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Andrew Hore – Quoted Micro 14 June 2021
AQUIS STOCK EXCHANGE
Clarify Pharma (PSYC) joined the Access segment on 11 June and raised £1.96m at 2.5p a share. Prior to flotation, Clarify Pharma raised £100,000 at 0.1p a share and £1.19m at 1p a share. Pro forma NAV, after flotation expenses, is £2.97m. That is equivalent to 1p a share. Management includes Michael Edwards and Jonathan Bixby from NFT Investments (NFT) and other recent Aquis new admissions. Clarify Pharma will focus on investing in psychedelic medicine businesses and products in the UK and Canada. The share price ended the day at 2.875p (2.75p/3p).
Angelfish Investments (ANGP) is changing its Igraine (KING) and DiscovOre (ORE) is subscribing £2m at 2.5807p a share (post consolidation) for a 24.6% stake. Burns Singh Tennent-Bhohi is a director of both companies. Angelfish will become a biotech and medtech investor and it will have co-investment rights with Excalibur Healthcare Services, which is run by Professor Sir Chris Evans. He will also become an Angelfish director. Angelfish will take a 2% stake in Excalibur Medicines Ltd, which has the rights to a potential drug for diabetics suffering from Covid-19. Angelfish will pay £600,000 in cash plus issue £500,000 of deferred shares at 5p each, which could be converted into ordinary shares is the trial of the potential Covid-19 treatment is successful. Every 1,000 existing shares will be consolidated into one new share.
Ananda Developments (ANA) plans to acquire 100% of cannabis grower DJT Plants Ltd. Ananda already owns 50% and it will issue 790.5 million shares, equivalent to £7.3m, to Anglia Salads for the other 50%. Stuart Piccaver will become joint chief executive of Ananda.
KR1 (KR1) has invested the equivalent of $4.45m in KSM tokens in Shiden Network, a smart contract platform on Kusama. Once the parachain auction is completed the KSM will be returned and KR1 will receive Shiden tokens. KR1 made a similar investment in the Karura crowdloan.
Rural Broadband (RBBS) has 2,571 monthly fee-paying clients for its broadband services. Annual run rate revenues are £820,000.
Veni Vidi Vici (VVV) had £272,000 in cash and NAV of £359,000 at the end of 2020. The company has since raised £220,000 at 50p a share. This will help finance the A$300,000 that the company has to spend over the next three years on the 51% owned Shangri La gold, copper and silver project.
Vulcan Industries (VULC) raised £100,000 at 1.675p a share.
Virgata Services has extended its bid for Walls & Futures REIT (WAFR) until 21 June. Acceptances currently total 9.3% of the share capital.
UK SPAC (SPC) has withdrawn its application for a move from AIM to Aquis.
AIM
NWF (NWF) is trading ahead of expectations and net debt will be lower than anticipated at the end of May 2021. The fuels division has a strong year thanks to the cold winter. The food distribution business improved its trading, but the unstable patterns of demand are hampering profit. Feed margins were under pressure.
AB Traction has increased its stake in construction dispute and property services provider Driver Group (DRV) from 17.32% to 18.27%. That was after Driver reported a 11% decline in revenues to £25m, while underlying pre-tax profit fell from £1.3m to £1m. The comparatives were tough, but gross margins were maintained at 25.6%. Europe and the Americas performed strongly, but the other regions lost money. Net cash was £7.2m at the end of March 2021. A full year pre-tax profit of £2m, down from £2.5m, is forecast.
Cambria Automotive (CAMB) is recommending an 80p a share cash bid, which values the motor dealer at £80m.
Mind Gym (MIND) is increasing its development spending on digital assets, but the benefits are yet to show through. Even so, the learning and development services company returned to profit in the second half. Revenues began growing again in the fourth quarter. In the year to March 2021, revenues were 18% lower at £39.4m, while underlying pre-tax profit slumped from £6.6m to £300,000. Even so, there was £5.9m of cash generated from operations. This level of cash generation will not be repeated, but advance payments mean that cash generation is impressive. There is £16.8m in the bank, after spending £2.8m on new digital products. Two of these products will launch later this year. The first quarter is well ahead of the same period last year.
Drug discovery company Redx Pharma (REDX) plans to move its main cancer treatment, RXC004, into phase 2 studies later this year after the phase 1 safety study is completed. This treatment is designed to prevent tumour growth. The main focus is colorectal, pancreatic and biliary cancer. Lung fibrosis treatment RXC007, the ROCK2 selective inhibitor, has started clinical trials. Redx still had £39.9m at the end of March 2021 and this cash should last until the end of 2022.
MAIN MARKET
JLEN Environmental Assets Group Ltd (JLEN) started investing in battery storage projects in the year to March 2021. JLEN generated £39.5m in cash from operations, up from £36.2m the year before. The proposed increase in UK corporation tax from 19% to 25% has reduced the NAV by around £20m due to its effect on deferred tax provisions. NAV was cut from 97.5p a share to 92.2p a share. The total dividend was 6.76p a share in 2020-21.
Associated British Engineering (ASBE) lost £49,000 in the six months to March 2021. NAV is £1.06m, including £383,000 in cash.
Sure Ventures (SURE) has raised £662,500 at 100p a share. The NAV was 92.06p a share at the end of March 2021.
Cellular Goods (CBX) has secured a supply agreement with Willow Biosciences, which will supply ultra-pure, biosynthetically-produced cannabigerol for use in the company’s cannabinoid-based skin care products.
Aircraft leasing firm Avation (AVAP) generated revenues of $91m in the nine months to March 2021. Key customers are starting to run more flights.
Andrew Hore
Andrew Hore – Quoted Micro 29 March 2021
AQUIS STOCK EXCHANGE
New Apex segment entry Samarkand (SMK) has got off to a strong start. At one point, shares were changing hands at 142p, against the placing price of 115p, but they ended the week at 123.5p (120p/127p). There was £15.4m raised after expenses. The company has developed e-commerce software technology known as Nomad. There are a number of modules and these can be used by clients to sell their products in China. There are 105 special cross-border e-commerce zones in China. This market is expected to reach £138bn in 2021. Samarkand also sells its own brands in China and some of the money raised will be used to buy other brands.
Incanthera (INC) has raised £1.14m at 12p a share. This will provide enough cash until the middle of 2022. There are discussions ongoing with two potential partners for the Sol skin cancer prevention product.
Imperial X (IMPP) has announced its intention to gain a standard listing and raise up to £1.5m. The company will change its name to Cloudbreak Discovery.
Rutherford Health (RUTH) has secured a £40m investment from Equitix Investment Management. In return the freehold of the South Wales centre will be transferred and there will be other security. There will be an initial investment of £25m with the rest paid in three equal instalments. The cash will be used for investing in infrastructure. The current debt of £18.6m will be repaid.
Arbuthnot Banking (ARBB) generated flat operating income of £72.5m, while there was a £1.1m loss. Management is optimistic about a strong rebound if the government continues with its current roadmap out of lockdown. There is a growing demand for lending.
Capital for Colleagues (CFCP) had NAV of 57.97p a share at the end of February 2021. That is before the sale of the investment in Anthesis for £1.15m. That leaves the company with £2.64m in cash.
In the first 18 days of March Bin 1301, a bar in Washington DC where Rogue Baron (SHNJ) has a stake, generated sales of $35,330, nearly double the same time the previous year. That is despite Covid restrictions.
SulNOx Group (SNOX) has appointed A and S International as a distributor of lubrication and bioremediation products.
EPE Special Opportunities (ESO) had an NAV of 437.63p a share at the end of January 2021, which was a 38% increase on the year before thanks to the strong performance of the Luceco (LUCE) share price. EPE is considering raising more cash through a loan note issue. That would provide further cash for investment.
Altona Rare Earths (ANR) has secured a memorandum of understanding for the acquisition of a rare earths mining project in Mozambique. The plaln is to buy 70% of the Monte Muambe rare earths project, via an earn-in.
First Sentinel has resigned as corporate adviser to Block Commodities (BLCC) after less than one month in the position. Block has entered into an option in partnership with Century Cobalt Corporation to acquire two million seeds, which can be used to produce medicinal grade cannabis. Block would have to issue more than 142.8 million shares at 0.07p each if the option is taken up.
Chris Akers has increased his stake in Quetzal Capital (WENP) from 15.2% to 17.2%.
Upper Thames Holdings has changed its name to Valereum Blockchain (VLRM).
S-Ventures (SVEN) has applied for an OTCQB quotation in the US.
AIM
Hormonal disease treatments developer Diurnal (DNL) says that Chronocourt, also known as Efmody could gain approval in the EU by the summer and that could enable a commercial launch in some European markets in the third quarter. Chronocourt/Efmody is a modified release hydrocortisone used to treat adult and adolescent patients with congenital adrenal hyperplasia, which is caused by a block in cortisol production. Potential sales are greater than for Alkindi, which is aimed at children.
A potential management buyout for Cambria Automobiles (LON: CAMB) at 80p a share would value the motor dealer at £80m. This is a premium of more than one-fifth to the previous market price.
Digital healthcare company Cambridge Cognition (COG) substantially reduced its loss in 2020 and is on course to move into profit this year. Revenues increased and expenses were reduced. There is a strong order book. There was £3m in the bank at the end of 2020. Voice-based service NeuroVocalix is set to be launched this year.
