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Andrew Hore Quoted Micro 15 April 2019
NEX EXCHANGE
High Growth Capital (HASH) is increasing its stake in Sentiance to 15% and is negotiating an option to acquire a majority stake in the artificial intelligence and machine learning business. The additional 5% stake will cost £7m in shares issued at 0.8p each. The option would enable an increase in the total stake to between 51% and 84.8%. The company would offer 100,000 of its own shares for each Sentiance share and the option is subject to High Growth Capital raising at least £25m. High Growth Capital has also acquired the intellectual property of Malta-based BDD, a company founded by Chris Akers, for £4m in shares at 1p each. The project involves an annual blockchain raffle that would raise money for social impact and environmental initiatives.
EPE Special Opportunities (ESO) had a net asset value of 205.2p a share at the end of January 2019, which was 12.5% lower than the year before. The stake in fully listed LED lighting products manufacturer Luceco (LUCE) is a significant part of the portfolio and its valuation fell by 27.7%. There has been a recovery in the Luceco share price since the end of January, even though there was a decline of three-quarters in 2018 pre-tax profit to £3m. The EPE NAV had risen to 232.8p a share on 9 April on the back of Luceco share price rise. The EPE share price is 180p.
Angelfish Investments (ANGP) is subscribing £150,000 for a 9.14% stake in Just Bee Drinks and is also providing a loan facility of up to £100,000 at a annual interest charge of 10%. Just Bee has developed a natural juicy water drink sweetened with honey. This means that there is no added sugar. More than one million bottles were sold last year, and revenues doubled. The drink is already sold in Waitrose and Boots. Just Bee had net assets of £83,000 at the end of March 2018. Angelfish has also provided a £100,000 debt facility at the same interest rate to Wallet Ads. The previous loan of £150,000 was converted into a 20% stake.
NQ Minerals (NQMI) nearly doubled zinc concentrate production at the Hellyer mine in Tasmania to 3,015 DMT in the first quarter of 2019, while lead concentrate production increased by 18% to 4,712 DMT. Pyrite concentrate production jumped by 331% to 18,488 DMT.
AIM
Video games developer and services provider Sumo (SUMO) reported better than expected 2018 revenues of £38.7m and pre-tax profit of £9m. Sumo has been acquiring businesses to give it extra capacity as well as opening new studios. There is plenty of demand for Sumo’s services so utilisation rates are high and there is further upside from performance-based royalties and its own IP.
Destiny Pharma (DEST) had £12.1m in the bank at the end of 2018 and this will last into 2020. That should be long enough for the phase IIb study of XF-73 for the prevention of post-surgery infections.
Maiden full year results from legal services and credit hire business Anexo (ANX) have led to an upgrade by its broker Arden. The 2019 pre-tax profit forecast has been edged up from £17.8m to £18.1m, up from £16.1m in 2018, and the 2020 figure is 4% higher at £20.1m. Net debt is expected to increase from £17.3m to £26.3m in order to finance the growth of its legal business.
RA International (RAI) continues to win contracts, but larger contracts are taking longer to secure. RA provides services to remote locations in nine countries in Africa and the Middle East. Having joined AIM last summer, RA has $27.8m in the bank and this is helping it to tender for and win larger contracts. The average contract term is 4.4 years. This makes revenues relatively predictable and they are expected to rise by 10% this year to more than £60m.
Property investor Safeland (SAF) intends to leave AIM and secure a matched bargain facility on Asset Match. It is tendering for shares at 42.5p each, which compares with an NAV of 140.2p a share at the end of September 2018.
Having sold the RTLS SmartSpace business, the continuing revenues of geospatial software and services provider IQGeo (IQG) fell from £16.5m to £9.98m, although recurring revenues were 22% higher, and gross margin improved. There were lower software revenues, but the main decline was in the sale of third party products. There is a significant market for the company’s products and new modules are being launched. However, the full benefits of changes being made by management will probably not show through until next year. There is £30.9m in the bank and some of this will be returned to shareholders after a capital reorganisation is completed.
