Daily Stock Market Report (Mon 23 June 2025) - SXS, AGR/PHP, AVON, ITM, SEIT, CBOX, OHGR

Good morning and welcome to today's report.

The agenda is complete.

Update at 1pm: That's all we've got time for today, thank you for your comments.

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Companies Reporting

Name (Mkt Cap)	RNS	Summary	Our view (Author)
Londonmetric Property (LON:LMP) (£4.2bn)	Takeover of Urban Logistics REIT becomes effective	SHED shares will be cancelled from 8am tomorrow (24/6).	PINK
Tritax Big Box REIT (LON:BBOX) (£3.7bn)	Refinancing supports delivery of strategic objectives	New £400m 5-year RCF replaces £300m facility. Options to extend. Also refinanced £150m loan.
Spectris (LON:SXS) (£3.3bn)	Recommended cash acquisition	Spectris has recommended an offer from private equity group Advent for 3,763p per share. Advent offer: 3,735p in cash plus 28p interim dividend. Shareholders will also be able to receive this year’s final dividend if the timetable allows.	PINK (Roland) [no section below] The Spectris board has recommended this offer from Advent, but rival private equity group KKR also remains in the bidding and has until 11 July 2025 to make a firm offer. KKR has issued a statement today confirming that it is “in the advanced stages of due diligence and arranging financing commitments”. Unfortunately (in my view), it looks like this high-quality British engineering group will be leaving the FTSE 250 one way or another. However, there’s still a real possibility that a bidding war between two PE buyers will increase the final offer for shareholders. If I held the shares, I would continue to sit tight.
Plus500 (LON:PLUS) (£2.4bn)	Plus500 secures new regulatory licence in Canada	Gained licence from CIRO. Will initiate services within the OTC market, with aim to expand further.
Assura (LON:AGR) (£1.6bn)	Recommended combination of Assura and Primary Health Properties (LON:PHP)	Corrected at 10.50: Assura board has recommended a new cash and shares offer from PHP worth a total of 53.3p 55.0p per share at Friday’s closing PHP share price of 103.5p. PHP offer: 0.3865 new PHP shares + 12.5p in cash, plus a 0.84p special dividend, plus April & July quarterly dividends.	PINK (Roland) Updated at 10:50 to correct the offer details Perhaps under pressure from shareholders, Assura’s board has engaged more closely with PHP and secured an improved proposal that has replaced the KKR/Stonepeak bid as the company’s recommended offer. PHP shares are down slightly today, but my sums suggest that at current prices the PHP offer is equivalent to a further 1.68p per share in addition to the KKR/Stonepeak offer. While I’m in favour of this healthcare REIT remaining a UK-listed entity, we’ll have to wait to see if this improved offer is sufficient to win the bidding war.
European Smaller Companies Trust (LON:ESCT) (£783m)	Combination with European Assets Trust (LON:EAT)	EAT shareholders can choose new ESCT shares or cash (limited to 15% of EAT shares).
PPHE Hotel (LON:PPH) (£655m)	Acquisition of development site	13k sqm hotel/office site in City of London w/ planning. Total spend exp £90m, opening 2029.
SDCL Efficiency Income Trust (LON:SEIT) (£556m)	Full Year Results	NAV +0.2p to 90.6p. Portfolio cash inflow +5% to £97m. Divi in line at 6.32p, 1.0x cash cover.	AMBER (Roland) These shares trade on a 40%+ discount to NAV and offer a tempting 12%+ dividend yield. I can believe that SEIT may be too cheap, but my initial impression is also that this trust has a more concentrated and highly leveraged portfolio than some other alternatives in this sector, perhaps adding risk. The company’s failure to meet its asset disposal targets over the last year and today’s strategic review announcement highlight the difficult conditions for alternative asset ITs with less-than-robust balance sheets. SEIT may be worth more in-depth research for interested investors, but I’m going to take a neutral view today.
