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Quoted Micro 22 January 2024
AQUIS STOCK EXCHANGE
Standard listed Mustang Energy (MUST) has entered into non-binding heads of terms for the acquisition of Cykel AI (CYK). The offer is 1.844 Mustang Energy shares for each Cykel AI share. The Mustang Energy share price is 30.6p, having risen from 25.5p prior to the announcement of the deal. Cykel AI is developing artificial intelligence software, which will be marketed via a Software as a Service (SaaS) model, and it joined Aquis on 25 October 2023 at 3p/share. Trading in Cykel AI shares has been suspended at 9.25p, valuing the company at £19m. Mustang Energy previously tried to do a deal with Bushveld Minerals (BMN), involving one of its subsidiaries but that fell through. A prospectus for the acquisitions is expected in the second quarter of 2024.
Fuel additives developer SulNOx Group (SNOX) generated third quarter revenues of £98,400, up from £53,500 in the second quarter. Nine months revenues were doubled. There is £2.68m in the bank. Fourth quarter invoiced sales are already £64,500.
Global Connectivity (GCON) says 15%-owned investee company Rural Broadband Holdings has increased its stake in UK broadband provider Voneus from 32% to 36% as part of a £25m financing.
Cooks Coffee Company (COOK) has increased the number of coffee shops and revenues in the 12 months to December 2023 were 16% higher at £26.9m. Like-for-like UK sales were 6% ahead and in Ireland it was 6.8%. December was a record month and there was positive operating cash flow. The year-end is being changed to March.
Electric motors and drivetrains developer Equipmake Holdings (EQIP) has gained a contract for the next stage of its electric motor development with aerospace company H55 for electric aircraft. There will be £315,000 of work deliverable by the end of May 2024 with a further £400,000 after that. Aircraft production could commence in 2025. Dr Nicholas Moelders has been appointed as chief operating officer. Interim revenues rose from £1.05m to £2.07m, while the loss increased from £2.79m to £2.96m because of higher admin expenses.
Hydrogen production systems developer Hydrogen Future Industries (HFI) has commenced its first mining sector feasibility study in the US. The idea is to use wastewater from tailings as a way of generating hydrogen. Management is discussing a potential deal with a partner in Australia for the deployment of renewable energy microgrids.
Marula Mining (MARU) subsidiaries have been issued seven new graphite mining licences for Takela and NyoriGreen projects in Tanzania. The licences last seven years. Marula Mining owns 75% of the licence owners and it is paying $25,000/licence, as well as issuing 1.05 million shares at 13.5p each as additional consideration for the investments. Marula Mining has approved a $6.38m exploration budget for its projects in Tanzania.
Igraine (KING) investee company Fixit Medical, which has developed the Cingo drainage catheter fixation device, expects to produce the first production prototypes in the first quarter of 2024. Fixit Medical is preparing a technical dossier for the ISO 13485 application.
Looking Glass Laboratories (NFTX) has decided to withdraw from the Aquis Stock Exchange, having joined in November 2022.
WeCap (WCAP) has invested a further £900,000 in WeShop convertibles, taking the total investment to £3.75m. The conversion price is 200p/share. WeCap has also invested in £4m of convertibles with a conversion price of 300p/share. Including an investment in a company owning shares, WeCap owns 15.3% of the diluted share capital of WeShop. This is valued at £24.6m at the latest fundraising price.
A purchase of 4,250 shares in Investment Evolution Credit (IEC) at 50p each led to a 125% jump in the share price to 45p. There were four other trades during the week, and they were at 24p/share and 25p/share. The online consumer loans company joined Aquis on 14 December 2023 when it raised £508,000 at 4.5p/share. There is no reason for the share price to have risen so far other than the limited liquidity of the shares.
Valereum (VLRM) has restarted talks with Vinay Gupta of Mattereum and they are exploring potential opportunities.
Chief executive Dr Michael Hudson has acquired 50,000 EDX Medical Group (EDX) shares at an average price of 8.89p each, taking his stake to 6.77%.
Michael Edwards has bought one million shares in Aqru (AQRU) at 0.12p each.
AIM
Tissue converter Accrol (ACRL) has acquired wet wipes and tumble dryer sheet manufacturer Severn Delta for around three times EBITDA. There is a factory in Somerset with four production lines. Revenues are £5m and this will take Accrol into new markets.
Scientific instruments manufacturer Judges Scientific (JDG) generated organic sales growth of 15% in 2023. Profit should be in line with expectations. Liberum expects pre-tax profit to rise from £28.3m to £31.4m. Increased stocks have held back cash generation. Net debt is forecast to be £44.9m.