Interim revenues generated by LightwaveRF (LWRF) have more than doubled to £2.5m which is nearly as much as the £2.8m generated in the previous 12 months. Direct sales, e-commerce and telesales have contributed to the growth, as has the development of retail clients.
Legal firm Gordon Dadds (GOR) has acquired Gibraltar-based Rampart Corporate Advisers for up to £1.34m depending on performance. Rampart specialises in e-gaming, fintech and distributed ledger technology, and made a profit of £400,000 in the year to June 2018. Five former Ince network firms are joining Ince Gordon Dadds, although they remain independent. This would add £23m to existing group annual revenues of £77m. The firms are based in Hong Kong, Singapore, Dubai, Greece and Germany. This will boost profitability.
Strategic Minerals (SML) says the Cobre magnetite operations generated cash of $206,000 in the first quarter and the group cash balance was $1.24m at the end of March 2019. Volumes were lower because customers were undertaking plant maintenance and the continued suspension of a major client’s contract. There should be seven years of magnetite stockpile. The company expects to acquire the other 50% of the Redmoor tin/tungsten project by the end of May. This will cost £2.66m.
PhotonStar LED (PSL) says that it has enough cash for its immediate needs, but the blocking of the issuing of more shares by shareholders means that there is not enough cash to follow the strategy to find a reverse takeover target. The company may launch an open offer or ask shareholders for a second time for the authority to issue shares without offering them to existing shareholders a second time. Having become a cash shell, the company has been dropped from the FTSE AIM All Share index. It has six months to find an acquisition. A number of potential acquisition targets have been met by the board. Additional directors will be appointed.
Rose Petroleum (ROSE) has raised £275,000 at 1.1p a share in order to finance the appraisal of projects. The shares are being acquired by new executive chairman Robert Bensh, who has experience of the US oil and gas sector. Chief executive Matthew Idiens has more than doubled his stake to 2.52% by acquiring two million shares at 1.75p each. The finance director Chris Eadie has also more than doubled his stake to 1.2% at 1.67p a share. New non-executive director Tom Reynolds also bought shares.
Concepta (CPT) is raising £2.3m at 3p a share to finance marketing and further development of its myLotus fertility test.
MAIN MARKET
Cadmium-free quantum dots developer Nanoco (NANO) had £6.2m in cash at the end of January 2019. There was a total cash outflow of £4.57m in the latest six month period. The main capital investment at the Runcorn site is almost complete. Non-executive director Chris Batterham has bought 125,000 shares at 47.354p each. Miton has reduced its stake to 4.96%.
Bonmarche (BON) says the mandatory cash bid of 11.445p a share by Spectre undervalues the retailer. Bonmarche is reducing costs. Cavendish Asset Management has edged its stake up to 10%.
Standard list shell Contango Holdings (CGO) has entered into an agreement to acquire the Lubu coalfield project in Zimbabwe for £6.45m in shares at 5p each. Once regulatory approvals have been gained the acquisition should go ahead and trading in the shares can recommence. That should happen by the end of June. There will be a placing to raise cash to fund initial trial mining.
Telecom services provider Toople (TOOP) says that it had more than £1.1m in the bank at the end of March 2019. That is a £1m reduction on the level at the end of September 2018, when there was also a shareholder loan, which was assigned a value of £572,000 in the balance sheet but has a cash value of £607,000. There is no indication if this loan has gone down. Last year, admin expenses were £1.55m, net of other income, and that was more than revenues. Revenues have grown but even if gross margin were to improve there will still be a significant first half loss.
Nuformix (NFX) has signed an agreement for cannabinoid therapeutics development, licensing and commercialisation for an initial upfront payment and other research and development and milestone payments that could total up to £51m. Canada-based Ebers Tech Inc will use Nuformix technology to develop a range of consumer and pharma products.
Zegona Communications (ZEG) has increased its stake in Euskaltel to 21%.
