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Quoted Micro 15 January 2024
AQUIS STOCK EXCHANGE
Electric motors and drivetrains developer Equipmake Holdings (EQIP) has won an extension of its contract from sightseeing tours operator Big Bus Tours, and it has doubled in size to cover 20 buses. The contract is worth £3.5m. The buses will be delivered by the end of the third quarter of 2024. Full year revenues are expected to be £13.4m, although Equipmake will still be loss making. The share price slipped 8.57% to 8p, but it has risen by one-fifth over the past year.
Silverwood Brands (SLWD), whose shares are suspended at 30p. has come to a conditional settlement with the vendors of the 19.8% Lush stake, which was never transferred to the company by Lush. The deal was cancelled. The vendors are paying £300,000 to Silverwood Brands to cover deal costs.
Capital for Colleagues (CFCP) had 14 investments in the quarter to November 2023 and the NAV was £15.1m or 81.67p/share, down from 81.99p/share at the end of August.
Tyndall Investment Management increased its stake in skin treatments developer Incanthera (INC) from 6.85% to 11.8%.
Tony Wilson has increased his stake in Oscillate (MUSH) from 3% to 3.66%, while Rikki Devlin has taken a 3.04% shareholding.
Bitcoin mining company Vinanz Ltd (BTC) says that the SEC in the US has approved Bitcoin ETFs, which will provide investors with a way to access cryptocurrency. This should be positive for Vinanz. David Lenigas has bought 80,000 shares at an average share price of 9.2p.
NFT Investments (NFT) is changing its name to Phoenix Digital Assets. The share price rose 18.5% to 3.2p. NAV is 4.67p/share.
EDX Medical Group (EDX) sent shareholders a letter that stated it is pursuing nine different projects for point of care and laboratory testing services. The reverse takeover of TECC Capital means that there has been selling by legacy shareholders holding back the share price, but it has started to rally rising 17.2% % to 8.5p.
AQRU (AQRU) is changing its name to Supernova Digital Assets and it is focusing on becoming a value provider for the Solara ecosystem. Net assets are 0.297p/share, including crypto assets of 0.166p/share.
Kasei Holdings (KASH) non-exec director Bryan Coyne has acquired 125,000 shares at an average price of 8.14p each.
Valereum (VLRM) says that the general meeting to approve the acquisition of GSX Group will be held on 30 January and there will be a shareholder update meeting the next day. Nick Cowan has joined the board as chief executive, as has former AIM and Plus Markets boss Simon Brickles. Gary Cottle has also joined as a non-exec.
EPE Special Opportunities (EO.P) had net assets of 301.9p/share at the end of 2023.
PanGenomic Health (NARA) has entered into a non-binding letter of intent with Crescita Capital for a $5m drawdown facility. This will last three years and can be used for working capital and acquisitions. The facility involves the issue of shares at a discount to the market price at the time of issue. There will be a $300,000 commitment fee payable in cash or shares.
Tony Wilson has increased his stake in Oscillate (MUSH) from 3% to 3.66%, while Rikki Devlin has taken a 3.04% shareholding.
AIM
The Property Franchise Group (TPFG) has made an agreed bid for rival franchised lettings company Belvoir (BLV). The agreed offer of 0.806377 TPFG shares for each Belvoir share values Belvoir at 277.4p/share based on a TPFG share price of 344p, but it has subsequently fallen to 307.5p valuing Belvoir at 248p/share. TPFG shareholders will own 51.75% of the enlarged group.
Capital equipment supplier Mpac (MPAC) had a strong second half in 2023 and there was a record order intake during the year. Margins improved in the second half and full year pre-tax profit was £6.9m, up from £3.5m in 2022. The higher second half margins should continue in 2024, enabling a further improvement in profit.
NWF (NWF) has signed a 15-year lease on a third food distribution warehouse in Newcastle-under-Lyme. This will add 52,000 pallets to capacity. The site should be open in the autumn after capital expenditure of £8.5m. This site could add £1.2m to pre-tax profit in 2025-26.