Cyber security firm ECSC (ECSC) grew recurring revenues by 22% to £2.4m last year. Even so, total revenues fell 4% to £5.7m due to a tough second quarter. The loss fell from £639,000 to £153,000. Net cash is £1.1m. There has been a good start to the new year with a clutch of contract wins.
STM Group (STM) has sold its trust and company services business for £2.45m plus net assets at completion of around £570,000. This has been non-core for some time. This will reduce short-term earnings – although there could be some cost savings – but the company can focus on pension administration and life assurance.
Judges Scientific (JDG) continued its record of increasing the ongoing dividend with a 10% increase to 55p a share. Pre-tax profit fell from £17m to £13.7m in 2020 and it could recover to £16m this year.
MJ Hudson (MJH) managed organic revenue growth of 3.6% in the first half, even though there was a lack of new fund launches. Cross-selling is paying off. The North American operations are more significant following recent acquisitions. Further acquisitions will help to increase the scale of the business.
Chariot Oil and Gas (CHAR) is acquiring AEMP, an African renewable energy developer, for up to $2m. There are discussions with mine operators that require 500MW of electricity.
MAIN MARKET
Foams manufacturer Zotefoams (ZTF) almost maintained its pre-tax profit last year thanks to strong sales to the footwear sector. Revenues were 2% ahead at £82.7m, but pre-tax profit was 5% lower at £8.3m. The final dividend is 4.27p a share. The new factory in Poland has started production and capital investment should be lower this year. Net debt was £35.6m at the end of 2020 and this figure should fall this year. This year pre-tax profit should improve to £9.3m.
LED lighting and wiring accessories supplier Luceco (LSE: LUCE) more than doubled 2020 pre-tax profit from £15.8m to £34m, even though revenues barely increased. Margins improved significantly, but there is still potential to improve LED operating margins. A strong second half offset the more difficult first half. The dividend is 6.2p a share. Net debt has fallen to £18.3m.
Oxilio has decided to exercise its option with drug developer Nuformix (NFX) to licence NXP001 for oncology indications. A licence agreement is being worked on. Once completed it will trigger a second upfront payment. Future royalties for any commercial treatments are capped at £2m a year.
Books publisher Quarto Group Inc (QRT) reported a dip in revenues from $135.8m to $126.9m, while adjusted pre-tax profit improved from $5.1m to $7.9m. Capitalised development costs were reduced from $23.8m to $20.3m, although the amortisation charge was higher at $28.6m. Strong cash flow combined with a share issue helped reduce net debt from $50.5m to $19.7m.
Dukemount Capital (DKE) is moving into the flexible power sector. A 50%-owned joint venture called HKSB will develop two 11KV gas peaking facilities that will produce 10MW for a total cost of £6.25m. The plan is to secure 15-year, CPI-linked contracts for each site.
Residential property developer One Heritage Group (OHG) had net assets of 9.25p a share at the end of 2020. There was an interim loss.
Andrew Hore
Andrew Hore – Quoted Micro 11 January 2021
AQUIS STOCK EXCHANGE
Standard list shell Baskerville Capital (BASK) plans to switch its quotation to the Access segment of the Aquis Stock Exchange. This move will happen at the time of the reverse takeover of Oberon Investments, the owner of fund manager MD Barnard. The transfer to the Access segment is expected to happen on 5 February, although this depends on completion of the deal.
Walls and Futures REIT (WAFR) increased its NAV to £3.96m at the end of September 2020. The Southfields property has been sold for £660,000, which was a small discount to the previous book value. The remaining residential property will be sold in the next few months. The company will then concentrate on specialist supported housing.
KR1 (KR1) has sold its remaining holding of FunFair tokens for an average price of 2.0207 cents each. That raised $1.28m, which is more than treble the cost.
Wishbone Gold (WSBN) expects the analysis of the aerial magnetic survey of the Red Setter project in Western Australia will be available before the end of the first quarter of 2021.
All Star Minerals (ASMO) continues to review opportunities in the mining sector in Africa. The deal is likely to be funded by a share issue, but more cash will be required.
Arbuthnot Banking (ARBB) non-executive director Nigel boardman has increased his shareholding from 5,020 shares to 11,348 shares. Shepherd Neame (SHEP) director JB Neame has sold 4,000 shares at 690p each and bought back 2,000 shares at 691.5p for an ISA.
Vulcan Industries (VULC) has raised £150,000 in share issues at 5p a share and 5.5p a share. TruSpine Technologies (TSP) is still waiting to receive £250,000 from Evrensel Capital Partners.
Peel Hunt has been approved as an AQSE corporate adviser.
AIM
Capital equipment manufacturer Mpac (MPAC) did better than expected last year although pre-tax profit is still likely to decline from £7.5m to £6.2m. net cash is £5m following the payment of £10m for Switchback last autumn. The order book is worth more than £55m, compared to 2020 revenues of £83m. The focus on healthcare and pharma has helped Mpac.
Judges Scientific (JDG) had a strong second half in 2020 and this has led WH Ireland to increase its 2020 pre-tax profit forecast from £12.1m to £13.5m. The 2021 figure has been maintained at £15.1m. Full year results will be announced on 23 March.
Fashion retailer Joules (JOUL) offset weak high street sales prior to Christmas with strong growth in online sales. Even so, continued uncertainty means that Peel Hunt has reduced its 2020-21 pre-tax profit forecast from £5.4m to £3.5m. Net cash is £13m.
Motor dealer Cambria Automobiles (CAMB) says trading the three months to November 2020 was ahead of the same period last year even though the market remains uncertain.
Wealth management firm Mattioli Woods (MTW) had more than £10bn of client assets by the end of November 2020. Gross discretionary assets under management are £2.9bn. Management is still seeking acquisition opportunities and there is £18m of cash in the bank.
Creo Medical (CREO) has received 510(k) clearance from the FDA for its MicroBlate soft tissue ablation devices. This broadens the range of products with approvals.
AssetCo (ASTO) has acquired a 2.9% stake in investment manager River and Mercantile at 186p a share. This cost £4.7m. There is still around £26m in cash available since the payment from Grant Thornton and after the tender offer to shareholders.
Avingtrans (AVG) is merging its two medical equipment businesses with Australia-based MRI technology developer Magnetica and it will own 59% of the enlarged business after also injecting A$600,000. A further £3.2m investment could increase the stake to 61.2%. The combined business is loss-making but the increased scale will help it to move towards profitability.
Telit Communications (TCM) has ended bid discussions with u-blox, although the potential bidder is still interested in making an offer. An all-share bid of 250p a share was indicated.
Tekmar (TGP) has secured a contract to design and manufacture subsea scour protection for a quay development project, which is worth more than £4m. That will be recognised in this financial year.
IntegraFin has decided not to bid for Nucleus Financial Group (NUC), which increased assets under administration by 8% to £17.4bn in the three months to December 2020. Inflows of funds increased, and outflows fell.
Eqtec (EQT) has signed a memorandum of understanding with Greece-based Nobilis Pro Energy, which will enable Eqtec to be involved in its partner’s pipeline of gasification projects opportunities in Thessalia and central Greece. A joint venture will be formalised.
MAIN MARKET
One Heritage Group (OHG) has acquired a site on Bank Street, Sheffield for £880,000. The final development cost is expected to be £2.9m and gross development value should be £3.6m. The residential developer says that its Burnley development will not be completed until later in the first quarter. Construction of the Waterloo Place development in Salford should commence in the second quarter.
Argo Blockchain (ARB) mined 96 Bitcoin during December. The increase in the bitcoin price means that these are valued at £1.63m. Argo holds 209 Bitcoin. The sharp rise in the share price has led to the exercising of warrants and options. This has raised £1.63m.
Tirupati Graphite (TGR) is on track to commission the Vatomina graphite project in the second quarter and build production to 6,000tpa. Tirupati raised £6m at 45p a share when it floated at the end of last year and the share price has risen to 83p.
Rainbow Rare Earths (RBW) has completed its drilling programme at the Phalaborwa rare earths project under budget and the results are expected before the end of the first quarter.
Pembridge Resources (PERE) has raised £570,000 at 4p each and this should be enough cash to take the company into next year.
Andrew Hore
Andrew Hore Quoted Micro 9 September 2019
NEX EXCHANGE
BWA Group (BWAP) is acquiring Kings of the North Corp, which owns five groups of exploration licences in Canada. BWA will pay £4.66m for the business, which is owned by a Canadian Stock Exchange listed company. Management believes that there is significant upside in the licences. Nearly $C1m needs to be spent for the licences to be renewed.
World High Life plans to join NEX on 12 September. This is an investment company that intends to acquire businesses involved in medicinal cannabis. The company (www.worldhighlife.uk) has already raised £2.4m from subscribers and no additional cash will be raised on flotation.
Adnams (ADB) director Guy Heald has purchased 3,000 B shares at £95.21 each. That takes his shareholding to 15.1%. The shares were sold by Sidney Sussex College in Cambridge, whose interest has been reduced to 6.32%.
Better news from Ashley House (LSE: ASH) because a scheme in Romsey has reached financial close. There are still two other delayed schemes that have not completed. Funding sources are being explored.