Avon Technologies (LON:AVON) (£547m)	UK MoD respirator order for Ukraine	Received £10.2m order for FM50 respirators for Ukraine Armed Forces. Will be delivered in FY26.	AMBER (Roland) [no section below] Today’s announcement is positive but equates to 3% of expected FY26 revenue and does not seem likely to move forecasts, as far as I can see. Progress seems reasonably good at Avon, but as I discussed in March, the group is currently involved in both a restructuring project and a major expansion of production capacity. Such operational complexity can pose risks, as the company has acknowledged. With the stock trading on a FY26 P/E of 23x and margins under pressure from transformation costs, I think the price is up with events. I’m staying neutral.
ITM Power (LON:ITM) (£460m)	FEED contract for 120MW Uniper project	Will deploy six 20MW POSEIDON electrolysis modules into Humber H2ub project, still subject to FID.	AMBER (Megan)  The flurry of contracts signed in the last couple of months have caused plenty of excitement for ITM shareholders. It’s too risky for me, but I don’t believe the surge in popularity is at an end yet.
Norcros (LON:NXR) (£243m)	JTSA Outcome of Strategic Review	Johnson Tiles SA will cease manufacturing shortly and be closed. <4% FY25 group revenue.
Aoti (LON:AOTI) (£96m)	AOTI unlocks broad market access in Germany	Positive rec from G-BA for TWO2 Therapy, covers c.90% of popn. Guidelines exp to take >9 months.
Cake Box Holdings (LON:CBOX) (£79m)	Update on Timing of Results	Auditors need additional time due recent acquisition of Ambala Foods. FY25 rev & EBITDA to be slightly ahead of exps.	AMBER/GREEN (Roland - I hold) [no section below] Audit delays are always a possible cause for concern, but today’s explanation that additional time is needed for the first-time audit of Ambala Foods does not seem overly worrying to me. This acquisition only completed just before the year end so may have created some unforeseen work for the auditors. Confirmation that the FY25 results should be slightly ahead of expectations is encouraging and management says trading has remained positive since March. I remain broadly positive on this SIF stock.
One Health (LON:OHGR) (£21m)	Full Year Results	Rev +23%, adj EBITDA +33% to £2.02m. FY25 adj EPS: 13.75p. NHS patient referrals +28% to 17,020, procedures +27% to 7,043. Outlook: strong Q1 trading. PanLib forecasts unch: - FY26E EPS: 13.6p - FY27E EPS: 14.9p	AMBER (Roland) [no section below] This provider of NHS-funded medical procedures floated on AIM in March, so today’s results provide a good opportunity for us to begin coverage. A quick review of the accounts shows net cash of £9.1m, while free cash flow of £1.5m covers the dividend twice. Profitability looks average to me, with a 5% operating margin and 11% ROCE. Although growth was strong last year, unchanged broker forecasts today suggest earnings will be broadly flat this year. Is this another well-timed flotation? Hopefully not. Based on a brief review of today’s figures, OHGR seems in decent shape to me. The group will also hopefully benefit from continued founder ownership. On a P/E of 14 I would argue the shares are up with events, but the price doesn’t look unreasonable to me. In line with our normal approach to recent IPOs, I’m going to take a neutral view at this time.
Safestay (LON:SSTY) (£16m)	Full Year Results	NAV -6% to 47p, adj EBITDA -4.4% to £6.5m. Loss after tax of £0.9m. Outlook: “competitive” mkt.
Mothercare (LON:MTC) (£16m)	Licence agreement with Ebebek Mağazacılık A.Ş.	Agreed licence with Turkey’s leading mother and baby retailer, with annual sales c.£400m.
Lexington Gold (LON:LEX) (£16m)	Full Year Results	Net loss $1.4m, net assets $15.7m at year end. Net cash $0.9m. Recently renewed Jelani licence.
Petards (LON:PEG) (£5m)	Full Year Results	Rev +28% to £12m, adj EBITDA +21% to £410k. Loss after tax £1.1m. Net debt £1.5m.
Aferian (LON:AFRN) (£4.2m)	Trading Update	H1 rev exp +36% to c.$16.6m. Adj EBITDA exp $1.6-1.8m. Net debt $14.2m, in talks to refinance.

