BA owner IAG’s share target cut by Credit Suisse on ‘increasing rights issue risk’

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British Airways owner IAG is the biggest faller on the FTSE 100 today, as travel stocks were among the most volatile of sectors in the past week.


Today, Credit Suisse (NYSE:CS.) cut its share price target on IAG to 195p from 256p, on “increasing rights issue risk”, following the heavily discounted cash call by budget airline easyJet this week.


“We think it is getting increasingly likely IAG looks to raise equity,” the analysts said and, though they have not yet changed their financial forecasts, the price target was lopped to “reflect the risk of shareholder dilution”.


The number-crunchers said they “are conscious that until the transatlantic market re-opens unfettered, the IAG investment case will remain challenging, however we retain an Outperform rating as we continue to see it as one of the best ways to play ultimate air travel recovery across the value chain (alongside names such as Ryanair, Wizz Air, Airbus, Aena also under our coverage).”


3.15pm:


Arkle Resources PLC (AIM:ARK) shares leapt like their thoroughbred namesake, up 50% to 1.2p, after announcing results from the latest drillholes at the company’s 100% gold project in Ireland.


Chairman John Teeling described the results from Hole 7 as “spectacular”, with grades including 51.6 grammes of gold per tonne the highest discovered at the Mine River project.


While laboratory analysis it awaited, he reported “good indications” in Holes 8 and 9, where the targets are an extension of the gold zone and to look for gold veins between 50 and 200 metres.


“Visual observation shows the mineralisation we are looking for both above and below 100 metres. The core is in the laboratory,” he said.


11.50am: Caracal cracking on


Caracal Gold plc (LSE:GCAT) (LSE:GCAT), which is still going under its former name of Papillon Holdings PLC (LSE:PPHP) on many websites, is another riser on Friday morning, with its shares up 8% to 1.43p after saying it has “hit the ground running across every aspect of our gold mining and exploration business” after last month’s reverse takeover deal.


The deal saw Mayflower Gold Investments reverse into listed Papillon, bringing the ownership of Kenya’s Kilimapesa gold mining and processing operations back to the public markets, having formerly been owned by Goldplat PLC (AIM:GDP).


Robbie McCrae, chief exectuvie of Caracal, said “excellent progress is being made” at Kilimapesa, where the company is looking to increase gold production to 25,000oz per year.


He said a recent agreement to connect the plant to the grid power was a “key achievement” as it would “deliver major cost savings and improved economics, but it also strengthens our ESG credentials given Kenya’s advanced stance on the use of renewable energy”.


“Additionally, our exploration programmes aimed at increasing our JORC compliant resources to +2Moz are also making headway, with initial trenching of shallow open pit areas initiated, the acquisition of our own RC and DD drills, and in-house drilling teams established to allow us to accelerate our exploration activities.”


9.30am: Tanfield surfaces


Tanfield Group (AIM:TAN) PLC led the early risers on Friday, climbing 30% to 3p on the back of its half-year results, where it provided an update on US and UK legal proceedings.


The AIM-listed company, which used to be focused on electric vehicles, has for some years now been an investment company with a single principal investment: a 49% share of aerial work platform company Snorkel, which is valued on its books at GBP19.1mln.


Having been sued in 2019 in the US by Extreme, the majority owner of Snorkel since 2013, and issued its own claim in the English courts against its lawyers in the 2013 deal, Tanfield said “both the US and UK Proceedings are continuing to progress and […] the board believes a positive outcome to either/both proceedings is possible”.


“So far as it is necessary, the company will continue to vigorously defend and advance its position in both proceedings, whilst continuing to seek advice.”


Tanfield said it continues to receive the support of its shareholders via loan note subscriptions in order to provide the necessary legal funding and day-to-day costs, though its operating loss in the period reduced to GBP0.19mln from GBP0.33mln as a consequence of lower legal fees during the period.


Elsewhere, shares in One Media iP Group PLC (AIM:OMIP, FRA:1M9) stomped and twirled higher after saying it had snapped up the rights to more songs penned by soul and high energy legend Ian Levine.


The latest batch includes a new recording deal Levine made with multimillion-selling artist Evelyn Thomas who topped the charts with ‘High Energy’ in 1984, with the pair now working on three new recordings due to be released before Christmas.


One Media said it will represent both artist and producer on the publishing to the new tracks, adding it is the first time Levine and Thomas have collaborated on music together in 33 years.

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