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Quoted Micro 25 November 2024
AQUIS STOCK EXCHANGE
Cooks Coffee (COOK) moved back into profit in the six months to September 2024. Revenues were 27% higher at NZ$2.74m with growth coming from new openings and existing sites. This income comes from fees from franchisees. Like-for-like growth in the UK was 6% and 3% in Ireland. Sales growth has accelerated in the second half with record sales per store in October. There were 83 coffee shops at the end of September 2024, and this could rise to 90 by next March. The company is moving domicile to the UK.
In the year to September 2024, Time to ACT (TTA) increased revenues from £958,000 to £1.67m. There was an underlying operating profit. There was a cash outflow from operating activities of £784,000 because of working capital movements. There was £1.17m in cash.
Global Connectivity (GCON) has had its stake in Rural Broadband Solutions diluted to £9.5m. The valuation of the stake has been reduced from £13.6m to £11.7m, which is equivalent to 3.2p/share. There is an agreement in principle for an investment in a new business.
Aquaculture technology developer OTAQ (OTAQ) has sent out the circular seeking shareholder approval to leave Aquis. The general meeting will be held on 10 December. Delays in orders mean that 2024 Dowgate forecasts a drop in revenues from £4.4m to £3.1m (previously £4.2m) this year and a £1.8m loss, up from £1.2m in 2023. There should be net cash of £100,000 by the end of the year. Convertible loan note interest can be capitalised with up to 75% of proceeds from the sale of certain inventory will be used to pay back the holders.
Lift Global Ventures (LFT) core financial information business Miriad made a positive contribution despite the tough financial markets. It generated £127,000 in cash. There was £163,000 in cash at the end of June 2024.
Invinity Energy Systems (IES) has sent a circular to shareholders to gain approval to move the domicile from Jersey to the UK.
Tap Global Group (TAP) has cancelled its long-term incentive plan and granted options to directors with most of the options vesting when there are increases in the share price. Peter Wall has been formally appointed as chairman.
Marula Mining (MARU) has appointed Morre Kingston Smith as auditor. Results from metallurgical testing work on ore from the Kinusi copper mine should be available in the first quarter of 2025. Further test shipments will happen before the end of the year. Sampling work of high-grade tungsten deposits at the Northern Cape lithium and tungsten project in South Africa is continuing. Tungsten concentrate could be produced next year.
Oscilate (MUSH) has identified areas to start hydrogen operations in Minnesota. Work is under budget.
Valereum (VLRM) has been admitted to the Apex segment of the Aquis Stock Exchange.
Vinanz Ltd (BTC) has added another 21 bitcoin miners to its site in Nebraska, taking the total to 56.
RentGuarantor Holdings (RGG) has launched an offer of £500,000 10% convertible loan notes lasting two years. This will fund an expansion of the workforce. The Renters’ Rights bill will increase demand for rent guarantor services.
SuperSeed Capital (WWW) reported a NAV of 111p/share at the end of September 2024.
Capital for Colleagues (CFCP) has disposed of more shares in investee company Computer Application Services and raised £299,000. It still owns 24.4%. Pipes and valves distributor TPS shares were sold raising £901,000. The remaining TPS stake is 16%. The cash raised will be invested in other businesses.
WeCap (WCAP) investment WeShop has appointed a US investment bank ahead of a flotation. Audited accounts for 2022 and 2023 have been signed off.
AIM
Rail optimisation software and services provider Tracsis (TRCS) had a tough year, but strong recurring revenues helped. One-off revenues the previous year meant that revenues were 1% lower at £81m. Underlying pre-tax profit fell from £14.1m to £10.4m. Total dividend is 2.4p/share. There should eventually be further investment in the rail industry, which will be good news for Tracsis. The timing of the spending is uncertain. There are already potential deals in the pipeline, though. The business has been rationalised so that management can focus on core operations and further acquisitions. There is £19.8m in cash that can be spent on acquisitions that will enhance earnings.
Telecoms enterprise software supplier Cerillion (CER) continues to beat expectations. Full year pre-tax profit was 18% ahead at £19.8m. There were record new orders of £38.1m. The technology helps telecoms companies to operate more efficiently. Growth is set to continue.
It was no surprise that telecoms testing equipment supplier Calnex Solutions (CLX) had a tough first half. Revenues dipped from £7.8m to £7.4m and the loss more than doubled to £1.3m. Even so, the interim dividend has been maintained at 0.31p/share. Cash was reduced to £8.6m. New partners are starting to sell group products, and they are replacing Spirent. Second half revenues should be better than the particularly weak comparatives. This should enable a return to profit for the full year.
Semiconductors developer CML Microsystems (CML) improved interim revenues, but that was down to the Microwave Technologies business not being included in the comparatives. Like-for-like revenues were similar to the second half of last year. Pre-tax profit slumped from £1.9m to £800,000. The interim dividend is maintained at 5p/share. Net cash is £15m. There are potential property sales that will boost the balance sheet. The proposed move of Microwave Technologies to a new site will reduce the cost base. Existing and new products have good long-term prospects.
Frontier IP (FIPP) is raising £3m via a placing and subscription at 28p/share. A retail offer via Primary Bid could raise up to £1m. Minimum subscription is £250. The offer closes at 5pm on 25 November. Frontier IP made unrealised gains of £1.3m in the year to June 2024, but there was an overall loss of £1.3m. NAV is 79.7p/share. Despite that, there is a shortage of cash in the balance sheet and the additional cash should last 12 months as the company tries to generate some additional cash from investment realisations.
Helix Exploration (HEX) drilling at Clink#1 in Montana has been successful. There was 2.5% helium encountered in the Flathead formation, which was higher than expected, and 55% hydrogen in drilling mud. Testing is ongoing and there should be further news in the near future. The well could go into production next year.
