NEX EXCHANGE
Ananda Developments (ANA) is acquiring 15% of UK-based Liberty Herbal Technologies Ltd, which is the owner and developer of hapac, a technology for vaping cannabis. The investment cost £460,000 and Ananda has the right of first refusal for any further fundraisings in the next two years. The technology can be used to provide a measured medicinal dose. A commercial launch is planned in Italy before the end of the year and in Canada next year. Ananda is holding a general meeting to extend its geographical focus to the UK and Italy.
Chapel Down Group (CDGP) is leasing 388 acres of land adjoining its existing vineyards on the North Downs. This site will be vined between 2019 and 2021 and with the rest of the land that has already been planted it will be the largest vineyard in England.
DagangHalal (DGHL) intends to leave NEX after less than three years on the market. Trading in the shares has been limited but this is not surprising given the problems the company has had. Shareholders owning 84.7% of the company are in favour of the withdrawal from NEX and this will happen on 1 October.
Trading in Etaireia (ETIP) shares was suspended because the annual report for the year to March 2018 was not published by the end of August. The results were released on 5 September and trading was restored. The loss was increased from £622,000 to £857,000, following a £434,000 write down on the value of land at Dalry. The NAV was £1.81m at the end of March 2018.
Milamber Ventures (MLVP) remains suspended with full year results due to be published by the middle of September. The audit of Essential Learning still needs to be completed.
Hot Rocks Investments (HRIP) had nearly £17,000 in the bank at the end of March 2018. The NAV was £722,000. The majority of the loss of £219,000 in the year was due to share-based payments. Hot Rocks has a stake in Minergy Ltd, which has floated on the Botswana Stock Exchange and has been granted a mining licence for the Masama coal project. Production could start by next February. Another investee company, Block Energy (BLOK) has floated on AIM and more than two million shares have been acquired in standard list flotation Predator Oil and Gas.
Ecovista (EVTP) has raised £550,000 from a convertible loan note issue, which has to be repaid or converted (at 0.0005p a share) by the end of August 2019.
AIM
Bilby (BILB) founder Phil Copolo and his son Leigh have left the board of the building and gas maintenance services provider and sold more than 31% of the company to institutional investors at a discount of around 6% to the then market price. Janet Copolo still owns 7.2% of Bilby and cannot sell until 3 September 2019, according to an agreement with Stanford Capital Partners, which was sole book runner of the placing. Miton has increased its stake from 15.1% to 19.8%, while MI Discretionary Fund has bought 8.19% and Ruffer has acquired 8%.
TLA Worldwide (TLA) published its latest profit warning at 10.35am on 4 September. At least it was while the markets were still trading rather than after they had closed for Christmas. Numis has had enough and resigned as nominated adviser. Trading is weak and TLA is set to breach banking covenants. TLA needs to raise cash.
Microsaic Systems (MSYS) is still building he base from which it can grow over the next few years. The interim figures do not reflect the progress that is being made. Revenues doubled from a low base, but higher costs meant that there was a flat loss of £1.5m. There is £6.96m in the bank at the end of June 2018 so the mass spectrometry technology developer has plenty of time to build up its revenues. The venture with a global bioprocessing partner is progressing and is in an integration phase. Commercialisation should be completed by early 2020. New agreements with two manufacturers and four distributors augur well for growth over the next 18 months. The target is revenues of more than £17m in 2022.
A full first half contribution from the Carlton acquisition helped Michelmersh Brick (MBH) to increase interim revenues by 43% to £23.1m and underlying pre-tax profit by 57% to £3.8m. The interim dividend has been raised by 51% to 1.06p a share. Demand for bricks remains strong and there is limited production capacity.
Tax Systems (TAX) continues to reduce its net debt, putting it in a good position to make further acquisitions. Net debt was reduced by 15% to £17.5m over a six month period. Interim revenues grew by 14% to £8m and order intake is 22% higher. The corporation tax software provider is broadening its range of software in order to make the most of the move to a digital tax system in the UK.
Filtration systems supplier Amiad Water Systems (AFS) grew its interim profit even though growth in revenues was modest. Stifel Nicolaus expects a stronger second half with full year revenues improving from $112.3m to $116.8m and then a further acceleration in growth to $123.4m. Although underlying pre-tax profit is expected to be flat at $5.1m, it is forecast to jump to $6.8m in 2019. A jump in 2018 dividend to 6.5p a share is forecast, despite relatively flat earnings per share. The dividend would still be more than twice covered.
Performance-based mobile marketing services provider Taptica International Ltd (TAP) continues to grow internationally and, via a combination of acquisitions and organic growth, interim revenues were 119% higher at $144m. Underlying pre-tax profit improved from $12.3m to $18m. An interim dividend of 3.98 cents a share is being paid. Net cash was $42.1m at the end of June 2018.
Mobile location data services provider Location Sciences (LSAI) increased revenues from £49,000 to £234,000 in the first half of 2018 but there is a lot more to come. New products have been launched and it will take time for them to make a significant contribution. Even so, 2018 revenues of £702,000 are forecast, rising to £2.2m in 2019. The loss will reduce but a profit is not forecast until 2020. There was £720,000 in the bank at the end of June 2018 and more funding will be required to achieve the expected growth in sales.
Finsbury Food (FIF) is acquiring Free From bakery manufacturer Ultrapharm for an initial £17m with more dependent on performance. The business made a pre-tax profit of £800,000 in 2017. The acquisition is earnings enhancing.
Safestyle UK (SFE) has settled litigation with former employees who set up in competition. They will change their brand name from SafeGlaze and promise not to use confidential information.
IFA Lighthouse (LGT) continues to prosper. Interim revenues were 5% ahead at £26.9m and pre-tax profit 12% higher at £1.26m. Net cash was £9.6m. and the interim dividend is two-thirds higher at 0.2p a share. Growth has been coming from the affinity business.
MAIN MARKET
Commercial aircraft lessor Avation (AVAP) reported a 16% increase in revenues to $109.1m in the year to June 2018. However, pre-tax profit dipped by 6% due to a gain on aircraft sales in the corresponding period. The dividend was increased by one-fifth to 7.25 cents a share. The NAV was equivalent to 283p a share. Cannacord Genuity forecasts a rise in pre-tax profit from $18.9m to $23.8m this year.
Dukemount Capital (DKE) has entered into a 50/50 joint venture with Rascasse Developments in order to expand into the Midlands.
Kavango Resources (KAV) has received a permit for an airborne electromagnetic geophysical survey of the Kalahari Suture Zone area, which covers 12 prospecting licences.
Haynes Publishing (HYNS) increased full year revenues by 13% to £33.8m and underlying pre-tax profit by a similar percentage to £2.9m. The total dividend is unchanged at 7.5p a share. Net cash was £2.5m at the end of May 2018. Growth in the sales of digital products is faster than the decline in other revenues.
Andrew Hore