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Andrew Hore – Quoted Micro 19 November 2018
NEX EXCHANGE
Renewable energy supplier Good Energy (GOOD) has traded slightly ahead of expectations and been cash generative in the first ten months of 2018. Customer numbers have remained flat. The financial year should be in line with expectations. This reassurance led to a 17% increase in the share price, although it is still more than two-fifths lower than one year ago.
Capital for Colleagues (CFCP) has made a further investment in TG Engineering Ltd, which makes steel and aluminium components for the aerospace and medical sectors. A loan of £150,000 takes the total loan to £625,000, alongside a 35% stake.
MetalNRG (MNRG) has raised £159,500 from a placing at 1p a share and the exercise of warrants. This will fund the investment in the uranium mine in the Kyrgyz Republic, over which MetalNRG has an option, and progress work at the Gold Ridge project in Arizona. There was £77,000 in the bank at the end of August 2018.
NQ Minerals (NQMI) has produced its first lead, gold and silver concentrate from the Hellyer polymetallic project in Tasmania. This has been delivered to Traxys Europe and payment has been received.
Tectonic Gold (TTAU) has mapped a large intrusive intersection of two major crustal faults at Mount Cassidy. This could a significant intrusive related gold system.
Clinical support systems provider DXS International (DXSP) has set a target of achieving a six-fold increase in turnover over the next five years and it believes that post-tax profit could reach £7m a year. This would come on the back of past investment in developing new products, two of which have been launched recently.
Ganapati (GANP) says that its Malta-based subsidiary has signed a games licence agreement with NYX Interactive for the supply of gaming software. After the initial software is supplied, Ganapati will supply one game each month for three years.
TechFinancials Inc (TECH) will receive a $867,000 dividend from 51%-owned Asia Pacific-focused subsidiary DragonFinancials.
Frontier IP (FIPP) has raised £2.49m at 65p a share from existing and new investors and this will finance an expansion of the management team and provide working capital for the business. The value of the company’s investment portfolio has increased by one-third to £9m and there was £1.1m in the bank at the end of June 2018. The NAV increased from £11.8m to £12.7m. The cash should last into 2020 even if there are no proceeds from investment realisations.
SVS has pulled the £532,000 placing at 8.5p a share for TomCo Energy (TOM) and resigned as broker. SVS says that there has been a material change because of the suspension of the field test on the Holliday block in Utah. Trading in the shares has been suspended. TomCo has cash of £250,000.
There were disappointing phase III trial results for the Hutchison China Meditech (HCM) drug Fruquintinib, which did not achieve the primary endpoint in treating non-small cell lung cancer patients. That knocked nearly one-fifth off the share price.
AB Dynamics (ABDP) continues to grow strongly and is already planning to add to its capacity at its new site. Forecasts were raised for the automotive testing and simulator systems supplier earlier in the year and the full year outcome was a 51% increase in revenues to £37.1m and a jump in underlying pre-tax profit from £5.9m to £8.6m. A profit of £10.4m is expected this year.
Eve Sleep (EVE) is changing its focus following the appointment of a new chief executive. The mattress supplier will focus less on heavy marketing for one-off purchases and instead expand its range and generate repeat purchases. Lower marketing spending will reduce the growth rate of revenues. There was £7m in the bank at the end of October 2018 and the company wants to raise a further £15m.
Genedrive (GDR) has raised £5.6m after expenses from a placing at 23p a share, jointly run by Stanford Capital Partners and Peel Hunt, and an issue of loan notes to the British Growth Fund. There was £3.53m in the bank at the end of June 2018. The funds will finance the launch of the Genedrive HCV-ID kit for hepatitis C diagnosis and further assay development for antibiotic induced hearing loss and tuberculosis.
Trakm8 (LSE: TRAK) slipped out its interims on a Friday, albeit at 7am and not at Immunodiagnostic Systems Holdings (IDH) o’clock (around 4.30pm). In the six months to September 2018, revenues fell 38% to £8.84m and even excluding contract manufacturing, which is not done any more, the decline is 26%. Recurring revenues fell by 7%. Even taking the most flattering figures, a pre-tax profit of £363,000 last time was turned into a £2.46m loss. Net debt more than doubled to £5.73m.
Marshall Motor Holdings (MMH) is going to make a better full year profit than expected despite the disruption of new testing rules. That has helped used car sales. The 2018 pre-tax profit is still expected to decline from £29.1m to £25.7m, but that is an improvement for the continuing operations.
Beximco Pharmaceuticals (BXP) has increased its first quarter revenues by 26%, although some of the improvement came from Nuvista, which did not contribute in the corresponding period. Pre-tax profit was 17% higher at BDT973 million. Beximco reported a 37% increase in export sales for its last financial year and they accounted for 12% of total sales. There are five treatments with US approval and it will take time to build up sales. The plan is to eventually generate two-fifths of revenues from exports.
Trinidad-focused oil and gas producer Touchstone Exploration Inc (TXP) generated $9.12m from operations in the nine months to September 2018, up from $2.22m in the corresponding period last year, thanks to higher production and selling prices and slightly lower operating expenses. This cash has been used to increase development spending.
Wynnstay Properties (WSP) is increasing its interim dividend by 8% to 7p a share. The NAV was760p a share at the end of September 2018 and 99% of the property portfolio is let. There was a decline in income due to disposals.
AIM shell Stirling Investments (STRL) had £7.7m of cash at the end of September 2018. Management includes ex-Melrose management. The share price has fallen from 100p to 74.5p, which is less than the cash per share.
IFA Lighthouse Group (LGT) has signed an agreement with Tavistock Investments (TAVI) for the use of the latter’s investment products, which will be offered by Lighthouse as well as its own Luceo Asset Management products. Tavistock raised £1.2m at 3.28p a share and Lighthouse subscribed for £1m of the total.
Event driven marketing technology services provider Mporium Group (MPM) has raised £2.3m at 5p a share.
Mercantile Ports and Logistics (MPL) is raising £27.75m at 2p a share and could raise a further £2.07m via an open offer.
