Blog

Crude prices moved lower again on Tuesday as investors continued to assess the implications of the emerging U.S.-Iran peace agreement and awaited further information on plans to reopen the Strait of Hormuz.

At 09:09 GMT, August Brent crude futures were down 2.1% at $81.41 per barrel, while July WTI futures declined 2.4% to $78.83 per barrel.

Peace Agreement Triggers Sharp Price Correction

The latest decline follows a near-5% drop in both benchmarks on Monday after the United States and Iran announced a preliminary framework designed to extend the existing ceasefire by 60 days and restore access through the Strait of Hormuz.

The move has removed a substantial portion of the geopolitical premium that had supported prices during the Gulf conflict, pushing oil benchmarks to their lowest closing levels in three months.

Markets Await Confirmation of Reopening Schedule

Investors are now focused on the timeline for implementing the agreement and the speed at which energy exports can resume.

President Donald Trump has said the Strait of Hormuz should be fully reopened by Friday, when U.S. and Iranian representatives are expected to formalize the agreement during a meeting in Switzerland.

While the announcement has improved sentiment, analysts caution that operational and logistical challenges could slow the return to normal trading conditions.

Energy Industry Faces Lingering Challenges

Questions remain over shipping security, insurance coverage and the ability of delayed cargoes and vessels to re-enter the market efficiently.

Several banks and research firms have warned that restoring inventories and rebuilding normal trade flows may take considerably longer than expected, even if diplomatic progress continues.

As a result, energy markets are likely to remain highly sensitive to developments surrounding the agreement.

OPEC Lowers 2026 Demand Outlook

Separately, OPEC revised down its forecast for global oil demand growth in 2026 for the second consecutive month.

The organization now expects demand to increase by roughly 970,000 barrels per day next year, compared with its previous estimate of 1.17 million barrels per day.

The downgrade reflects expectations for softer consumption growth across key regions.

Supply Risks Have Not Completely Disappeared

Although concerns over disruption have eased, analysts note that oil inventories were significantly reduced during the closure of the Strait of Hormuz.

Any delays to the reopening process or setbacks in diplomatic negotiations could quickly reignite concerns over supply availability and lead to renewed volatility in crude markets.

Rathbones Group Plc (LSE:RAT) said it will introduce a series of operational and compliance enhancements after completing a Skilled Person Review conducted following discussions with the Financial Conduct Authority.

The review identified areas for improvement within the company’s UK Wealth Management division, particularly relating to Consumer Duty requirements and aspects of its compliance and oversight framework.

Two-Year Improvement Programme Planned

The wealth manager said it will implement a comprehensive programme over the next two years to address the review’s findings and strengthen its internal controls.

As part of the process, Rathbones will also carry out a targeted assessment of selected client relationships to determine whether customers have received appropriate outcomes in line with Consumer Duty expectations.

New Restrictions for Enhanced Due Diligence Clients

While the remediation programme is underway, the company will temporarily suspend the onboarding of new clients requiring Enhanced Due Diligence for a period of up to 12 months.

Rathbones said these clients generated approximately £370 million of gross inflows during the past year.

The group will also temporarily stop accepting additional inflows into general investment accounts from certain existing Enhanced Due Diligence clients. The measure affects around 4,700 clients, representing approximately 4% of Rathbones’ total client base of 119,000.

Gross inflows from these affected clients amounted to roughly £530 million over the last 12 months. The company said it will work closely with clients to satisfy the relevant requirements and enable inflows to resume.

£60 Million Cost Expected

Rathbones expects the review and remediation programme to result in costs of approximately £60 million, net of anticipated insurance recoveries.

These expenses will be recognised as non-underlying items over the next two years as the company implements the required changes.

Dividend and Buyback Plans Remain Intact

Despite the additional costs, Rathbones confirmed that its dividend policy remains unchanged.

The company also said its previously announced £20 million share buyback programme has now received approval from the Prudential Regulation Authority and is expected to commence shortly.

Fee Changes to Support Client Value

Separately, Rathbones announced changes to its charging structure as part of its ongoing focus on delivering fair value to clients.

From July 1, the group will no longer charge investment management fees on cash balances held within discretionary portfolios. Management expects the move to reduce underlying profit before tax by approximately £9 million during 2026.

Management Maintains Strategic Focus

Chief Executive Officer Jonathan Sorrell said the actions being taken are designed to strengthen the business and support its long-term ambitions.

He added that the company’s strategic direction remains unchanged and that Rathbones continues to make progress against the objectives outlined earlier this year, with the goal of becoming the leading wealth manager in the UK.

Associated British Foods (LSE:ABF) has secured approval from the UK Competition and Markets Authority for its planned acquisition of bread producer Hovis, clearing the way for the transaction to move forward.

The competition regulator confirmed its decision on Tuesday, concluding its review of the proposed deal and determining that the acquisition can proceed without any conditions or remedies.

Final Obstacle Removed

The CMA’s decision eliminates the last major regulatory requirement standing between ABF and the completion of the transaction.