Tectonic Gold (TTAU) is selling its 2.5% royalty interest in the Graphmada graphite mine in Madagascar for up to A$550,000 in cash and convertible notes in royalty business SilverStream.
Primorus Investments (PRIM) reported a decline in net assets from £5.16m to £4.74m in the six months to June 2019. Management believes there are plenty of opportunities in the pre-IPO market.
Capital for Colleagues (CFCP) has agreed the terms for a realisation of its investment in Cotswold Valves, because it no longer wants to focus on employee ownership. The equity interest is being sold for its £220,000 cost and loans totalling £450,000 have been rescheduled. The cash will be received over a three year period.
KR1 (KR1) has made investments in the Nym Protocol project, Alice Si, a blockchain-based social funding platform developer, and Nexus Mutual, which is a follow-on investment.
Resources-focused investment company Hot Rocks Investments (HRIP) increased its cash position from £17,000 to £47,000 in the year to March 2019, but net assets fell from £722,000 to £687,000.
AIM
Good news from car dealers Cambria Automobiles (CAMB) and Vertu Motors (VTU). Cambria says that trading in the eleven months to July 2019 has been well ahead of the same period last year and the full year profit will be higher than market estimates. New car sales are lower but Cambria is making more profit on each sale because of the mix of franchises and greater exposure to the luxury end of the market. More profit was made on each used car sold as well. Vertu says that its trading is in line with expectations, helped by price stability in the used vehicle market since July.
Mirada (MIRA) has won a new contract for the deployment of its Iris multiscreen digital TV product with a new Spanish interactive TV services provider Plataforma Multimedia de Operadores. Mirada’s technology will be used to deliver content to Android set-top boxes, smartphones, laptops and other devices. The commercial launch will be early next year and the plan is to build up a subscriber base of 600,000.
Adamas Finance Asia (ADAM) says that its consolidated NAV increased by 3.5% to $96.3m (£78.4m) in the six months to June 2019. That includes cash of $5.4m. There was interest income of $677,000 in the period. Production at Future Metal Holdings’ dolomite magnesium limestone mine in China should restart before the end of the year.
A secured creditor has appointed voluntary administrators to five subsidiaries of Management Resource Solutions (MRS) but the businesses continue to trade. A creditors meeting is set for 16 September. The businesses will need to be recapitalised.
Filtronic (FTC) has decided to sell its antenna division.
Colin Harrington has switched from executive chairman to chief executive of Rose Petroleum (ROSE) following the departure of its previous chief executive Matthew Idiens. Rick Grant will become chairman. Gordon Stein is a new independent non-executive.
MAIN MARKET
Avation (AVAP) reported full year results that were ahead of expectations. The commercial aircraft leasing company’s pre-tax profit was 15% ahead of forecasts and there was also a tax credit which further boosted earnings per share. The dividend was raised by 45% to 10.5 cents a share.
Packaging manufacturer and distributor Macfarlane (MACF) has acquired the Leyland Packaging Company for up to £3.25m, with up to £1m in the form of an earn-out based on performance of the distributor in the year to August 2020, in cash and shares. In 2018, Leyland made a pre-tax profit of £550,000 on revenues of £4.06m.
Fully listed shell Highway Capital (HWC) has published its accounts for the year to February 2019. They showed net liabilities rising to £781,000. There was cash of £245,000 in the balance sheet following the repayment of loans. Trading in the shares has been suspended for three years.
Standard list shell Boston International Holdings (BIH) is considering potential acquisitions outside of the foreign exchange sector.
Argo Blockchain (ARB) has ended discussions about a partnership with Hive Blockchain Technologies. Argo believes that its investment in additional crypto mining capacity has provided it with the scale it needs.
Sure Ventures (SURE) is investing a further €2.5m in Sure Valley Ventures Fund.
Andrew Hore
Andrew Hore Quoted Micro 13 May 2019
NEX EXCHANGE
National Milk Records (NMR) improved revenues from £5.32m to £5.56m in the three months to March 2019. Disease testing revenues grew at the fastest rate. This quarter did not benefit from one-off revenues like the first two quarters of the financial year.
Gledhow Investments (GDH) reported a reduction in net assets to £735,000 at the end of March 2019. Gledhow has trebled its money in Block Energy and sold the stake, but most of the proceeds came after the end of March.
Primorus Investments (PRIM) believes that Sport:80 has missed the chance to float, but TruSpine still has a chance to become quoted. International payments and lifecycle software provider Zuuse could be ready for a flotation within 18 months.
Wheelsure Holdings (WHLP) has finally published its results for the year to August 2018. They show revenues falling from £226,000 to £96,000, although the loss was similar at £336,000. UK and Netherlands demand were weaker than expected.
Health and community care properties developer and modular buildings supplier Ashley House (ASH) says its joint venture Morgan Ashley has achieved financial close on two more projects. A further three could be closed in the current quarter. Even so, group pre-tax profit will be lower. There will be an update in July.
Sativa Investments (SATI) is changing its name to Sativa Group to reflect that it is a trading company with a greater focus on UK operations. The application for a Home Office research and development licence to grow medicinal cannabis is proceeding well. This is for its own requirements as well as growing some varieties for order.
Ace Liberty and Stone (ALSP) has acquired properties in Warrington and Middlesbrough for more than £10m. The Communities and Local Government department is the long-term tenant of both properties. The Warrington property cost £2.9m and the Middlesbrough property £7.125m.
In the first four months of 2019, NQ Minerals (NQMI) has produced 6,857 DMT of lead concentrate, 4,763 DMT of zinc concentrate and 29,389 DMT of pyrite concentrate.
Giles Brand has increased his stake in EPE Special Opportunities (ESO) from 23.1% to 30.5%. EPE has a NAV of 241.3p a share. Almon I Holding SA has a 3.16% stake in Coinsilium Ltd (COIN).
MetalNRG (MNRG) is delaying a move to the Main Market because of the uranium exploration ban in The Kyrgyz Republic, which means that the proposed farm-in agreement for the Kamushanovskoye uranium deposit has been suspended. Due diligence is progressing on the Thambani licence and the transaction agreement with Mkango Resources by the end of June. Once it has funding, MetalNRG will make progress with the Gold Ridge project.
Panther Metals (PALM) reported a doubled cash outflow from operating activities of £309,000 last year. There was £1,247 in the bank at the end of 2018.
AIM
Begbies Traynor (BEG) says that trading was ahead of expectations. The business recovery and property services provider says both divisions performed well. Shore has upped its pre-tax profit forecast for the year to April 2019 by 6% to £7.1m, compared with £5.6m the year before. The full year figures will be published on 9 July.
Interactive Investor has decided not to make a bid for Share (SHRE).
RA International (RAI) has won two new contracts. A five year contract worth $9.8m has been awarded by the United Nations Support Office for vehicle and equipment fleet services in Somalia. This is for ten locations compared to one previously. There is also a contract for construction services relating to the US Embassy in Denmark.
Immupharma (IMM) intends to merge its two French subsidiaries and either get private equity backing or float the combined business on a European stockmarket. The business is developing the Nucant cancer programme (Elro) and the peptide platform (Ureka). Immupharma will concentrate on Lupus treatment Lupuzor and it is talking to potential corporate partners.
India-focused online fashion retail investment company Koovs (KOOV) has agreed a £10.5m cash injection at 15p a share by a subsidiary of Indian retailer Future Group.
Bidstack (BIDS) is raising £5m at 12.5p a share. This will finance the growth of the in-game advertising business. Bidstack reversed into Kin Group nine months ago and that that time raised cash at 6p a share.
Trading in contract research organisation Venn Life Sciences (VENN) shares is suspended ahead of the reverse takeover of Open Orphan DAC for £5.7m in shares. The strategy is to gain approval for and provide orphan drugs for the European market. Cash will be raised to fund the new strategy.
Keystone Law (KEYS) increased full year revenues from £31.6m to £42.7m and pre-flotation costs profit jumped from £2.54m to £4.75m. This year’s profit forecast had already been upgraded at the time of the trading statement and the figure is maintained at £5.6m. This year’s dividend is set to rise from 9p a share to 10.3p a share. The cash pile is expected to rise from £6.3m to £7m.
N+1 Singer has upgraded its profit forecasts for Cambria Automobiles (CAMB) following its interims. The pre-tax profit forecast for the year to August 2019 has been increased by 13% to £11m, up from £9.8m last year and not far off the figure for 2016-17. Capital investment is peaking and net debt is expected to rise to £9.1m by the end of August 2019. NAV is set to rise to 68p a share.
Vertu Motors (VTU) reported strong full year figures with growth in used cars and aftersales offsetting the downturn in new car sales. Pre-tax profit of £23.7m was higher than forecast but lower than the £28.6m reported for the previous year. Cash generation is also better than expected. This year’s forecast has been trimmed to £25.7m. The share price remains below its NAV of 44.9p a share.
Osirium Technologies (OSI) is considering raising additional funds in order to fully exploit its new product. Opus is a cyber security product for IT process automation. Additional business development managers and distribution partners have been taken on and additional cash would enable further geographic expansion. Osirium is good at retaining clients and Opus provides an additional product to sell to them.
Packaging manufacturer Robinson (RBN) has increased its revenues by 15% in the first four months of the year and most of that is due to higher volumes. This means that it is well on its way to growing full year revenues from £32.8m to £36.1m even though second quarter revenues may be lower due to destocking. Further capital spending has been funded by cash from operations.