Fastjet (FJET) has raised £9m at 1p a share in order to keep itself going. There has also been a £3.16m subscription from Solenta Aviation and £19.1m worth of shares have been issued to acquire four Embraer 145s from Solenta and settle various fees, charges and loans. A further £4.1m could be raised via and open offer at 1p a share. This should finance the airline business for 2019.
Empyrean Energy (EME) has raised £1m at 10p a share and this will provide working capital.
Allenby Capital has resigned as nominated adviser to CSF Group (CSFG) and will step down at the end of 2018. CSF has been turned down by potential replacements and trading is likely to be suspended at the end of 2018 and the quotation cancelled at the end of January 2019.
Rasmala (RMA) plans to cancel its AIM quotation and tender for up to 20% of tis share capital at 150p a share.
MAIN MARKET
Resources-focused standard list shell Cobra Resources (COBR) floated on 15 November when it raised £523,500 at 1.5p a share. The share price ended the week at 1.75p. The board believes this is a good time to identify and acquire undervalued base and precious metals projects, which are already have a good management team and are well on the way to becoming a producing asset. There could be direct investments or farm-ins. There are 59.9 million warrants exercisable at 2p each.
The former Golden Saint Resources, now known as Golden Saint Technologies (GST), is planning to join the standard list. A placing at 0.75p a share will raise £911,000, of which £270,000 will go to pay directors fees that are owed. The rest will pay other costs. The company has switched from diamond exploration to an installer of network and connectivity products.
Trifast (TRI) reported interims in line with expectations and the fastenings supplier is on track to improve full year pre-tax profit from £22.2m to £23.1m. Management is cautious about the UK, but two-thirds of revenues are overseas.
Andrew Gaughan is stepping down as chief executive of Sportech (SPO) in February. The chairman will take up an executive position for an interim period and he purchased 250,000 shares at 40.6p each. The potential acquisition of ilottery provider Lot.to Systems was also announced with a strategic alliance initially put in place.
Avation (AVAP) has announced a 2 cents a share interim dividend. The aviation leasing business estimates that in the six months to December 2018 leasing revenues will increase from $41.7m to $57.8m and, along with a disposal gain, this means that interim profit will be better than expected and much higher than the $7.3m achieved in the first half of the previous year.
IQ-AI (IQAI) has made its first commercial sale of StoneChecker Software to a South Korean hospital.
BigDish (DISH) is building up resources to grow its business in the UK next year. The restaurants platform is considering selling its Asian business.
Bluebird Merchant Ventures Ltd (BMV) has completed a $380,000 placing at 2.5p a share. Each of the new shares has a warrant exercisable at 2.5p, which has to be done if the share price trades at 3p a share or above for ten consecutive days.
Andrew Hore
Andrew Hore – Quoted Micro 6 August 2018
NEX EXCHANGE
Veni Vidi Vici Ltd (VVV) joined NEX on 2 August. The minerals investment company has net cash of £513,000, following a £490,000 subscription at 50p a share. The focus will be precious metals and base metals opportunities in Australia, Western Europe and North America. Management will concentrate on capital appreciation.
EPE Special Opportunities (ESO) is changing its domicile from the Isle of Man to Bermuda. The private equity investment company will have to be readmitted to NEX and AIM. EPE has invested £2m in Main Market-listed LED lighting company Luceco at 39.74p a share. That takes EPE’s stake in Luceco to 27.4%. Poor trading has meant that the Luceco share price has slumped to well below its 2016 flotation level. EPE has redeemed 50% of its unsecured loan notes.
Etaireia (ETIP) has appointed Dennis Rogers as chief executive. He has more than three decades of experience in property development.
Equatorial Mining and Exploration (EM.P) has issued 2.685 billion shares, around one-quarter of the enlarged share capital, to wipe out the convertible loan note debt and other creditors. Twenty three year old Devon Marais, who works with ARQ Minerals, which is helping Equatorial to extract coal from the St Leonard’s mine in Nigeria, has been appointed as a non-executive director of Equatorial.
Asia Wealth Group Holdings (AWLP) reported a profit last year. In the year to February 2018, revenues increased from $1.52m to $2.16m, while a pre-tax loss of $110,000 was turned into a pre-tax profit of $150,000. That figure was helped by a $114,000 currency gain, compared with a $19,000 loss. There was still a small net loss from operations before other income.
AIM
Petrol stations operator Applegreen (APGN) intends to take a majority stake in UK Motorway services operator Welcome Break. The purchase of a 55% stake for €361.8m would be a reverse takeover. The deal would make Applegreen market leader in the UK as well as Ireland.
A subsidiary of Stride Gaming (STR) has been issued a notice by the Gambling Commission, which intends to levy a significant financial penalty because of the manner in which it carried on its trading. This is not final and there might be room to appeal but it has hit the share price of the online bingo operator.
The Property Franchise Group (TPFG) increased interim revenues by 11% to £5.3m. Most of the growth came from management service fees from the property lettings franchisees. The EweMove estate agency business was profitable.
Goldplat (GDP) says that gold production fell by 17% to 35,400 ounces, which is lower than anticipated, but pre-tax profit will be in line with expectations because of a higher margin per ounce. There was 39,400 ounces of gold sold during the year.
Beximco Pharmaceuticals (BXP) has received abbreviated new drug application approval from the FDA to sell Nadolol tablets, which are a generic form of Corgard and used for managing high blood pressure. This is the fifth approval in the US. A pre-tax profit of £33.3m is forecast for the year to June 2018.
Tough UK trading and higher costs held back the results of security and facilities management services provider Mortice Ltd (MORT) in the year to March 2018. Revenues were 21% higher at $219m, but underlying pre-tax profit was down by 16% to $3.9m. Net debt was $18.4m.
Precision marketing software supplier Pelatro (PTRO) is acquiring assets from the Danateq Group for an initial $7m. The deal will take the group into central Europe and adds to the recurring revenues base. A placing has raised £6m at 73p a share.
GetBusy (GETB) grew its interim revenues from £4.5m to £5.2m, with £4.5m of that figure recurring revenues. Annualised recurring revenues are running at £9.4m. Profit generated from document management software sales is being ploughed back into developing the existing product and the new GetBusy software. There is £2.37m in the back.