Paper and technical fibres maker James Cropper (CRPR) has been hit by weak trading in the paper business and slower growth in sales to hydrogen companies in advanced materials. As a highly operationally geared business this has led to a slashing of current year pre-tax profit forecast from £5.9m to £500,000. Employee numbers have been reduced in the paper division, completing the restructuring. Higher capacity utilisation will improve the profit contribution.
Trading in scientific instruments developer Microsaic Systems (MSYS) has recommenced after a 625-for-one share consolidation and a placing raising £2.1m at 1.25p. The consolidated share price was 4.0625p and it fell to 1.4p in initial dealings and stayed at that level, which is a 65.5% decline. Cash will be used to acquire assets from DeepVerge. Full year results for 2022 and interims for 2023 were published to enable the shares to recommence trading after suspension.
Growth at payments technology company Bango (BGO) was held back by contract delays. Moving into profit for the full year was always going to be a tough and Bango has fallen well short. Revenues grew 62%, which is 6% below forecasts. Bango did move into profit in the second half, but it was not enough to make the full year profitable, and the loss is likely to be around $3.7m. That is due to the high margin, lower sales, increased costs and negative foreign exchange movements. Bango should still move into profit in 2024 and start to generate cash.
Hercules Site Services (HERC) did well in the year to September 2023 with underlying pre-tax profit better than expected at £900,000. HS2 work is building up. The construction workers provider is opening its own training centre. That will help the business in the longer-term, but initial costs will hold back profit this year.
XP Factory (XPF) says Boom Bars generated like-for-like growth of 29% and Escape Hunt grew 17% in the past 12 months. This is much faster growth than the market. Group revenues were 95% ahead at £44.5m and this underpins the current forecast for the 15 months to March 2024. XP Factory is on course to move into profit in 2024-25.
Third quarter trading was in line with expectations at Naked Wines (WINE) with the decline in constant currency sales of 10% lower than in the previous quarter. This was the peak trading time. Quarterly operating profit is likely to be £3m-£5m. Annual costs have been reduced by £7m. Net cash is £3m and the business should become cash generative by 2025.
Zeus has cut its 2024 and 2025 forecasts for Big Technologies (LON: BIG) after the monitoring technology company’s trading statement. The 2023 figures were in line with expectations, but Big Technologies expects its Colombia prison service contract to end in the first half of this year. This year’s revenues are expected to fall to £51m and the operating profit estimate is reduced from £31,7m to £23.9m, down from £28.9m in 2023. The 2025 operating profit is expected to be £27m.
A trading statement from utility infrastructure platform IQGeo (IQG) shows 2023 revenues 6% ahead of forecast and a much higher cash figure of £11m. Annualised recurring revenues are 50% higher at £21.1m. This has sparked an upgrade of 2024 estimates by Cavendish with revenues of £49.8m and pre-tax profit of £5.5m, up from £3.4m in 2023.
Strategic Minerals (SML) says that the Cobre magnetite operation has regained a major client that has ordered 30,000 tons. There could be a second contract of a similar size. This follows a halving of sales volumes in 2023.
There were positive drilling results from Thor Energy (THR). The drilling at the Wedding Bell and Radium Mountain uranium prospects in Colorado intersected high-grade uranium. Grades were up to 0.69%. This follows positive results from the Groundhog prospect. The assay results should be received in February. There are plans to drill other prospects in the region. The uranium price has moved above $100/lb.
Prospex Energy (PXEN) says that the Podere Malar-1 well in the Selva field is producing gas at the expected levels. Prospex Energy owns a 37% working interest in the Selva Malvezzi production concessions. Operator Po Valley Energy is determining the optimal flow rate for the longer-term. There are plans for further drilling on the concession.
MAIN MARKET
Foams manufacturer Zotefoams (ZTF) had a strong end to 2023 with revenues in line and pre-tax profit slightly better than forecast at £13.1m – a small increase on 2022. The foam business did particularly well and should continue to as new Nike shoe designs are launched. The ReZorce recyclable carton business remains loss-making and trials with customers will happen in the next few months. Net debt is £31.9m and capital investment will lead this to increase in 2024.
Gulf Marine Services (GMS) has updated guidance for 2023. The offshore energy vessels provider says underlying EBITDA will be around $86m, which is one-fifth higher than in 2022. The 2024 EBITDA range is $87m to $95m.