MAIN MARKET
Ingredients supplier Treatt (TET) increased interim revenues by 6% to £56.6m and pre-tax profit was 7% higher at £6.2m. Additional shares in issue mean that earnings per share were slightly lower. The core citrus business revenues fell slightly but other areas grew. Net cash was £9.4m at the end of March 2019. This will be spent on the relocation of UK operations and there will be net debt by the end of September 2019.
Air Partner (AIR) slipped out its figures for the year to January 2019 well after the market closed on Thursday. Even so, there was a positive share price reaction and there were no real disappointments. Underlying pre-tax profit was flat at £5.8m. The total dividend was edged up to 5.6p a share.
Macfarlane (MACF) has acquired protective packaging distributor Ecopac for £3.9m. A pre-tax profit of £500,000 was generated in 2017-18. Macfarlane will provide additional products for Ecopac to distribute.
Argo Blockchain (ARB) will hold the requisitioned general meeting on 16 May. Frank Timis is hoping to change the strategy of the company and conserve the cash pile for other uses. He wants Jonathan Bixby and Mike Edwards removed from the board. Argo expected to generate £220,000 in cryptoassets in April, which is similar to cash operating costs. These costs are expected to rise to £300,000 in May but the month should still be cash neutral.
Cardiff Property (CDFF) increased its NAV from 21.78p a share to 21.84p a share in the six months to March 2019. The interim dividend has been raised by 5% to 4.6p a share. Activity in the Thames Valley area has slowed in the first half.
Andrew Hore
Andrew Hore – Quoted Micro 11 March 2019
NEX EXCHANGE
Brewer Shepherd Neame (SHEP) reported a 1% increase in underlying 2018 pre-tax profit of £5.9m. Pubs provided higher revenues and profit, while the brewery reported a reduction in profit contribution due to the ending of third party contracts and a small decline in volumes of its own beers and ciders. The brewing volumes have recovered in the early part of 2019.
Good Energy (GOOD) is making a strategic investment in Zap-Map owner Next Green Car Ltd. This is a business that provides electric vehicle market data and will help Good Energy move into the electric vehicle charging market. The initial investment is £1.08m for a 12.9% stake and £800,000 of convertible loan notes. If the loan notes are converted and payment of deferred consideration of £720,000 dependent on achieving financial targets, then the stake will increase to 50.1%.
Gunsynd (GUN) and Northbay Capital Partners have agreed with TSX-V-quoted Oyster Oil and Gas Ltd to settle debts of C$1.43m with the company in return for the outstanding share capital of Oyster’s subsidiary that owns production sharing contracts in Madagascar and Djibouti. Oyster shareholders have to agree to the deal for it to go ahead.
IMC Exploration Group (IMCP) has commenced drilling on PL2551 in County Wexford. The drilling should help to prove the presence of a major gold mineralisation trend.
Primorus Investments (PRIM) has increased its stake in Greatland Gold (GGP) by two million shares, taking the stake to 1.15%. The average cost is 1.71p a share. Over the next 18 months Greatland will pursue targeted exploration campaigns in Australia and accelerate the development in the Paterson region.
Ananda Developments (ANA) says 15%-owned Liberty Herbal Technologies reports that the first 11 weeks of sales of the hapac medicinal cannabis products in Italy have grown strongly from a low base.
Cadence Minerals (KDNC) is acquiring three prospective lithium assets in Australia. They are Picasso in Western Australia, Litchfield in Northern Territories and Alcoota in Northern Territories.
Clean Invest Africa (CIA) lost £204,000 in the near-13 months since incorporation. There was £69,000 in the bank at the end of September 2018. The reverse takeover of the 97.5% of CoalTech not owned by the company has still to be completed.
Barkby Group (BARK) has secured an eight-year operating agreement for the Queens Arms in East Garston, Berkshire. The pub and restaurant also operates a 120-capacity function room and 12 bedrooms.
Eight Capital Partners (ECP) has paid £3,500 for a 70% stake in financial adviser and investment firm Epsion Capital, which could provide advice to Eight Capital investee companies. Former ZAI corporate finance director and current Eight Capital non-executive director John Treacy is the sole director and other shareholder of Epsion, which is working on two corporate finance transactions.
Following the demise of Daniel Stewart, NQ Minerals (NQMI) has changed its corporate adviser to Arden, Gamfook Jewellery (GAMF) has switched to Peterhouse and VI Mining (VIM) has moved to VSA.
AIM
Telephony services and technology provider Netcall (NET) is increasing its cloud revenues and bookings. Interim revenues improved from £11.4m to £10.7m but pre-tax profit dipped from £1.9m to £1.2m because of increased investment. Annual contract value has risen by 11% to £15.1m.
Tracsis (TRCS) improved its interim revenues from £18.1m to £19m and pre-tax profit will be higher than the £3.9m reported last year. There was £18.7m in cash at the end of January 2019. Chris Barnes has joined the transport optimisation software and services provider ahead of becoming chief executive.
Ramsdens Holdings (RFX) is buying 18 Money Shop sites for £1.5m. They are in north west England and Scotland and will be rebranded as Ramsdens. The pawn books of the sites and five others that will be closed are being acquired by Ramsdens. City Financial Investment has sold its remaining 9.73% stake.
WH Ireland (WHI) has raised £4.95m at 45p a share, which was a 30% discount to the market price. The cash will make sure that the broker has enough regulatory capital. Trading is tough and the operating loss in the second half will be higher than previously expected.
SimplyBiz (SBIZ) grew 2018 revenues by 15% to £50.7m and earnings per share were 28% higher at 11.9p. The supplier of compliance and business services to financial advisers continues to add to member numbers and sell more services to them. Net cash was £6.4m at the end of 2018.
DX (Group) (DX.) is making progress with its turnaround but there is still a long way to go. The parcel delivery business has restructured its business and raised prices to clients. The cash outflow was significantly reduced in the first half. DX could move back into profit next year.
Swallowfield (SWL) was hit by weak trading in its cosmetics manufacturing operations. The brands business maintained its revenues and profit. The second half outlook for manufacturing is better and costs have been reduced. The interim dividend was raised by 7.5% to 2.15p a share. Fidelity has increased its stake to 5.73%.
Ilika (IKA) has secured an 18 month project with Network Rail for the use of its Stereax battery technology in a ultra-low power wireless sensor for the network’s condition monitoring platform.
Pelatro (PTRO) has won a contract with Ooredoo Maldives worth $1.6m over three years. There is a fixed monthly fee and a share of the incremental revenue generated. There are also opportunities to cross-sell to other Ooredoo telecoms operations.
Cambria Automobiles (CAMB) has traded ahead of the first five months of the previous financial year. Although new car sales were lower, Cambria made more profit because of the higher value franchises. It was a similar trend in used cars. The aftersales operations increased sales and profit.
FFI Holdings (FFI) says that the film competition contracts business has been slow because of a lack of films and smaller productions. There are also possible claims. Delayed productions have hit the insurance agency business. That has reduced operating profit by $6m. The expected range for this year is $7.5m-$11m.
Allergy Therapeutics (AGY) reported a 11% increase in interim revenues to £46.7m and underlying pre-tax profit was 70% higher at £11.4m. That was partly down to lower development and marketing spending. Cash more than doubled to £31.6m, helped by a £10.2m placing. Net cash was £28.5m. The data from the phase III PQ Birch allergy study is expected in the next few weeks.
Finance provider ThinkSmart (TSL) reported a lower interim loss and there is cash in the bank of £11.3m. A special dividend of around 2p a share will return £44m to shareholders.
Accounting regulation changes mean that Paragon Entertainment Ltd (PEL) will not be able to recognise as much revenue in 2018 as it thought it would. That could reduce the figure by £700,000. The new range is £8.8m to £9.2m. The loss will be more than £2.5m. Revenues are expected to be higher this year.
Touchstone Exploration Inc (TXP) increased its proved reserves to 11,222 Mbbl at the end of 2018. Proved plus probable reserves are 19,275 Mbbl. NPV of future net revenues of proved reserves has increased by 18% to $79.8m.
Begbies Traynor (BEG) has completed a number of contingency engagements in the third quarter and there should be more in the fourth quarter. Corporate insolvencies are rising.
GetBusy (GETB) has increased its revenues from its core software products by 17% to £10.9m and it is making progress with its GetBusy productivity software which is in use with beta users. Cash generated from operations is being ploughed back into development spending.
Gfinity (GFIN) more than doubled its interim revenues from £1.8m to £4.4m with the growth coming from the managed services division, which includes the F1 Esports series. The Esports business is targeting breakeven in 2021.
Independent Oil and Gas (IOG) has rejected a proposed 20p a share bid from RockRose Energy (RRE) which would value the company at £26.6m. Trading in the standard list company’s shares is suspended due to the proposed $140m acquisition of Marathan Oil West of Shetland.
Housebuilder Springfield Properties (SPR) is on track to increase full year pre-tax profit from £9.8m to £16.1m, following a strong first half. The housing market is stronger in Scotland than in the rest of the UK. The business has a mix of private housing and affordable housing developments. The Walker Group acquisition takes the company further upmarket in price terms and will make an initial contribution in the second half.