Starcom (STAR) says that interim revenues have improved from $1.92m to $3m and the loss will be lower. Most of the revenue increase came from two large clients. Growth is starting to come from higher margin security products. The 2018 loss is expected to be much lower than last year’s.
Kosovo-based quarry operator Fox Marble Holdings (FOX) increased interim sales from €329,000 to €614,000 and the second half has started strongly. The benefits of investment in capital equipment are beginning to show through.
MAIN MARKET
Argo Blockchain (ARB) has joined the standard list after raising £25m at 16p a share, which values the company at £47m. However, the share price fell to 12.5p by the end of the first day of trading on 3 August. Argo is developing a global datacentre management business facilitating cryptocurrency Mining-as-a-Service. It currently covers four cryptocurrencies. AIM-quoted Vela Technologies (VELA) owns 2.5 million shares, which were acquired for 8p a share.
Motor finance provider S&U (SUS) achieved record first half profit as the second hand car market continues to grow. Quality standards have been tightened with 25% of applications accepted, but net receivables have reached £263m. The property bridging loan book has risen from £11m to £16m over six months. The interims will be announced on 25 September.
BigDish (DISH) was originally going to reverse into AIM shell Nyota Minerals Ltd but instead it has joined the standard list. The company operates an online and mobile restaurant reservation platform, which is in operation in the Philippines, Indonesia and Hong Kong. The purchase of Pouncer, takes the company into the UK. Revenues come from booking fees per diner. BigDish raised £2.22m at 4.5p a share.
Path Investments (PATH) is raising £10m to complete the farm-in agreement with 5P Energy for the proposed acquisition of a 50% participating interest in the Alfeld-Elze II licence and gas field. This will make Path cash generative. The new shares will be eligible for EIS and VCT relief because Path is moving to AIM.
Dave Brieth has sold his stake in telecoms services provider Toople (TOOP).
Associated British Engineering (ASBE) reported a sharp increase in full year revenues from £1.04m to £1.6m in the year to March 2018. The loss fell from £962,000 to £582,000. This includes investment in developing new diesel engines. The NAV is £976,000, as the loss was partly offset by a £600,000 property revaluation gain. The oil and gas-related operations are still depressed.
Mila Resources (MILA) plans to acquire Capital Metals, which owns 100% of a high-grade mineral sands project in southern Asia. The reverse takeover will be subject to due diligence and shareholder approval.
Fandango Holdings (FHP) has ended bid discussions with Corporate Commercial Collections and Vatbridge following initial due diligence.
Andrew Hore
Andrew Hore – Quoted Micro 22 January 2018
NEX EXCHANGE
Capital for Colleagues (CFCP) reported a decline in full year revenues from £560,000 to £372,000 and there was no repeat of the realised gains on investments in the previous year. There was an increase in unrealised gains from £71,000 to £317,000. However, there was a £1.32m investment impairment. This meant that a profit of £158,000 was turned into a loss of £1.17m. There is £1.28m in the bank. The employee-owned businesses investor is focusing on managing its portfolio and the advisory business spun off into a joint venture. The NAV is 42.7p a share.
First Sentinel (FSEN) has invested the £1.4m it raised when it joined NEX last year. These investments include fellow NEX-quoted company NQ Minerals, where First Sentinel boss Brian Stockbridge is chairman, AIM-quoted UK Oil and Gas Investments and AIM-quoted Premier African Minerals. There is a £65,000 loan to unquoted tea cafés operator Yumchaa, where Stockbridge is 50% shareholder. The loan has an interest rate of 12% and lasts until October.
Block Energy (BLOK) has further delayed the planned move to AIM. The oil and gas company has a new expected admission date of end-February. Trading remains suspended on NEX.
AIM
Mark Watkin Jones intends to step down as chief executive of student and private rental accommodation developer Watkin Jones (WJG) but he will stay until a successor is identified. In the year to September 2017, revenues were 13% higher at £301.9m and underlying operating profit rose by a similar percentage to £42.7m. The dividend was 6.6p a share, equivalent to a 10% increase if Watkin Jones had been quoted for all the previous year. Investor demand for student accommodation and private rental residential property remains strong.
Van Elle (VNL) has an outstanding debt of £1.6m from failed facilities management and construction company Carillion. finnCap has also assumed lower second half profit of £1.3m relating to expected business from Carillion. The specialist piling contractor has a poor record since floating and this does not help.
Engineering and IT recruitment company Gattaca (GATC) says that most of Carillion’s debt to the company is insured with around £100,000 uninsured. Premier Technical Services (PTSG) says that it has £800,000 of annual revenues with Carillion with £300,000 still owed. Elsewhere, business is in line with expectations. Bilby (BILB) says that it does not think that the contract with CarillionAmey will be impacted.
Sinclair Pharma (SPH) directors have been buying shares on the back of the news that it has received regulatory approval of Ellanse pre-mixed bioresorbable collagen stimulating fillers in Brazil, one of the most important global markets. Ellanse will be soft launched immediately and the full launch is a matter of weeks away. Other Sinclair dermatological products are selling well in Brazil.
K3 Capital (K3C) reported interim figures that were better than forecast. This led to a £1m increase in forecast full year revenues but the pre-tax profit forecast is maintained at £5.4m because of additional costs required to accelerate the growth of the business. The business broker and corporate finance adviser announced an interim dividend of 2.85p a share and a total dividend of 8.2p a share is forecast for the full year.
Full year trading at Midwich (MIDW) was better than expected with revenues 28% ahead at £470m, helped by acquisitions performing ahead of expectations. The audio visual equipment distributor has also improved gross margin. The 2017 results will be published on 13 March.
Utilitywise (UTW) has changed its accounting policy relating to initial revenue recognition of new contracts.
LiDCO (LID) has signed up a new Japanese distributor. Merit Medical has a three year exclusive agreement and there is potential to significantly increase last year’s sales of £117,000. The LiDCOunity version 2 monitor has been approved in Japan.