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Megan's section

ITM Power (LON:ITM) 

Down 3% to 72p (£460m) - Further hydrogen project contract signed - Megan - AMBER

The steady stream of contract announcements which have flowed out of ITM Power throughout May and June has continued this morning. The company has signed the front end engineering design contract for the Humber H2ub hydrogen project being built by low carbon energy company Uniper, for which it had already been picked as the electrolyser supplier.

ITM’s share price has more than doubled in the last two months amid the flurry of contract announcements. But contract announcements don’t necessarily translate into profits, as anyone who has followed the company for a while can attest.

The company’s share price hit a high of almost 600p in early 2021 amid optimism for hydrogen fuel demand. But in 20 years on the stock market it hasn’t yet turned a profit. At 72p, shares are currently trading just below the IPO price.

The road to net zero does not run smooth

Optimism for ITM and its hydrogen peers peaked during the pandemic as nations (and fuel price watchers) piled more pressure on the need for cleaner, reliable energy supply.

ITM and its Trident system, which uses electrolysis to turn water and renewable electricity into clean hydrogen, found themselves in the spotlight as companies and nations invested more time and money into exploring alternative energy supply options.

But the five years since then have seen a change in fortunes for the green energy push as a whole. Wars and recessions have pushed climate change down the list of global crises that need attending to, meanwhile questions have emerged about the efficiency of hydrogen as a fuel source.

I live two miles from Sizewell where another nuclear reactor is being built. When it comes online Sizewell C will pump out 3.2GW of power, enough to satisfy about 7% of the UK’s energy demands. Each ITM Trident stack generates 2MW 20MW [corrected] (to save those who, like me, may have had to Google the comparison, there are 1,000 megawatts in a gigawatt). Sizewell is a huge long term project, but when it is complete, it will make a meaningful difference to the UK’s reliance on oil and gas. Hydrogen is still some way from making such an impact and comes with its own set of safety concerns - hydrogen isn’t quite as unstable as uranium, but it still needs to be treated with caution.

When will the momentum trap snap shut?

I have almost no doubt that ITM’s recent share price surge is a momentum trap.

It’s true that the recent flurry of contracts are bringing more hope to the seemingly optimistic revenue forecasts for FY2026. In the current financial year to April, consensus is for sales to rise 145% to £56.3m (in FY2025, sales surged 40% to £22.9m). Profits remain elusive though and the forecasts suggest £30m of net losses in the current financial year. And with zero profits, a price to forecast sales valuation of almost 10x looks a little bit spicy.

But, ITM has enjoyed this sort of momentum before and lack of profits didn’t stop it from reaching monumental heights. More contracts might push those sales forecasts up higher, which could spark further share price gains.

The fact that the company has also recently welcomed industry veteran Jürgen Nowicki (the former chief executive at major shareholder Linde Engineering) to the board has also helped sentiment.

The number of investors with short interest in the company has also fallen from its post-pandemic highs and now sits at 5.4%.

Megan’s view:

This is definitely too risky for my taste, even in the short term, and I am unconvinced in the long term investment proposition. Even if hydrogen proves the saviour to the world’s energy needs, surely a bigger company is going to make the difference rather than ITM and Trident.

That said, my hunch is that the contract-fuelled surge could have further to run. And those with an appetite for trend-driven, risky stock picking might want to take a closer look. AMBER

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Roland's section

Assura (LON:AGR) 

Up 0.3% to 50.15p (£1.63bn) - Recommended Combination of Assura and PHP - Roland - PINK

Correction: this section was amended at 10.50 to correct some details of the PHP offer.

After assuring us of its objectivity last week, Assura’s board appear to has engaged more closely with rival bidder PHP and secured an improved offer.

The full value of the offer given in today’s RNS is 55.0p, but this is a complicated figure that includes two of Assura’s regular quarterly dividends, including one paid in April.

Here’s a summary of the full offer details for each Assura share:

• 0.3865 new PHP shares + 12.5p cash

• 0.84p per share special dividend

• Subtotal: 53.3p per share (based on Friday’s PHP closing price of 103.5p)

• Quarterly dividend of 0.84p paid on 9 April 2025

• Quarterly dividend of 0.84p declared on 19 May and due to be paid on 9 July 2025

• Total offer value: 55.0p

Is this better than the KKR/Stonepeak offer? KKR/Stonepeak also factored in the April and July quarterly dividends to their all-cash total offer of 52.1p.

Excluding these, the actual offer from KKR/Stonepeak was for a cash payout of 50.42p per Assura share.

PHP shares have fallen slightly this morning, but my sums suggest the core element of the PHP offer gives a comparable value of 52.1p, 1.68p above the core offer from the US buyers.

Roland’s view

Assura's last-reported net asset value was 49.4p per share (Sept 24), so its board has now secured two offers at a premium to its (somewhat stale) last-reported NAV. That seems an encouraging sign of the value that informed investors can see in this portfolio of (primarily) NHS properties.

Reports in the FT (£) have suggested some of AGR’s institutional holders favour a deal with PHP. Today’s announcement nods to this with comments on the benefits of a larger and more efficient REIT with a £6bn healthcare portfolio.

While a potential concern was PHP’s need to dispose of some properties to help fund this deal, comments today suggest Assura’s board is confident these requirements can be managed.

I am also in favour of a UK-listed solution if it can be achieved, so am pleased this is now the favoured option. We’ll now need to await a further statement from KKR confirming whether they wish to remain bidders.

