth product for use in magnet manufacturing, without exposure to China, a key geopolitical driver for the U.S., the analysts say. "We think that the news adds a further attractive dimension to the Rainbow Rare Earths' story, particularly focusing on the geopolitical angle," they say. Berenberg rates the rare earth minerals miner's stock a buy, with a 43-pence price target. Shares are up 4.6% at 17 pence. ([e-mail])

---

Ithaca's Valuation Only Slightly Hit by Drilling Delay

1024 GMT - Ithaca's first-oil estimates on several projects are pushed back one to two years due to the several hundred million dollars lower investment guidance amid windfall tax and delayed drilling, Jefferies analysts Mark Wilson and Ruben Dewa write in a research note. Jefferies has reduced its forecasts for capital expenditure in 2023 by 16% and in 2024 by 30% by pushing out first oil for the Rosebank field to 2027, to 2028 for Fotla, Isabella, Leverett and Marigold, and even further out for Cambo, the analysts say. Still, the oil-and-gas company's net asset value is only reduced by 2% despite removing Cambo and Marigold from core NAV, as it is being offset by the lower net debt, they say. ([e-mail])

---

M.P. Evans Production Potential Seen Improving Profits, Cashflow

0936 GMT - Although M.P. Evans Group's 1H profit fell as expected, its strong 2H start means analysts aren't changing their forecasts for the year, Peel Hunt analysts Charles Hall and Andrew Ford say in a note. Output at the palm-oil producer's own estates increased 35% from the 1H average and 7% versus the year before, with cost-per-metric ton expected to reduce materially in the period, the analysts say. Furthermore recent new plantations acquisitions should add around 20% to its total production when mature, and additional mills will likely be added as production builds, the analysts say. "The company is continuing to add to its production potential, which should improve profits and cashflow," the analysts say. Peel Hunt rates the stock buy. ([e-mail])

---

Vistry Shares Soar as Shift to Affordable Housing Gives Solid Foundations

0910 GMT - Vistry's shares soared Monday after it said it will stop building private homes for the foreseeable future and instead focus on its Parnertships business, delivering affordable homes for lower-income households, AJ Bell says. The house builder's strategic shift allows it to take out Housebuilding unit costs, scale back its workforce and frees up so much capital it is able to commit to paying out GBP1 billion to shareholders over the next three years, AJ Bell investment director Russ Mould says in a market comment. "Affordable housing is much less sensitive to interest rates and the economic backdrop and this should give Vistry some solid foundations which its peers could only dream of right now--reflected in a resilient set of first-half results," Mould says. Shares are up 15% at 920.0 pence. ([e-mail])

Contact: London NewsPlus, Dow Jones Newswires;

(END) Dow Jones Newswires

09-11-23 0811ET