African Battery Metals (ABM) is the new name for Sula Iron and Gold. Prior to the name change, £1.75m was raised and the Riverfort facility terminated with an associated buy back of shares. ABM is paying $100,000 ($50,000 is still outstanding) for a 70% stake in cobalt licences in the Democratic Republic of Congo. The other shareholder will retain its 30% stake up until a decision is made to mine, so ABM will pay the exploration costs.
Orosur Mining Inc (OMI) produced 7,052 ounces of gold at an average cash operating cost of $867/ounce in the second quarter and plans to produce at least 30,000 ounces in the financial year. Although the South America-focused gold producer and explorer generated $2.16m in cash in the second quarter, there was a $251,000 loss in the period because the all in sustaining cost was higher than the gold price received. Asset Chile has forfeited the 16% stake it earned in Anillo because it did not move into phase 2 of the project.
Shareholders have approved share buybacks by China New Energy Ltd (CNEL) until the end of 2019. Up to one-fifth of the shares can be acquired for less than 2p a share. The bioenergy technology developer and operator increased revenues from £8.85m to £24.7m in 2017 and the order book is worth £13.7m. The company was profitable last year and anticipates it will be in 2018.
Data software company WANdisco (WAND) says bookings increased 45% to $22.5m in 2017 with two-thirds generated by WANdisco Fusion software. There was cash of $27.4m at the end of 2017, with $4m from a new growth capital facility.
Thor Mining (THR) has had its stake in US Lithium diluted to 20.8% due to a A$240,000 fundraising at A$0.12 a share, which is four times the Thor acquisition price. US Lithium plans an ASX-listing.
Veltyco Group (VLTY) is acquiring a 51% stake in Varkasso, which has exclusive rights to use the crypto wallet technology platform 8Crypt, for £265,000 in cash and shares. Veltyco will incorporate the 8Crypt crypto wallet in all the gaming platforms it is involved with.
Newmont Mining has decided not to become involved in the Greatland Gold (GGP)-owned Ernest Giles gold project in Australia. It appears that the project was not in the right place or large enough for Newmont to go ahead with, although it took its time to make a final decision. Greatland benefits from the work conducted by Newmont, which has identified a large gold anomaly. Targeted exploration will be undertaken at Ernest Giles in the first quarter of 2018.
Kodal Minerals (KOD) says that the authorities have approved its exploration licences for the Bougouni lithium project in southern Mali. Triumvirat Mining Company will have a 10% economic interest in the licences, which are for an initial three year life. There has been positive drilling news concerning the Ngoualana and Sogola-Baoule prospects.
Electrical accessories supplier Volex (VLX) moved from the Main Market to AIM on 19 January.
Waste gasification technology business EQTEC (EQT) has partially repaid a five-year, £1.1m loan facility with an annual interest rate of 15%. The remaining balance of £621,000 is repayable in July 2020. The £2m of convertible secured loan note with Altair Group Investment Ltd has been extended until July 2020 and the interest rate doubled to 15%.
Renewable fuels technology developer Velocys (VLS) has raised £14m via a placing at 10p a share and hopes to raise up to £4.4m through an open offer at the same price. Last year, there was a £1.16m share issue at 45p a share. The cash will be used to finance initial development of the Mississippi biorefinery and fund the UK waste-to-renewable jet fuel project which has been around for many years.
Generic drugs supplier Beximco Pharmaceuticals (BXP) expects to complete the £18.2m acquisition of a 85.2% stake in Nuvista Pharma by the end of February.
Gama Aviation (GMAA) says last year’s trading was in line with expectations. The business aviation services provider has incurred $1m of costs relating to legal proceedings and there will be a similar amount to come. There will be around $2.5m of restructuring costs and write-downs. Net debt fell from $19m to $13m.
Although Blancco Technology Group (BLTG) says that first half sales declined this is due to the fact that certain contracts were not repeated in the latest period. The data erasure software business is expected to report continuing full year revenues 6% higher at £28.5m. However, higher overheads mean that there will be little profit.
Cyber security software supplier Crossrider (CROS) says that 2017 trading was in line with expectations and revenues improved 16% to $65.8m, while underlying EBITDA was 29% ahead at $8.3m. Profitability from the core activities more than doubled. There was $69.4m in the bank at the end of 2017.
Legend Gold Corp shareholders have agreed to the arrangement for Altus Strategies (ALS) to acquire the entity that owns the Legend gold projects in Mali in return for 41.1 million Altus shares. The mining projects investor is also applying for a dual listing on the TSX-V. Legend shareholders will be issued three Altus shares for each Legend share that they own, giving them 27.6% of Altus.
Toys supplier Character Group (CCT) says it has exited Christmas with “virtually no excess stocks”. International sales were poor but domestic sales grew. Pokemon products will be launched during the summer.
Caledonia Mining Corporation (CMCL) reported higher than guided annual production at the Blanket gold mine. The prediction was 54,000-56,000 ounces but the outcome was 56,135 ounces.
Sustainable pallets manufacturer RM2 International SA (RM2) had unrestricted cash of $4.1m at the end of 2017, but that could fall to $2m by the end of January. That means that there should be enough cash until the third week in February. Management continues to seek additional finance. There are plenty of potential customers but little in the way of orders.
Tiziana Life Sciences (TILS) has raised a further £150,000 at 150p. This is on top of the £150,000, £275,000 and £200,000 raised at the same price during November and December. There is a warrant with each new share and they are exercisable at 160p a share, although the most recent warrants last until January 2024. The cash is being invested in the phase IIa clinical trial for the Milciclib cancer treatment.
Remote tracking and monitoring products developer Starcom (STAR) says that last year’s turnover improved from $5.1m to $5.5m and lower operating costs mean that it will move from loss to breakeven. Strong orders mean that revenues and margins should improve this year.
Condor Gold (CNR) has obtained a TSX listing.
MAIN MARKET
Path Investments (PATH) is cancelling its standard listing even before finalising its acquisition of a 50% participating interest in the Alfeld-Elze licence and gas field in Germany. The plan is to cancel the standard listing on 19 February and raise money and apply for an AIM quotation in the first quarter of 2018. Path has previously been on AIM in a different guise but if the deal does not go ahead the plan would be to maintain the standard listing.