European High Growth Opportunities Securitization Fund has transferred 35.4 million shares in WideCells (WDC) to David Sefton and Linton Capital, which has promised to hold them for 12 months. European High Growth Opportunities still owns 18.2% of WideCells.
Andrew Hore
Andrew Hore – Quoted Micro 18 March 2019
NEX EXCHANGE
Peel Hunt forecasts a dip in Shepherd Neame (SHEP) pre-tax profit from £11.8m to £11.2m in the year to June 2019. The broker still expects the total dividend to be increased from 29.2p a share to 30p a share.
Etaireia Investments (ETIP) has suspended Ian Fellman as a non-executive director pending investigation into certain matters. The mortgagee of two units at Whitehouse Business park in Peterlee has enforced security and sold the properties and these have been written off the Etaireia balance sheet. David Barnett, who owns 37.8% of the company, has requisitioned a general meeting in order to have himself appointed to the board.
European Lithium (EUR) expects to commence drilling in the second quarter in order to convert the resource in zone one of the Wolfsburg lithium project into measured and indicated categories. The company is part of a syndicate applying for grant funding for building up battery production in Germany. Lithium hydroxide is expected to continue to rise in price until 2022 and then fall back. European Lithium is in talks with lithium battery plant operators in Europe about an offtake agreement. The company had £3.3m of cash and financial assets at the end of 2018, as well as a convertible note of £2.56m, with more available to draw down. There was a cash outflow of £2.6m in the six month period. European Lithium is also ASX-listed and is considering a listing in Vienna.
Sandal (SAND) has decided to leave the NEX Exchange growth market after four years. Management says that share trading is limited, and the company has not been able to raise the cash it wanted to. They believe it would be easier to raise funds as an unquoted company. The company already has the backing of enough shareholders to make a general meeting pointless. The last day of trading is 10 April.
Primorus Investments (PRIM) has already made a significant gain on its stake in Greatland Gold (GGP) after the miner announced a $65m farm-in agreement with Newcrest for the Havieron gold copper project in Western Australia. Newcrest, which will ear up to 70% of the project, also has first right of refusal over the rest of the Paterson project area. The Greatland stake cost 1.71p a share. Even after some profit-taking, the Greatland share price is 2p, which represents a gain of more than £100,000 on the Primorus investment. Primorus has invested £875,000 in WeShop Ltd and has a 3.5% stake worth more than £1m. WeShop has developed new branding for its platform, added to its product range and enhanced the management team. The number of WeShop retailers has trebled to more than 9,000. The technology provides access to more than 20,000 merchants around the world. Vela Technologies (VELA) has a 1.42% stake in WeShop, which cost £100,000 and is valued at £427,000. Two Shields Investments (TSI) invested at a later date and has a 1.2% stake valued at £350,000.
Barkby Group (BARK) made a small interim loss on revenues of £1.82m. The three gastropubs operated by the company were profitable before central overheads and exceptionals. There was £37,000 in the bank at the end of 2018 and a VAT refund is expected. This period is before the acquisition of Centurian Automotive, which was acquired for shares.
Gunsynd (GUN) has sold its stake in UK Oil and Gas (UKOG) at 1.405p a share. The 31.17 million shares raised £438,000. Gunsynd had net assets of £2.18m at the end of January 2019, including £543,000 in cash. The flotation of FastBase Inc has been delayed and Gunsynd is no longer advising the company. Human Brands International Inc, where Gunsynd has a £300,000 convertibles investment, is on course for a standard listing.
Coinsilium Group Ltd (COIN) has incorporated a subsidiary in Gibraltar and it is applying for a business licence.
Ganapati (GANP) says that its subsidiary GanaEight Coin Ltd, which is developing and operating a blockchain-based online casino platform, has launched a virtual token private pre-sale of its initial virtual financial asset offering.
Gavin Burnell has bought 5.83 million shares in Hot Rocks Investments (HRIP) and that takes his stake to 22.3%. His fellow director Charles Vaughan bought 750,000 shares, taking his shareholding to 1.67%. Non-executive chairman Brian Rowbotham bought the same number of shares, taking his stake to 3.09%. The shares were all acquired at 0.136p each.
