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Barclays upgraded Safestore (LSE:SAFE) to “overweight” from “equal weight” on Monday while downgrading Big Yellow (LSE:BYG), Shurgard (EU:SHUR) and Unite (LSE:UTG) to “underweight” as the bank reassessed its European real estate coverage using a greater emphasis on free cash flow.

The brokerage cited a combination of softer growth expectations, operational challenges and macroeconomic risks behind the rating changes.

Barclays also lowered Merlin Properties (EU:MRL) to “equal weight” from “overweight” and Swiss Prime Site (USOTC:SWPRF) to “equal weight” from “overweight.” SEGRO (LSE:SGRO), meanwhile, was upgraded to “equal weight” from “underweight” following the board-approved takeover offer from Prologis.

Barclays Shifts Valuation Focus to Free Cash Flow

As part of the review, Barclays said it was replacing its previous total accounting return methodology with a framework based predominantly on free cash flow, supplemented by dividend discount models where appropriate.

The change reflects the bank’s view that listed property companies should increasingly be valued as operating businesses capable of generating contractually supported income and expanding cash flow, rather than being assessed mainly through periodic changes in the value of their property portfolios.

Under the revised methodology, Barclays forecasts five years of free cash flow per share. Capitalised interest, maintenance spending and other sustaining capital expenditure are deducted from recurring earnings when calculating these forecasts.

Free cash flow typically carries an 80% weighting in the brokerage’s valuation, with dividend discount models accounting for the remaining 20%. A larger weighting may be assigned to the dividend model where cash-flow forecasts are considered less dependable.

European Real Estate Viewed as “defensive growth”

Barclays said European listed property should increasingly be regarded as “defensive growth”, supported by predictable contractual income and limited new supply.

Other characteristics supporting this assessment include embedded rental reversion or indexation, manageable recurring capital expenditure, disciplined development activity and opportunities to increase cash flow through acquisitions.

However, the outlook differs substantially between individual property segments and companies, prompting Barclays to make several significant changes to its ratings and earnings forecasts.

Safestore Remains Preferred Self-Storage Stock

Within self-storage, Barclays highlighted a less favourable operating backdrop than during the pandemic. Industry capacity has expanded by approximately 30% since COVID-19, while customer demand has moved away from the elevated levels recorded during that period.

The brokerage reduced its adjusted EPRA EPS forecasts for Safestore by 3% for fiscal 2026 and by 11% for fiscal 2030. Despite these reductions, Safestore remains Barclays’ preferred exposure to the self-storage sector.

The bank retained a 670 pence price target for Safestore, while acknowledging challenges including weaker occupancy, affordability pressures and rising customer-acquisition costs.

Big Yellow and Shurgard Downgraded

Barclays made larger reductions to its forecasts for Big Yellow, cutting adjusted EPRA EPS estimates by 7% for fiscal 2027 and 25% for fiscal 2030.

The stock was downgraded to “underweight” with an 820 pence price target, with Barclays pointing to a weaker medium-term free cash flow outlook compared with Safestore.

Shurgard was also moved to “underweight”, accompanied by a €22 price target. Barclays lowered its earnings estimates by 9% for fiscal 2026, with the reductions increasing to approximately 21%-22% for fiscal 2028 through 2030.

The brokerage cited continuing lease-up risks and weakness across Shurgard’s existing portfolio as factors behind the more cautious stance.

Unite, Merlin and Swiss Prime Site Ratings Lowered

Unite was downgraded to “underweight” with a 460 pence price target. Barclays identified competitive pricing, occupancy levels and rental growth as important risks facing the student accommodation group.

Merlin Properties was cut to “equal weight” with a €14.70 target. The bank expects higher operating costs within the company’s data-centre business, together with a partner promotion, to restrict near-term earnings growth.

Swiss Prime Site was also downgraded to “equal weight”, with Barclays setting a 125 Swiss franc target. The brokerage said the company’s defensive qualities were becoming increasingly reflected in its current share price.

SEGRO Upgraded Following Prologis Offer

Barclays raised SEGRO to “equal weight” from “underweight” and set a 970 pence price target following the agreed takeover proposal from Prologis.

The valuation is closely linked to the agreed offer of 978 pence per SEGRO share together with a 22.54 pence final dividend.

Barclays nevertheless highlighted the potential downside should the transaction fail to complete, setting out a downside scenario of 740 pence per share in that event.

Tower Resources (LSE:TRP) has reported further progress towards securing regulatory approvals for its previously announced farm-out agreements with Prime Global Energies in Namibia and Cameroon. Completion of the approval processes is expected to trigger initial payments and provide access to further funding for the company’s African exploration activities.

Namibia and Cameroon Approvals Move Forward

In Namibia, the deed of assignment covering PEL 96 is currently with the Upstream Petroleum Unit for final checks before being submitted for ministerial execution. Completion would allow Tower to move ahead with planned activities across the licence with the financial support of its farm-out partner.

Progress is also being made in Cameroon, where the approval documentation relating to the Thali licence is awaiting execution at the Presidency. Final approval represents an important step towards funding and advancing the proposed NJOM-3 well.