World Trade Systems (WTS) plans a transaction involving the sale of its assets to a new company that will float on the Channel Islands-based The International Stock Exchange. WTS shareholders will be distributed shares in the new company that will be used to acquire the assets.
Loss-making telecoms firm Toople (TOOP) did not publish a full set of figures on RNS. That is always a giveaway. It did announce that the operating loss declined by 23% to £1.31m in the year to September 2017. Cash flow is much more important for a colander company like Toople.
Technology investment company Sure Ventures (SURE) has joined the Specialist Fund Segment of the Main Market, having raised £3.31m at 100p a share. The main focus is augmented reality, fintech and the Internet of Things.
Challenger Acquisitions Ltd (CHAL) has invested $300,000 in a new giant observation wheel for Dallas, Texas. Challenger also has the opportunity to operate the wheel.
Andrew Hore
Quoted Micro 13 November 2017
NEX EXCHANGE
Blockchain investment company Coinsilium Group Ltd (COIN) has signed a memorandum of understanding with UMT United Mobility Technology, which has shares traded on the Frankfurt Stock Exchange and owns 3% of Coinsilium, to collaborate on the development of blockchain-related mobile payments services for the business to consumer market. Coinsilium will advise UMT on the potential uses of digital tokens. The initial agreement is for three months.
Hellenic Capital (HECP) has launched a one-for-three open offer at 0.5p a share that will raise £250,000. The minimum subscription is 100,000 shares and the closing date is 22 November. Each share comes with a warrant for an additional share.
Early stage investor Primorus Investments (PRIM) has invested a further A$75,000 in Melbourne-based Fresho at A$0.38 a share. Online food ordering business Fresho was seeking A$1.5m but eventually raised A$2m. Primorus initially invested at A$0.27 a share and it owns 3.1% of Fresho, which is valued at nearly A$500,000 at the placing price. Fresho is moving towards cash flow breakeven in Australia earlier than expected and the $4m in the bank will help the company to launch operations in New Zealand and Singapore.
Kryptonite 1 (KR1) has generated £750,000 at 6p a share in order to invest in more blockchain token issues. Smaller Company Capital has increased its stake to 4.59% and one of its owners and Kryptonite 1 non-executive director Jeremy Woodgate owns 1.27%.
NQ Minerals (NQMI) has raised a further £150,000 at 8.5p a share and a holder of convertible loan notes has converted into 350,000 at a price of 8p a share.
Early Equity (EEQP) has raised £590,000 at 0.6p a share and issued 30 million shares to pay for 60,000 units in Yicom Global. Early Equity owns 47.1% healthcare products importer Yicom.
Lombard Capital (LCAP) has issued a further £45,000 of 7.5% convertible loan notes 2020, with 450,000 warrants, exercisable at 10p a share, attached. That takes the convertible loan notes in issue to £195,000.
Peter Hain, Simon Dorling and Declan O’Brien have all stepped down from the board of African Potash (AFPO).
AIM
Tracsis (TRCS) had a much better second half as predicted at the interim stage. In the year to July 2017, revenues improved by 6% to £34.5m, while pre-tax profit was 14% ahead at £4.6m. The total dividend was increased from 1.2p a share to 1.4p a share. There is £15.4m in the bank. The main growth in the rail technology division was from Ontrac software business, while revenues from traffic and data were flat, although there was growth if the former Australian operations are excluded. Profit should edge up this year but it will do even better if further large contracts are secured.
Castleton Technology (CTP) reported a rise in interim EBITDA from £2m to £2.3m and strong cash flow is reducing borrowings. Net debt was £8m at the end of September 2017. Castleton provides software to social housing operators and they are signing up for multi-year contracts.
Oxford Pharmascience (OXP) is demerging its assets into an unquoted vehicle and retaining a quotation as a shell. Management believes that it will be better for the business to be private in order to commercialise the OXPzero technology and existing investors will still have an interest. The shell will have few limitations in terms of the sectors that could provide an acquisition but there is board experience in pharma and technology. There was still £20.6m in the bank at the end of October and the shell will retain more than £19m. The company will change its name to Abaco Capital.
AfriTin (ATM) has completed its spin-off from Bushveld Minerals (BMN) and a placing raised £3.5m with a further £1m coming from convertible loan notes. The main asset is the Uis tin project in Namibia.
City Pub Group has confirmed plans to join AIM by the end of November. The company has 34 pubs in southern England and it wants to raise £30m. The business was founded in 2011 by experienced pub group operators, including David Bruce, who previously sold Capital Pub Company to Greene King for £93m.
Peter Gyllenhammar has built up a 8.35% stake in Stratex International (STI) and Bob Foster has returned as interim chief executive. He will review the strategy of the company. The takeover of Crusader Resources is not going ahead. The sale of the Goldstone Resources stake raised £550,000 and there was £6.08m in the bank at the end of June 2017. Gyllenhammar is more likely to be interested in the cash rather than the mining operations. The current capitalisation of Stratex is similar to the pro forma cash and around one-third of NAV.
Versarien (VRS) raised £2.9m instead of the £1.2m it was seeking one week ago. The cash was raised at 18p a share and the share price has risen to 24p. The cash will be used to purchase capital equipment.
Pre-IPO investment company St Peter Port Capital (SPPC) has concluded a strategic review just over 13 months after it commenced. The formal sale process has been terminated. The plan is to realise investments in an orderly manner. The NAV was 25.3p a share at the end of September 2017.
Redx Pharma (REDX) has returned from suspension having come out of administration. The share price almost halved to 17.5p. Chief executive Neil Murray has been given the push, or stepped down as it is described in the announcement, and Iain Ross has taken over as executive chairman. Dominic Jackson has been appointed as finance director. Hopefully, this will mean that Redx is better run than it was before. A phase I trial for the lead cancer asset is due to start in the first quarter of 2018 and initial phase 1a results should be available by the end of 2018. There is £13.6m in the bank and no debt.