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SDCL Efficiency Income Trust (LON:SEIT) 

Up 3% to 52.6p (£571) - Results for y/e 31 March 2025 - Roland - AMBER

Today’s results show SEIT shares trading at a 42% discount to NAV. This means that this energy efficiency investment trust continues to trade at one of the steepest discounts in a heavily-discounted sector.

Investors tempted by SEIT’s 12%+ dividend yield need to decide whether this situation offers an opportunity, or is a sign of underlying weakness.

Today’s full-year results provide some clues, in my view, and sees the company acknowledge the unsustainability of this situation by entering into a strategic review:

It is hard to see how the alternative asset segment of the UK investment trust market can solve the current market issues without either a material improvement in sentiment, consolidation or investments being sold, and capital returned to shareholders. The status quo is clearly unsustainable and so the Board is considering all strategic options to deliver value for all shareholders in an effective and efficient manner.

What does SEIT do? SEIT specialises in energy efficiency investments, such as on-site solar, energy efficiency and recycling projects for a steel furnace, district energy and bioenergy. The company says this diversity helps to differentiate it from most renewable energy ITs and also reduces its exposure to power prices. As we saw with NextEnergy Solar Fund recently, power price exposure has not been a positive factor in recent times.

Financials: today’s headline figures show moderate improvement in cash inflows and stable net asset value. The dividend has also been increased in line with target, with cash cover maintained:

• Net Asset Value per share 90.6p (FY24: 90.5p)

• Portfolio NAV +0.2% to £984m

• Investment cash inflow +5% to £97m

• Gross disposal proceeds: c.£90.8m

• FY25 total dividends: 6.32p (FY24: 6.24p)

• Dividend cash cover: 1.0x (FY24: 1.1x)

I think there are a couple of points worth highlighting here.

Leverage: SEIT’s net asset value per share was flat last year. While the company’s overall portfolio valuation rose by 7% to £1,197m, net asset value was flat at £984m. The difference between these is reflected by an increase in holding company net debt last year to £278m (FY24: £217m), offset by a slight reduction in working capital.

According to today’s figures, aggregate gearing is now 63.6% of net asset value. For comparison, NextEnergy reported a total gearing figure of 48.4% last week.

A figure over 50% feels a little high to me and could certainly result in material equity losses, if SEIT is forced to sell any of its assets at a discount to their book value.

Debt drawdown: the main reason for the increase in holding company debt levels appears to have been the use of the RCF to fund investee company Onyx’s growth pipeline. This on-site solar business is said to be seeing demand driven by AI data centre growth.

Because SEIT can’t currently issue new equity to fund such investments, the money had to be drawn from its bank facilities instead. SEIT’s RCF ended the year with £234m drawn down, from just £98m on 31 May 2024.

Management say the majority of last year’s £172m capital expenditure went to Onyx.

Asset sales on hold: the leverage situation would probably have improved if SEIT had been able to achieve its target for asset sales over the last 12 months.

Onyx was placed up for sale in 2024 and bids were received in January 2025. However, management says that market uncertainty triggered by the US tariff announcement in April 2025 meant that bidders were unable to make bids within SEIT’s timetable.

Similarly, EVN Group, in which SEIT has a minority holding, delayed a planned equity raise in 2024. This would have been used to fund the purchase of a wholly-owned EV charging portfolio (‘Zood’) from SEIT, releasing cash. The trust is now investigating other possibilities for releasing cash from Zood.

Portfolio concentration: SEIT’s investments may have lower exposure to power prices than conventional renewable assets. But the group’s portfolio appears to be more concentrated than that of most renewable energy trusts.

Today’s results show that the five largest investments make up 81% of the portfolio by value and contributed 82% of EBITDA last year. (In this case, EBITDA is a useful proxy for operating cash flow.)

Outlook: management aims to reduce short-term debt as soon as practicable to strengthen the balance sheet. This may be through asset disposals or some other action to realise value, as an outcome of the strategic review.

The dividend target for FY26 has been increased to 6.36p per share, which is expected to have 1.1-1.2x cash cover.

Roland’s view

My impression from this initial review is that SEIT is more highly leveraged than some other trusts and has been struggling to realise value through asset disposals.

The increase in RCF usage this year to support Onyx looks uncomfortable to me and is certainly not ideal.

The concentration of the portfolio is another potential risk, in my view. With more than 80% of cash flows coming from just five assets, I would want to know more about each of them before forming a detailed view on whether to invest.

On balance, I think it’s clear that there could be some value here. On the other hand, SEIT is perhaps a little riskier than some alternatives and may be suffering more than most from the current situation in the energy infrastructure trust sector.

I am going to take a neutral view today, as I think SEIT’s cheapness relative to its sector may be justified by slightly higher risk levels