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Quoted Micro 20 December 2021
AQUIS STOCK EXCHANGE
The ecommerce technology and brands retailer Samarkand Group (SMK) reported lower interim revenues because of a one-off PPE contract in the previous period. There was a small underlying dip in revenues to £7.17m as the wholesaling business is being run down to a less important level of operations. The two core parts of the business grew revenues. The company’s brands generated £2.25m and the NOMAD ecommerce technology business generated just over £3m. Samarkand remains loss-making. Net cash was £8.8m at the end of September 2021, but Samarkand subsequently acquired Napiers the Herbalists for an initial consideration of £1.7m in cash. Revenues continue to grow at an accelerating rate. The current focus is organic growth through adding new clients.
Rural Broadband Solutions (RBBS) is acquiring Cadence Networks for £80,000 in cash and the issue of two million shares at a notional price of 7p each. Cadence is an internet service provider with revenues of £145,000. It has three data centres in London that Rural Broadband Solutions can use to build its national data network to replace third party providers. This will help to improve gross margins. There are 2,733 premises connected to the fixed wireless network of Rural Broadband Solutions. A placing is raising £1.675m at 3p a share. Directors are subscribing for 18.3 million shares. Investec Bank will advise on infrastructure funding.
VSA Capital (VSA) reported interim revenues of £1.16m and a loss of £235,000. This reflects the delay in the flotation of Tungsten West, which subsequently generated revenues of more than £1m.
Walls and Futures REIT (WAFR) has sold its residential property in Southfields for £662,500, which is a 2% premium to its valuation. This is the final private rental property in the portfolio.
Love Hemp Group (LIFE) generated revenues of £4.33m in the year to June 2021 and revenues from major retailers are increasing. Plans to move to the Main Market are progressing.
Apollon Formularies (APOL) has completed its high-volume processing laboratory. Processing capacity has increased to 20 litres of medicinal cannabis oil a day.
BWA Group (BWAP) says that the independent expert review of the two 90%-owned mineral sands projects in Cameroon supports the potential for significant mineralisation. BWA intends to drill 2,500 metres at Nkoteng and 1,500 metres in Dehane in the first quarter of 2022. An initial mineral resource estimate is expected by next summer.
Igraine (KING) says 2%-owned investee company Excalibur Medicines has completed the ARCADIA phase II clinical trial to assess a potential treatment for diabetics with Covid-19. The trial shows that AZD1656 reduced mortality in patients in combination with other medication. There are no safety concerns
S-Ventures (SVEN) has raised £3m at 70p a share and it will spend the cash on growing its food and wellness businesses. Clean Invest Africa (CIA) has raised £102,000 at 0.5p a share. IamFire (IAF) has raised £4.75m at 3p a share. EPE Special Opportunities (ESO) has raised £20m from a zero dividend preference share offer. EPE has spent £1.1m and £175,000 buying back ordinary shares at 330p each and 350p each respectively.
Rutherford Health (RUTH) has arranged an £8m loan at an annual interest rate of 15%. Schroder UK Public Private Trust and other shareholders will provide the loan in two tranches of £4m. There is also a convertible loan of £2m from LF Equity Income Fund – the conversion price is 176p. This will provide the working capital needed and a longer-term financing will be arranged next year. The cash is required because the cash for the £12.35m placing with SDI Holding has not been received. The acquisition of Proton Partners International has also not been completed.
Western Selection (WESP) has reduced its stake in AIM-quoted Northbridge Industrial Services (NBI) from 11.35% to 9.65%. The sale, at 159.7p a share, raised £791,000. That is a gain on the balance sheet value of £216,000. Harwood Capital has increased its stake from 15.1% to 16.9%, including an unchanged 13.4% held by Gresham House Strategic (GHS).
New chief executive Andrew Carter has bought 66,079 shares in Chapel Down Group (CDGP) at 45.4p each. He owns 99,699 shares. Voyager Life (VOY) chief executive Nick Tulloch bought 537,776 shares at 18p each and chairman Eric Boyle acquired 519,112 shares at the same price. They own 14.3% and 9.1% respectively. Burns Singh-Tennent has bought one million shares in Oscillate (MUSH) at 2p each. He owns 5.22%.