BOS Global Holdings (BOS) is facing a battle with its former boss. The workflow efficiency software provider has received a general meeting requisition from interests related to former managing director Michael Travia, who recently stepped down from the board. He wants to be reappointed to the board and have Adam Webb removed from office. These are two of the eleven proposals put forward.
Trading in the shares of Red Emperor Resources (RMP) on ASX has been suspended because it does not have sufficient operations to warrant a listing. There are plans to increase the company’s stake in an exploration block in the Philippines and there are also potential oil lease acquisitions in California.
Shari’a-compliant investment company Tejoori Ltd (TJI) is cancelling its AIM quotation ahead of returning cash to shareholders. The company’s investments have been sold and there is $17.6m in cash.
Beximco Pharma (BXP) is commencing the export of Sotalol Hydrochloride, which is a generic version of heart drug Betaplace. This is the second product to be exported to the US. Interim pre-tax profit improved by 13% to £27.5m on the back of double digit sales growth.
Amphion Innovations (AMP) has a 26% stake in Polarean Imaging Ltd, which is planning to float on AIM. Polarean is a clinical stage medical imaging business and it is expected to be valued at $29m before new money. This compares with a valuation of $22m at the time of the previous fundraising during May. That would mean that the Polarean stake is worth more than Amphion’s current market capitalisation.
SkinBioTherapeutics (SBTX) says that its SkinBiotix technology has passed all three necessary toxicity tests. This will enable human studies to begin next year.
Connemara Mining Corp (CON) has completed five holes at the Meeneragy gold project and they demonstrate the presence of a significant gold bearing system in the area. Survey data should be processed by next February.
Coal bed methane projects developer Tlou Energy (TLOU) has commenced core hole drilling at the Lesedi project in Botswana. A seismic survey is almost complete. The focus is increasing gas reserves and contingent resources. The data will be used to provide information for when development starts.
WynnStay Properties (WSP) increased its NAV to 685p a share at the end of September 2017 and the interim dividend has been raised by 18% to 6.5p a share. There was a gain on sale of properties in Colchester and Gosport as well as a 16% increase in property income to £1.12m.
TLA Worldwide (TLA) has agreed a renewed senior debt facility of $28.75m from SunTrust Bank. This was announced at 8.48am on 9 November. This contrasts with the profit warning released at 6.26pm on the last day of trading prior to Christmas 2016.
Snoozebox (ZZZ) has appointed Moore Stephems as administrator and trading in the shares has been suspended. Snoozebox is moving towards cash breakeven but the main lender, SQN Asset Finance Income Fund, has not agreed to a suitable debt refinancing plan so the company cannot continue to trade as a going concern. Panmure Gordon has resigned as nominated adviser and broker.
Thor Mining (THR) has raised nearly £494,000 from the conversion of warrants, at 0.9p each and 1.25p each, so far in November 2017. A placing recently raised £565,000 so there is plenty of cash to move ahead with exploration activities.
InterEnergy Holdings has decided not to become involved with a bid for Rurelec (RUR) as part of the consortium headed by Peter Earl. He had approached InterEnegy about the provision of loan finance. The bidding consortium subsequently pulled out of the potential bid until the full effect of the problems at Rurelec’s Patagonian power station are known.
MAIN MARKET
PV Crystalox Solar (PVCS) has won an award of €34m plus interest from the International Court of Arbitration of the International Chamber of Commerce. This relates to a supply agreement with a PV company, which failed to purchase wafers in line with its contract. The customer has to pay up but it can also ask for the delivery of 22.9 million wafers that are due under the contract.
Sportech (SPO) is seeking potential offers by January 2018. A distribution of cash to shareholders is still planned for this year. Annualised cost savings of at least £2m have been identified. Trading remains in line with expectations.
Illustrated book publisher Quarto Group (QRT) has ditched its dividend after a second half upturn was not strong enough to achieve profit expectations. Full year revenues will be lower. Year end net debt will be higher than at the end of 2017. Bid talks appear to have hampered the business. The children’s and foreign rights businesses are strong. The focus is to achieve 60% annual recurring revenues.
Gemstones project developer Shefa Yamin plans to join the standard list and the Israel-based company will use the money raise to finance further exploration and to complete the pre-feasibility study at the Kishon Mid-Reach project. There are plans to set up an internet platform to sell the gemstones, some of which are unique to the area. The Carmel Sapphire brand has been registered for dark blue sapphires. Several potential primary and secondary deposits have been identified. Bulk samples are being taken, so far 11,000 tonnes have been sampled, and there are plans to delineate a mineral resource. Production is targeted within the next 24 months.
Symphony International Holdings (SIHL) had a diluted NAV of $1.146 a share at the end of September 2017. This was after a $0.10 a share dividend. The shares are trading at a one-quarter discount to NAV.
Challenger Acquisitions Ltd (CHAL) is diversifying into film conventions. Challenger is loaning £100,000 to a private company that is putting on a film convention in London in 2018. The loan is repayable, with a premium of 40%, by 15 May 2018. The cash will help to finance the venue, staff and guests. Challenger has the right to participate in future events held by the company.
Oxford Biomedica (OXB) is collaborating with a major US biopharma company for research into patients that have abnormal wound-healing responses leading to fibrosis. The collaboration will use the EpiSwitch platform.
Andrew Hore
Dr David Paul talks VectorVest Composite index, plus AIM stocks BXP, MGNS, DFX, VCP with Jeremy Naylor on IG TV
Dr David Paul discusses the VectorVest Composite index, market timing plus AIM stock picks: Beximco Pharma (BXP), Morgan Sindall (MGNS), Defenx (DFX) and Victoria (VCP) with Jeremy Naylor on IG TV.
Brand CEO Alan Green talks Macron-omics, Beximco Pharma (BXP) & EnQuest (ENQ) on TipTV
Brand CEO Alan Green discusses Macron-omics, Beximco Pharma (BXP) and EnQuest (ENQ) with Zak Mir on TipTV.