PhotonStar LED Group (PSL) has raised a further £170,000 at 0.01p a share, while directors John Treacy and Jonathan Freeman intend to subscribe a £24,000 when the company has authority to issue more shares. A general meeting will be held where the company will become a shell and change its name to Bould Opportunities. The operating business is being wound down. Antos Glogowski has a 20.9% stake.
In the past ten months, the valuation of the property assets of Sutton Harbour (SUH) has increased by 7% to £45.7m.
MAIN MARKET
Small company-focused investment company Athelney Trust (ATY) reported a 21% decline in NAV to 225.9p a share at the end of 2018, although that is not a surprise given the weak stockmarket at the end of the year. The final dividend was increased by 2% to 9.1p a share. The board is in the process of appointing a fund management team. The plan is to increase the size of the fund to between £50m and £150m.
Standard list shell Cobra Resources (COBR) has agreed to acquire the owner of a 100% right title and interest in the Prince Alfred licence in South Australia. Prince Alfred was a producing copper mine. There is also an entitlement to earn 75% of five tenements in South Australia. Trading in the shares has been suspended.
European High Growth Opportunities Securitization Fund has converted £140,000 of convertible bonds and penalty payments of £210,000 into 140 million shares in WideCells (WDC) and that has nearly doubled the number of shares in issue. The first 60 million shares have been sold.
Andrew Hore
Andrew Hore – Quoted Micro 7 January 2019
NEX EXCHANGE
VI Mining (VIM) has not made the required $2.19m loan repayment to Tassili by the end of 2018. Tassili also has right of refusal over the first 24,000 ounces of gold production. The loan is secured by a charge over the VI subsidiary that owns the interest in the Ora Pesa concession. VI had to secure additional funding because it could not draw down from a facility provided by chief executive David Sumner the $7m required in August 2018. The lack of cash has held up bringing Ora Pesa in to production and recommencing mining at Minaspampa.
Angelfish Investments (ANGP) has converted its £150,000 loan to Wallet Ads into a 20% stake in the company, which can deliver more than ten million personalised updates per hour for a campaign. The terms of the £150,000 convertible loan to Rapid Nutrition have been amended. Rapid Nutrition is still set to float in London, but it has been further delayed. The loan will be repaid in nine equal monthly instalments of £16,667 starting at the end of January. Interest will be charged at an annual rate of 15%. Interest owed up until the end of February 2018 has been settled by the issue of 50,000 Rapid Nutrition shares at 13.4413p a share and a further 200,000 shares have been issued as a fee for the amended terms. Rapid Nutrition is quoted on the Zurich-based SIX Swiss Exchange and the last share trade was at €0.17. The share price was more than €1 in 2017.
MiLOC Group Ltd (ML.P) has secured an agreement with China Post Advertising, which will help it to promote Aaron Kwok’s AKFS+ hair care products and future celebrity branded products. China Post has more than 50,000 outlets.
Natural resources investor Hot Rocks Investments (HRIP) used £49,000 in cash in operating activities in the six months to September 2018. The NAV is £804,000 and that includes nearly £48,000 of cash.
AIM
Musical instruments retailer Gear4Music (G4M) continues to be hampered by pressure on margins although sales are increasing. Management had expected this pressure to have ended prior to Christmas but it has continued and on top of this were problems at the warehouse with the increased demand. In the four months to the end of December 2018, sales increased by 41%. Peel Hun has cut its 2018-19 pre-tax profit forecast from £2.6m to £800,000 and this took the shine off the premium rating of the shares.
Trading in the first quarter at Cambria Automobiles (CAMB) is ahead of the same period last year. The new car market was hit by changes in emissions regulations and new vehicle sales were one-quarter lower, but gross profit per unit was much higher because of new franchises with the likes of Bentley and McLaren. There will be more upmarket vehicle franchise openings in February. This offset the effect of lower new vehicle sales and there was a similar experience with used cars, although overall like-for-like profit improved. Aftersales profit also improved.
Digital music distribution technology developer 7digital (7DIG) could lose its contract with Juke GmbH for the Juke music service, which was expected to generate revenues of £4m this year. The service could be closed or reorganised so 7digital takes on more responsibility. 7digital also owes HMRC £417,000 and one of its subsidiaries has been served with a winding-up petition. This tax should be paid before the hearing of the petition on 16 January. 7digital has reduced its annualised cost base by £6.2m and it is winning new contracts.
Faroe Petroleum (FPM) continues to reject the bid from DNO. An independent report provides an estimated valuation of between 186p a share and 225p a share. This does not include the previously announced Equinor asset swap or utilisation of Norwegian tax losses. Cash flow of £90m is expected over the next two years. DNO has been buying shares in the market at between 147p a share and 152p a share and it has taken its stake to 30.6% so the 152p a share cash bid is mandatory. This stake plus acceptances takes total acceptances to 43.8%. DNO can improve its offer up until 27 January.
ReNeuron (RENE) has announced the first collaboration for its exosome nanomedicine platform. There is an initial feasibility stage, where no revenues will be generated. If it moves on to the preclinical safety and efficacy stage, then there will be evaluation payments.
Leaf Clean Energy (LEAF) is reducing directors’ fees by 70% and there have also been reductions for the administrator and employees. This is ahead of the hearing of Leaf’s appeal of damages awarded to it in its lawsuit with Invenergy Wind, where a decision is expected later this year. Invenergy is has already paid Leaf $36.4m and a further $14.2m is included in the Leaf balance sheet, but that will depend on the court decision.
Home automation technology developer LightwaveRF (LWRF) increased its first quarter revenues by 156% to £1.15m. That is nearly as much as in the first half of the previous financial year.
Shareholders have authorised the $25m subscription at $1.60 per ADS by Summit Therapeutics (SUMM). Robert W Duggan is subscribing for the shares. The cash will fund the initiation and commencement of patient enrolment for the phase 3 clinical trial of the potential treatment for C.diff.
Tracsis (TRCS) has won a major, multi million contract with a train operating company, covering all its individual franchises. The flow of revenues is difficult to predict.
Alpha FX (AFX) says that its 2018 figures will be ahead of expectations. The growth came in the UK and internationally.
WANdisco (WAND) has secured its first multi-cloud contract, valued at $565,000. The contract with the telecoms company was won with Amazon Web Services.
Richland Resources (RLD) is seeking to obtain investment to recommence mining at Capricorn Sapphire and it is in talks with one party about the sale of the project. The £400,000 convertible loan facility has been extended to the end of February.
Central Asia Metals (CAML) has consolidated borrowings into one facility of $151m, which is provided by offtake partner Traxys. The debt will be repaid monthly within a four year period.
ECR Minerals (ECR) has submitted nine exploration licence applications in the Yilgarn region of Western Australia.
Ethiopian authorities have reconfirmed their support for the development of the Tulu Kapi gold project and KEFI Minerals (KEFI) has taken the first steps for the community resettlement programme.
MAIN MARKET
Circassia Pharma (CIR) has gained shareholder approval for the move to AIM, which will happen on 4 February. Circassia has completed the acquisition of full US commercial rights to Tudorza and the FDA is expected to approve the transfer of the licence by the end of March. There was £41m in the bank at the end of 2018.
Nanoco (NANO) is partnering with Plessey Semiconductors to use quantum dots to shrink microLED pixels by 87%. This will lead to smaller, higher resolution displays.
Gresham Technologies (GHT) has won orders for Clareti software from two major, world banks. Revenues should start to be recognised this year. Over five years the contracts should be worth more than £7m, with £1.8m likely to be recognised in 2019. However, 2018 revenues will be lower than expected at £20m and profit will be below expectations.
Andrew Hore
Andrew Hore – Quoted Micro 26 November 2018
NEX EXCHANGE
Blockchain venture builder Coinsilium Group Ltd (COIN) says that RIF Labs is acquiring RSK Labs, where Coinsilium owns 65,000 series Seed-1 preferred shares. The cost of the investment was $83,750. The acquisition is a share for token swap and Coinsilium will end up with 1.95 million RIF tokens, which is the equivalent of 139.4 bitcoins, currently valued at $773,000. However, an initial 12.5% of the consideration will be released six months after the deal is completed and then 2.5% each month for 42 months.
NQ Minerals (NQMI) has entered into an additional marketing and off-take agreement with Traxys Europe. The deal covers the production from the Hellyer project in Tasmania for the first five years. This includes a facility for prepayment.
Tectonic Gold (TTAU) says that its Australian subsidiary has received a A$590,000 tax rebate from the Australian government. A 43.5% rebate is due on qualifying technical expenditure and so far more than A$2m has been received. Spending continues.
Gowin New Energy Group Ltd (GWIN) chief executive Chen Chih-Lung is lending £40,000 to the company for 12 months at an annual interest rate of 2%.
AIM
Music and audio equipment supplier Focusrite (TUNE) is continuing to grow internationally although Asia is growing at the fastest rate. Full year revenues grew by 14% to £75.1m, while pre-tax profit improved from £9.51m to £11.3m. The dividend is 22% higher at 3.3p a share. There is £22.8m of cash in the bank and this could be used for add-on acquisitions. Tariffs on Chinese exports are being used as a way of testing out price rises for the US market. Forecast profit growth is modest but there is potential for outperformance.