AIM
NWF (NWF) had a successful first half even though feed volumes were disappointing and group figures will be much better than the previous year. Actions taken to retain drivers have helped the fuels and food distribution divisions. Fuels has done better than expected with a short-term boost from fuel shortages, which NWF did not suffer from, in the autumn. The food distribution business is benefiting from increased capacity. Net debt has fallen providing further scope for fuels acquisitions.
Totally (TLY) is acquiring Energy Fitness Professionals (Energy Fit-Pro), which provides workplace fitness services. The total cost will be up to £1.3m and Totally still has plenty of cash to finance further acquisitions. In the year to March 2021, Energy Fit-Pro made a pre-tax profit of £445,000 on revenues of £984,000. There will be cross-selling opportunities.
Digital transformation services provider Made Tech Group (MTEC) grew interim revenues by 131% to £11.7m thanks to the focus on the public sector. Hiring continues ahead of anticipated growth. Short-term gross margin was reduced due to the increased use of contractors.
Multi-utility connections and electric vehicle charging installer Fulcrum Utility Services Ltd (FCRM) is raising £19.5m at 12p a share and it could raise up to £6m more via an open offer. The placing and open offer price is below the underlying NAV of 15.4p a share, although more than 50% of that figure relates to intangible assets. The order book was £80.9m at the end of September 2021.The cash will be used to invest in the smart energy infrastructure sector as meter asset provider (MAP).
Acquisitions and tax adviser K3 Capital (K3C) expects to report a 30% increase in interim revenues to £30m through a combination of like-for-like growth and acquisitions. The diversification into additional services provides a stronger base for the group.
Hurricane Energy (HUR) could make a $54m write-off on its activities in the Greater Warwick area (GWA) of the North Sea because it does not want to fund the drilling obligations under the licence.
Tungsten Corporation (TUNG) founder Edmund Truell and his associates are backing a possible bid of 40p a share by Kofax Inc. California-based Kofax is an automated software provider that simplifies the handling of data. The board says that the bid significantly undervalues the digital invoicing business. Cloud-based automation technology provider Jaggaer LLC has decided not to make a rival bid but venture capital firms Accel-KKR, could still make an offer.
Deepmatter Group (DMTR) is seeking more cash, but it will take until early next year to secure additional investment for the digital chemistry data company. At the end of June 2021, Deepmatter had £1.8m in cash and that has fallen to £400,000. Deepmatter is loss-making.
Printed circuit technology developer Trackwise Designs (TWD) is raising £6m at 80p a share, which is a significant discount to the market price at the time of the announcement. An open offer could raise up to £1m. Capital equipment deliveries were delayed, although the EV contract will start next year.
Sovereign Metals Ltd (SVML) was listed on the ASX and obtained a secondary quotation on AIM. A scoping study for the Kasiya rutile project confirms that it is a significant deposit. The NPV8 after tax is $861m with a mine life of 25 years. The capital cost is estimated at $332m.
Youth-focused digital media company LBG Media (LBG) joined AIM in order to build a cash pile on the balance sheet so that organic and acquisitive growth can be achieved. It raised £30m at 175p each, leaving pro forma net cash of £27.1m. The share price ended the first day at 200p and the week at 193.45p.
DSW Capital (DSW) licences its brand to professionals involved in corporate finance and accounting services and provides them with back office support. Many individuals become licensees after working with major accountancy firms. Warrington-based DSW believes that the flotation will boost the profile of the business and enable it to grow geographically and broaden the services provided. DSW raised £5m at 100p a share and the price ended the week at 123.5p.
In the six months to October 2021, Begbies Traynor (BEG) revenues were 39% ahead at £52.3m. Underlying pre-tax profit jumped 60% to £8m thanks to an improvement in operating margin from 14.4% to 16%. Net cash was £1.2 million at the end of April 2021.
Public Policy Holding Company Inc (PPHC) provides public affairs, crisis management and lobbying services in the US. It has three subsidiaries in the top 20 US lobbying firms. A placing raised £11.1m at 135p a share. Although the company has reported losses, a change in bonus arrangements will make it profitable.
Problems at the CHESS naval systems subsidiary led to a slump in interim profit at defence firm Cohort (CHRT), but it still increased the interim dividend by 10% to 3.85p a share. The group order book remains strong and includes some large orders. A new managing director has been appointed at CHESS.