Tectonic Gold (TTAU) has commenced gold mining under the joint venture agreement with VAST Mineral Sands in Australia, where it has a 50% economic interest. Tectonic has provided the initial funding. Tectonic is considering moving to the standard list.
First Sentinel (FSEN) has taken a 3.48% stake in standard listed coal bed methane company Curzon Energy (CZN). Brian Kinane has resigned as a director of Curzon.
AIM
Driver Group (DRV) disappointed the market with a warning because of delayed expert witness contracts in the first half. The construction consultancy services provider has not made the expected progress in the Middle East and south east Asia and full year underlying pre-tax profit will be slightly lower than the £3.5m originally forecast. There is a strong pipeline of potential business, but this has to be secured in order to reassure investors about the full year outcome. There is still £5.1m in the bank. Driver will spend up to £500,000 buying back shares and it has already spent £124,000 at 55p a share. The directors have also been buying shares.
Bowmark Capital has increased its bid for Tax Systems (TAX) from 110p a share to 115p a share, valuing the company at £102.3m. The subsequent general meeting voted in favour of the scheme of arrangement.
Cyber security services provider ECSC (ECSC) increased its revenues from £4.12m to £5.38m, while the loss was cut by two-thirds to £1m. The loss should be much lower in 2019 and cash should be generated so that net cash exceeds £1m. Demand for cyber security continues to grow and the consulting division is getting business from existing and new clients. This is also feeding through to additional managed services business.
Marshall Motor (MMH) managed to edge up its underlying pre-tax profit to £25.7m even though trading conditions remain tough for car dealers. There was a strong last quarter for the used cars division. A small dip in profit to £24.1m is expected for 2019.
Franchise Brands (FRAN) had a full 12-month contribution from the Metro Rod business acquired in 2017, although the full benefits of the restructuring of the business and IT investment are still to come through. These changes should help to generate organic growth this year. Allenby forecasts a rise in pre-tax profit from £2.9m to £3.5m in 2019. The group is in a position to seek more acquisitions, particularly ones that add to the services provided by Metro Rod.
Microsaic Systems (MSYS) grew its full year revenues by 69% to £578,000 and gross margin improved. The protein identification product ProteinID will be launched later this month. There was still £5.4m in the bank at the end of 2018. This is enough to cover the expected cash requirements.
Standard list shell Safe Harbour Holdings (SHH) has appointed James Brotherton as finance director. He was previously finance director at Tyman, where he was involved in acquisitions, and he earned £568,000 in 2017. Fully listed Tyman, which was previously on AIM, made an underlying pre-tax profit of £72.7m in 2018. The acquisition Safe Harbour is seeking will be in distribution and business services. WSP founder Chris Cole was recently appointed as independent non-executive director. There was £28.1m in the bank at the end of June 2018.
Immupharma (IMM) is seeking partners for its lupus treatment Lupuzor and is also seeking to commence a managed access programme in Europe for the treatment. An extension study from the original phase III trial has commenced.
RedT Energy (RED) is raising up to £3.2m via a placing and open offer at 2p a share, ahead of a strategic review to decide how to finance the business. Last October, the energy storage equipment developer raised £5.03m at 7p a share. The company could generate $1m from the sale of its US business and costs are being cut. The plan is to cut the monthly cash costs to less than £500,000. Discussions continue with strategic partners.
SimplyBiz Group (SBIZ) has signed a five-year contract with insurer Aviva, which will use the company’s Zest employee benefits technology platform to deliver a new benefits product for smaller clients. This follows a three-year contract with Taylor Wimpey, which will use Zest to deliver employee benefits to its 5,000 plus employees.
Concepta (CPT) is supplying its myLotus fertility test to Walgreens Boots Alliance.