With competition concerns resolved, the company is now in a position to finalise its purchase of Hovis and integrate the well-known bakery business into its portfolio.

Deal Cleared Without Conditions

The regulator approved the acquisition without imposing restrictions, allowing ABF to proceed with the transaction as originally proposed.

The clearance marks an important milestone for the group as it expands its presence within the UK food manufacturing sector through the addition of one of the country’s best-known bread brands.

Frasers Group (LSE:FRAS) shares fell more than 6% on Tuesday after RBC Capital Markets cut its recommendation on the retailer to “underperform” from “sector perform”, arguing that recent share price gains have left limited upside for investors.

The broker increased its target price modestly to 750p from 720p, but said the stock’s 12% rise since the start of the year has pushed the valuation beyond what it considers fair value.

“The shares have now run slightly ahead of our fair value and we see more upside in several other stocks,” RBC said.

Valuation Suggests Limited Near-Term Upside

RBC’s 750p valuation is based on a combination of discounted cash flow and sum-of-the-parts methodologies.

The discounted cash flow model implies a value of approximately 712p per share, based on a 9% weighted average cost of capital and a 1% terminal growth rate. Meanwhile, the sum-of-the-parts analysis produces a valuation of around 789p per share.

Despite the higher target price, the broker believes the risk-reward profile has become less attractive relative to other opportunities within the retail sector.

Earnings Forecasts Lifted on Buyback Support

RBC raised its adjusted earnings per share forecasts for fiscal 2026 and fiscal 2027 to reflect the impact of ongoing share repurchase programmes.

The broker now expects adjusted EPS of 95.6p for fiscal 2026, up from a previous estimate of 93.6p, while its fiscal 2027 forecast has been increased to 103.7p from 100.8p.

Frasers recently announced a new £70 million share buyback programme, adding to a £70 million repurchase initiative unveiled in December 2025. The latest programme is scheduled to begin on June 16.

Core Sports Retail Business Faces Challenges

RBC forecasts revenue of £5.19 billion for fiscal 2026, representing growth of 5.4% year-on-year. However, underlying pre-tax profit is expected to edge down 0.9% to £555 million.

The broker highlighted softer prospects for the UK Sports Retail division, which accounts for roughly half of group revenue and earnings. RBC expects the segment to decline around 5% during fiscal 2026 before stabilising in fiscal 2027.

Hugo Boss Bid Raises Leverage Concerns

A key factor behind RBC’s cautious stance is Frasers’ proposed acquisition of Hugo Boss (TG:BOSS).

Last week, Frasers launched a voluntary public offer of €38 per share for the portion of Hugo Boss it does not already own, representing approximately 73.9% of the company’s share capital. The transaction would cost around £1.70 billion.

RBC estimates the acquisition would be modestly earnings accretive at the proposed price but would increase leverage, pushing net debt-to-EBITDA from roughly 1.3 times to around 2 times.

“We see potential for Frasers to have to pay more to secure 100% of BOSS,” Chamberlain wrote, noting the offer represented only a 4% premium to the pre-announcement share price.

Additional Acquisition Activity in Australia

Frasers has also made a takeover approach for Australia’s Accent Group, offering AUD0.65 per share for the 77.1% stake it does not already own. The proposal values the transaction at approximately £166 million.

RBC’s analysts covering Accent believe a higher offer may ultimately be required to gain support from shareholders.

International Expansion Remains a Mixed Picture

The retailer’s International Retail division now contributes close to 30% of group sales, compared with around 20% in fiscal 2025.

RBC values the segment at 0.3 times fiscal 2027 enterprise value-to-sales, reflecting what it described as a mixed track record across international markets despite the division’s growing importance.

Wide Range of Potential Outcomes

RBC’s downside scenario values Frasers at 400p per share, assuming long-term sales growth of around 1% annually and operating margins gradually declining to approximately 8%.

Its bullish scenario values the shares at 1,000p, based on assumptions of 5% long-term annual sales growth and operating margins improving to around 13%.

The broker believes future performance will largely depend on the success of Frasers’ acquisition strategy, international expansion efforts and its ability to sustain profitability across its core retail operations.

Active Energy Group plc (LSE:AEG) has signed a strategic distribution agreement with Fog Hashing Pte. Ltd., a provider of modular digital infrastructure for high-performance computing (HPC), artificial intelligence (AI) and digital asset hosting, as it looks to accelerate the rollout of its digital infrastructure platform across the Gulf Cooperation Council (GCC) region.

The agreement grants Active Energy distribution rights throughout the GCC and creates a framework for a potentially broader exclusive partnership, subject to agreed commercial milestones and future definitive agreements.

The company said the partnership strengthens its ability to deploy digital infrastructure across sites connected to ultra-low-cost power sources in the UAE and wider GCC, supporting its strategy of building a regional compute and hosting platform.

Faster Deployment Across Growing Site Portfolio

Active Energy expects the arrangement to improve access to modular infrastructure, technical expertise, deployment support and more favourable purchasing terms as it expands its network of power-connected locations.

Management believes the enhanced supply chain will shorten the time required to move from securing grid-connected sites to deploying operational infrastructure capable of generating revenue through hosting agreements and strategic compute partnerships.