The two farm-out transactions are central to Tower’s strategy of bringing in external capital to progress its exploration portfolio while limiting the amount of funding required directly from shareholders.

Tower Raises £325,000 for Working Capital

While it waits for proceeds from the farm-out transactions, Tower has raised £325,000 through a subscription for approximately 2.36 billion new shares at a discount to the prevailing market price.

The company has also granted broker warrants covering around 59.1 million shares, with an exercise price representing a 100% premium to the subscription price.

Following admission of the newly issued shares, Tower’s total issued share capital will increase to approximately 45.2 billion shares. Although the transaction results in further dilution for existing investors, the proceeds provide additional working capital while the company awaits completion of the regulatory processes and receipt of farm-out funding.

External Funding Remains Critical

Tower’s financial position remains challenging, with the company generating no reported revenue while continuing to record losses and negative free cash flow. As an exploration-stage business, it therefore remains dependent on external financing and farm-out partnerships to fund its operations and development plans.

Technical indicators also remain weak, with the shares trading below major moving averages and signalling an established downward trend. While valuation may appear inexpensive based on certain price-to-earnings measures, such metrics provide limited insight given the company’s underlying losses, lack of operating revenue and continuing cash requirements.

More About Tower Resources

Tower Resources is an AIM-quoted oil and gas exploration company focused on upstream opportunities in Africa. Its principal assets include the PEL 96 licence offshore Namibia and the Thali licence in Cameroon.

The company uses farm-out partnerships as a central part of its financing strategy, bringing in external partners to help fund exploration, appraisal and drilling programmes. Its portfolio provides exposure to frontier and emerging African hydrocarbon basins, although the early-stage nature of its projects carries significant exploration, financing and execution risks.

Zephyr Energy (LSE:ZPHR) is investing in additional engineering and well-related work at its Paradox Basin project in Utah as it prepares for potentially higher initial gas production. The decision reflects the board’s confidence that regulatory approval will be obtained to increase operating pressures on Enbridge’s 16-inch pipeline, which would provide greater export capacity for gas produced from the project.

Gas Processing Capacity Increased to 15 MMscf/d

Engineering work is progressing on a modular gas processing system designed to handle as much as 15 million standard cubic feet of gas per day. This represents approximately three times the capacity assumed under Zephyr’s previous base-case plans.

Initial production is expected to come from the State 36-2R and Federal 28-11 wells. Additional volumes could subsequently be introduced from existing and future wells, depending on available cash flow and the receipt of necessary permits.

By installing infrastructure capable of processing higher volumes from the outset, Zephyr is positioning the Paradox project for a potentially faster ramp-up as it moves towards commercial gas production.

Enbridge Pipeline Inspection Work Progresses

Enbridge has completed the mandatory in-line inspection of the pipeline and is now undertaking routine excavation and visual inspection work. No issues have been reported from the process so far.

Zephyr is carrying out its own field preparations in parallel with this regulatory and inspection work. The strategy is intended to minimise the time between receiving the necessary pipeline approvals and delivering first gas from the Paradox project.

The company is also continuing discussions regarding a potential farm-out of the project and is progressing a proposed US$15 million commodity purchase agreement. These initiatives could provide additional funding support as Zephyr advances development and seeks to expand production.

Financial Performance Remains a Constraint

Zephyr’s outlook continues to be affected by weakening financial performance, including declining revenue, sustained net losses and a significant deterioration in cash generation. Operating and free cash flow were both negative in 2025.

Technical indicators are more constructive, although an RSI of around 78 points to overbought conditions that could limit confidence in further near-term share price gains. Valuation also provides limited support while the company remains loss-making, resulting in a negative price-to-earnings ratio, while no dividend yield is currently indicated.

More About Zephyr Energy

Zephyr Energy plc is a technology-led oil and gas company focused on responsible resource development in the Rocky Mountain region of the United States. Its principal operated asset is the approximately 70,000-acre Paradox project in Utah.

The project includes the 20,000-acre White Sands Unit, which has independently assessed 2P reserves of 35.3 million barrels of oil equivalent and total recoverable resources of 74.2 million barrels of oil equivalent.

Zephyr also owns a portfolio of non-operated production interests across the Williston Basin and other parts of the Rocky Mountain region. These assets are supported by a US$100 million strategic partnership intended to accelerate growth and strengthen cash generation as the company expands its regional upstream operations.

SkinBioTherapeutics (LSE:SBTX) has appointed Anita Slater as interim Chief Financial Officer for an initial six-month period as the life sciences group looks to strengthen its financial governance and controls. Slater will work alongside the existing interim finance team to support a smooth transition and reinforce the company’s financial framework.

Anita Slater Brings Three Decades of Financial Experience

Slater is a chartered accountant with around 30 years of senior commercial and financial experience spanning start-ups, AIM-listed companies and FTSE top 10 businesses.

Her appointment comes as SkinBioTherapeutics focuses on improving its governance structure while progressing the commercial development of its skin health portfolio. Working with the interim finance team, Slater will help ensure continuity across the group’s financial operations during the leadership transition.

Further Board Appointments Under Discussion

SkinBioTherapeutics is also in advanced discussions regarding the appointment of additional non-executive directors, signalling that further changes to the board could be forthcoming.