Another positive trading statement from payments services provider Cornerstone FS (CSFS) has led to an upgrade of December’s previous upgrade. A maiden pre-tax profit of £800,000 on doubled revenues of £9.6m is forecast for 2023. Revenues per customer increased by around two-thirds to more than £10,000. The company moved from net debt to net cash.
AdvancedAdvT (ADVT) switched from the standard list to AIM on 10 January. Last year, five businesses were acquired from Capita and one of these is being sold. The remaining companies operate in business solutions and human capital management.
Online builders’ merchant CMO Group (CMO) had a tough fourth quarter. Online traffic rates declined, but conversion rates improved. Overall orders were flat. Home improvement and DIY spending is declining. The overall repair, maintenance and improvement sector is still relatively strong, but it weakened in the second half of 2023. Market share has grown, and costs have been cut. Liberum has increased its 2023 pre-tax loss forecast from £800,000 to £1.2m and forecasts a 2024 loss.
Consultancy Elixirr International (ELIX) confirmed 2023 results are in line with expectations and it will pay two dividends each year. Pre-tax profit is expected to improve from £19.3m to £23.9m. The shares will go ex-dividend for the 5.3p/share interim on 19 January.
Plant monitoring technology developer Light Science Technologies (LST) published a positive 2023 trading statement. Cost savings have helped to halve the pre-tax loss of £1.3m on revenues rising from £8.2m to £9.3m. Contract electronic manufacturing remains the largest sales contributor, although controlled environment agriculture products are growing in importance.
Touch sensors manufacturer Zytronic (ZYT) reports a 30% decline in full year revenues to £8.6m and it fell back into loss. Gross margins were hit by higher raw material costs and product mix. Sales continue to decline this year. There are signs that there could be improvement in the second half. Net cash is £4.7m.
Palm oil producer Dekel Agri-Vision (DKL) says 2023 revenues were at record levels, but there are problems with ramping up the cashew operation. Investment is required to replace parts of the machinery used in cashew production. Production should improve in the second quarter. The 2024 pre-tax profit forecast has been cut from €1.5m to €600,000.
Mercantile Ports and Logistics (MPL) says some trading activity was deferred last December. Cavendish reduced its 2023 revenues forecast from £6.9m to £5.4m. Coal import to the Karanja port were lower because of destocking. The loss will be higher. Management hopes to replace the current debt facilities with a new facility with lower interest charges. Buying by directors did not help the share price. Non-exec John Fitzgerald acquired 624,419 shares at 1.5725p each and Dmitri Tsvetkov bought 617,360 shares at 1.62p each.
Oriole Resources (ORR) has confirmed receipt of the payment of $450,000 related to the earn-in agreement with BCM International for the Bibemi gold exploration project in Cameroon. BCM will spend $4m on exploration to earn 50% of the project. Drilling should resume in the first quarter.
Semiconductors designer EnSilica (ENSI) has released a range of Post-Quantum Cryptography accelerators. These are cryptographic algorithms that can withstand cyber-attacks from quantum computers.
MAIN MARKET
Tertre Rouge Assets (TRA) has entered into a purchase agreement for a 1972 Lamborghini Miura P400 SV for £2.8m, which means that there are purchase agreements for six cars valued at £32m. Formal marketing of a fundraising has commenced, and the issue price should be 105p. Approval of the prospectus by the FCA is still awaited.
Kelso Group Holdings (KLSO) plans to raise up to £1.88m at 3p/share. The cash will be used for further investments in UK listed companies. Previous fundraisings were at 2p/share and 2.5p/share.
Standard list shell Sivota (SIV) has identified a potential acquisition that operates a technology platform in the travel sector, subject to due diligence and other conditions. The plan is to acquire up to 51% of the company for $15m. Sivota will raise £2.5m to provide the target with a convertible loan for working capital.
Quantum dots developer Nanoco (NANO) has signed a joint development agreement with STMicroelectronics. This two-year programme will optimise a second generation sensing material. This will boost non-licence fee income in 2024 and sales of test materials in 2024 and 2025.