Proton Power Systems (PPS) has signed a letter of intent with Skoda for the development of fuel cell electric buses using Proton’s HyRange systems. The plan is to build 10 buses by the first quarter of 2020.
i3 Energy (I3E) has raised £16m via a placing at 16p a share, although it is partly dependent on shareholder approval for the issue of additional shares. Existing shareholders are being given the opportunity to subscribe up to £2m through an open offer. Along with a £24m loan, the cash will fund the drilling of three wells. Two will be on the Liberator oil field and the other will be on the Serenity prospect.
Paragon Entertainment Ltd (PEL) has raised £150,000 at 0.8p a share, which was a 23% discount to the market price. Management and an existing shareholder bought the shares.
Urals Energy (UEN) failed to replace Allenby as nominated adviser and the quotation has been cancelled.
Mereo BioPharma (MPH) expects its merger with OncoMed Pharmaceuticals Inc to close in the second quarter of 2019.
Touchstone Exploration Inc (TXP) achieved crude oil sales of 1,994 barrels per day in January and 2,179 barrels per day in February. The realised prices were $52/barrel and $56.84/barrel for each month respectively. Current estimated production is 2,358 barrels per day.
MAIN MARKET
Quarto Group (QRT) reported a 51% recovery in underlying 2018 pre-tax profit to $5.9m, although the publisher’s revenues were slightly lower. The best performance was in children’s publishing. Net debt fell by 6% to $60.4m.
Local Shopping REIT (LSR) has responded to the bid by Thalassa (THAL) and it continues to find it opportunistic. The company is committed to returning cash to shareholders and it argues that they will get more cash than the £9m on offer as part of the cash and shares bid. The offer is 14.64p in cash and 0.26 of a Thalassa share for each Local Shopping REIT share.
Path Investments (PATH) has withdrawn from the proposed transaction with ARC Marlborough after due diligence. The plan was to acquire ARC, which has a nickel and cobalt project in Queensland.
European High Growth Opportunities Securitization Fund has converted more of its bonds into shares in WideCells Group (WDC) having sold most of the recently converted shares. A further 115 million shares have been issued in return for £115,000 of bonds and a penalty payment of £172,500.
Bluebird Merchant Ventures (BMV) has submitted an application for a permit to develop the Kochang Mine in South Korea. The application for the Gubong mine should get a response by 23 March.
Andrew Hore
Andrew Hore – Quoted Micro 5 November 2018
NEX EXCHANGE
Brewer Shepherd Neame (SHEP) has secured long-term facilities of £50m, which expires in 2023, and a £35m private placement of loan notes with BAE Systems Pensions Fund which lasts for 20 years. These replace existing loans. A revaluation of pub assets has delivered a £24m gain on book value.
Mechanical and electrical services provider Field Systems Designs Holdings (FSD) has benefitted from strong spending in the water sector as Asset Management Plan 6 reaches its mid-point, as well as demand from the energy from waste sector. However, the energy from waste customer’s tough stance has held back group gross margin. In the year to May 2018, revenues improved from £17.2m to £25.9m, but pre-tax profit fell from £839,000 to £625,000. If the defined benefit scheme settlement gain is stripped out, then there is an improvement in profit from £463,000 to £558,000. There is £3.97m in the bank. The current order book is worth £12m.
Coinsilium Group Ltd (COIN) is pushing ahead with Flowstone Capital Ltd, which is a private crypto fund and it has set up Flowstone Management Ltd to manage the fund. Coinsilium has also secured a strategic advisory partnership with LC LITE, which is planning a token generation event to finance the development of a digital letter of credit system for importers and exporters.
Startup Giants (SUG) still had £665,000 in the ban at the end of July 2018. Thee are plans to raise more cash via the event management services provider Exponential Events’ platform.
TechFinancials Inc (TECH) is in talks with blockchain-based sports ticketing platform Footies Tech to establish a new subsidiary to develop a blockchain-based venue management system. The idea is that TechFinancials will own 75% of the company and it would provide finance of up to $500,000 to develop a proof of concept. TechFinancials will licence its technology to the new company for free.
