AQUIS STOCK EXCHANGE
Aquis Stock Exchange owner Aquis Exchange (AQX) reported interims showing growth in all four divisions of the group and the Aquis Stock Exchange remains profitable. Group revenues improved from £7.85m to £9.34m, while pre-tax profit rose from £699,000 to £1.15m. Net cash is £13.9m.
Brewer Adnams (ADB) says trading improved in the second quarter and cost savings started to kick in. This partly offset the decline in revenues in the first quarter, but the interim revenues were still slightly lower at £30m. Operating costs and interest charges increased, and the loss trebled to £3.13m. Adnams is taking on new customers, but the average order size has reduced. Trading conditions are uncertain, but the new customer sand listings will help to boost the second half.
Africa-focused battery metals company Marula Mining (MARU) is considering moving to the standard list as an alternative to AIM. Management believes that this would not add any additional time to the process, and it believes that the proposed investment by Q Global Commodities will make Marula Mining large enough to be eligible for the standard list. It is also planning listings on the Nairobi Securities Exchange and the Johannesburg Stock Exchange. Warrants exercised at 4p/share raised £50,000. A shipment of 27.5 tonne high-grade material processed from stockpiles at the Blesberg lithium and tantalum mine in South Africa has been delayed. The offtake agreement with Southern Jade Resources has been terminated and an alternative agreement is being finalised. Additional drilling at Blesberg is progressing and initial assay results should be published in late October.
Apollon Formularies (APOL) has executed a binding letter of intent with Sproutly Canada Inc, who will acquire the assets of the cannabis-based drug discovery company. After completion of due diligence, the assets will be acquired in return for shares equivalent to 49% of Sproutly. The effective valuation is C$7m (£4.2m). Sproutly has to go through audits and other regulatory requirements to become active and trading on the Canadian Stock Exchange.
Fuel additives SulNOx Group (SNOX) says it requires new equity investment from existing and new investors in order to achieve faster and sustainable revenue growth. There would additional industry hires for the board and sales personnel. There will also be increases in stock levels and new products will be developed. The board is seeking shareholder authority to issue new shares. Mohanned Nawaz Haq does not agree with the new strategy and the board recommends voting against his appointment at the AGM on 26 September.
Newbury Racecourse (NYR) improved interim turnover by 3% to £8.03m, but the company fell into loss because gross margins slumped. The nursery increased its contribution, but there were lower attendances at races. An event in July had the highest attendance for four years. Next year will get the full benefits of the media rights deal.
Broker and wealth management company Oberon Investments (OBE) has raised £2.5m via a placing at 3.6p/share and a retail offer could raise a further £500,000. The share price dipped 2.78% to 3.5p. The cash will fund expansion, including the recruitment of revenue generating teams. The Winterflood Retail Access Platform offer has a minimum subscription of £50. Investors can apply for shares via their broker or intermediary and the closing date is 4.30pm on 25 September.
Silverwood Brands (SLWD) has been given an extension of the time to deliver its defence to the legal action by Lush and VSA resigning as corporate adviser and being replaced by Peterhouse. Lush is refusing to recognise the transfer of a 20% stake to Silverwood Brands. VSA Capital (VSA) owns 0.88% of Silverwood Brands and says that the share price slump will hit its interim results to September 2023. It will make the loss larger than expected.
Property investor Ace Liberty and Stone (ALSP) increased net assets by 1% to £34.4m at the end of April 2023. Disposals meant that full year revenues fell 2.5% to £5.56m. There is £6.23m in cash available for investment. No final dividend is declared, partly due to the lack of distributable reserves.
Cadence Minerals (KDNC) investee company Evergreen Lithium has completed the final analysis of its EXOSPHERE BY FLEET Ambient Noise Tomography geophysics survey at Bynoe. Nine pegmatite targets have been identified. Approvals are required for drilling.
Watchstone Group (WTG) had net assets of £7.6m at the end of June 2023, including cash of £8.3m. By 19 September, cash had fallen to £7.6m. The claim against PwC was dismissed by the High Court and Watchstone had to settle legal costs. Canadian legal action continues.
Helium Ventures (HEV) has raised £250,000 at 4p/share. There are plans to move to AIM rather than the standard list, while maintaining the Aquis quotation. It hopes to do this by the end of this year. The potential acquisition of tracking technology company Trackimo is progressing, and Mark Notton has been appointed as its chief executive.