Jade Road Investments Ltd (JADE) says that the structure of restaurants group Fook Lam Moon has changed, and it may no longer own 71%. This could lead to a partial or full provision of the $29.1m valuation in the balance sheet.
MAIN MARKET
Anemoi International (AMOI) has completed the acquisition of id4 AG for £5.33m, with an initial payment in shares with 50% deferred and dependent on achieving targets over the next five years. The SaaS-based business provides anti-money laundering and know your client software products. A placing raised £2.175m at 4p a share.
Spinnaker Acquisitions (SPAQ) is planning to acquire leak detection technology developer HomeServe Labs, from fully listed HomeServe (HSV) for a mixture of cash and shares. The business trades under the name LeakBot and it helps insurers to reduce claims costs. Insurers can provide LeakBot to homeowners free of charge. The company would be renamed Ondo InsureTech.
Marine technology products developer OTAQ (OTAQ) is raising £1.38m at 22p a share. Interim revenues fell from £2m to £1.8m. Net debt was £800,000 at the end of September 2021. The regulatory review in Scotland has held back progress and it continues to do so. There are plans for new product launches.
Publisher National World (NWOR) says full year revenues will be around 85%, following the purchase of JPI Media, with growth in digital income and a slowing in the rate of decline of print revenues. There should be cash of £23m at the end of 2021.
Andrew Hore
Andrew Hore – Quoted Micro 9 July 2018
NEX EXCHANGE
Ananda Developments (ANA) joined NEX on 4 July having raised £930,000 at 0.45p a share. Ananda is the latest medicinal cannabis-focused investment vehicle. The pre-money valuation was £500,000 There are already potential investments being assessed and management has built up relationships with businesses in Israel and Canada. A reverse takeover valued at up to £10m appears most likely.
Medicinal cannabis business investor Sativa Investments (SATI) has acquired PhytoVista Laboratories from a company owned by Sativa boss Geremy Thomas. Sativa is paying £235,000 in cash and £200,000 in shares at 4p a share. PhytoVista operates a laboratory that tests cannabis oils and hemp products. Because of the demand for the shares, the shareholders originally subject to the orderly market arrangements will be allowed to trade in the shares with the consent of Peterhouse.
KR1 (KR1) has made four more investments. The company invested £593,000 in Dfinity network tokens. Dfinity is developing a supercomputer to host the next generation of software and it is expected to offer unlimited capacity. A further £100,000 has been invested in the Flying Carpet Project, which is involved with a communication protocol for devices, such as drones and automated cars. The number of tokens that the cash will represent has not been decided. A 1.25% stake has been acquired in Connext Inc, which is developing a payment hub, for $50,000 and the same amount of money has acquired a 10% stake in Blocksmith. There is a 12-month option to acquire a further 5% of blockchain system development agency Blocksmith for $100,000
Ace Liberty and Stone (ALSP) has increased its dividend by 25% to 1.25p a share. The shares go ex-dividend on 12 July. This will cost £500,000. Property acquisitions have been completed in Oldham and Wigan. The total cost is £6.4m and the rental income is just over £597,000.
Monreal (MORE) has left AIM and joined NEX. Monreal has net cash of £730,000 and the plan is to invest in private technology, media and telecoms businesses.
Tectonic Gold (TTAU) has received a refund of €289,000 (£256,000) from the French tax authorities. This relates to the 2009 tax year and Tectonic hopes to get a €416,000 (£368,500) refund for the 2010 tax year. VSA Capital has been appointed as financial adviser and joint broker.
Ganapati (GANP) is launching blockchain-enabled casino games and plans to issue a utility token, which will be called G eight C, through an initial coin offer. Pre-sales of the tokens should start in the fourth quarter of 2018.
EcoVista (EVTP) has raised £300,000 at 0.035p a share.
There have been previously unreported trades by a broker in Karoo Energy (KEP), All Star Minerals (ASMO), Valiant Investments (VALP) and Clean Invest Africa (CIA).
AIM
Film and video localisation services provider Zoo Digital (ZOO) continues to gain momentum. Content owners can sell programmes in additional territories because using Zoo’s services means that it is economic when it was not in the past. That means that the addressable market is even bigger because it includes back catalogue that would not have been localised previously. In the year to March 2018, revenues rose from $16.5m to $26.8m and Zoo moved into profit. That pre-tax profit is expected to more than treble to $1.8m this year.
eve Sleep (EVE) is growing but not at the rate that was hoped for and the chief executive and founder has stepped down. That was inevitable considering the ridiculously high valuation put on the company when it floated and how it has not justified that level of optimism. The mattress supplier grew sales by 61% in the first half when the market had expected more than doubled sales. A new distribution agreement with beds retailer Dreams should help supplement growth in the second half. Even so, eve Sleep is not expected to make a profit until 2020.