Tavistock Investments (TAVI) is acquiring Alpha Beta Partners, which is an asset manager with £3bn under management. The business is focused on retail investors, and this will scale up the existing business of offering asset management services to third party advisers. Operating profit was more than £500,000 on revenues of £4m in the year to September 2024. The initial payment is £6m, with the maximum consideration of up to £18m. Two disposals have been completed and the initial payment of £22m will be received in early December. They could eventually generate £37.75m.
Iron treatment provider Shield Therapeutics (STX) says it will hit the 2024 target revenues of $31.5m, up from $13.1m, as revenue peer prescription has increased. Recruitment has been completed for an Accrufer phase III study in China. The proposed $10m investment by AOP Health still requires shareholder approval. Costs are being lowered by 10%. Cash flow breakeven should be hit by the end of 2025, if the sales growth momentum continues.
Chain and transmission equipment Renold (RNO) reported flat interim revenues of £123.4m and pre-tax profit of £11.3m. Spending on acquisitions increased net debt to £42.2m. There was a dip in chain revenues and transmission revenues were slightly higher with improved margins. North America should recover in the second half and destocking is ending in Europe. The Valencia factory being hit by flooding has hurt sentiment. There will be additional short-term costs of £4.8m because of this with insurance payments potentially coming through in 2025-26.
Webis (WEB) has decided to leave AIM. The US-focused gaming company will seek shareholder approval on 18 December. This will help to reduce costs. The operations remain loss making.
Churchill China (CHH) had a tougher second half than expected with a lack of seasonal uplift in the fourth quarter. This means that 2024 pre-tax profit will be well below expectations. Next year is expected to continue to be weak with hospitality businesses hit by higher National Insurance costs. There will also be a hit for Churchill China and costs are being reduced, but 2025 expectations are also downgraded. The balance sheet remains strong.
Scientific instruments supplier Judges Scientific (JDG) says order intake has reduced if the large Geotek contract is excluded. China is particularly weak, but other markets are also tough, and orders have been deferred. Zeus has cut its 2024 pre-tax profit forecast by 19% to £25m. Next year’s forecast has also been trimmed.
Ilika (IKA) has reached the D6 milestone through the testing of 10Ah cells in its Goliath solid state batteries for electric vehicles. These larger cells have been shown to be safe and the D7 version should be available to potential customers in the second quarter of 2025. This moves the company nearer to finding a partner for the Goliath battery.
Property fund adviser and investor First Property (FPO) had a good first half with one-off profits from the trading of properties by a fund, where the company has an investment. There was also the early receipt of fees from disposal of properties in another fund. There was a swing from a loss of £650,000 to a pre-tax profit of £1.16m. Net debt was £18.7m.
Cannabis-based medicines developer Celadon Pharmaceuticals (CEL) has received a further £200,000 drawdown from the committed credit facility and the lender is committed to providing the remaining £500,000. However, it has to sell an investment to provide the cash. There is still £400,000 outstanding from a share subscription. Celadon Pharmaceuticals has enough cash to get it to January. Talks with another lender continue.
MAIN MARKET
Construction equipment hire company Speedy Hire (SDY) made a small profit in the first half with a recovery expected in the second half. Interim revenues fell 2% to £204m with flat hire revenues and lower fuel sales. Volumes are not being chased so that profit can be maximised. Pre-tax profit was £300,000 because of operational gearing, higher interest charges and a lower joint venture contribution. The Amey contract starts in the second half. Net debt is £112m.
J Smart and Co (Contractors) (SMJ) improved its full year pre-tax profit from £105,000 to £2.37m despite a higher loss on construction activities. The investment property business made a larger contribution. Investment properties are worth £70m and there is £7.5m of net cash. NAV is £126.3m. The total dividend is 3.23p/share.
Media Concierge has approached publisher National World (NWOR) about a possible offer of 21p/share. Media Concierge claims to have the backing of 72.2% of the share capital. Media Concierge wants the offer to be recommended by the board and to be able to complete due diligence. National World claims that entities affiliated with Media Concierge owe it £4.4m.
Technology consolidator Sealand Capital Galaxy (SCGL) is making its maiden AI investment. After evaluating suitable opportunities, the company has decided on EVOO AI (www.evoo.ai), which is a data platform with AI learning models incorporated. It provides insights to the luxury goods sector, such as market trends and consumer behaviour. The main product is Olive, a luxury e-commerce marketplace that offers personalised shopping. The company was incorporated on 15 December 2023. On 14 March 2024, EVOO AI had net assets of £848,000, including fixed asset investments of £800,000 and £1 in cash. The plan is for Sealand Capital Galaxy to invest in a convertible loan note. The first tranche is £200,000 and the second trance will be £100,000. The annual interest rate is 12% and the term is 18 months. Interest is payable on maturity. There will be a fee of one million warrants exercisable at €0.06/share. If the company floats at a lower share price the exercise price will match that price.
Andrew Hore
Quoted Micro 27 May 2024
AQUIS STOCK EXCHANGE
Samarkand (SMK) says revenues will be slightly lower than expected – with a decrease of up to 4% – but the ecommerce services provider’s EBITDA will be halved in line with expectations. Owned brands generated 46% of revenues with the decline coming in third party brands. Samarkand has acquired Optimised Energies, which has brands Natures Greatest Secret and BeNatural, for £600,000 in cash and deferred consideration of £700,000. The acquired company made EBITDA of £300,000 last year. Executive directors have lent £400,000 to the company for fund the acquisition.
Aquis-quoted Phoenix Digital Assets (PNIX) is proposing a tender offer of up to £33.7m at a share price of 5.39p/share. That covers up to 57.9% of the current share capital. The tender price is equivalent to the current NAV since the recovery in Bitcoin and adjusted for potential tax. The tender offer is open until 13 June. The company has available cash of £40.6m. Phoenix Digital Assets also has 17.4 million shares in Flex Labs Inc (FLEX) after it acquired AI software company IO+ PTE, for 110 million shares in total. Supernova Digital Assets received 771,930 shares in Flex Labs.