Formerly AIM-quoted Metminco (MNC) has withdrawn from the proposed acquisition of Gunsynd (GUN) investee company Sunshine Minerals after it failed to complete due diligence. Gunsynd says that there are other interested buyers even though the nickel price has fallen since the original announcement about the proposed acquisition.
The chairman and chief executive of DXS International (DXSP) have bought further shares last week. Chairman Bob Sutcliffe bought 18,857 shares at 10.5p each, while chief executive Bob Immelman acquired 19,802 shares at 10p a share which took his stake to 10.4%.
Ananda Investments (ANA) executive director Melissa Sturgess has bought another 500,000 shares at 0.4501p each.
AIM
Gordon Dadds (GOR) is acquiring Ince and Co International LLP and its associates, which will make it the largest quoted law firm. Annual revenues will be more than £110m. The estimated consideration will be £34m, depending on revenues generated in the three years after acquisition. The merged company will be called Ince Gordon Dadds. Share trading remains suspended until the full details of the deal are published.
Watkin Jones (WJG) says that its full year figures will be slightly better than expected. Good progress is being made with the build to rent operations, but the benefits will come in the future. The sale of a client portfolio of the student accommodation management division has led to a termination fee and a share in the profit of the disposal, which totals £4m.
Concepta (CPT) has obtained a CE Mark for its myLotus fertility testing technology. This enables women to test for their optimal level of fertility. The self-test platform has been launched at the Fertility Show in London. Initial sales will be via the company’s own website. It will take time to build up sales and it is likely to be next year when they become more significant. Concepta raised £2m in August so it is well-funded for its current requirements.
Goldplat (GDP) says that first quarter production fell to 6,100 ounces of gold because of problems sourcing raw materials in Ghana and South Africa, but there has been a recovery in the second quarter and it should be able to achieve full year production estimates of 39,5000 ounces of gold. The Kilpesa mine is being put on care and maintenance if a partner cannot be found and that could knock 3,700 ounces off the production figure.
Next Fifteen Communications (NFC) has raised £20m at 475p a share. The PR firm will use some of the cash to finance the acquisition of Activate Marketing Services for an initial $9m in cash. This technology-focused business is data-led and will continue to be operated separately. This is the latest example of Next Fifteen’s strategy of growing its digital marketing operations.
Gama Aviation (GMAA) says that growth has been slower than anticipated in the second half. The main culprits are the US air associate and slower than expected growth at the new Bournemouth ground services facility. This equates to a $3m cut in forecast operating profit for 2018 and the earnings per share forecast has been reduced by 19% to 21.3 cents.
The share price of floorcoverings manufacturer Victoria (VCP) slumped on the back of a warning that margins were coming under pressure. Like-for-like revenue growth was more than 3% in the six months to September 2019, but less profit is being made. Victoria is attempting to refinance its two-year bank facility through the issue of a five-year €450m bond, which has been given a BB minus credit rating by Standard & Poors.
Safestay (SSTY) has acquired a 20-year lease on a site in Vienna. This is currently a hotel and it will be converted into a 234 bed hostel at a cost of less than €300,000. Safestay will have 13 hostels.
Pires Investments (PIRI) had a NAV of £950,000 at its year end. The £200,000 increase was mainly due to investments in SalvaRx and Eco (Atlantic) Oil and Gas.
Imaginatik (IMTK) has launched its six-for-nine open offer to shareholders. This could raise up to £253,000 at 1.1p a share. The closing date is 26 November.
Market research firm System1 Group (SYS1) has declared a maintained interim dividend of 1.1p a share, but the final dividend may be reduced. Interim revenues declined by 5% and pre-tax profit was lower without the £250,000 exceptional credit. That is due to investment in the Ad Ratings business. There was £3.55m in the bank at the end of September 2018.
Mporium (MPM) has signed a deal with BPC Land and Sales Marketing, a services provider to property developers. BPC will use Mporium’s IMPACT technology for digital advertising campaigns. This is a new sector for Mporium.
Biome Technologies (BIOM) has increased nine months revenues by 59% to £7m, which is more than for the whole of 2017. Biome is profitable and it had £2.5m in the bank at the end of September 2018. The main growth has come in the RF Technologies division. The bioplastics business increased its third quarter revenues, but nine months revenues are still lower.