Sinclair Pharma (SPH) has received a bid approach from Huadong Medicine and discussions are at an early stage. Both companies supply aesthetic products. Sinclair says first half revenues outside of the US grew by 18% and overall sales improved from £20.1m to £21.3m. US sales fell from £2.5m to £800,000 following the split from the company’s former partner. The direct sales operation in the US is beginning to generate revenues. Net debt was £14.8m at the end of June 2018.
Integumen (SKIN) is not proceeding with the reverse takeover of biomaterials company Cellulac but it hopes to acquire a minority stake. The 2017 accounts have still not been published.
Digital imaging technology developer Kromek (KMK) increased its revenues by nearly one-third to £11.8m in the year to March 2018 and the loss was down from £3.79m to £2.34m. There is £7.7m in the bank and that should be enough to enable Kromek to reach a cash generative situation. The medical business is growing particularly well, while nuclear detection has good prospects for medium-term growth.
Telematics firm Quartix (QTX) reported first half revenues grew by nearly 10% and flat profit. Insurance business is declining because of competitive pricing so all the growth is coming from overseas fleet business. Full year earnings per share are likely to be flat. The forecast dividend of 13.5p a share would not be covered by earnings of 12.8p a share.
Defence equipment and services supplier Cohort (CHRT) managed to improve its pre-tax profit from £14.5m to £15.5m even though the defence market was tough. Management believes that the order book has fallen due to delays to projects. The dividend was raised from 7.1p a share to 8.2p a share.
Technology business investor Mercia Technologies (MERC) reported flat NAV of 40.7p a share but it has a number of investments that could mature over the next couple of years and their valuations could be upgraded. Mercia nearly covered its expenses with its revenues. There is still £52.9m of cash that can be invested.
Waste to energy plants developer Powerhouse Energy (PHE) has raised £694,000 at 0.5p a share. Powerhouse had £750,000 in the bank at the end of 2017 but there are still significant cash outflows.
Direct carrier billing company Boku Inc (BOKU) appears on course to make a £2.7m pre-tax profit this year. Boku processed $1.5bn worth of transactions in the first half and revenues should be nearly $17m. There was $30m in the bank at the end of June 2018.
Churchill China (CHH) says that first half trading is stronger than expected on the back of growing sales in Europe. The interims will be published on 30 August.
EQTEC (EQT) has secured $3.2m (£2.4m) in new loan facilities from Cuart Investments Fund and associates. This will be drawn down in two instalments. Origen Capital put together the lenders and it is subscribing £1.15m at 0.6p a share. Existing lenders have agreed to capitalise £693,000 of interest. This means that the previous loan facility has ended.
MAIN MARKET
Shefa Yamim (SEFA) has made a high grade spinel discovery. The northern Israel-focused gemstone explorer has found nine different gemstone minerals.
Software company Gresham Technologies (GHT) is paying up to €8.5m for B2 Group, which will add €1.4m in revenues and should be earnings enhancing in its first full financial year. The customer base includes banks, insurers and asset managers. Gresham expects its own first half revenues to be 5% lower due to a weak performance in Australia. Net cash was £6.8m at the end of June 2018.
Electronic Data Processing (EDP) has recommended a bid from a company owned by Kerridge Commercial Systems. The cash offer is 91p a share and values the enterprise resource planning software provider at £11.9m.
Andrew Hore
Ian Pollard – Wizz Air #WIZZ increases capacity by 20% and fills it!
Wizz Air Holdings WIZZ opened six new routes in June and took delivery of 4 brand new A320 family aircraft, taking the flee to 102. Seat capacity increased by 20.5% over June. 2017 whilst passenger numbers rose by 21.8% and load factor was up by 1pp to 93.3%
RM plc RM The first six months to the 31st May has seen good progress in each of the three divisions with revenue rising by 33.1% and statutory operating profit up by 78.4%. The interim dividend is to be increased by15% and the Board is confident of at least meeting full year expectations.