Brewer Adnams (ADB) improved 2023 sales 3% to £66.3m, but the pre-tax loss increased from £2.3m to £4m. Net debt was £15.9m at the end of 2023 and there is still some headroom in the loan facility despite the review of how to finance the long-term future of the company. Off trade volumes were 14% higher. First quarter group sales were 11% ahead. Cost pressures are easing.
Flow battery technology developer Invinity Energy Systems (IES) raised £56m at 23p/share via a placing with £25m committed by the UK Infrastructure Bank and £3m from Korean Investment Partners. The open offer raised an additional £1.38m out of the £6.6m of shares that were on offer.
Arbuthnot Banking (ARBB) says trading is in line with expectations, although loan growth has been minimal. Specialist lending has been growing faster.
Metals One (MET1) has terminated the farm-in agreement with Gunsynd (GUN).
SuperSeed Capital (WWW) reduced the outflow from operating activities from £306,000 to £144,000. The NAV of the fund of funds company improved from 97.31p/share to 113.33p/share. That was helped by an unrealised gain of £297,000.
Paul Ryan has sold his 3.9% stake in Mortgage Chat (MCAI). Non-exec CP Freeman bought 500 shares in Hydro Hotel, Eastbourne (HYDP) at 948p each.
AIM
Telecoms testing equipment supplier Calnex Solutions (CLX) reported 2023-24 revenues two-fifths lower at £16.3m and it fell into loss. The final dividend was maintained at 0.62p/share. The telecoms market remains subdued, and Calnex Solutions is moving into new markets, such as defence. The distribution agreement with Spirent ends in July, but management is advanced with its plans to replace this source of income. Net cash declined to £11.9m because of higher inventory levels and capitalised R&D. A return to profit is expected this year and the cash level should be maintained.
Automotive interior components supplier CT Automotive (CTA) returned to profit in 2023, while net debt was reduced to $3.8m. Liberum expects underlying pre-tax profit to improve from $8.3m to $10.2m in 2024, even though revenues are forecast to decline. Improved efficiency is helping to boost margins. The Mexico factory is operating at 50% of capacity so there should be further improvement as this figure increases.
Bigblu Broadband (BBB) has sold its Nordic operations to management – including Bigblu Broadband chief executive Andrew Walwyn who is stepping down – at an enterprise value of £1.3m. There could be contingent consideration. Finance director Frank Waters becomes chief executive. The disposal leaves operations in Australia, which could be sold or floated on the ASX, and a stake in Quickline. Cavendish forecasts a 2023-24 pre-tax profit of £3m.
Coatings company Hardide (HDD) has appointed Matt Hamblin as the new chief executive, who has been a non-exec and previously ran a similar coatings business. The interim figures had been flagged. The pre-tax loss increased to £960,000. Lower depreciation means that the full year loss will not be as high as originally thought and it could be similar to the interim loss. Hardide has been EBITDA positive for the past two months. There is cash of £700,000 in the bank.
Another strong trading statement from Kinovo (KINO) with profit and cash ahead of expectations. The property services provider says 2023-24 revenues were £64.1m and net cash is £400,000The pre-tax profit estimate has been raised from £5.8m to £6.1m. Next year’s profit forecast has been raised from £6.3m to £6.6m. Most of the costs relating to the guarantee for DCB have been paid.
Energy and water efficiency services provider Eneraqua Technologies (ETP) reported 2023-24 results in line with the trading statement earlier in the year. The business moved from a pre-tax profit of £10.1m to a £6m loss because local government contracts were delayed. Cost savings have been put in place and additional work has been won so Eneraqua Technologies could move back into profit this year. A change of government could lead to additional incentives for energy saving projects.
Education software and services provider Tribal Group (TRB) has finally reached a settlement with Nanyang Technological University. This dispute has been hanging over the business for years. Tribal Group will pay £3.1m over 18 months. A further exceptional charge for the dispute will be taken in the first half of 2024.
MRI device developer Polarean Imaging (POLX) launched a heavily discounted placing, subscription and open offer. The placing and subscription raised £8m at 1p/share with £2m of that invested by NUKEM Isotopes and £1.6m by Bracco – both existing investors. Up to £2m could be raised from an open offer. The cash is being used to accelerate commercialisation of the XENOVIEW technology and further development.
Pennant International (PEN) has raised £1.51m at 25p/share. The training and software products supplier is trading in line with expectations, but order conversion has been slower than anticipated. The cash will fund the development and integrations of software products.
Watkin Jones (WJG) returned to profit in the first half to March 2024. The student accommodation and rental property developer generated an improvement in revenues from £153.9m to £175.1m. There is no dividend as cash is conserved. Borrowings have been reduced and net cash is £44m.
B90 Holdings (B90), which provides online marketing services to the gaming sector, says Oddsen.nu, an affiliate that is part of the group, has secured fixed listing fee marketing agreements that will generate income of €200,000 during 2024. There could be additional income on top of this based on marketing performance.
Scientific instruments manufacturer Judges Scientific (JDG) says that there is unlikely to be a material revenues contribution from coring contracts at the Geotek subsidiary. The potential contract is unlikely to commence until near to the end of 2024 and then make a significant contribution in 2025. Trading is subdued against tough comparators. WH Ireland still expects a full year pre-tax profit of £33.8m, although that assumes a stronger second half.
Secure payments company PCI-Pal (PCIP) has been successful in the Court of Appeal for the unfounded case brought by Sycurio against its patents. This means that £1.1m of cash should be released from escrow. The finding upheld the original court judgment. PCI-Pal will seeking further costs. The full ruling will become available in a few days.
Piling contractor Van Elle (VANL) expects 2023-24 revenues to be £140m, which is a like-for-like reduction of 12%. Last November, Rock & Alluvium was acquired, and its volumes are 30% higher than pre-acquisition. Housing and infrastructure sectors are expected to recover and a move into energy transmission will help the overall improvement for the business. The order book was worth £36.8m at the end of March 2024. Net cash is £5.5m.