Andrew Hore
Andrew Hore – Quoted Micro 2 August 2021
AQUIS STOCK EXCHANGE
Brewer Shepherd Neame (SHEP) says trading has picked up since 12 April and was even better from 17 May. Beer volumes are good, but the company lost money in the year to June 2021. Between 12 April and 26 June managed pub revenues were 84% of the same time in 2019, while tenanted pubs achieved 77% of the volume in 2019. Tenanted pubs return to paying normal rent on 2 August. Net debt is £89.8m.
Brands owner and ecommerce technology platform operator Samarkand (SMK) increased its revenues by 201% in the year to March 2021, but that was flattered by one-off personal protective equipment revenues. Since the year end a Tokyo office has been opened. The latest technology, Nomad Checkout is being piloted.
Oberon Investments (OBE) more than trebled its revenues to £3.8m in the year to March 2021. Assets under administration increased by 340% to more than £550m and more investment management firms were acquired after the year end. The broking operation has already started to win clients and has raised £30m since June 2020. There were record first quarter revenues. Chris Akers has taken a 3.58% stake.
CBD and hemp products supplier Love Hemp (LIFE) has increased its full year revenues by 60% to £4.31m, although second half revenues were lower than those in the first half, which benefitted from large orders by Boots and Holland and Barrett. This year online revenues are expected to increase significantly.
NQ Minerals (NQMI) has requested that trading of the shares on Aquis should cease. There are problems with the company’s 2020 accounts. Begbies Traynor has been appointed to advise on restructuring, but the board is unsure whether the company can continue trading.
KR1 (KR1) has invested $100,000 in the Redstone project, which will be changed for tokens at a later date. Redstone is a cross-chain data oracle technology that provides fast access to data and historic audit trail. A further $269,892 was invested in Interlay for 1,224 series seed shares.
S-Ventures (SVEN) has acquired plant-based nutrition products supplier Pulsin for £2m in cash, £2m in loan notes and 15.18 million shares. The issue of three million of the shares is deferred and dependent on sales in 2021. Pulsin has net debt of £1.2m and generated sales of 37.05m in the year to April 2021. S-Ventures already owns Ohso Chocolate and snacks firm We Love Purely.
EPE Special Opportunities (ESO) has invested £22.5m for a majority stake in a company that owns homeware brands, including Kilner, Viners, Typhoon and Ravenhead. In 2020, revenues were £35.6m.
Dispersion Holdings (DEFI) had net cash of £8.8m at the end of July 2021. It has also invested £910,000 in decentralised finance investments.
Black Sea Property (BSP) is selling a property in Cyprus for €1.06m, compared with a valuation of €830,000.
Coinsilium (COIN) has moved to the Apex segment.
AIM
Big Technologies (BIG) provides remote and personal monitoring services, predominantly to the criminal justice market, and the technology has been developed over more than a decade. The company raised £14.7m after expenses at 200p a share. There was also £185.6m raised by existing shareholders, which sold around one-third of the shares in issue. In three days of trading the share price soared to 355p, which values the company at £1bn. Revenues increased from £19.3m in 2019 to £29.6m in 2020 thanks to new contracts and additional revenues from existing customers. Pre-tax profit jumped from £5.53m to £12.7m.
Tracsis (TRCS) has won a multi-year contract for its RailHub planning software. The deal is worth several million pounds, and this will make an initial high margin contribution to the financial year to July 2021. It sparked a £1m uplift in the 2021 profit forecast to £10.5m.
The Property Franchise Group (TPFG) has doubled interim revenues, helped by the Hunters acquisition early this year. Organic growth was 35%.
Hostels operator Safestay (SSTY) had a tough 2020 and has just published its 2020 figures. It achieved 38% occupancy in its hostels when they were open. The loss was £10m. NAV is £28.5m. Leasehold sales have helped to reduce bank debt to £18m in July 2021. There are 16 hostels currently trading and the other two are set to reopen.
Seed Innovations (SEED) has a 5.1% stake in Canadian Stock Exchange listed CDD and health products supplier Yooma Wellness Inc, which is joining Aquis on 10 August.
MAIN MARKET
Spinnaker Acquisitions (SPAQ) is a new cash shell that has been brought to the market by the same team that floated Spinnaker Opportunities, which eventually acquired cannabis products supplier Kanabo (KNB). It raised £2.08m at 10p a share. The share price has risen to 12.5p, but there is a wide spread of 10p/15p. Spinnaker is seeking to acquire a business in the sustainability and energy transition services markets.
Motor dealer Lookers (LOOK) outperformed the market in the first half of 2021 with a like-for-like increase in vehicle sales of 45%. The interim profit will be around £50m, which is one-fifth higher than previous expectations.
Andrew Hore