Andalas Energy ADL The appointment of a New CEO and a new Chairman resulted in the imposition of greater financial discipline during the year to the 30th April The operating loss was reduced by 73% to $1,161,000 from 2017’s $4,317,000. The company has reviewed its operations and restructured its business.and claims it is now in a good position to reap the benefits of its new strategy.
Solid State plc SOLI delivered a combination of strong organic revenue growth and strategic re-organisation in the year to the 30th April. Revenue rose by 16% but adjusted operating profit fell by 4%. During the first two months of the financial year the order book was strong and as at the 31 May stood at a record level of £23.0m, up 11% on the previous year. The dividend remains unchanged at 12p. per share.
Big Sofa Tech Group BST has continued to build on the positive momentum achieved in 2017 and In the first half of 2018, the order book reached nearly £1 million, a 91% increase over the first half of 2017
Cohort plc CHRT improved its performance during the year to the 30th April and adjusted operating profit rose by 8% to record levels, despite a large fall in the order book from £108.6m. to £76.6m. which the company says was due to delays rather than “losses or lack of opportunities”. . Adjusted earnings per share rose by 7% and the dividend is to be increased by 15%
Beachfront real estate for sale in Greece; http://www.hiddengreece.net
Andrew Hore – Quoted Micro 18 December 2017
NEX EXCHANGE
Wine and beer maker Chapel Down Group (CDGP) has raised £18.53m at 50p a share and could raise up to £1.47m more via a one-for-35 open offer at the same share price. The latest acceptance date is 5 January. Chapel Down will invest in an additional 500 acres of vineyard land and more money will be put into marketing. The family interests of Michael Spencer have invested in the fundraising. Nigel Wray has invested a further £500,000 but his stake has fallen to 16.5%, prior to the open offer. This year’s turnover is expected to be at least £11.6m and management expects growth to accelerate after the additional investment. New gin and vodka brands have been launched and the Ashford brewery should be up and running by the end of 2018.
Ashley House (ASH) has signed a joint venture with Morgan Sindall to develop extra care and supported living housing. This deal sparked a 55% increase in the share price to 14.75p. Morgan Sindall is paying £4m in total for the 50% stake in the joint venture, with £1.5m of this dependent on certain completion factors. It should all be paid by the end of 2018. The Ashley House housing division will complete two existing schemes and then own 50% of the joint venture, which will develop any further schemes. This additional cash will help to accelerate the growth of this part of the business. There is already a pipeline of potential developments. Ashley House will make an interim loss but expects to profitable for the full year.
e-commerce technology provider Netalogue Technologies (NTLP) reduced its interim loss as revenues grew from £317,000 to £479,000. There has been a lower number of larger projects, particularly in the food and drink sector, and Netalogue would have been profitable without the investment in the company’s technical team. A move towards a SaaS-based model could hold back short-term revenues.
AIM-quoted, spread betting business London Capital Group (LCG) has joined the NEX Exchange Growth Market on 15 December. Glio Holdings Ltd owns 78.1% of London Capital.
Early Equity (EEQP) has made two more investments. It has invested £60,000 in TruSpine Technologies Ltd, which plans to join AIM next year. TruSpine has developed the Faci-LOK and Cervi-FAS minimally invasive spine stabilisation devices and the VOSC catheter atherosclerosis treatment product. The plan is to gain FDA authorisation for Faci-LOK next year and then float. TruSpine is valued at £15m. A £35,000 investment in the profitable corporate finance and asset management business Farina Investments (UK) Ltd has been made ahead of a flotation. Early Equity raised £115,000 at 0.6p a share.
Hydro Hotel, Eastbourne (HYDP) has declared an unchanged total dividend of 21p a share for the year to October 2017.
Lombard Capital (LCAP) says that it is progressing towards the issue of an investment bond that will be quoted on a recognised bond market. There was nearly £60,000 in the bank at the end of September 2017.
Coinsilium Group Ltd (COIN) raised £720,000 at 9p a share and this will be used to invest in blockchain companies and expand the company’s own advisory business. Last June, £250,000 was raised at 2.2p a share. Coinsilium has been appointed as an adviser to token generation event of Hdac Technology AG, which is developing payment platforms for connected devices.