Healthcare communications technology developer Feedback (FDBK) says delays in the NHS procurement process means that 2023-24 revenues will be lower than expected at £1.2m. Management hopes that the contracts will be secured in 2024-25. There was still £4.3m in the bank at the end of April 2024.
Chamberlin (CMH) has been placed in administration. Coal miner Bens Creek (BEN) has also gone into administration.
Victorian Plumbing (VIC) has acquired rival Victoria Plum for £22.5m. The business had been in administration and costs are already being reduced, so it should break even in the second half.
MAIN MARKET
James Gundy, chief executive of shipbroker Braemar (BMS), bought 6,600 shares at 290.5p/share following the full year results. Pre-tax profit fell from £18m to £14.6m on maintained revenues. The total dividend was raised from 12p/share to 13p/share. The new financial year started with an order book of $82.6m.
Power products supplier XP Power (XPP) received an indicative bid approach at £19.50/share. XP Power has rejected the proposal by Nasdaq-listed Advanced Energy Industries.
Admiral Acquisition (ADMR) has agreed to buy critical asset integrity and testing services provider Acuren for $1.85bn from American Securities. The business generates EBITDA of $190m.
Associated British Engineering (ASBE) had net assets of £391,000 at the end of March 2024, including cash of £419,000.
Andrew Hore
Quoted Micro 27 November 2023
AQUIS STOCK EXCHANGE
Guanajuato Silver (GSVR) produced 787,086 ounces of silver equivalent and the loss fell by one-fifth to $7m when compared with the second quarter. The all-in sustaining cost increased to $26.22/ounce due to changes in mining and temporary closures.
SuperSeed Capital (WWW) generated 78% IRR combined from two exits. There were £220,000 of realised gains in the nine months to September 2023. There is £430,000 of cash on the balance sheet. NAV is 112p/share.
Vinanz Ltd (BTC) has teamed up with Luxor Technology Corp to improve its bitcoin mining operating efficiency. Luxor’s firmware improves mining margins when profitability is low and can increase a machine’s hashrate when profitability is higher.
Wishbone Gold (WSBN) has secured an option to acquire 100% of the Crescent East lithium and gold project in the Mosquito Creek area of Western Australia. Shares were issued at 1.25p each to pay the £25,000 option fee.
Fuel additives developer SulNOx Group (SNOX) has successfully demonstrated the effectiveness of drop-in fuel conditioner SulNOxEco in the shipping sector. Monaco-based dry-bulk ship management company Marfin Management trialled the additive onboard a 60,000 MT DWT bulk carrier over a three-month period. This showed improvements in fuel consumption.
Cadence Minerals (KDNC) says investee company Hastings Technology Metals has agreed a $50m equity funding facility for the Yangibana rare earths project. Hastings Technology Metals can draw down up to $50m from Alpha Investment Partners to provide working capital for the development of the mine. Project financing talks are progressing and there have been offers from potential partners and debt providers. Cadence Minerals has a 1.4% stake in the investee company.
Steve Xerri, who owns 4.81%, has been appointed as an executive director of Oscillate (MUSH) and he intends to focus on special situations either through individual investments or via a reverse takeover.
One Health Group (OHG) has gained two new contracts with NHS Trusts. One is to supply orthopaedic services and the other is for orthopaedic and gynaecology services. They will help to reduce waiting lists.
Apollon Formularies (APOL) says Sproutly Canada has completed due diligence on the acquisition of the company’s global cannabis-related assets in return for 49% of the enlarged share capital of Sproutly Canada. The effective valuation is likely to be around £4.2m. Regulatory approvals are required.
Kasei Holdings (KASH) has a digital asset portfolio worth $2.07m at the end of October 2023.
EDX Medical (EDX) has entered into a collaboration with Thermo Fisher Scientific. They will jointly develop and commercialise cancer diagnostics.
Looking Glass Labs (NFTX) has raised $1m at $0.10/unit – one share and one warrant exercisable at $0.10/share. A further ten million units have been swapped for $1m of debt. Further sources of finance are being sought.
Quantum Exponential Group (QBIT) has appointed VSA Capital as corporate adviser, while Pharma C (PCIL) has appointed First Sentinel as its corporate adviser.
Res Privata NV has increased its stake in NFT Investments (NFT) from 3.33% to 4.09%.
AIM
Telecoms enterprise software provider Cerillion (LON:CER) grew strongly last year, while the rate of growth might slow this year it is still likely to make good progress given the recent €12.4m contract win. In the year to September 2023, revenues were one-fifth higher at £39.2m, while underlying pre-tax profit was two-fifths ahead at £16.8m, helped by a reduction in impairment charges from £1.77m to £256,000. The growth has come from software with a dip in services revenues. Net cash reached £24.7m at the end of September 2023. The dividend has been raised from 9.1p/share to 11.3p/share.
Light Science Technologies (LST) is acquiring the Injecta Fire Barrier trade and assets from Fire Barrier International. The Injectaclad product expands when heated and prevents the spread of fire and smoke. There is no initial payment with consideration in the form of a deferred profit share agreement. The deal should be earnings enhancing and generate cash. There are maintenance and installation synergies with the contract electronics subsidiary. The cash generated will help to finance the growth of the group.
Video games developer Team17 Group (TM17) says 2023 trading is slightly better than expected, although some titles are not performing as well as anticipated and that has hit margins. There has also been overspending and delays on some development projects. That means that underlying EBITDA will be around one-sixth lower than forecast at around £40m. Some titles are being reassessed and that is likely to lead to impairment charges of up to £11.5m.
Parity (PTY) announced the sale of its remaining business yesterday afternoon. It will become a cash shell. Parity will receive up to £3m depending on working capital adjustments for recruitment business Parity Professionals. The deal costs will be £240,000. There will be £639,000 including costs spent to settle the pension liability and finance the search for an alternative business. The company will change its name to Partway.