MBH Corporation (M8H) has acquired caravan and motorhome retailers Lincoln Leisure Vehicles and Golden Castle Caravans for an initial £400,000 in cash and £2.58m in loan notes. There will also be share issues totalling £2.24m over the next two years. The companies made an operating profit of £660,000 last year. These businesses will be integrated with the existing caravan and motorhomes operations.
Pharma C investments (PCIL) says that the general meeting scheduled for 27 September will not go ahead because the requisition has been withdrawn. The proposals were to remove Gavin Hilary Sathianathan and appoint Paul Ryan and Noel Lyons to the board.
Medical device developer TruSpine Technologies (TSP) has appointed Victoria Sena and Samuel Ogunsalu to the board. The company is not appealing the disciplinary notice from the Aquis Stock Exchange and the new appointments will improve corporate governance.
SuperSeed Capital (WWW) says that the SuperSeed II LP has sold Garvis, a SaaS company offering language model technology and AI-native demand forecasting. The original investment was in September last year. There was a triple digit IRR on the investment.
Lift Global Ventures (LFT) subsidiary Miriad has been appointed as corporate communications agency to Imperial Diagnostix Laboratories, which plans to float next year. Imperial Diagnostix Laboratories provides point of care testing products and has been granted access to the NHS supply chain.
Wishbone Gold (WSBN) says drilling has started at the Red Setter project in Western Australia. Initial targets are at a shallow depth and the company is seeking broad spreads of mineralisation. Drilling at the Cottesloe prospect reinforces previous findings. Additional drilling will be 50% funded by the Western Australian government’s EIS scheme up to a total of A$220,000.
Invinity Energy Systems (IES) says that Canadian company Elemental Energy has commenced operation of the company’s 8.4MWh Invinity VS3 vanadium flow battery. This is the largest operation so far.
Majestic Corporation (MCJ) reported flat revenues of $13m, while pre-tax profit dipped from $980,000 to $862,000. There was $680,000 generated from operating activities. The metals recycler has $1m in the bank. Rising interest rates have had a negative impact on commodity prices.
EPE Special Opportunities (EO.P) directors and the managing partner of EPIC Investment Partners bought a total of 16,837 shares at 160p each.
Kasei Holdings (KASH) has switched its corporate adviser to VSA.
AIM
International retailer Mothercare (LON: MTC) reported a decline in full year revenues from £82.5m to £73.1m. A fall in admin expenses and interest costs, partly offset this decline, but underlying pre-tax profit still slumped from £8m to £3.4m before restructuring costs. The lack of contribution from Russia was a factor in the lower revenues – this is part of the Alshaya franchise area. Middle East demand remains subdued since Covid. Net debt rose from £9.9m to £12.4m. The loan facility is being renegotiated. The current interest rate is 19.2%. Since the year end, a reduction in pension contributions has been agreed. In the ten years to March 2033 the total contributions will be £34.9m, down from £73.7m in the previous ten years. The revaluation of the pension fund shows a deficit of £35m.
Finsbury Food (FIF) is recommending a 110p/share bid by a company backed by DBAY Advisors valuing the cake maker at £143.4m. There is a non-voting share alternative to the cash bid for eligible investors. The bid is less than ten times prospective earnings. The share price has not been at this level since early 2019.
Renewable electricity supplier Good Energy (GOOD) had a strong first half due to higher tariffs and lower supply costs, but the second half will be tougher. Interim revenues were 46% ahead at £156.1m and the company swung from a loss to a pre-tax profit of £13.1m. The energy services business is losing money as it is being built up. The interim dividend has been raised by one-third to 1p/share. Tariff reductions are happening ahead of falls in supply costs for the company and that will lead to a second half loss, but Good Energy will still be profitable for the full year.
Orcadian Energy (ORCA) announced that it has entered non-binding heads of agreement with a North Sea operator to farm out the Pilot project for a full carry until first oil. Orcadian Energy would retain a 18.75% working interest. The agreement includes the drilling of five subsea wells. Orcadian Energy will receive $100,000 when the agreement is completed, plus $100,000 if it is awarded an additional licence. Field development plan approval would trigger a payment of $3m.
