Sunday share tips: Urban Logistics, Jadestone Energy

Joanne Hart at the Mail on Sunday expects Urban Logistics shares to continue gaining momentum, highlighting the skills of “dyed-in-the-wool property man” Richard Moffit, with more than 25 years' experience in logistics, buying and selling sites used by companies to move goods around the country.

After having successfully built up a business and disposing of it to CBRE, the largest property advisory group in the world, Moffitt decided to have another crack.

“In 2016, he set up Urban Logistics, a company specialising in so-called 'last-mile' warehouses. The business floated at £1. The shares closed at £1.23 last week and they should continue to increase in price. The firm also offers a generous dividend, forecast at 7p for this year and 7.5p for 2020,” said Hart in this week’s Midas share tips for ThisIsMoney.co.uk.

With e-commerce completely turning the once considered dull and boring logistics industry on its head, the sector has become “one of the most exciting areas in the property sector”, according to Hart.

“However, most attention is focused on the huge distribution sites that are often the size of several football pitches and used as central distribution hubs by companies such as Amazon or Tesco,” said Hart.

“Urban Logistics is rather different. It owns smaller properties, used by firms to deliver goods direct to homes and businesses.”

Hart also highlighted the need for such sites to keep growing in order to avoid supply constraints- which is where she believes Moffitt and his team of property veterans’ experience “comes into its own”.

“Between them, they hear about sites coming up for sale before anyone else, they can gauge values more accurately than less established operators and they know when to drive a bargain.”

With Paul Blakeley and some ex-Talisman colleagues having now returned for what he called “unfinished business” in the Asia-Pacific region with oil and gas producer Jadestone Energy, Rachel Millard at the Sunday Times feels confident the group is a ‘buy’

Listed in London and Toronto, Jadestone is yer another in a sea of newcomers buying fields from the majors as they shift their attentions elsewhere.

Millard, in this weeks’s edition of her Inside the City column, highlighted that the upstarts hoped to use “more efficient methods” to work the fields at lower cost - a strategy that helped Blakeley build Talisman’s North Sea business into one of the most successful of the 1990s.

“There are encouraging early signs” she noted.

“Jadestone joined AIM last year, raising $110m (£85m) to buy the Montara field off northern Australia from Thailand’s PTTEP. It has yet to take full control, but has already managed to increase efficiency and boost production at Montara by about 50% — to 12,000 boe a day. At Stag, its other active field, Jadestone has cut costs and increased production from about 2,600 boe a day in 2017 to 3,600 last year.”

Millard added that other areas “also look promising”, with Jadestone expecting to start producing gas from its fields in southwest Vietnam by 2021, while in April, it announced plans to sell gas to state-owned PetroVietnam as “demand booms in the region”.

While she noted there were risks ahead, as the Australian regulator had yet to accept Jadestone’s safety plan for Montara, delaying its full takeover, Millard states that analysts had pointed to Blakeley’s “strong track record” and suggested that the group’s 75% share price rally indicated the market was “starting to take note”.