Velocys (VLS) is the worst performer on the day after the sustainable fuels company said that there is a potential bid at 0.25p/share from a consortium including Lightrock and Carbon Direct Capital Management. This would ensure long-term funding of the business. The low share price makes it difficult to finance the sustainable fuels operations. The share price dived 63.7% to 0.25p, which values Velocys at £4.5m. A large multiple of that value needs to be raised to fund development and production. Interim funding will be required.
musicMagpie (MMAG) is in bid talks with BT Group (BT.A) and asset manager Aurelius. The talks are at an early stage.
Cyber software and services provider Shearwater Group (SWG) appears set to return to profit this year. The core software businesses have been integrated, as have two of the three consultancy businesses. In the six months to September 2023, revenues dipped from £10.8m to £10.5m. That was due to much lower software revenues. Even so, gross profit improved and, stripping out amortisation and exceptionals, the underlying loss reduced £493,000 to £93,000. That is before restructuring costs. The cost savings will show through in the second half.
Telecoms testing instrumentation supplier Calnex Solutions (CLX) has been hit by a reduction in spending by telecoms companies. In the six months to September 2023, revenues slumped from £12.7m to £7.8m and the company moved from a pre-tax profit of £3.1m to a loss of £600,000. Trading did not pick up in September as is normally the case. Non-telecoms revenues make up one-quarter of total revenues. The cost base is being kept steady in expectation of a recovery, even though that may not be until the next financial year. There is £13.5m in the bank.
There were no revenues from systems in the first half at SRT Marine Systems (SRT), but that will change in the second half when transceivers revenues will be well below the systems contribution as work on contracts reaches points where revenues can be invoiced and recognised. Interim revenues fell from £18.8m to £5.5m, although transceivers revenues were higher. Last year’s loss could be turned into a £7.2m profit this year.
Battery technology developer Ilika (IKA) has achieved its D4 development point for the Goliath battery. This is the start of turning the development into a battery product. Ilika will be able to create P1 samples for testing by customers. At the end of the week, Ilika confirmed that its interims will be in line with expectations with revenues of £1.3m and there is £13.2m in cash left.
Neometals (NMT) has completed the A$9m from a placing at 10p/share and wants to raise a further £6.8m from a one-for-eight entitlement offer. The cash will fund the development of the nickel, cobalt, lithium recycling business Primobius, including the delivery of a facility to Mercedes Benz, and potentially to purchase a stake in Canadian licensee Stelco.
Empire Metals (EEE) has released initial results for the first diamond drillhole at the Pitfield project in Western Australia. This shows significant grades of titanium oxide. There will be results from two more diamond drilling holes in the coming weeks. A further 6,000 metres of drilling is planned with more likely early next year. Copper is still potentially in the area as well.
Interim figures from diagnostics company Cambridge Nutritional Sciences (CNSL) showed the benefits of concentrating on its core personalised health and nutrition business. Revenues rose 44% to £4.9m and the loss was reduced. Production problems have been sorted out. There was strong growth in North America as management puts more resources into the region. A small full year loss is expected.
Lifestyle concierge services provider Ten Lifestyle (TENG) has moved into profit for the first time. It swung from a loss of £2.7m to a pre-tax profit of £3.2m thanks to economies of scale. There was also a tax credit recognised due to past tax losses. Investment in its digital platform and the international spread of business is helping Ten Lifestyle. New contract wins will help to increase this year’s pre-tax profit to £3.9m, according to Singer.
Gold explorer Oriole Resources (ORR) has announced heads of terms with contractor BCM International for the development of the Bibemi and Mbe gold projects in Ghana. BCM can earn up to 50% of the Bibemi project by making a cash payment of $500,000 and commit to spend $4m on the project. BCM will pay $1m in cash and spend a further $4m to earn a 50% stake in Mbe project.
Mercia Asset Management (MERC) has exited one of its older investments, raising £30.2m – a 2.7 times return on invested capital. Virtual reality games developer nDreams has been acquired by Aonic for £90.3m. This was Merica Asset Management’s largest investment and £3.8m of the proceeds are being reinvested in Aonic. The consideration was 17.5% ahead of the March 2023 valuation.
Duke Royalty (DUKE) generated a 17% increase in recurring cash revenues to £12.2m with a 35% increase in all cash revenues to £14.1m. During the period, Duke Royalty made one of its biggest initial investments in glass architectural products supplier Glasshouse Products. The $11.5m investment is backing a member of the original founding family buying back the business.
Maritime AI provider Windward (WNWD) has signed a five-year contract with a European national coastguard that is valued at €3.2m. The cash is expected to be paid upfront, while annual contract value will be increased by $700,000/year.
MAIN MARKET
Structural steel supplier Severfield (SFR) reported lower interim revenues, but a higher profit. In the six months to September 2023, revenues were 8% lower at £215.3m, but underlying pre-tax profit improved 17% to £14.2m. This includes an unchanged contribution of £600,000 from the India joint venture, while the modular products business made a maiden profit. The interim dividend was raised 8% to 1.4p/share. The UK and Europe order book is worth £482m, even though the £50m contract for Hertfordshire-based film studio Sunset Studios has been delayed.
Standard list shell Tertre Rouge Assets (TRE) is attempting to raise up to £50m to buy rare cars and acquire cash generative businesses involved in supercar events. Around £30m is set to be invested in a range of cars that have already been identified. They are worth between £1m and £10m. The plan is to generate gains on these investments -15% annual returns are targeted – while hiring them out to photoshoots and other income generating activities to cover overheads. The Run To Group Ltd, which organises supercar adventures to the Monaco Grand Prix, will also be acquired and management will remain with the business. The group’s board of directors includes racing drivers and business men and they can expand this business and others. There will be cash left over to buy other companies.