The company expects to provide a broader business update by mid-September. The planned update, together with potential new board appointments, should provide shareholders with further information on the group’s strategic priorities and evolving leadership structure.

Profitability and Cash Flow Remain Key Challenges

SkinBioTherapeutics has delivered strong revenue growth, but its overall financial profile continues to be constrained by negative profitability and cash flow.

Technical indicators provide some support, with recent trend and momentum signals showing improvement. However, conventional valuation measures remain difficult to assess positively while the company continues to report losses, resulting in a negative price-to-earnings ratio, while no dividend yield is currently indicated.

More About SkinBioTherapeutics

SkinBioTherapeutics is an AIM-listed UK life sciences company specialising in skin health. Its operations are built around the proprietary SkinBiotix platform, which originated from research conducted at the University of Manchester.

The group follows a dual approach to skin health, developing topical products designed to work externally alongside oral supplements intended to support the skin from within. SkinBioTherapeutics also operates contract manufacturing and distribution activities serving the wider skin and healthcare products market.

BATM Advanced Communications (LSE:BVC) reported a solid first-half performance for 2026 as growth in its core networking operations accompanied further progress with the group’s strategy of disposing of non-core businesses. Adjusted revenue from continuing operations reached $41.7 million, while gross margin remained stable at 34.9% and cash stood at $22.5 million.

BATM Networks Delivers 20% Revenue Growth

BATM Networks was a key contributor during the period, with divisional revenue increasing 20% to $8 million. Growth was supported by strong demand for the company’s Carrier Ethernet products as well as its Edgility edge-computing platform.

The group’s cybersecurity operations also continued to develop new encryption products. Revenue from BATM Cyber declined slightly during the half, although the company attributed the movement primarily to the timing of customer budgets rather than a deterioration in underlying demand.

Development of advanced cybersecurity technology remains an important part of BATM’s strategy, including solutions designed to provide protection against emerging post-quantum security threats.

Non-Core Disposals Could Generate $36.6 Million

BATM made significant progress in simplifying its portfolio during the period, agreeing to dispose of three of its four remaining non-core businesses. The company also completed the sale of an analytical laboratory operation.

The proposed transactions, together with a related share sale involving one of the divested businesses, are expected to generate approximately $36.6 million in cash.

These disposals are intended to streamline BATM’s corporate structure, strengthen its balance sheet and release capital for investment in its principal networking and cybersecurity operations. The strategy is increasingly concentrating the group on higher-growth technology areas where management sees stronger long-term opportunities.

Profitability and Cash Flow Remain Key Challenges

Despite improving revenue growth and relatively low leverage, BATM’s financial outlook remains constrained by continuing losses and negative operating and free cash flow.

Technical indicators also remain subdued, with the shares trading below major moving averages, the MACD in negative territory and the RSI below 50. Valuation provides only limited support while the company remains loss-making, resulting in a negative price-to-earnings ratio, while no dividend yield is currently indicated.

More About BATM Advanced Communications

BATM Advanced Communications is a global technology company specialising in advanced network infrastructure and cybersecurity solutions. Its growing areas of focus include secure managed networking, edge computing and encryption technologies designed for emerging quantum-era security requirements.

The group serves customers including governments, critical infrastructure operators and large enterprises, with its strategy increasingly centred on higher-growth and higher-margin networking and cybersecurity markets.

GEO Exploration Limited (LSE:GEO) has reported encouraging soil geochemistry results from its Gorge Project in Western Australia, including a peak assay of 7.74 grams per tonne of gold from the Gorge Mine target. Gold was detected in 99.6% of the 245 samples collected, providing further evidence of widespread mineralisation across the project area.

Results Strengthen Priority Gold Targets

The sampling programme identified strong and coherent gold-in-soil anomalies, with several samples returning grades above 1 gram per tonne of gold. The results reinforce the Gorge Mine target and the nearby 401 Prospect as priority areas for further exploration.

Both targets form part of an approximately five-kilometre mineralised corridor that GEO is evaluating for its potential to host additional gold mineralisation.

Multi-element geochemical analysis also identified pathfinder element associations consistent with intrusion-related and orogenic gold systems, providing further geological support for the company’s exploration model.

Expanded Exploration Programme Planned Ahead of Drilling

Following the latest results, GEO intends to significantly expand its exploration activities at Gorge. The next phase will include approximately 1,188 additional soil samples alongside rock-chip geochemistry and detailed geological mapping.

The programme is designed to better define the extent of the identified anomalies and allow GEO to refine and rank prospective targets before beginning its planned maiden drilling campaign.

The latest results increase the exploration potential of the Gorge Project, although drilling will ultimately be required to determine whether the surface geochemical anomalies correspond with significant high-grade mineralisation at depth.

More About GEO Exploration Limited

GEO Exploration Limited is a mineral exploration company focused on the discovery and development of gold resources, with the Gorge Project in Western Australia forming a key part of its portfolio.

The company uses techniques including multi-element soil and rock geochemistry, geological mapping and targeted drilling to identify and advance prospective gold targets along established mineralised corridors.