Tristel (TSTL) is buying its distributor in Benelux and France and this will enhance earnings. The maximum payment for Ecomed will be €6.8m (£6m) with €5m paid up front. The deal also provides an additional warehouse in Europe. A full year contribution in 2019-20 will increase pre-tax profit by £700,000 to £6.5m.
Sustainable timber supplier Accsys Technologies (AXS) has increased its capacity for Accoya production by 50% and this will help production in the second half. Demand for Accoya is strong and sales increased from €28.3m to €31.1m in the six months to September 2018. The development of the Tricoya plant in Hull is progressing. Construction could be completed in the middle of 2019 and it will breakeven at 40% of capacity. Tricoya, which is used in MDF-type panels, is currently produced from Accoya and this plant will free up Accoya production for other customers. Numis forecasts a rise in full year revenues from €60.9m to €73.1m and a decline in loss to €5.1m. Net debt is expected to be €46m at the end of March 2019 and it will continue to rise because of the capital investment programmes. If partners can be secured in the USA and Asia then this could provide a significant boost to the company.
Initial drilling results at the Havieron licence area in Western Australia provided good news for Greatland Gold (GGP) with two wide zones of gold and copper mineralisation intersected. This significantly extends the known mineralisation.
Immunodiagnostic System Holdings (IDH) is up to its old tricks. The interim figures were published at 5.04pm on Friday 23 November. To be fair this is 14 minutes earlier than the half year trading statement so maybe the company is improving. Here’s hoping. Interim revenues were flat at £18.5m but the company fell into loss. There was £27.8m of cash in the bank (net cash of £26.5m) at the end of September 2018. Maybe some of this should be spent on an alarm clock so management can get up in the morning to release its results.
Chris Jagusz has stood down as chief executive of Redcentric (RCN) as revenue growth has been hard to come by. The latest interims have sparked downgrades for 2018-19 with revenues cut by 5% to £94.2m.
SIMEC AtlantisEnergy (SAE) has singed a joint venture with AD Normandie Developpement and this will enable the commencement of tidal energy projects between France and Alderney. A capacity of 3,000MW is being targeted and there is potential for EU grants.
Innovation software provider Imaginatik (IMTK) has achieved annualised cost savings of £1.2m, but the strategic review held back revenues and new orders in the first half. The cash outflow declined. Trading levels are picking up.
There are no competition concerns about the Ebiquity (EBQ) disposal of its advertising intelligence business to Neilsen Media Research. The business has been underperforming because of the uncertainty and this will enable the deal to go ahead. Ebiquity says that 2018 operating profit will be lower than expected.
Positive news about the Wressle oil project, where the planning officer for North Lincolnshire has recommended approval. The original application was refused two years ago. Operator Egdon Resources (EDR) owns a 30% interest in Wressle, Europa Oil and Gas (EOG) has a 30% interest and Union Jack Oil (UJO) has a 27.5% interest. Humber Oil and Gas owns the other 12.5%.
Integumen (SKIN) has raised £355,000 from a placing at 0.44p a share. This cash will support the development and commercialisation of Labskin. Integumen is paying €40,000 and six million shares to former chief executive Declan Service.
Sutton Harbour (SUH) returned to profit in the six months to September 2018, although the corresponding period had a hefty asset write-down, and it is raising cash for pre-construction funding. An open offer of 77-for-786 at 29p a share will raise up to £3m and close on 6 December. Planning approvals have been received for the Sugar Quay and Harbour Arch Quay schemes in Plymouth.
Electronic and battery products supplier Solid State (SOLI) is starting to improve its performance, although there may still be a decline in full year profit. In the six months to September 2018, revenues were 5% ahead at £23.6m and pre-tax profit improved from £1.55m to £1.66m. The interim dividend was 5% higher at 4.2p a share. The order book was worth £29.6m at the end of September 2018.
TomCo Energy (TOM) has appointed Turner Pope to replace SVS as broker and trading in the shares has recommenced.
SEC (SECG) is acquiring France-based public and corporate affairs business CLAI. An initial 10% stake, but with 50.1% of voting rights, will cost €490,000 in cash. A further stake of 40.01% will be acquired in the second half of 2020 and another 10% in the second half of 2023. The shareholders can ask SEC to buy the remaining shares between 30 July 2025 and 30 November 2025. The final payments are based on an earnout although the maximum will be €8.8m. In 2017, CLAI made a pre-tax profit of €551,000 on revenues of €4.49m. The acquisition could be earnings enhancing. CLAI will continue to be run by existing management.
Majestic Wine (WINE) is finding the UK market tough and margins are coming under pressure. Peel Hunt has reduced its 2018-19 pre-tax profit forecast by £2m to £12.8m, partly due to increased investment in Naked.
Kestrel has increased its stake in Pebble Beach Systems (PEB) to 22.2%.
Another disappointing trading statement from Fire Angel Safety (FA.) has led to a 2018 profit downgrade. Stock problems and delays to orders have hit the smoke alarms supplier. Scottish legislation due to be passed next year should provide a boost to demand. Fire Angel will be loss-making in 2018 but should make a small second half profit.
Legal services firm Knights Group (KGH) says that interim figures will be in line with expectations with double digit organic revenue growth. The interims will be announced on 15 January.
Maritime identification systems developer SRT Marine (SRT) had already flagged its 9% increase in interim revenues to £3.2m and increased underlying loss of £1.3m. There was little contribution from the GeoVS analytics system. There are expected to be significant deliveries in the second half, but timing cannot be guaranteed. A full year profit of around £3m is expected if the deliveries do take place. SRT is no longer considering investing in its own satellite constellation for this business.
FIH Group (FIH) reported flat interim profit, although there was a sharp improvement in contribution by the Momart art and museum logistics business. There was a decline in the performance of the Gosport ferry and Falkland Islands activities.
Lawyer Gateley (GTLY) says interim revenues will be one-fifth higher at £46.4m with around 50% of this organic growth. Full year revenues should be at least £102m. EBITDA margins should be maintained suggesting full year EBITDA of more than £19m. That is slightly higher than previous consensus.
Argentina-focused oil and gas producer and explorer President Energy (PPC) says the first Puesto Flores development well is producing at 600 bopd, having peaked at 1,000 bopd. This is as much as was anticipated from all three development wells. The results from the second development well appear positive and testing is about to commence. finnCap believes that the first well could have a post-tax NPV of $20m.
Pallett developer and manufacturer RM2 International (RM2) is raising £13m at 105p a share, following a 200-for-one share consolidation. This replaces the second tranche of a previously announced placing which would have happened at 1p a share (200p a share equivalent) but RM2 did not meet the performance requirements to spark the other placing. All but one of the investors set to buy shares previously will subscribe to the new placing. The cash will be used to fit track and trace devices to existing pallets, produce new pallets and cover admin costs. The cash will last until next April.
finnCap has sharply downgraded its pre-tax profit forecasts for telecoms services provider Maintel Holdings (MAI) due to project delays. The 2018 figure has been cut from £12.9m to £9.8m and the 2019 figure from £16.1m to £12.7m. The 2018 dividend is still expected to be 34.5p a share, although the cover will fall to 1.6 times. There is a move towards recurring revenues which will have a longer-term benefit for Maintel.
Restaurants operator Tasty (TAST) has revised its £7m term loan facility, which will be extended until March 2022. Quarterly repayments will be reduced from July 2019, by which time the amount draw down will be reduced by £1.1m. Net debt is currently £4.3m.
The NAV of value-focused investment vehicle Gresham House Strategic (GHS) has held up well considering the stockmarket decline. It grew to 1264p a share at the end of September 2018 and it was still 1243.2p a share on 16 November. The stake in IMImobile (IMO) has been reduced but it remains a strong performer. Cloud communications software supplier IMImobile improved its interim revenues by one-quarter and organic growth was 15%. The growth came from the European and American operations. Established customers are buying more services from the company and acquisitions are supplementing growth. Liontrust has increased its IMImobile stake to 21.4% but Kestrel has cut its to below 3%.
Payment protection software provider PCI-PAL (PCIP) is paying former boss William Catchpole his contracted entitlements plus £100,100 in settlement of his claims. The board unanimously asked Catchpole to leave in October. The final loan note repayment of £250,000 has been received from the buyer of the contact centre business.
Digital and media recruiter Nakama Group (NAK) reported flat interim net fees of £2.7m, but it managed to return to profit thanks to reduced costs. Further cost cutting is underway. There was a £558,00 cash inflow from operations and net debt was £488,000.
Antennas developer MTI Wireless Edge (LSE: MWE) has completed its merger with Israel-quoted majority shareholder MTI Computers and the initial benefits will show through in the second half. The interim figures show organic growth in revenues of 2%, but that growth should accelerate in the second half. Water management technology provider Mottech is winning new business and there are good prospects for the other divisions. The NAV is 17.8p a share and the full year dividend could be 1.25p a share.
Two directors have invested nearly £230,000 in shares in Condor Gold (CNR) at 22pa share. Non-executive Jim Mellon took his stake to 7%, while executive chairman Mark Child has reached 6%. Condor has been granted an important environmental permit for the development of a processing plant at its La India project in Nicaragua. SRK Consultants is preparing an updated mineral resource.