Andrew Hore
Quoted Micro 31 January 2022
AQUIS STOCK EXCHANGE
NFT Investments (NFT) plans to acquire Pluto Digital Assets. NFT Investments has a non-binding letter of intent relating to the acquisition, which is valued at £96m – based on the issue of 2.4 billion NFT Investments shares at a nominal valuation of 4p each. That is equivalent to 9.3p a share. However, NFT Investments shares have been suspended at 2.475p (2.35p/2.6p). NFT Investments is lending £5m to Pluto, which is a crypto technology and operations company involved in decentralised finance and NFTs.
SuperSeed Capital Ltd (WWW) is set to join Aquis on 31 January, having raised £2m at 100p a share. SuperSeed is a Guernsey-based closed-ended collective investment scheme operating a fund of funds. Investments will primarily be in unquoted funds managed by SuperSeed Ventures. The initial funds will invest as a limited partner of SuperSeed Ventures II LP.
Capital for Colleagues (CFCP) has redeemed its A shares in investee company Bright Ascension and received the book value of £250,000. It still owns ordinary shares in the space software technology company worth £1.75m. Capital for Colleagues NAV was 70.9p a share.
Valereum (VLRM) has accelerated its purchase of the Gibraltar Stock Exchange. An option will be exercised to take the stake from 10% to 50%. Once change of control is allowed, Valereum will take its stake to 90%. The plan is to make the stock exchange one of the world’s first regulated integrated fiat and digital exchanges.
Samarkand Group (SMK) has become a FedEx alliance partner. FedEx clients will be able to use Samarkand’s Nomad ecommerce platform.
MiLOC Group (ML.P) says that one of its subsidiaries has received a claim for £202,000 that it says it is owed.
AIM
Hargreaves Services (HSP) reported a jump in profit thanks to a large contribution from German joint venture HRMS. In the six months to November 2021, revenues fell from £92m to £76.1m partly due to the past sale of the coal stocks to HRMS, although operating profit improved from £868,000 to £1.06m. Pre-tax profit was £10.4m, up from £1.08m, which includes a share of HRMS profit of £9.27m, up from £944,000. The interim dividend has been raised from 2.7p a share to 2.8p a share. Net assets are 462p a share.
Compliance and energy saving services provider Sureserve (SUR) is not paying a dividend even though net cash is £16.5m. The cash will be invested in acquisitions to grow the business. In the year to September 2021, revenues increased by one-quarter to £244m, while pre-tax profit was 77% higher at £13.8m. There was an improved profit contribution from compliance services, particularly the gas business, and energy services contribution recovered.
Acoustic and thermal insulation material manufacturer Autins Group (AUTG) continues to be hampered by electronic component shortages that have slowed car production. Demand from the automotive sector will return when these components are available. In 2020-21, revenues increased 9% to £23.4m. That is better than it appears because there was a £1m plus reduction in short-term PPE revenues. The main growth came in flooring sales.
Real Estate Investors (RLE) says occupancy is 85.75% and this could move to over 86% if expected lettings are secured. The total dividend for 2021 will be at least 3p a share, which is a yield of more than 7.5%.
Digital advertising services provider Dianomi (DNM) grew revenues by more than one-quarter in 2021. Growth is being supplemented by newer elements such as video and lifestyle. Underlying EBITDA will be slightly ahead of expectations and cash increased to £10.3m.
Velocity Composites (VEL) reported a slump in revenues in the year to October 2021, but the supplier of engineered kits for the aerospace sector is experiencing a recovery in demand. Airbus is likely to ramp up production and this could help revenues improve from £9.8m to £11.7m. It will still be loss making at that level. Longer-term, Velocity Composites has its sights on moving into the US aerospace model using the same model as in the UK.
Redx Pharma (REDX) is set to have three phase II clinical trials in process later in 2022. A 2mg dose has been selected for the RXC004 study for colorectal cancer and the other RXC004 study for pancreatic cancer and unselected biliary cancer. Both these studies have already commenced. There is also a phase II study for use of RXC007 as a treatment for idiopathic pulmonary fibrosis (IPF) starting later this year. These studies mean that costs will increase. There was £29.6m in the bank at the end of September 2021 and a further $19m in milestone payments have been received since then.
