ISDX
Markets operator WMC Retail Partners (WMC) reported a sharp fall in revenues and profit in 2015. That was due to the loss of the Old Spitalfields Market contract in January 2015. Revenues were reduced from £6.08m to £4.31m, while pre-tax profit dived from £369,000 to £13,000. That profit was after fair value movements in asset values of £165,000, compared with £190,000 the year before. There was £196,000 in the bank at the end of 2015, although there are also borrowings. At 19.5p a share, WMC is valued at £1.2m, whereas the NAV was £3.58m at the end of 2015.
Brewer and pubs operator Adnams (ADP) says that first quarter operating profit was slightly ahead of expectations thanks to strong sales of own-brand beer and gin. Distillery capacity has been trebled and £7m is being invested to increase brewing capacity. A six year sponsorship of the University Boat Races has begun and increased marketing spending will hold back profit. At £99.50 a share, Adnams is valued at £28.4m. There have been deals at above this price in recent days.
Leni Gas Cuba (CUBA) is in talks to reverse into a TSX Venture market shell that until recently was going to buy Mongolian mining assets. Knowlton Capital Inc (TSX-V:KWC H) will provide access to North American investors but the enlarged group wants to retain the ISDX quotation. An all share bid by Knowlton, whose shares are currently suspended, for Leni Gas Cuba is anticipated but prior to this the Knowlton share capital will be consolidated which will give shareholders 0.7825 of a share for each share currently owned. One Knowlton share will be issued for every 2.5 Leni Gas Cuba shares. Leni Gas Cuba shareholders will own 84.4% of the enlarged group although they will be contributing a higher percentage of the group cash and assets. The Leni Gas Cuba share price is 1.15p, which is double the low in March but a fraction of the 5p a share flotation price, valuing the company at £5.7m, which is above pro forma NAV.
Ace Liberty & Stone (ALSP) has announced an interim dividend of 0.033p a share – an increase of 10% on the previous year. The ex-dividend date is 12 May. An additional 13.3 million shares have been issued at 3p each to pay for a property acquired from non-executive director Dr Anthony Ghorayeb. At 4p a share, which is the highest the share price has been, Ace is valued at £39.3m.
Investment company Gledhow Investments (GDH) reported a decline in NAV from £546,000 to £414,000 in the 12 months to March 2016 as the value of resources investments fell. During the period, a €40,000 investment was made in Dutch electric scooter developer Bolt Mobility BV. There was still £190,000 left in the bank at the end of March 2016. At 0.75p a share, Gledhow is valued at £368,000.
Valiant Investments (VALP) has set up a mobile app development business called Flamethrower and it retains an 83.33% interest. Valiant also has a portfolio of resources and green energy investments but it currently has a small net deficit.
Cyber security technology commercialisation Crossword Cybersecurity (CCS) reported initial revenues of £21,000 in 2015. The loss increased from £239,000 to £755,000. There was £1.23m in the bank at the end of 2015.
AIM
House broker Stockdale expects a slump in profit reported by smoke alarms supplier Sprue Aegis (SPRP) from £12.8m – before £5.5m battery warranty provision – to £2.1m in the year to December 2016. This is due to the revelation about unreliable batteries and poor trading in France and Germany. These are important potential markets. In Germany, 10 million homes will have to have a smoke alarm by the end of 2017. Despite being uncovered, the dividend is expected to be maintained at 8p a share. Net cash was £22.4m at the end of 2015.
Arian Silver Corp (AGQ) has raised £700,000 at 1p a unit – one share and 0.5 of a warrant to subscribe for a share at 1.5p (expiring on 28 April 2019). The current share price is 1.13p. The cash will be used to push ahead with the exploration of mining concessions in Mexico, particularly those relating to the Tierra Neuva Mineria option assets. Other projects are also being assessed.
Tekcapital (TEK) has acquired assets from Vortechs Group Inc, an executive search firm specialising in technology transfer professionals. This will add to the range of services that Tekcapital can offer. Tekcapital has paid $100,000 and 577,868 shares at 47.5p each. The current employees will be retained. The business made a small loss on revenues of $351,000 last year. In the year to November 2015, Tekcapital lost $1.46m.
MAIN MARKET
Highland Natural Resources (HNR) has raised £519,000 at 18p a share. This cash will be used to invest in oil and gas assets and technology and it should cover overheads until the end of 2017. Research into the company’s US oil and gas assets suggests that there could be uranium assets. The first commercial test of the DT Ultravert oilfield technology are set for June in Colorado.
Global Resources Investment Trust (GRIT) continues to trade at a substantial discount to NAV. The share price is 6.5p a share, whereas the NAV was 25.7p a share at the end of April. That figure is after writing down the value of a number of unquoted resources shares. GRIT recently sold its stake in NuLegacy Gold for £2.2m – more than double book value. The main concern is that the largest holder of the company’s cumulative unsecured loan stock has requested repayment because a covenant has been breached. The other two holders are supporting the company but GRIT does not have the cash to redeem the loan stock of the largest holder. Further disposals should enable this largest chunk of the loan stock to be repaid by the autumn.
Microbiological technologies supplier Bioquell (BQE) is returning £42.7m to shareholders via a tender offer for 50% of the share capital that is likely to be at 200p a share. The formal sale process for the business continues. There was £47.6m in the bank at the end of 2015, following the disposal of TRaC Global. Continuing operations reported flat revenues of £26.9m, while Bioquell swung from loss to profit.
North Midland Construction (NMD) has appointed SPARK as its financial adviser and Si Capital as its broker. This could mark a review of strategy or even a potential move to AIM.
Small Cap Awards 2016 nominations
IPO of the Year Bilby ; Curtis Banks; Gear4music; Premier Technical Services Group; Stride Gaming
Company of the Year Bioventix; Crawshaw; James Cropper; Trakm8
Impact Company of the Year Ashley House; Capital for Colleagues; Good Energy Group; Menhaden Capital; V22
Executive Director of the Year Nick Taylor – Waterman Group; John McArthur – Tracsis; David Cicurel – Judges Scientific; Stephen O’Hara – OptiBiotix Health
Transaction of the Year 1pm acquisition of Academy Leasing; AdEPT Telecom acquisition of Centrix; Scientific Digital Imaging acquisition of Sentek; Venn Life Sciences acquisition of Kinesis Pharma
Analyst of the Year Mike Allen – Zeus Capital; Charles Hall – Peel Hunt; Matt Butlin – Allenby Capital; Eric Burns – WH Ireland
Journalist of the Year Paul Scott – Stockopedia; Simon Thompson – Investors Chronicle; Smit Berry – The Small Company Sharewatch
Advisor of the Year FinnCap; Hybridan; Peterhouse; Zeus Capital
Fund Manager of the Year Conor McCarthy – MFM Techinvest Special Situations; Gervais Williams – Miton UK Smaller Companies; Ken Wotton – Wood Street Microcap Investment; Paul Spencer – Franklin UK Smaller Companies
Alternative Financing Deal of the Year Funding Circle SM Income Fund – IPO; Seedrs for Chapel Down – Curious Drinks; Capital For Colleagues – institutional and crowd placing; TRC Contracts by ArchOver – record working capital loan
ANDREW HORE