Juridica Investments Ltd (JIL) plans to leave AIM as part of the process of winding-up the company. The quotation will be cancelled on 21 December after liquidators from KPMG Channel Islands are appointed. Management fees will be reduced.
Online women’s fashion retailer Sosandar (SOS) continues to build up its sales, having been trading for two years, and they reached £1.84m in the six months to September 2018. The loss was nearly £2m. Returns were 52% but that was put down to a high level of dress sales in the period and it can be more difficult to get the right fit. The benefits of the move to the Magento 2 ecommerce platform and the investment in the website are showing through in the second half. October was a record month. A placing raised £3m after the balance sheet date so pro forma cash is £5.56m.
600 Group (SIXH) has rationalised its UK business and sorted out its pension problems. Interim revenues were slightly ahead but underlying margins improved from 5.1% to 6%. The machine tools and laser marking equipment supplier is expected to improve its full year pre-tax profit from $3.05m to $3.9m.
Motor dealer Cambria Automobiles (CAMB) has performed well considering the dip in the new car market. Used vehicles and aftersales offset some of the decline. There was a 2% decline in revenues to £630m and underlying pre-tax profit fell by 13% to £9.8m. The capital investment programme for new sites has peaked and the benefits of that investment are still to come.
Veltyco Group (VLTY) is still finding it difficult to collect the money it is owed. This means that its cash is running low and this will impact its ability to promote its own brands.
Graphene materials supplier Directa Plus (DCTA) is confident that it will achieve 2018 revenues of €2.3m and this figure could double in 2019. Growth is coming from textiles, environmental and elastomers customers.
Ubisense Group (UBI) is selling RTLS SmartSpace for up to £35m, which is around two-thirds of the software company’s current market value. The group had cash of £6.8m in the middle of November 2018. Funds managed by Investcorp Technology Partners will pay an initial £30m. Liabilities of £3.1m and a loan of £1.75m will have to be paid out of the proceeds. The company’s name will be changed to IQGeo and it will focus on the myWorld product, which helps telecom companies to integrate their technology ecosystem. The myWorld business generated interim revenues of £5.7m but £3.2m was geospatial services from third party products. Some of the cash will be distributed to shareholders.
The decline in annual pre-tax profit at Stride Gaming (STR) from £18.9m to £14.8m was no surprise given the impact of regulation and tax. The online bingo and gaming company is likely to report a further fall in profit this year. A special dividend of 8p a share has been announced and in future 50% of net earnings will be paid in dividends.
MAIN MARKET
Packaging and labels supplier Macfarlane Group (MACF) continues to grow revenues organically, supplemented by recent acquisitions. Organic growth has been 5% and overall growth is 13%. The fourth quarter is important, though. Full year pre-tax profit is forecast to improve by 47% to £13.6m and earnings per share by one-third to 7p. Acquisition payments should be offset by cash generated in the second half.
S and U (SUS) has increased its investment in Aspen Bridging from £20m to £30m. Aspen has been trading for less than two years and is already in profit.
Creightons (CRL) increased its interim profit by 44% to £1.38m on revenues one-third ahead at £22.3m. The main growth in sales has come from retailer own brands, while Creightons own brands raised their sales by 11%.
David Brown has sold his 4.55% stake in Associated British Engineering (ASBE).
Sealand Capital (SCGL) has formed a new subsidiary called ePurse (HK) Ltd, which is generating commissions from WeChat Pay activities in Hong Kong. Licences have been obtained in the UK and Dubai.
Andrew Hore
Andrew Hore – Quoted Micro 14 May 2018
NEX EXCHANGE
Ashley House (ASH) is expected to achieve its full year profit target of £1.8m, although that includes a non-cash write back. The health and community care property developer had year-end net debt of £1.5m. The Morgan Sindall joint venture has reached financial close on its first extra care apartments and bungalows scheme in the Isle of Wight with a further scheme expected to reach financial close in the next few weeks. Modular building business F1 Modular lost money last year. There is work manufacturing classrooms for schools and projects in the retail sector so it is not dependent on residential and health development. Maureen Moy has taken her stake to 10% after buying 1.9 million shares at 13.23p a share.
Dairy and livestock services provider National Milk Records (NMR) generated revenues of £5.32m in the three months to March 2018. This means that revenues are £1.51m ahead so far this year, although the comparatives are weak. Herdwise, the screening service for Johne’s disease and other testing services are providing growth with a small improvement from milk recording services. Rising milk supply has started to hold back milk prices. There will be a one-off benefit in the fourth quarter and the first quarter of next year from a contract to supply 10,000 genomic tests that should help to provide information to improve resistance to bovine TB. NMR is one of the nominees for NEX Exchange company of the year at the 2018 Small Cap Awards.
Forbes Ventures (FOR) says that the majority shareholder in challenger bank Civilised Investments Ltd has exercised warrants that increased its shareholding to 95.7. Warwick Capital Partners is also underwriting a £12m subscription, although £4.65m of this can be subscribed by minority shareholders. This would increase the overall valuation of the bank to £20m. Forbes owns 0.05% of Civilised Investments prior to the subscription and it has not said if it will be investing any more cash.
Gledhow Investments (GDH) had £172,000 in cash at the end of March 2018 but £20,000 is trapped in a Beaufort Securities account. NAV has increased from £510,000 to £869,000.
Gunsynd (GUN) says that Brazil Tungsten Holdings, the company it owns a 6.18% stake in, has restarted mining operations after a government suspension was lifted.
Coinsilium Group Ltd (COIN) will advise FANTOM Foundation on the $39.8m token generation event due to start on 15 June. FANTOM is using Directed Acyclic Graph (DAG) as a smart contract platform. This is an alternative to blockchain, which should be faster and have lower fees.
IMC Exploration Group (IMCP) is focusing on the completion of works programmes in its three principal projects. The joint venture with Trove Rehabilitation only requires ministerial approval to complete. Eamon O’Brien has been appointed as a director and he will become chairman. Kathrine Byrne is also joining the board. Nial Ring and Liam McGrattan will step down from the board.
AIM
A strong performance in the used vehicles market and continued growth in aftersales helped to offset the downturn in the new vehicles contribution at Cambria Automobiles (CAMB) in the six months to February 2018. Underlying operating profit still fell from £5.8m to £5.3m. Interim pre-tax profit was £4.8m. Full year pre-tax profit is expected to decline from £11.3m to £9.5m. The significant capital investment programme continues but net debt is minimal.
Vertu Motors (VTU) also performed well despite the tough background in the motor dealer sector. In the year to February 2018, adjusted pre-tax profit fell from £31.5m to £28.6m on flat revenues. The full year dividend was increased by 7% to 1.5p a share. It appears that trading may be starting to improve and the benefits of the current investment programme are yet to show through. Net cash is £19.3m. A further dip in profit to £25m is expected this year.
CEPS (CEPS) reported flat 2017 revenues but the underlying pre-tax profit jumped from £146,000 to £902,000. The biggest improvement in profit came from Friedman’s and Aford Awards, while CEM Press made a larger loss.
TyraTech Inc (TYR) says sales of the PureScience poultry mite treatment are building in the US and a launch is planned in Europe. Trials of a treatment for intestinal worms in pigs have shown a 70% reduction in the worms. TyraTech has shown that it can develop effective products and the remaining cash from the sale of Vamousse will finance further product development and trials.
Deltex Medical (DMG) had a tough 2017 but lower cost meant that the loss was reduced. The medical monitoring equipment and consumables supplier has won significant contracts in the US and France. Revenues dipped from £6.3m to £5.9m, while the loss was down from £2.4m to £2m. Annualised cost reductions of £1m will partly show through in 2018. The UK remains tough with potential recovery later in the year. International business should grow. A £2m fundraising should provide enough cash to invest in the technology and cover a reduced loss.
HaloSource Inc (HALO) has disappointed the market again. This time the auditors have not allowed some of the sales shipped at the end of 2017 to be included in revenues. Cantor Fitzgerald has maintained its 2018 loss forecast at $3.4m, down from $5.7m. The cash outflow should be lower.
Sprue Aegis (SPRP) has come to an agreement with BRK over the termination of their distribution and manufacturing agreements. Sprue Aegis will have to pay £11m in instalments up until December. There will be a £3.8m exceptional charge in the 2017 accounts. The full year results will be published on 15 March.
Wey Education (WEY) reported interim revenues 44% ahead at £1.74m and an improvement in underlying pre-tax profit from £75,000 to £145,000. An initial contribution from Academy 21 accounted for part of the improvement. A 2017-18 profit of £500,000 is forecast, rising to £2.5m the following year.
Trading in the shares of Lionsgold Ltd (LION) has been suspended following the completion of the acquisition of Goldbloc, which has developed a digital gold currency. This is deemed as a change of business. The suspension could last up to four months.
Fox Marble (FOX) increased revenues by 50% to €1.2m in 2017 and lost €3.4m. This year will be more significant with the processing factory up and running and capital investment made in machinery. There was €440,000 in the bank at the end of April 2018.
Out-of-hospital care services provider Totally (TLY) has secured the renewal of an urgent care services contract worth €1.2m with the Northumbria Healthcare NHS Foundation Trust.
Westminster Group (WSG) has admitted that a previously announced Middle East contract is in Iran and it has still to become effective. The current political situation could scupper the deal or at least delay it.