Packaging manufacturer and distributor Macfarlane Group (MACF) says lower volumes and prices meant that revenues fell 2% in the nine months to September 2023. New customers are being attracted and this will help future volumes. Margins are increasing.
Seraphim Space Investment Trust (SSIT) improved its NAV to 96.5p/share at the end of September 2023. That was helped by positive currency movements and a small uplift in valuations, predominantly due to a fundraising by an investee company.
Andrew Hore
Andrew Hore – Quoted Micro 22 February 2021
AQUIS STOCK EXCHANGE
British Honey Company (BHC) is acquiring Union Distillers for an initial £8m in cash and shares. Leicestershire-based Union Distillers has been trading for more than eight years and has its own still and bonded warehouse. There is a range of gins, vodkas, a spiced rum, an absinthe and an espresso vodka liqueur under the Two Birds brand. There could be up to £2m of earn-out consideration payable in cash and shares depending on the target revenues from the Union products. A share issue raised £4.59m at 110p a share, while a convertible loan note issue added a further £1.63m. Union has £250,000 in cash. The deal should be earnings enhancing and cash generative. In the year to September 2020, Union generated revenues of £4.94m and pre-tax profit £1.13m. NAV was £1.52m.
National Milk Records (NMRP) reported flat interim revenues of £10.8m, but pre-tax profit increased by one-quarter to £500,000. Net debt was reduced to £1.1m despite investment in a genomics lab. An unchanged dividend of 1.25p a share will be paid. The outlook is positive for the dairy sector with UK milk prices expected to be maintained at current levels. Finance director Mark Frankcom has bought 9,974 shares at 101.75p each.
Imperial X (IMPP) is making four acquisitions and continues to move towards a standard listing. The purchases involve the issue of 245.6 million shares. Cloudbreak Discovery Corp, Howson Ventures Inc and Cabox Gold Corp are all being acquired, and certain assets of Anglo African Minerals are being bought. Imperial X has a £10m drawdown agreement with Crescita Capital. This lasts for three years.
Upper Thames Holdings (UPPT) is not going ahead with the proposed acquisition of Sweden-based mobile camera systems technology company Ridercam. Instead, the focus will be on blockchain and the linking of conventional currencies with cryptocurrencies. A placing has raised £516,000 at 1p a share. Peterhouse has been appointed as corporate adviser.
Hydro Hotel Eastbourne (HYDP) fell into loss last year as revenues slumped by two-fifths. The hotel has been closed or under restrictions for the period since the year end in October 2020. There is £1.03m in the bank and the NAV is £3.3m.
S-Ventures (SVEN) has bought a 75.1% stake in Ohso Chocolate for £295,000 in shares at 9p each. The remaining 24.9% stake in Ohso could be sold for nearly 1.1 million shares. Ohso is a probiotic chocolate supplier and it generated revenues of £311,000 during 2020. The S-Ventures chief executive and finance director owned 50.6% in Ohso.
World High Life (LIFE) is changing its name to Love Hemp. A general meeting will be held on 11 March. In the first half, revenues were £2.36m and second quarter revenues were nearly double those in the first quarter, although the gross margin fell. A debt of £2.15m has been settled by the issue of 86.1 million shares.
Sativa Wellness Inc (SWEL) has submitted a novel food application for validation by the Food Standards Agency. This covers a range of CBD products.
Wishbone Gold (WSBN) has identified new gold targets at the Red Setter project in Western Australia. The magnetic survey has discovered targets that are shallower than previously.
Ananda Investments (ANA) has raised £300,000 from two investors. This will finance the first phase of the medicinal cannabis growing facility in Lincolnshire. Vulcan Industries (VULC) has raised a further £330,000 at 4p a share.
AIM
Avacta (AVCT) is starting its first clinical study. This is a phase I study for AVA6000, developed from the pre|CISION platform. This is a treatment for solid tumours, including those for bladder, pancreatic, colorectal and breast cancer. The trial will assess safety and dosage levels. Early data could be published before the end of the year.
Transense Technologies (TRT) should move into profit next year as it receives a full year of royalties following the sale of the iTrack business to Bridgestone. In the year to June 2020, there was a £1.3m loss and this year there could be a much-reduced loss this year. Once Bridgestone has built up iTrack sales the royalties will cover group overheads. This will enable Transense to invest in its surface acoustic wave technology and Translogik tyre probes. A 2021-22 pre-tax profit of £357,000 is forecast.
Strong underlying growth in the mobile division helped Blannco Technology (BLTG) to maintain interim revenues at £17.4m. The previous year included £1.4m of one-off contract income. The fastest growth is in Asia Pacific. The prospects for data erasure operations are good and new partners have been signed up. Data erasure is particularly important while remote working is a major factor in companies.
Chamberlin (CMH) is getting a cash injection from Trevor Brown. The £200,000 loan will, subject to shareholder approval, be converted into shares at 6p each and Brown will have a 29.5% stake. The Scunthorpe foundry is busy and profitable, but management is still trying to win work for the Walsall foundry.
Duke Royalty (DUKE) has secured a new client involved in steel fabrication. There is a £6.2m royalty financing agreement with Meteor HoldCo, which makes steel street lighting and guardrail products.
Telecoms testing systems supplier Calnex Solutions (CLX) says some revenues appear to have been brought forward into 2020-21 and therefore the full year revenues and profit will be ahead of expectations.
Trans-Siberian Gold (TSG) has published details of the Rodnikova project scoping study, which suggests a potential 14-year life for the project. The JORC resource is 6.3Mt at an average grade of 5g/t gold. Post tax NPV10 is $177.6m – based on $1,600/ounce gold price.
MAIN MARKET
Israel-based cannabis-based products supplier Kanabo Research has completed its reversal into standard list shell Spinnaker Opportunities to form Kanabo Group (KNB) two years after the deal was announced. The value of the deal was £15m in shares and the company also raised £6m at a share price of 6.5p. Kanabo was valued at £23.4m when it was admitted to trading. The share price has risen to 31p – having at one point reached 50.75p – and that values Kanabo at £111.7m. One of the investors in Kanabo is AIM-quoted Vela Technologies (VELA) and it invested £150,000 at 6.5p a share.