Equatorial Mining and Exploration (EM.P) has raised £5,000 at 0.01p a share and issued further shares for convertible loan notes and warrants at the same price. Valiant Investments (VALP) has raised £34,000 at 0.1p a share. Via Developments (VIA1) has issued a further £50,000 of debenture stock.
AIM
Satellites owner Avanti Communications Group (AVN) has revealed a financial restructuring that could put it on a firm footing. Certainly, without this restructuring the outlook would be bleak. The $557m of 2023 loan notes will be converted into two billion shares, while investors in the 2021 loan notes are being asked to accept and extension of the term and lower income. Annual interest charges would still be $36.6m
Best of the Best (BOTB) says that it expects to pay remote gaming duty and this will knock £300,000 from profit this year and £600,000 next year. This year’s pre-tax profit is forecast to decline from £1.5m to £1.4m, with a further fall to £1.2m in 2018-19. Net cash is expected to be £2.6m at the end of April 2018. The company is still claiming £4.5m of VAT so this could provide a cash boost in the future.
Plant Impact (PIM) is suffering continued delays in demand for its Veritas product in Brazil. A new partnership with Albaugh Brazil will commercialise other Plant Impact products in Brazil. This has sparked the decision to consider putting the company up for sale. Cash is running out and a further £7m would need to be raised to keep the company going well into 2019.
Van Elle Holdings (VANL) has defeated the five resolutions proposed by former chairman Michael Ellis at last week’s general meeting.
Recruitment and outsourcing services provider Servoca (SVCA) reported better than expected full year figures. Pre-tax profit improved from £3.5m to £3.9m. Education and healthcare will be the main growth areas.
Evgen Pharma (EVG) is collaborating with King’s College London to examine the use of SFX-01 as a therapy against ischaemic stroke. Multiple doses will be assessed and this will take nine months. This could lead to a clinical trial that might be funded by a charity organisation associated with King’s College.
Range Resources Ltd (RRL) returned to AIM following the reverse takeover of producing oil and gas assets in Trinidad from Trinity Exploration and Production (TRIN).
Defence equipment and services supplier Cohort (CHRT) had a weak first half but it expects to more than make up for that in the second half. There was a mixed performance with some parts of the business finding trading conditions difficult. The order book is worth £132m. Full year pre-tax profit is forecast to improve from £14.5m to £15.4m.
Savannah Resources (SAV) says that it has discovered high-grades and large intercepts in the latest drilling at the Mina do Barroso lithium project. A maiden mineral resource estimated could be announced before the year end with potential for upgrades from further drilling.
Daniel Stewart expects China New Energy (CNEL) to report a jump in pre-tax profit from £400,000 to £2.6m in 2017. The shares are trading on less than four times fully-taxed 2017 prospective earnings. The company constructs bioenergy plants that convert feedstock into ethanol. The most recently reported order book was worth £28.7m with the orders due to be fulfilled in 2017 and 2018. Demand from China is strong and there is also international business.
Coal bed methane projects developer Tlou Energy Ltd (TLOU) has secured a listing on the Botswana Stock Exchange and trading commenced on 13 December. Tlou raised £2.4m at 11p a share.
Synairgen (SNG) has secured a £5m cash injection from a deal with Pharmaxis, which will take over the development of LOXL2 in fibrotic diseases. Synairgen will also receive 17% of any partnering revenues. This compares with £3m invested by Synairgen in LOXL2. The cash will enable Synairgen to fund the phase IIa study for SNG001 for COPD. The trial should be complete by the end of 2018.
New management has turned around the performance of contract disputes and expert witness services provider Driver (DRV) and it moved back into profit last year. Cost savings have been made and the focus is on profitable business rather than just growing revenues. Cash collection is improving with net debt down to £200,000 and there is likely to be net cash of £2m in one year’s time. This year’s revenues are likely to be flat at around £60m but pre-tax profit should improve from £2.5m to £2.7m.
One month after its previous trading statement IDOX (IDOX) says that an internal audit has found that it should not recognise all the revenues that it originally intended to. This will knock £3m off profit for 2016-17. The software company reported its full year figures in December but the attest full year figures have been delayed until February. Chief executive Andrew Riley is away ill and former boss Richard Kellett-Clarke has taken over on a temporary basis.
Abzena (ABZ) reported interims in line with expectations. Growth came from the chemistry and manufacturing businesses. This is a period of capital investment as various parts of the company move to new facilities. The ADC master services agreement with a US biotech will yield at least $5m in services revenues over the next 12 months. This deal is shared between chemistry and manufacturing divisions.