Dr David Paul of VectorVest discusses the uptrend in VectorVest Composite UK index on TipTV, plus the early risers portfolio
Dr David Paul, Managing director of VectorVest says the short-term trend and the underlying trends in the ‘VectorVest Composite UK’ index / London market is up, however, caution is advised as more standard indicators like the weekly MACD are suggesting the trend looks matured. “The weekly MACD shows bearish divergence”, says Dr. Paul. Watch the full segment for more info on this week’s VectorVest Early Risers portfolio picks, including Victoria (VCP.L), 3i Group (III.L), Coats (COA.L), Beximco Pharm (BXP.L) & Plus 500 (PLUS.L) & Dr. Paul’s trade of the day
Buy Beximco Pharmaceuticals (BXP) says VectorVest. Underlying momentum and milestones achieved indicates there is plenty more to come.
Founded in 1976 and based in Dhaka, Bangladesh, Beximco Pharmaceuticals (BXP.L) manufactures and sells generic pharmaceutical formulation products and active pharmaceutical ingredients. The Company also undertakes contract manufacturing for multinational and leading global generic pharmaceutical companies. The Company operates from a 23 acre site in Dhaka and has manufacturing facilities for producing various drugs in different delivery systems such as tablets, capsules, liquids, semi-solids, intravenous fluids, metered dose inhalers, dry powder inhalers, sterile ophthalmic drops, prefilled syringes, injectables, nebuliser solutions and oral soluble films etc. Ensuring access to quality medicines is the powerful aspiration that motivates 3,500 employees of the Company.
On January 27 2017, BXP announced half-year results for the period ended 31 Dec 2016. BXP said net sales increased by 13.6% to BDT 7,630.6m or £79.7m, while profit after tax increased by 17.8% to BDT 1,112.9m or £11.6m in the first half. During the period, the company launched a total of eight new products in the domestic market – three of which were launched for the first time in Bangladesh; Voglibose, Cholecalciferol and Dienogest. It also commenced US export of Carvedilol, a prescription drug for treating hypertension, in August, making it the first Bangladeshi pharmaceutical company to export pharmaceutical products to the US. “With the formal launch of Carvedilol in August, Beximco Pharma became the first Bangladeshi pharmaceutical company to export a prescription drug to US,” explained Beximco managing director Nazmul Hassan. “In addition, we received approval for two more products from US FDA during the period.” Hassan said the company continued to perform well in the domestic market, posting a sales growth of 14.4% over the corresponding period in 2015. “We are confident that we will be able to maintain our growth momentum by achieving our operational and financial targets for the full year.”
The growth in BXP sales in both domestic and export markets, resulted in a series of flags across VectorVest metrics during mid 2016 onwards. The GRT (Earnings Growth Rate) metric, which reflects a company’s 1-3 year forecasted earnings growth rate, flagged at 25.00%, which VectorVest considers to be excellent. In addition the VST (VST-Vector and the master indicator for ranking every stock in the VectorVest database) rates BXP at 1.26, which is very good on a scale of 0.00 to 2.00. With the growth momentum clearly established, BXP logs a current Value of 84.5p per share, meaning it is undervalued compared to its current price of 69.50p per share.
The chart of BXP.L is shown above over a period of two years. The price is in candlestick format with the upward trend being clear. The share is undervalued as shown by the price trading below the green line study which is the VectorVest valuation of the stock. In the window below price earnings per share (EPS) is charted via the blue line study and this shows EPS doubling over the period. The share is breaking above a 52 week high and is on a Buy recommendation at VectorVest.
Summary: BXP is currently in a major growth phase, and has passed a number of major milestones over the past year, not least of which is the company’s achievement of becoming the first Bangladeshi pharma company to be approved by the US FDA. The underlying momentum highlighted across VectorVest metrics indicates there is plenty more to come, the share is in a strong upward trend and the probabilities favour a further move upwards to close the valuation gap toward 84.5p.
Dr David Paul
May 3 2017
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Quoted Micro 30 January 2017
NEX / ISDX
There was a sharp improvement in operating profit from £120,006 to £213,657 at Hydro Hotel, Eastbourne (HYDP) in the year to October 2016. Revenues improved from £3.13m to £3.21m, while gross margin jumped from 9.9% to 13.6%. Pre-tax profit rose from £133,576 to £224,352. Improved marketing has helped to boost trade but the hotel will be hit by increases in the national living wage. Further refurbishment is panned at the hotel. Strong cash generation has increased the cash position from £651,000 to £1.39m. The second interim dividend is being raised from 12p a share to 14p a share, taking the total to 21p a share, up from 18p a share.
Rail track technology supplier Wheelsure Holdings (WHLP) reported an increased loss in the year to August 2016 because of higher admin expenses. Pre-tax loss moved from £228,000 to £262,000. Revenues increased by 21% to £290,000 even though London Underground orders have been delayed by budget restrictions. Orders have been received since the year end. Wheelsure has issued shares at 1p in lieu of £14,000 of commission owed to the company’s Italian agent, which has generated the first order for track equipment incorporating Tracksure.
Ashley House (ASH) remained profitable in the six months to October 2016 even though trading conditions were tough and there remains uncertainty about government funding for supported housing. It does appear likely though that there will be increasing demand for extra care housing schemes. Interim revenues were flat at £10.7m and the gross margin was much lower. The underlying pre-tax profit was halved to £200,000. Full year profit is still forecast to rise from £1.2m to £1.5m but this depends on three schemes reaching financial close by April.
Building projects manager and developer Formation Group (FRM) maintained its pre-tax profit at £2.2m in the year to August 2016, even though the recognised profit share from the development at Norwich House in Streatham fell from £2.42m to £1.42m. Group revenues were one-quarter higher at £29.4m helped by sales of apartments at Iverson Road, London N6. There was also a £1.02m post-tax write back relating to past properties. NAV increased from £7.6m to £10.4m. Since the year end, cash has been received from disposal proceeds, which will reduce net debt from £3m.
Mechan Controls (MECP) has appointed administrators from Leonard Curtis to its subsidiary PJO Industrial, following a deterioration in its prospects. PJO supplies mining and pipe laying equipment. Mining demand has been weak. PJO was hit by a bad debt in 2015 and lost £206,000, while net liabilities were £514,000.