M and C Saatchi (SAA) independent directors have rejected a revised offer from AdvancedAdvT (ADVT). The offer was 2.245 AdvancedAdvT shares for each Saatchi share or an alternative of 1.633 AdvancedAdvT shares plus 40p in cash for each share. The alternative is worth less than the all share offer. AdvancedAdvT says that it would move to AIM.
MAIN MARKET
ACP Energy (ACPE) is a standard listed cash shell seeking oil and gas acquisitions. It raised £830,000 at 5p a share. The share price ended the first day at 6.5p (5p/8p). The focus is the upstream oil and gas industry, particularly projects where oil and/or gas has already been discovered, which may be producing assets or ones where there has been some development spending. A minimum market capitalisation of £30m after the first acquisition is being targeted.
Air Partner (AIR) is recommending a 125p a share cash bid by Wheels Up Experience Inc, a provider of on demand private aviation in the US. This values the aviation services provider at £84.8m.
Associated British Engineering (ASBE) did not generate any revenues in the year to September 2021. NAV is 43p a share, including £489,000 in cash, although a Nasdaq investment has subsequently fallen in value. The trading business was sold in 2020.
Sivota (SIV) has entered into a conditional deal to acquire a majority stake in digital marketing platform Apester. There has been $36m invested in the technology and revenues were $9.2m in 2021.
OTHER MARKETS
FOS Holdings (FOS) has switched its listing from Vienna to the Cyprus Emerging Companies Market. FOS has decided to build film studios in Cyprus as part of a joint venture with Dias Media. The company’s subsidiary FOS Film Studios will have a 75% stake in the joint venture. The plan is to build a complex of three film and TV studios, plus additional facilities. There are plans to seek a loan from the EU and the Cyprus government is keen to have film infrastructure on the island. The first studio could be finished by the end of 2022. FOS has three films in early-stage development.
IPSX-listed building owner Mailbox REIT (MBOX) has declared a dividend of 1.75p a share for the fourth quarter of 2021. This is the first step in paying an annual dividend total of 7p a share. Mailbox REIT owns a single building in Birmingham and plans to switch 50,000 square feet of retail space into office accommodation. NAV is 101.9p a share.
Andrew Hore
Quoted Micro 10 January 2022
AQUIS STOCK EXCHANGE
Hydrogen Utopia International (HUI) has agreed an exclusive, non-transferrable licence for the distributed modular gasification technology developed by Powerhouse Energy, and this covers Poland, Greece and Hungary. There is also an initial agreement in Bulgaria. The technology turns waste plastic into syngas. Hydrogen Utopia has raised £3m at 7.5p a share, which values the company at £28.8m. The share price has risen to 13.75p. There has already been work done on developing a facility in Poland. The initial cost could be €10m and the facility in Poland could be on stream in 2023. Hydrogen Utopia is targeting places where EU funding or private sector cash is available to finance investment. Even so, the company will need to raise more cash, but not for 18 months.
Vulcan Industries (VULC) increased interim revenues from £2.19m to £2.72m and the loss was reduced from £1.56m to £951,000. Third quarter activity is improving and the acquisition of Aftech should be completed during January, although the effective date is 1 December, and this will help the second half, as well as enhancing earnings. Vulcan has raised £224,000 at 1.6p a share.
British Honey Company (BHC) says that 2021 sales will be at least £8.4m and there is a strong order book for the first quarter of 2022. Production and dispatch will be consolidated at the Market Harborough distillery and the Buckinghamshire office and distillery will be closed.
Ace Liberty and Stone (ALSP) has exchanged contracts on the acquisition of a property in Stafford that is let to Iceland Foods. The purchase price is £1.26m and the annual rent is £95,000. Ace Liberty has raised £11.85m from disposals. There were £200,000 of convertible loans converted into shares and there is £375,000 of convertible loans outstanding.
Apollon Formularies (APOL) has renewed three medical cannabis licences approved by the Jamaican government.