Surface coatings provider Hardide (HDD) is starting to improve its gross margin as demand improves. There is even some signs of improved demand from the oil and gas sector. Even so, Hardide remains loss-making but it still has not gained any orders from Airbus. It raised £2.5m for capital investment earlier this year. A new reactor will be installed in the US in this financial year and another next year.
MAIN MARKET
Titon Holdings (TON) continues to benefit from strong demand for its window ventilation components in South Korea. The majority of profit comes from South Korea and that is where all the growth came from last year as the contributions from the UK and North America fell. In the year to September 2017, revenues were one-fifth ahead at £28m, while pre-tax profit improved from £2.14m to £2.49m. The dividend growth of 20% to 4.2p a share is ahead of earnings per share growth. A pre-tax profit of £2.81m is forecast for this year.
Avation (AVAP) has secured an initial $100m revolving facility to finance the acquisition of aircraft.
Sealand Capital Galaxy Ltd (SCGL) has secured an agreement with AIM-quoted MySQUAR (MYSQ) for the distribution of its games on MySQUAR’s platform and MySQUAR’s games on the Huawei InTouch platform. This is initially a two year deal.
Standard list shell Stranger Holdings (STHP) says that it expects to complete the acquisition of biogas and renewable energy business Alchemy Utilities. A five-year £20m bond is being raised.
Andrew Hore
Quoted Micro 19 December 2016
ISDX/NEX
Hydro Hotel, Eastbourne (HYDP) has indicated an improvement in pre-tax profit for the year to October 2016 by raising its dividend payments. The first payment in January will be 7p a share and the second in May will be 14p a share. The total dividend has been increased from 18p a share to 21p a share. Hydro Hotel still has a significant cash pile. Company secretary Sally Gausden has been appointed as a non-executive director.
Netalogue Technologies (NTLP) has replaced its managing director. Richard Condon will become a non-executive director and he will be replaced in the role by development director Andrew Robathan. This follows a review of the company’s strategy and Netalogue will further develop its B2B functionality, which will help it compete against rivals and gain global strategic partners.
Trading commenced in property developer Formation Group (FRM) shares on ISDX on 15 December, although the AIM quotation will continue for the time being.
Gledhow Investments (GDH) made a number of new investments last year but disposals meant that there was still cash of £258,000 at the end of September 2016. The existing investments include a €40,000 convertible loan to Netherlands-based electric scooter developer AppScooter and investments in placings in virtual reality content developer EVR Holdings and Management Resource Solutions, which has run into financial difficulties. The NAV is £452,000, which is slightly higher than the market capitalisation based on the mid price of 0.75p (0.5p/1p) a share.
Black Sea Property (BSP) has signed a non-binding letter of interest to acquire Varna Project Investment, which owns six, almost complete, apartments and development land on the Black Sea coast. The acquisition will cost €130,000 and the assumption of debt of €1.02m – at an interest charge of 5% a year. The apartments will be marketed next May and the land should be sold within 18 months. The loan is repayable on 1 July 2020. The deal could be completed by the end of March.
Karoo Energy (KEP) has generated positive results from exploration on its production licences in the Gemsbok Basin in Botswana. Further exploration, including additional wells and extending the gravity survey data, will be undertaken in 2017.
AIM
It was a mixed first half for defence equipment and services supplier Cohort (CHRT) but the second half is expected to be better. Cohort reported a loss but there was a small improvement in underlying pre-tax profit from £3.51m to £3.86m on flat revenues. The mix of revenues has changed with acquisition contributions offset by lower contributions from SCS, which is being absorbed into two other divisions. The order book is worth £129.6m. Full year profit is expected to improve from £12m to £14.3m but this is down to acquisitions and earnings per share will dip slightly. Dividends should still be increased with a total of 7p a share forecast.
