ISDX
Hearing and mobility products marketer and retailer DHAIS (DHAP) slipped into loss last year after operating costs rose faster than gross profit because revenues did not grow as fast as expected. In the year to June 2015, revenues grew from £9.65m to £10.6m, while a profit of £161,000 was turned into a loss of £83,000. The interim profit had been flat but there was a larger second half increase in costs. However, there was a cash inflow after capital expenditure of £133,000, which helped to pay down debt – although this is mainly an interest free loan from a hearing aid manufacturer. Hearing aid sales were 15% ahead and mobility sales were 12% higher. At 30.5p (28p/33p) a share, DHAIS is valued at £19m. In May, Spain-based GN Hearing Care acquired the 4.76% stake previously owned by Eurohearingaids.com Ltd.
The new board at Lombard Capital Group (LCAP) has written down two investments in its portfolio by £141,000. At 4.5p (4p/5p) a share, Lombard is valued at £86,400. The NAV is £99,000 or 5.19p a share and that includes £16,000 in cash. Russell Darvill and Charlotte Argyle stepped down from the board and Mark Jackson, Graham Jones and Nigel Fitzpatrick were appointed to replace them early in November.
Miton Group took up all of the 15 million shares issued at 1p each by Wheelsure Holdings (WHLP), which gives it a 9.25% stake in the rail track safety products developer. Daniel Stewart, which became Wheelsure’s corporate adviser and broker in August, handled the subscription and has been issued warrants to subscribe for 1.4 million shares at 1p each any time in the next five years. At 1.125p (1p/1.25p) a share, Wheelsure is valued at £1.8m.
Titania Internet Ventures (TITP) has raised £25,200 from an issue of convertible unsecured loan notes maturing in November 2020. There is no interest income. The conversion price is 0.56p a share compared with the current market price of 2.5p (2p/3p) a share, which values the current share capital of the investment company at £44,000. The holder of the loan notes will not be allowed to have a stake of 30% or more in Titania on conversion. Titania is being run on a care and maintenance basis. Alexander David Securities has replaced SVS as corporate adviser.
Trading in the shares of Gowin New Energy Group Ltd (GWIN) has been suspended “due to a change in circumstances with its operating subsidiaries in China”. The suspension price is 0.55p (0.4p/0.7p) a share, which values the LED lighting products supplier at £2.5m.
AIM
Playtech has pulled out of its bid for Plus500 (PLUS) because of its failure to gain regulatory approval in an appropriate time scale. An interim dividend of $0.2121 a share has been announced – the plan is it to pay 60% of retained profit in dividend – and a share buy back programme of up to $20m will be put in place. Plus500 says that it had cash of $95m at the end of June 2015 and more has been generated since then. The dividend will cost $24.4m. Plus500 has had problems with regulators but it states that it “is not subject to restrictions imposed by any of its regulators”. Overall profit will be lower in 2015. Two non-executive directors have been buying shares but JP Morgan Chase has reduced its stake to 6.8%.
Motor dealer Cambria Automobiles (CAMB) reported slightly better than expected results, even after recent upgrades, and this has led to upgrades for 2015-16 and 2016-17. Underlying pre-tax profit improved from £5.4m to £7.7m in the year to August 2015. Cambria sold more new cars and made more profit on each of them. Used car and servicing revenues also increased. The dividend increased from 0.6p a share to 0.75p a share. Net cash was £1m and there is a £37m, five year bank facility that can be used for acquisitions. N+1 Singer has upgraded its profit forecasts by around 5% to £9m this year and £9.3m next year.
Pure Wafer (PUR) has agreed to sell its US wafer reclaim plant for $16m (£10.5m) and it will return the cash to shareholders. Pure Wafer had already decided not to rebuild the Swansea plant so it also has cash from the insurance claim. A decision on how much will initially be distributed will be made in December. WH Ireland believes that a distribution of at least 175p a share is possible. The company will leave AIM and be liquidated.
ASX-listed Tlou Energy (TLOU) raised £1.2m at 6.5p a share and joins AIM on 30 November. There is already £1m in the bank and no debt. Tlou has a coal bed methane project in Botswana, which has contingent recoverable resources of 3.3 trillion cubic feet. The Lesedi project in south east Botswana is 100%-owned but the Botswana government has an option to take a 15% stake when the mining licence is granted. The government will have to pay its share of the previous costs if the option is taken up, which could be around £6m. Broker Brandon Hill has already written a note on Tlou (http://tlouenergy.com/wp-content/uploads/2015/07/150721-Brandon-Hill-UK-Initiating-Coverage.pdf). First commercial gas sales could be in the second half of 2016. Botswana has a power shortage and expensive diesel generation can be replaced by gas. Tlou has been in discussions with a number of potential partners for power generation projects. The initial project would be a 10MW gas-to-power plant and then further generation plants would be developed. Tlou still has to secure government permits and approvals.
Kefi Minerals (KEFI) has raised £2.64m at 0.3p a share in order to provide cash to progress with its Ethiopian gold project at Tulu Kapi. Odey Asset Management has increased its stake to 26%. This will provide enough cash until the middle of next year. Construction of the project should start in 2016 and Kefi has managed to substantially reduce the cost of the project. Gold production could start at the end of 2017.
MAIN MARKET
Waterman (WTM) says that its revenues were 8% higher in the first few months of the financial year and cash levels are better than expected. Public sector demand for infrastructure services is growing and property-based business is spread around the UK not just in London. The professional services business wants to reach an operating margin of 6% by 2018-19. Sanlam forecasts a rise in profit from £2.7m to £3.7m in the year to June 2016 and a 40% increase in dividend to 2.8p a share.
Bluebird Merchant Ventures Ltd plans to join the standard list in early December. Bluebird is involved in trading copper concentrate from the Philippines and has an option to acquire a 50.1% stake in Red Mountain Mining Singapore, which is developing a gold project. Clive Sinclair-Poulton, who has been a director of a number of AIM resources companies, is involved in Bluebird.
ANDREW HORE