Parity (PTY) has warned that there will be a significant shortfall in profit in 2018 because of the continuing delay of a major contract. WH Ireland has slashed its pre-tax profit forecast from £1.9m to £850,000, suggesting limited profit in the second half.
Meat and delicatessen products retailer Crawshaw (CRAW) is appointing an administrator because it was unable to raise the cash it required.
Elektron Technology (EKT) has increased its nine months revenues from £22.1m to £25.8m and the full year outcome is set to be ahead of expectations. Sight screening technology developer Elektron Eye Technology is expected to move into profit. Net cash was £8.5m at the end of October 2018.
Transportation software and services provider Tracsis (TRCS) has received a renewal and extension of data hosting services and software with a rail client. The contract is worth more than £2m over two years.
More bad news from superyacht painting and maintenance services provider GYG (GYG) as 2018 figures are set to be well below expectations that have already been revised downwards. There will be a full year loss on revenues of €44m. There will be no dividend. Refit projects have been delayed and one shipyard undergoing maintenance. New build contracts have been won for 2019. The order book is worth €31.3m, of which €18.2m relates to 2019.
BlueRock Diamonds (BRD) has raised £626,000 at 0.3p a share with every two new shares coming with a warrant to subscribe for a share at 0.4p. The directors have invested £170,000. The cash will be used to open two of the five kimberlite pipes at the Kareevlei diamond mine in South Africa.
Tern (TERN) has invested a further £1.1m in in virtual reality training and data analysis technology platform developer FRVS.
PhotonStar LED Group (PSL) has appointed Menzies as administrator of its subsidiary PhotonStar LED Ltd. That business generated £1.15m of first half revenues of £1.33m. It also made most of the loss. More cash will be required for the remaining subsidiary.
TomCo Energy (TOM) has raised £100,000 at 8.5p and disposed of its stake in Red Leaf Resources for $133,333, which had no value in the balance sheet. This will take cash resources to £335,000. The field test on the Holliday block has been delayed due to a failure of couplings.
Ascent Resources (AST) is still finding it difficult to obtain the permits it is waiting for from the Slovenian authorities so that it can generate revenues from gas. Ascent is considering taking action in the European Court.
N4 Pharma (N4P) says clinical data suggests that its Nuvec technology is suitable for use with multiple antigens. It has delivered mRNA and pDNA in sufficient levels to generate the required immune response. The results of the next study should be available in the first half of 2019.
Wey Education (WEY) reported good results but WH Ireland has downgraded its forecasts for this year and next year. The broker is being more cautious about international growth prospects and cut the 2018-19 pre-tax profit forecast from £1.95m to £1.31m and the following year’s from £5.2m to £3.3m.
Frontier IP (FIPP) has made its second Portuguese investment. Des Solutio is developing greener versions of chemicals used to make beauty, pharma and personal care products. Frontier IP has taken a 25% stake.
Myanmar-focused social media platform operator MySQUAR Ltd (MYSQ) is raising £600,000 at 0.35p a share. Management is focusing on active users and in the first quarter of this financial year there were 412,338 active users of the mobile games offer and 426,750 media and mobile apps users. Last year’s revenues were $1.84m but they need to be much higher than that.
Property investor Safeland (SAF) has acquired North Downs golf club in Surrey for £1.07m and it will invest in the facilities.
Rose Petroleum (ROSE) says that the US Bureau of Land Management has approved the application for a permit to drill the GV 22-1 well on the Paradox acreage in Utah.
MAIN MARKET
Zotefoams (ZTF) has improved revenues by 16% in the nine months to September 2018. Full year profit is expected to be slightly better than anticipated. HPP sales have nearly doubled due to demand from the footwear and aviation sectors. Capacity is being increased.
Books publisher Quarto Group (QRT) has extended its facilities to the end of August 2020. The bank facility has been reduced. Large shareholders have agreed to provide unsecured and subordinated loans of $13m, repayable on 31 August 2020.