Shell company SigmaRoc (SRC) has secured the acquisition of Ronez Ltd from LafargeHolcim Group for £45m. SigmaRoc chief executive Max Vermorken should know the business because he was a consultant to LafargeHolcim until recently. Ronez owns two quarries and other construction materials operations in Jersey and Guernsey. In 2015, these operations made an operating profit of £4.32m on revenues of £26.3m. Ronez was acquired, as part of Aggregate Industries, by Holcim back in 2005. The markets are limited and market share is already high. Further acquisitions are planned as part of the buy and build strategy. There will be a 104-for-one share consolidation and £40m will be raised at 40p a share, while a further £10m will come from a convertible loan. When the company’s original assets were sold SigmaRoc raised £500,000 at the equivalent of 25p (0.24p pre-consolidation) a share. A listing on the Channel Islands Stock Exchange is planned following the reverse takeover.
Property management services provider HML Holdings (HMLH) is raising £2m at 37p a share and this will help to finance three potential acquisitions. These acquisitions could cost a total of £4.4m but there will be some deferred consideration. Four acquisitions have already been made this year and there are 62,000 homes under management. Interim pre-tax profit improved from £810,00 to £920,000. Net debt was £1.4m at the end of September 2016. The shares ae being issued at ten times prospective earnings.
Ultrasound training equipment developer Medaphor (MED) appears to have settled its patent dispute in the US. The agreement has yet to be put in writing but after this happens the lawsuit will be dismissed. Medaphor says that it will pay cash in settlement but it has enough in the bank to cover this. There was £3.5m in the ban at the end of June 2016 but this is likely to be less than £3m now.
A lack of insolvencies continues to hamper the profitability of Begbies Traynor (BEG). Interim revenues dipped from £25.5m to £24.5m but underlying pre-tax profit was flat at £2.5m because of a higher contribution from the property services side of the business – partly due to additional contributions from acquisitions. The interim dividend is unchanged at 0.6p a share. Bank facilities have been extended until 2021 and this will reduce the interest charge. Further add-on acquisitions are planned.
The news does not get any better at Redcentric (RCN). There has been an overstatement of net assets of £20.8m, which relates to overstated profit. Net debt was £34.4m at the end of September 2016, although that is lower than average monthly levels. Banking covenants are being waived but, unsurprisingly, there will be no dividend. Redcentric is attempting to improve the running of its finances and interim results are promised before the end of the year slimming tablets.
Veltyco (VLTY) says that it will beat the profit expectation of €1.38m for 2016. This helps to make the 2017 profit forecast of €3.17m appear to be more attainable. Veltyco’s business is generating players for online gaming and option trading websites.
First half trading has been tough for property adviser Fletcher King (FLK) but it is maintaining its interim dividend at 1p a share. Property prices have fallen by 5%-10% and transaction volumes are lower. There was some turmoil in the property market after the EU referendum, with some transactions falling through, but demand recovered after a few weeks. In the six months to October 2016, revenues fell from £2.96m to £1.68m, while pre-tax profit, excluding investment gains, fell from £597,000 to £163,000. There will be no one-off gains this year but there could be next year. Net cash was £2.64m. The decline in the pound has attracted foreign buyers, although uncertainty remains.
MAIN MARKET
Hair care and tanning products supplier InnovaDerma (IDP) has raised £800,000 at 110p a share to help fund higher stock levels. This follows a placing earlier in the month which raised £540,000 at 70p a share. Andrew Hore
Hardide Management Fights Off Challenges
Hardide HDD Depressed demand in the oil and gas sector adversely affected performance in the year to the end of September with a rise in operating losses from last year’s £0.22m to £1.47m. But Hardide fought back and in the second half sales began to improve with a 25% rise over the first half, amid signs of a slow recovery in oil and gas. Sales of precision engineering surged by 126% over the previous year and there was also an increase in aerospace sales. For the first time ever, sales in North America exceeded those in the UK. For 2017 there is the promise of further improvement.
Eco Animal Health EAH is increasing its interim dividend by 32% after a strong first half which saw revenue rise by 25%. Pre tax profits rose by 97% to £5.3m, adjusted EBITDA by 46% and earnings per share by 61%. The second half year has started well and another set of strong results is forecast for 2017
Hydrodec HYR October saw the first overall positive EBITDA since the rebuild of the Canton factory was completed last year. October also record sales of refined oil from Canton, at 2.8m litres, with daily production records being beaten twice during the month. Operations are expected to be profitable in 2017.
Cohort plc CHRT is increasing its interim dividend by 16.0% after a rise in adjusted operating profit of 11% for the six months to the end of October and a strong order book standing at £129m. With 80% of those orders deliverable in the second half, it is expected that second half sales will be strong.
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