Microsaic Systems (MSYS) has signed a distribution agreement with Rightek, which will distribute the Microsaic 4500 MiD mass spectrometry detector in Taiwan.
MAIN MARKET
Stem cell services provider WideCells Group (WDC) has commitments to invest £1.47m at 3p a share and is offering the chance of additional investment of up to £450,000, via a bookbuild using the Teathers app and that closes on 21 May. WideCells has still not been able to publish its 2017 accounts so trading in the shares remains suspended. Directors have loaned the company £215,000. At the end of June 2017, there was cash of £869,000 and debt of £634,000, before any of the director loans. WideCells intends to repay £120,000 of debt, spend £150,000 on product development, £110,000 on the CellPlan platform and £33,000 on WideAcademy. The other £1m plus will pay expenses and provide working capital.
Nanoco (NANO) will receive a £1.8m milestone payment from its unnamed US-listed partner. This is the second of three milestone payments.
Falcon Media House (FAL) has raised a further £200,000 from a convertible loan note issue, taking the total to £3.14m. The conversion price is 2.5p a share.
Treatt (TET) has sold pressed vegetable seed oils supplier Earthoil Plantations for £11m. That takes pro forma net cash to £17.5m. In the six months to March 2018, Treatt increased revenues by 14% to £53.6m and underlying pre-tax profit improved from £4.79m to £5.77m.
Andrew Hore
Andrew Hore – Quoted Micro 8 January 2018
NEX EXCHANGE
Kryptonite 1 (KR1) has invested $249,000 in a presale of 4,775,686 Simple tokens in a project administered by OpenST Ltd. The plan is for the tokens to be used to enable digital currencies to be launched by businesses. There has also been a $100,000 investment in the presale of tokens in the Props project. That bought 859,569 Props tokens. These tokens are used as a cryptocurrency as part of a decentralised ecosystem of video applications.
DagangHalal (DGHL) has launched its mobile app MEEMBAR (meaning raised platform in Arabic), which is targeted at Muslim travellers, on the Android platform. The app provides details of mosques, hotels and restaurants in an area. The app will become available on the IoS platform later this year. Longer-term, the company wants to introduce the ability to undertake transactions.
AIM…….
Housing developer Inland Homes (INL) ended the year strongly, selling two sites for a total of £12.7m. Inland Partnerships, which develops social housing, has entered into a £29.5m contract to develop 136 homes.
Kestrel Partners has taken a 4.32% stake in telematics equipment and services provider Trakm8 (TRAK).
Gear4Music (G4M) says that Christmas sales grew by 42%. The online musical instruments retailer is still on course for a full year profit of £2.4m.
Peter Scott is taking on the role of chief executive at digital marketing services provider Be Heard Group (BHRD) and David Morrison will replace him as chairman.
Smart metering technology supplier CyanConnode (CYAN) says that its order book is in excess of $100m even though a large order has been delayed. There was £5.5m in the bank at the end of 2017.
Cambria Automobiles (CAMB) has announced a new Lamborghini dealership in Chelmsford on the same site as the Bentley dealership. The showroom should be open by the end of the first quarter. A new site in Hatfield to house the new McLaren dealership and the company’s other dealerships in the area should be completed by the end of the year. Cambria is still cautious about the UK car market. Trading in the first quarter is in line with expectations. Chairman Philip Swatman and his wife sold 100,000 shares at 57p a share, leaving them with 200,000 shares.
Marble quarry operator Fox Marble Holdings (FOX) is raising £2.76m through a placing at 10.5p a share and Indian firm Kesari Tours PVT is investing £2m of the cash. Kesari boss Shailesh Patil has committed to buying a minimum of 3,000 tonnes a year of marble in return for exclusivity in the Arabian Gulf. Fox is also raising £235,000 via a convertible loan note issue and capitalising £783,000 of debt. Directors are also taking part of their pay in the form of shares. Fox will use £1.5m of the cash to repay debt and the rest will go towards expanding production. Total marble production was 8,800 tonnes in 2017. The new processing facility has capacity of up to 440,000 square metres a year so it will be able to cope with much higher quarry production.
Network data processing technology supplier Ethernet Networks Ltd (ENET) has disappointed the market six months after flotation. A customer has chosen to sign up to a different proposal than expected and two other projects have been delayed until 2018. This means that 2017 revenues and profit will be lower than anticipated, although profit will be higher than 2016. In 2016, revenues were $2.16m and operating profit was $339,000, which was exceeded in the first half of 2017 even though revenues were much lower.
Victoria Oil and Gas (VOG) says that its gas supply contract with ENEO in Cameroon has not been extended. This had covered 53% of Logbaba gas sales revenues in 2017. ENEO owes $8.7m.
Churchill China (CHH) says that its 2017 results will be slightly better than expected thanks to strong export sales. Full year figures will be published on 27 March.
Strand Hanson has resigned as nominated adviser to BNN Technology (BNN) following news that the company failed to account for a bonus claimed by Darren Mercer. The £270,000 bonus has been offset against the £450,000 he owes the company. Mercer also claims that the remaining amount of the loan should be reduced.
Corero Network Services (CNS) has gained $400,000 of contracts for its SmartWall cyber security system.
Ultrasound simulation technology provider Medaphor Group (MED) says that 2017 revenues were 27% ahead at £4.2m. The loss will be £2.9m. There was £4.2m in the bank at the end of 2017.
Cantor Fitzgerald has downgraded its 2017 profit forecast for waste treatment and energy generation plants developer Green and Smart Holdings (GSH) from RM7m to RM6.7m and the 2018 figure from RM16.9m to RM10.8m because of delays to electricity generation projects. Local project finance is taking longer than expected to secure.
Attractions designer Paragon Entertainment Ltd (PEL) chief executive John Dobson has acquired 1.43 million shares at 2.5p each. That increases his stake to 6.55%. This has helped the share price to recover after almost a year of decline following disappointing trading statement.
Babestation producer Cellcast (CLTV) says that it intends to provide for the £495,000 it had invested in the Lexinta fund, which is being investigated by the Swiss authorities. The investment vale had been raised to £754,000 in the last accounts. This appears to be in the trade receivables in the balance sheet last June. There was £862,000 in cash in the bank.
European PR firm SEC (SECG) has acquired 51% of Colombia-based Newlink for up to €2.2m and this could rise to €4.3m if the option to acquire the rest of the shares is taken up in the next five years.
TyraTech Inc (TYR) will buy back $8.4m worth of shares at the tender price of 3p a share.
Oil and gas firm San Leon Energy (SLE) has ended bid discussions with two potential bidders. A potential reverse takeover is still on the cards.
Even though Crawshaw Group (CRAW) says that the performance of its factory shops has been good, like-for-like sales for the delicatessen products retailer have declined. This has led Peel Hunt to increase its loss forecasts for this year and next year as like-for-like revenues are expected to continue to decline.
Egdon Resources (EDR) has had its appeal for planning permission for the Wressle oil development in Lincolnshire. Egdon owns 25% and Union Jack Oil (UJO) has a 15% stake. Egdon has been allow to retain the original planning permission until the end of April.
ReNeuron (RENE) is consolidating 100 shares into one new share. Management hopes that this will help to attract institutional investors. The cell-based therapeutics developer had £45.3m in the bank at the end of September 2017.
Christopher Brown is stepping down as chief executive of TomCo Energy (TOM) but he will remain for the short-term. He has agreed to loan £100,000 to the company.
Packaging machinery manufacturer Molins (MLIN) is changing its name to Mpac following the sale of the Molins tobacco machinery business.
The People’s Operator (TPOP) has returned from suspension having completed its £2.82m fundraising at 0.1p a share. The London Stock Exchange says that the settlement of outstanding trades is occurring and it allowed the restoration in dealings, but it says that it will continue to closely monitor the situation.
BOS Global Holdings (BOS) has appointed Marcus Yeoman, Will Giles and Michael Wilczynski to the board andMark Uren has resigned, which means that it does have the minimum required number of three directors. The finances of the software developer remain uncertain and trading in the shares is still suspended. A general meeting requisition has been withdrawn.
Average oil production from the Trinidad operations of Range Resources Ltd (RRL) in the fourth quarter of 2017 was 629 barrels a day and the current daily production is 703 barrels a day.
Premier African Minerals (PREM) did not meet its guidance on production at the RHA tungsten mine in the last quarter of 2017 and this means that it did not achieve profitable production in December. Premier has said that it would not provide any more cash unless profitability were achieved. Premier is spinning off the Zulu lithium project, which could have a value greater than Premier, and drilling programmes could be funded by offering a stake in the new company.
MAIN MARKET
Cayman Islands-based cash shell AIQ Ltd (AIQ) (ww.aiqhub.com) is joining the standard list on 9 January. AIQ has raised £3.6m after expenses, mainly at 8p a share. The plan is to seek an e-commerce acquisition, which has a strong management and is near to cash generation.
North American oil and gas explorer and producer PennPetro Energy (PPP) acquired Nobel Petroleum UK last May, which gives it a 75% working interest in City of Gonzales petroleum leases in Texas. Nobel has secured £2m in additional funding for the leases. PennPetro joined the standard list and was valued at £17.7m at 25p a share. Former Arsenal managing director Keith Edelman is chairman.
Andrew Hore