Forbes Ventures (FOR) has raised £530,000 from Gravity Investment Group at 0.3p a share. Gravity has a 60.8% shareholding in Forbes. The bulk of the cash will be invested in £500,000 worth of 12%, two-year convertible loan notes in residential care provider Primus Care, where Gravity director Chris Bateman is on the board. The conversion price will be 80% of the fair market value of an ordinary share.
There was further fundraising activity last week. NQ Minerals (NQMI) has raised £125,000 at 7p a share in order to finance working capital. Energy efficiency products supplier Sandal (SAND) has raised £52,000 at 28p a share. Milamber Ventures (MLVP) executive chairman Andy Hasoon has invested a further £16,300 in the technology investment company at 13.55p a share. Property investor Etaireia (ETIP) has generated £10,000 from the issue of shares at 0.09p each.
United Cacao (UCL) has raised further concerns about former chairman Dennis Melka. This involves a number of loans which were not previously disclosed. It also turns out that the small farmer programme has planted 70 hectares and not 194 hectares as said in the interim figures. The Peru-based cacao plantation operator has extended the exclusivity agreement with existing investors, in order to try to secure the long-term financial viability of the business, to 31 March. Cash is being raised from bond issues at large discounts. Just over $515,000 has been raised from the issue of $3.45m of nominal value bonds with a 7% coupon. One of the company’s directors will invest a further $40,000 at 18 cents per $1 bond.
AIM
Scientific instruments manufacturer Judges Scientific (JDG) had a strong end to 2016 and order intake grew organically by 3% during the year. This was too late to benefit the 2016 figures where slow orders and manufacturing problems had led to disappointment and pre-tax profit is expected to fall to £7.1m. Earnings per share will fall by nearly one-quarter to 82.8p a share. That is line with previously downgraded expectations. The year has started with an order book lasting 13.9 weeks and there are positive foreign exchange movements that will help in the recovery. A 2017 pre-tax profit of £8.6m and earnings per share of 102p are forecast, which is still below the level in 2015.
Imaging and radiation detection products developer Kromek Group (KMK) is raising up to £21m via a placing and one-for-30 open offer at 20p a share. Net cash was £2.3m at the end of October 2016 and the additional cash will provide a significant cushion for the company. Kromek is still a couple of years away from making a pre-tax profit but the cash outflow should decline.
Taptica Ltd (TAP) has issued a positive trading statement and this has led to a forecast upgrade for 2016. Earnings per share have been upgraded by 12% to 29.3 cents, which is 150% higher than the forecast was one year ago. Increasing mobile marketing spend by customers means that there should continue to be significant growth.
Beximco Pharmaceuticals (BXP) has formed a joint venture with BioCare Manufacturing in Malaysia. Beximco will own 30% of the joint venture and will provide technical support. The initial product is a metered dose inhaler. Beximco reported a 14% local currency increase in interim revenues but in sterling they rose from £58m to £79.7m, while the growth rate in pre-tax profit was slightly higher with the sterling equivalent rising from £8.2m to £11.6m. The first product is being sold in the US and approvals have been gained for two other products.
Walker Greenbank (WGB) has received a further £1m insurance payment relating to flooding at Standfast & Barracks at the end of 2015. This takes the total insurance payments for the Lancaster fabric printing factory to £14.3m and there could be more to come. The Milton Keynes warehouse has been restocked. Octopus has increased its stake to 13.1%.
Ultrasound training simulators developer MedaPhor (MED) says it still had cash of £1.4m, net of the litigation settlement, which has been formalised with SonoSim Inc. In 2016, revenues grew by 50% to £3.3m, partly thanks to an initial contribution of £850,000 from the acquisition of Inventive Medical. The loss has increased from £1.5m to £2.5m, after settlement costs.
ImmuPharma (IMM) has recruited the 200 patients it requires for its phase III trial for the Lupuzor potential treatment for Lupus. By the end of January, more than 80% of the patients will have been treated for three months. Patients have to be monitored for 12 months so the full trial will not be completed until the first quarter of 2018. So far, there have been no indications that the drug is not safe.
Headway Investment Partners has increased its offer for Ludgate Environmental (LEF) from 16p a share to 16.3p a share, which compares with the latest NAV of 21.7p a share. The bid, though, provides cash up front rather than having to wait for the portfolio to be sold off.
Ascent Resources (AST) has started a well test at Pg-10 at the Petisovci project in Slovenia and an announcement about the results of the test should be published later this week. Henderson took advantage of a share price rise to sell one-fifth of their stake taking it to just below 10% but then almost doubled the number of shares it owns by converting £1m of convertible loan notes into 100 million shares. There are still £8.14m of convertibles in issue.
Ramblers Metals & Mining (RMM) expects to achieve the milling of 1,250 metric tonnes a day by the middle of 2017. Saleable copper of between 5,100 and 5,800 tonnes is forecast to be produced in 2017, along with 4,400 to 5,100 ounces of gold. In 2016, there was 4,174 tonnes of copper and 6,132 ounces of gold produced.
Keras Resources (KRS) has raised £600,000 at 0.35p a share in order to finance exploration at the Klondyke gold project in Australia. Some of the cash will be used to repay a £265,000 loan.
A concept study for the development of the CS natural pozzolan project in Nevada should be completed by the end of the first quarter of 2017. Sunrise Resources (SRES) should have information about the potential timeline for commercial production for the pozzolan, which is more environmentally friendly alternative to Portland cement.
MAIN MARKET
East Africa-focused Rainbow Rare Earths has raised $8m at 10p a share ahead of its standard listing. Demand for the shares was strong. This cash will be invested in the Gakara rare earths project in Burundi. Rainbow requires $2.23m to enable it to commence production in nine months. The main rare earths will be neodymium and praseodymium, which are used in generators, electric vehicles and wind turbines. Rainbow has secured a ten year offtake agreement with thyssenkrupp Raw Materials, which covers the sale of 5,000 tpa of concentrate. Petra Diamonds founder Adonis Pouroulis is chairman of Rainbow, which could move into profit in the year to June 2018.
Andrew Hore