Trading has deteriorated since August at replacement windows supplier Safestyle (SFE) and it is expected to lose £10m in 2023. Order levels are falling short of budget. Net debt could reach £6m at the end of 2023 – the credit facility is £7.5m. Management wants to strengthen the balance sheet.
Harvest Minerals (HMI) reported interims showing a near-doubled loss as demand for fertiliser fell and pricing was lower in the period. The second half sales are normally much greater than in the first half, but they continue to be disappointing. Low crop prices mean that farmers are not investing to boost production. Cash has declined and the company has moved into net debt of £1.4m, partly due to a jump in inventories.
Eqtec (EQT) announced that the Billingham waste-to-energy project is not going ahead. Potential customers have closed facilities and the project is behind schedule. So far, £4m has been invested. There is a possibility of getting some of this cash back. Eqtec is also taking legal action against its partner in the Deeside project, seeking repayment of £4m of loans. The focus is other European markets. Forecast 2023 revenues have been slashed by more than three-quarters.
Scancell (SCLP) reports that early data from the phase II SCOPE study of SCIB1 in combination with checkpoint inhibitors as a treatment for advanced melanoma are positive. Tumour reduction at 13 weeks is 31-94%. This is for a relatively small number of patients, but it does indicate that there is strong potential for the treatment. The second stage of the study has a strong probability of success. This data will be available in the first half of 2024. Potential partners are likely to be interested.
Firering Strategic Minerals (FRG) raised £756,000 at 6.5p/share. This cash will be used to define identified pegmatite targets through a drilling campaign at the Atex lithium-tantalum project in Cote d’Ivoire. Firering Strategic Minerals holds 90% of the company that owns the Atex project. Firering Strategic Minerals also owns 75% of Bri Coltan, which owns the coltan rights for the Atex area. Coltan is composed of tantalum, niobium, iron and manganese. Nine target areas have been identified, including the six newer ones. The latest drilling is planned for the fourth quarter of 2023.
Alien Metals (UFO) says the latest drilling results from the 90% owned Hancock Iron Ore project in Western Australia indicate the potential for the project. There is high-grade mineralisation. The resource estimate will be upgraded.
Digital coupons and loyalty technology provider Eagle Eye (EYE) reported organic growth of 29% last year. International revenues grew strongly as new retailers were added to the service and when they sign up retailers tend to stay with the company. This year, pre-tax profit could improve from £4.3m to £6.2m. The cash pile reached £9.3m at the end of June 2023.
Cosmetics supplier Warpaint London (W7L) is bucking the trend of the consumer sector, where many other companies selling to the public are performing poorly. That is down to the fact that Warpaint London is in the value end of the cosmetics market. It is also adding retailers and benefiting from the international spread of the business. UK interim revenues were 28% ahead, while group revenues were 46% higher.
Structural steel supplier Billington (BILN) significantly improved margins in the first half and it still has a strong order book despite the contraction of the construction sector. This reflects the broad spread of projects being supplied. Revenues were 30% higher at £60.1m and pre-tax profit jumped from £1.3m to £4.59m.
There is not going to be a bid for Kinovo (KINO), which was not going to recommend the 56p/share offer and there was no increase tabled.
MAIN MARKET
Motor dealer Pendragon (PDG) plans to sell its entire core business to North American automotive retailer Lithia Motors for £250m. This would turn Pendragon into a software business and there could be a £240m payout to shareholders, equivalent to 16.5p/share. Lithia Motors would also subscribe £30m for 279.4 million shares and will roll out Pendragon’s Pinewood dealer management software to its existing 50 UK sites. However, there has been a bid approach for the whole company from Sweden-based Hedin Mobile and US transportation company PAG International. The initial 28p/share offer was turned down, but a higher bid of 32p/share is being considered.
First Tin (1SN) still has cash of £7.9m and that is enough to fund the DFS for the Taronga tin project in Australia. The cost of the project could be reduced by using solar power and more efficient processing. The mineral resource estimate has been increased by more than 240% to 133 million tonnes. The Tellerhauser project in Germany hopes to gain a mine permit in the third quarter of 2024.
Shipbroker Braemar (BMS) has reaffirmed that it will make an underlying pre-tax profit of at least £20m for the delayed results for the year to February 2023. The investigation into transactions between 2006 and 2013 is nearing completion. There may be adjustments to previous accounts.
Andrew Hore