As the company scales across multiple GCC locations, directors said rapid deployment capabilities will become increasingly important to support growth.

Standardised Infrastructure Model

A key feature of the partnership is the development of a more standardised infrastructure platform across Active Energy’s portfolio.

The company expects the modular approach to make it easier to relocate equipment between sites, helping support customer migrations, optimise capacity utilisation and accelerate commercial launches.

According to the board, this flexibility could improve both capital efficiency and operational performance as the business expands throughout the region.

Supporting Future AI and HPC Demand

While the company’s current focus includes digital asset hosting, the agreement also aligns with its longer-term ambitions in AI and high-performance computing infrastructure.

Fog Hashing’s modular systems are designed to accommodate evolving computing requirements, allowing upgrades through next-generation modules rather than major redevelopment of existing facilities.

Active Energy believes this approach will help future-proof its infrastructure platform and position the business to benefit from rising demand for AI and HPC capacity across the GCC.

The company said the combination of strategically located power-connected sites and flexible modular infrastructure provides a foundation for long-term growth as demand for compute resources continues to increase globally.

Strengthening Existing Growth Initiatives

The partnership also supports Active Energy’s broader expansion plans and complements previously announced strategic initiatives.

Management said the agreement enhances the company’s ability to support larger-scale deployment opportunities and reinforces the infrastructure strategy underpinning its non-binding Letter of Intent with Bitdeer Technologies Group (NASDAQ:BTDR), announced in April 2026.

While the Bitdeer agreement remains subject to due diligence and final commercial terms, the company views relationships with infrastructure providers such as Fog Hashing as an important element in building a scalable regional platform.

Commenting on the agreement, Chief Executive Officer Paul Elliott said: “This is more than a supply agreement. As we continue to build a regional digital infrastructure platform, the ability to rapidly deploy, redeploy and upgrade infrastructure becomes increasingly important.

Our strategy is centred around securing ultra-low cost power-connected sites and overlaying scalable digital infrastructure capable of generating long-term recurring revenues.

Through this Agreement, we gain enhanced access to technology, expertise and commercial terms that we believe will accelerate deployment across our portfolio.

Importantly, the modular nature of the Fog Hashing platform supports both current hosting applications and future AI and HPC opportunities.

We believe this provides significant operational flexibility and strengthens our ability to participate in some of the fastest-growing segments of the global digital infrastructure market.

Combined with our existing UAE operations, recent acquisitions and strategic partnerships, this agreement represents another important step in establishing AEG as a recognised digital infrastructure platform across the GCC.”

MediaZest (LSE:MDZ) delivered a strong first-half performance for the six months ended 31 March 2026, with revenue increasing 40% to £2.67 million and gross profit rising 20% to £1.35 million. Growth was driven by a number of large-scale audio-visual deployments for clients including First Rate Exchange Services, Arc’Teryx, Hyundai, KIA, Lululemon and Pets at Home.

While gross margins eased slightly due to a greater proportion of hardware-related revenue and increased investment in engineering resources, the company reported EBITDA of £120,000 and a significantly improved profit before tax of £754,000.

Major Projects Drive Growth

The company benefited from continued demand for digital signage and audio-visual solutions across multiple sectors, including retail, automotive and corporate environments. Management said the successful delivery of large roll-out programmes across the UK and Europe was a key contributor to the improved financial performance.

MediaZest continues to focus on building long-term customer relationships and expanding its recurring revenue streams through ongoing support, maintenance and content services.

Balance Sheet Strengthened Through Restructuring

During the period, the company significantly improved its financial position through a restructuring of its debt facilities. The agreement resulted in the write-off of £529,000 of accrued interest and converted the remaining borrowings into interest-free loans.

MediaZest also completed a £215,000 equity fundraising, attracting new institutional investors and further strengthening the balance sheet. Management believes these measures provide a more stable platform for future growth.

Positive Outlook for Second Half

The company expects trading momentum to continue during the second half of the financial year, supported by ongoing client roll-outs and sustained demand across its target markets. Growing recurring revenues and a healthy project pipeline are expected to underpin performance.

Management is targeting full-year revenue of more than £5 million and continues to evaluate acquisition opportunities as part of a broader buy-and-build strategy designed to accelerate growth.

Market Considerations

The company’s outlook is supported by improving profitability and stronger free cash flow generation, although leverage levels and a history of earnings volatility remain considerations for investors. Technical indicators remain positive, with the shares continuing to trade within a strong upward trend. However, overbought momentum signals may increase the risk of short-term share price volatility. Valuation appears relatively balanced, with a price-to-earnings ratio of around 13 and no dividend yield currently available.

More About MediaZest Plc

MediaZest Plc is a UK-based provider of creative audio-visual and digital signage solutions. The company works with leading retailers, automotive manufacturers and corporate clients, delivering services ranging from content creation and system design to installation, maintenance and technical support.

Listed on AIM since 2005, MediaZest focuses on helping businesses enhance customer engagement and communication through innovative visual and audio technologies.