MGC Pharmaceuticals (MXC) has expanded its research programme into the use of cannabinoids to treat aggressive glioblastoma brain cancer. The expanded study includes the use of a nanoparticle delivery system. MGC has also secured a three-year distribution agreement with Swiss PharmaCan for its product ArtemiC Rescue as a food supplement. The minimum order quantity is 40,000 units per quarter, which has a retail value of $3.4m.
Path Investments (PATH) is not going ahead with the purchase of DT Ultravert from two vendors including Zoetic International (ZOE) following concerns during the preparation of the potential prospectus. Path has raised £3.5m at 0.25p a share.
Rare earths explorer Pensana (PRE) is dropping its listing on the ASX.
Papillon Holdings (PPHP) has submitted a prospectus to the FCA for the proposed reverse takeover of the Kilimapesa gold project.
Andrew Hore
Andrew Hore – Quoted Micro 30 November 2020
AQUIS STOCK EXCHANGE
Healthcare IT supplier DXS International (DXSP) had £1.2m in cash at the end of October 2020. Net cash was £584,000, following the capitalisation of £568,000 of development spending. Interim revenues improved by 3% to £1.72m but progress was held back by Covid-19. Pre-tax profit jumped from £90,000 to £151,000 due to lower admin costs.
Imperial X (IMPP) is continuing its due diligence on previously announced acquisitions of mining and royalty interests and the plan is to apply for a standard listing when the acquisitions are completed.
TechFinancials Inc (TECH) has invested $148,000 in RenewSenses, which has developed a wearable device for the visually impaired. The cash will help to complete the development of the A.I. Cane product, which is a camera attached to a handheld device and this enables obstacles to be identified.
S-Ventures (SVEN) has invested a further £75,000 in a convertible loan note issued by vitamin-fortified juices and smoothies Coldpress Foods. The annual interest rate is 15%. S-Ventures has a 3.3% stake in Coldpress.
Primorus Investments (PRIM) has terminated options over 17.8 million shares held by three individuals and has paid a total of £140,000 in compensation. These options could have been exercised at 6p a share or 8p a share and were equivalent to 11.3% of the potentially enlarged share capital. Primorus has decided to drop the Aquis quotation on 24 December and keep the AIM quote. This and a reduction in director pay will reduce costs by more than £200,000 a year.
Formation Group (FRM) is withdrawing from the Aquis Stock Exchange on 31 December.
Good Energy (GOOD) has appointed Canaccord Genuity as joint broker.
Vulcan Industries (VULC) has raised a further £335,000 at 5p a share and 5.5p a share.
Aquis Stock Exchange has launched a market maker incentive scheme. The market makers will offer two-way prices for 505 of stocks on the Apex segment with a maximum spread of 5%. There should be 25 companies on the Apex segment. Market makers will receive warrants for shares in the Aquis Stock Exchange with the best performers gaining the largest percentage. They could earn up to 19.9% of the market over a three year period. Early adopters include Canaccord Genuity, Liberum, Peel Hunt, Shore Capital, Stifel and Winterflood.
Liberum Capital and Zeus Capital have been approved as corporate advisers for the Aquis Stock Exchange.
AIM
Kistos (KIST) began trading on AIM on 25 November. The investment company raised £30.2m after expenses and the market capitalisation was £40.3m. The plan is to seek acquisitions in the oil and gas sector. The team behind Kist is the same as for RockRose Energy. The share price has risen from 100p to 118.2p.
Cyber security software and services provider Shearwater (SWG) reported a slump in revenues, but the decline was in lower margin products. There were also overhead reductions. That meant that there was a profit before amortisation of acquired intangibles. Orders were delayed but there was still a £1.7m cash inflow from operations. Net cash was £3m at the end of September 2020. Two-fifths of revenues are recurring, and the long-term outlook is good.
Circle Property (CRC) reported a 2p a share decline in NAV to 283p a share at the end of September 2020. Loan to value is 42% and there is £37.7m of a loan facility still undrawn. New lettings have been secured since March and rent collections have been strong. The interim dividend is 2.5p a share.
Telecoms testing instrumentation supplier Calnex Solutions (CLX) has made an impressive start to its time on AIM with interim figures that show near-doubled underlying pre-tax profit of £2.3m. This has led to an upgrade of the full year profit expectations to £2.9m. The cash being generated is enabling additional development spending.
IG Design (IGR) benefitted from a full contribution from the CSS acquisition, which has also reduced the seasonality of the group. Even so, continuing operations sales held up well. There is still scope for additional demand for Christmas wrapping and gift products, but time is running out for any significant improvement. Full year pre-tax profit is expected to be flat at $35m, although shares issued to fund the CSS acquisition mean that there would be a one-fifth decline in earnings per share to 25.5 cents. There should be a significant improvement next year.
First Property (FPO) has significantly reduced its debt following the sale of a property in Poland. This puts it in a good position to take advantage of any opportunities over the next year or so. Short-term income has declined and there were no performance fees. NAV is 54.3p a share. The interim dividend is maintained at 0.45p a share.
Appreciate (APP) has reinstated its dividend and it proposes an interim of 0.4p a share. Interim revenues were 18% lower at £27.4m. There is always a first half loss and it increased from £1.2m to £4.6m, although that does not include the restructuring costs. The Christmas savings business held up and the corporate incentives operations were boosted by additional business due to free school meals vouchers. More business is being done digitally and there continues to be a monthly improvement in trading.
D4T4 (D4T4) is continuing its development into a business focused on recurring revenues. The data collection and analysis software provider lost money in the first half, but management remains confident that D4T4 will achieve the full year pre-tax profit forecast of £3.2m, down from £5m. Net cash is expected to be £14m. The interim dividend was raised by 5% to 0.81p a share.