EPE Special Opportunities (ESO) is stopping buying back its shares. It has bought 628,844 shares in the past month.
Trading in the bonds of Belvedere Leisure has been suspended because the annual report has not been published. The audit should be completed by the end of the month. Trading in Lombard Capital (LCAP) shares has also been suspended. Although the results for the year to June 2021 have been published Aquis has queried the audit report relating to the recoverability of loans. Lombard Capital has net liabilities of £1.57m.
AIM
Facilities by ADF (ADF) is the first AIM new admission of 2022. The company provides vehicles and services to the film and TV industry, predominantly in the UK but also in Europe. The £13m net raised at 50p a share that Facilities by ADF has raised will be invested in much needed additional capacity. The company is already nearly fully booked for this year. The company has a fleet of more than 500 vehicles and trailers. This includes artiste trailers, make-up units, generator units and transport vehicles. This could increase to 700 by the end of 2023. Unsurprisingly, revenues fell from £15.9m to £8m in 2020 because lockdowns affected TV and film production. There has been a sharp recovery in the first half of 2021 with revenues reaching £11.5m, which is nearly as much as in 2018.
Conroy Gold and Natural Resources (CGNR) has signed the joint venture agreement with Turkey-based Demir Export. This covers licences held along the 65km district scale gold trend in the Longford-Down Massif in Ireland. The plan is to develop an initial gold project and start mining. Phase 1 will involve Demir Export investing €5.5m to earn 25%, then another €4.5m to earn a further 15%. The final phase will involve the investment of additional funds by Demir Export so that the project will reach construction ready status. That will take the stake to 57.5%. Regulatory consent is still required.
Restaurants operator Tasty (TAST) says that second half trading was extremely encouraging, but December, normally the best month of the year, was disappointing because of Covid uncertainty. There are 50 restaurants trading with the other four due to reopen later this year. There are two or three restaurants that might be sold.
Nicholas Slater has increased his stake in upmarket kitchens supplier John Lewis of Hungerford (JLH) from 4.78% to 6.07%. John Llewellyn Lewis has reduced his stake from 22.15% to 19.57%, while non-exec Alan Charlton has bought 2.5 million shares at 1.2p a share, taking his stake to 8.73%.
MAIN MARKET
Slovenia-based Graft Polymer (GPL) is a developer of polymer modification and drug delivery systems. More than 50 products have been launched. In 2020, GraftBio was started to develop IP for biopharma applications. Revenues remain small but there are opportunities for them to grow significantly. The business should have strong operational gearing. A placing raised £5m at 21.5p a share. Graft Polymer intends to invest in capital equipment and further product development. A new production line will cost £2m and some of the other cash will go on lab upgrades and other investment. Management also wants to expand the distribution network and secure deals with more partners.
AdvancedAdvT (ADVT) has acquired 12 million shares in advertising agency M&C Saatchi (SAA) at 200p a share and the standard list shell approached the advertising agency with a bid proposition based on a share swap. AdvancedAdvT had £129.2m in the bank at the end of June 2021, so this investment is less than one-fifth of that cash. Vin Murria is a director of both companies, and she has a 13.2% stake in M&C Saatchi. The independent directors of M&C Saatchi say that they do not believe in the logic of a merger and also do not think the valuation put on the business is high enough.
Online retailer Made.com (MADE) says that the UK and Europe each achieved 38% growth over 2021. Average order values were 8% higher and active customers increased by 26%. The supply chain is a worry, but management says that lead times are three to four weeks. This follows the deferral of around £40m of sales to the first quarter of £40m. Made.com is still expected to lose money in 2021 before moving into profit in 2022.
Motor dealer Lookers (LOOK) has sparked another upgrade with its trading statement. Peel Hunt has increased its 2021 pre-tax profit forecast from £82.6m to £86.7m. Strong margins continued in the fourth quarter. However, those margins may not continue.
Macfarlane (MACF) has sold its labels business for £6.4m. This business generated a profit of £300,000 in 2020.
Andrew Hore