LoopUp (LOOP) has not achieved the annual run rate than it expected, and it will fall short of 2020 expectations. The remote meetings technology provider has been generating less revenue from international calls, which has hit overall revenues. Trimming the 2020 revenues forecast from £54.8m to £50.1m leads to a one-fifth reduction in pre-tax profit to £8.4m. The lower run rate means that 2021 forecast revenues have been slashed from £56m to £35.2m, which leads to a small loss for the year.
Outsourcing Inc has sent out the document for the takeover of CPL Resources (CPS). It is offering Euro11.25 a share, which values the Ireland-based recruitment company at Euro317.8m.
Digital advertising technology developer Miriad Advertising (MIRI) has raised £23m via a placing at 40p a share. A further £3m could be raised via an open offer. In July 2019, £16m was raised at 15p a share. The first half cash outflow was more than £4.6m. The cash will be spent on growing US revenues and further technology development.
Ilika (IKA) has decided to manufacture its Stearex batteries itself rather than outsourcing the process. This is the quickest route to production and operating margins will improve. Full scale manufacturing will start by early 2022.
ReNeuron (RENE) is raising up to £17.5m at a heavily discounted share price of 70p. This cash will enable the company to complete the current clinical trial for the retinitis pigmentosa treatment and design a phase III trial.
The share price rise of Wynnstay Group (WYN) has led to DBAY Advisors reducing its stake from 6.12% to 5.33%.
Urban Exposure (UEX) plans a tender offer of up to £65m at 75p a share. There is cash in the bank of £81m.
Second half trading was always going to be weak for Tracsis (TRCS) because of its exposure to events in the traffic and data division. Recurring revenues from the rail technology division have helped limit the pre-tax profit decline from £9.5m to £8.3m. This year is also likely to be tough, although it will depend on trading next summer. The main recovery is likely in 2021-22.
Serinus Energy (SENX) has raised $21m and this will pay off the debt of $16.5m. The lender will also receive a 9.9% stake. The rest of the cash will be invested in increasing oil and gas production.
Digital financial services and products provider Tungsten (TUNG) says profit will be lower than expected this year. Transaction volumes have declined, and revenues will be flat. Winning new business has become more difficult. Annualised savings of £4m are being made.
Michelmersh Brick (MBH) says that 2020 revenues and profit will exceed expectations. Government support of £500,000 will be repaid. There will still be net cash at the end of 2020. A final dividend of 2.25p a share will be paid.
Benchmark (BMK) has completed its restructuring and is on course to benefit from the investment it has made in products and capacity. The BMK08+CleanTreat treatment should be launched by next summer and this could help the aquaculture company to move into profit. In 2019-20, revenues fell from £124m to £105.6m, but lower costs meant that the loss was reduced. Genetics was the best performing division due to initial sales of salmon eggs from Salten. Net debt was £37.6m at the end of September 2020.
MAIN MARKET
Jlen Environmental (JLEN) is paying a second quarterly dividend of 1.69p a share, the same as the first quarter. There has been a small reduction in NAV from 97.5p a share to 96.1p a share because long-term expectations for electricity and gas prices have fallen. The portfolio is 34% wind power, 27% anaerobic digestion, 22% solar power, 15% waste and wastewater and 2% hydro and battery. A decline in waste volumes hampered the Bio Collectors business and other feedstocks are being sourced. There is £127.6m available to finance further acquisitions.
CML Microsystems (CML) had a mixed interim period with total revenues holding up at £12.9m. Storage technology revenues were one-quarter higher, but communications revenues fell by one-fifth and are no longer the largest contributor. However, the development activities have been broadened through acquisitions and there is a bigger addressable market. Pre-tax profit fell from £907,000 to £771,000 and the interim dividend is unchanged at 2p a share. The second half should be better than the first half and a rebalancing of resources should make the business more efficient.
Ingredients supplier Treatt (TET) improved pre-tax profit from £14m to £15.8m, although there was a small dip in revenues to £109m. The total dividend is 6.2p a share. Demand is likely to remain weaker than normal. The move to the new UK premises should happen in the middle of 2021.
J Smart Contractors (SMJ) reported halved underlying full year pre-tax profit of £1.28m. There was a surplus on investment property revaluations of £3.18m. There is net cash of £12m. A final dividend of 2.27p a share has been declared and the total for the year has edged up from 3.19p a share to 3.22p a share. The completion of building contracts has been delayed due to Covid-19 restrictions. Contracting work remains below the level of the previous year and private housing sales will be limited in the year to July 2021. NAV is £99.3m, which is double the market capitalisation.
Triad (LSE: TRD) revenues declined from £9m to £8.7m, but the IT consultancy did move from loss to profit due to lower costs. Utilisation rates for IT consultants is relatively high and cash covers around three-fifths of the market capitalisation.
Gulf Marine Services (GMS) has suspended chief executive Tim Summers, who was no longer a member of the board, due to an investigation into a severance payment of £429,000 on 10 November. Hassan Heikal was appointed a director at the general meeting on 25 November.
Cardiff Property (CDFF) increased its NAV from 2285p a share to 2436p a share at the end of September 2020, against a share price of 1725p. This reflects an uplift in the valuation of JV Campmoss due to an increase in value of Clivemount House in Maidenhead which has been sold since the year end. The dividend increased by 3% to 17.6p a share. There is cash of £5.5m and no debt.
Affordable housing services provider Aquila Services Group (AQSG) reported a decline in revenues from £3.89m to £3.51m, although there was a small improvement in operating profit prior to restructuring costs of £175,000. The dividend has been halved to 0.15p a share. Cash has increased to £1.4m.
OTAQ (OTAQ) increased interim revenues by 16% to £2.03m and it is on course for full year revenues of £4m. The growth has come from the aquaculture operations. Furlough claims reduced the loss.