Stem cell services provider WideCells Group (WDC) is restructuring its Wideacademy educational subsidiary and closed its London office. Annualised savings are worth £400,000. Alan Greenberg has stepped down from the board.
Social media investment company Sealand Capital (SCGL) has published its full year figures and subsequent interim results. Trading in the shares has recommenced. The SecureCom business has been sold. Sealand has subscribed for a 55% interest in Guangzhou Ruiyou Information Technologies Co, which is a mobile game distributor. It is also party to a licenced operator agreement of the WeChat advertisement product in the UK and UAE. There was £758,000 in the bank at the end of June 2018.
Gems explorer Shefa Yamim (SEFA) has raised £250,000 at 80p a share. The shares each come with one warrant exercisable at 100p a share.
Dukemount Capital (DKE) has gained planning permission for a minor extension on its second property in north west England.
Andrew Hore
Andrew Hore – Quoted Micro 27 December 2017
NEX EXCHANGE
Good Energy (GOOD) has sold two operational 5MW solar farms in Devon and south Wales, plus further development rights, for £5.83m and £5.6m respectively. This should yield a profit of £750,000 on each solar farm. The south Wales site has additional land and development or sale of this land could yield an additional payment. Good will still acquire the energy from both sites.
OneLife Technologies Corp is acquiring One Media Enterprises Ltd, which has agreed to pay back the investment and loan made by Angelfish Investments (ANGP). There will also be management fees payable. This is dependent on the acquisition going ahead. In total, Angelfish will receive $1m in cash and 200,000 shares. Most of the investment has been written off, bar nearly $42,000, so the payment is nearly all profit.
BWA Group (BWAP) expects to be granted mining licences for the extraction of rutile sands in Cameroon. It would then enter an agreement with investee company Mineralfields Group, which would operate the mining concessions. BWA would increase its stake from 12% to 25%. BWA and its directors would own the majority of the shares. BWA has issued 8.37 million shares at 0.5p each in order to pay creditors of Mineralfields. BWA is also issuing £300,000 of 14% convertible unsecured loan stock 2020. The cash interest payment is 4% and the rest will be rolled up and the total loan converted into 36 million shares at 0.5p each.
Malcolm Burne has taken advantage of the sharp rise in the Coinsilium Group Ltd (COIN) share price to reduce his stake to below 3%. He owned 5.7 million shares in April. The share price reached 20p and has fallen back to 15p. Earlier this month, Coinsilium raised £720,000 at 9p a share.
AIM-quoted, spread betting business London Capital Group (LCG) has announced its intention to leave AIM having joined the NEX Exchange Growth Market on 15 December. Glio Holdings Ltd owns 78.1% of London Capital and it will vote in favour of the cancellation of the quotation.
Capital for Colleagues (CFCP) had an NAV of 42.12p a share at the end of November 2017. The provider of capital to employee-owned businesses is switching its investments from debt to equity.
Wheelsure Holdings (WHLP) reported an increased loss in the year to August 2017. Revenues declined from £290,000 to £226,000 and the loss rose from £262,000 to £330,000. An order from Italy was delayed and there were lower orders from London Underground. There was nearly £304,000 in cash at the end of August 2017. Wheelsure raised £630,000 last year. There have been initial orders for high speed rail infrastructure.
EPE Special Opportunities (ESO) has invested in David Phillips Holdings, which supplies furniture and furnishing services to the UK property sector. The business is benefiting from the growth of the private rental sector.
Gunsynd (GUN) has invested £130,000 in a 9% convertible loan note in Human Brands, which supplies Copa Imperial Tequila and Shinju Whiskey. US-based Human Brands made a pre-tax profit of $90,000 on revenues of $1.04m.
Trading in the shares of China CDM Exchange Centre Ltd (CCEP) has been suspended because of issues with the annual returns for the Jersey Registry.
Black Sea Property (BSP) has raised €3.53m at €0.01 a share. This will help to finance the acquisition of a property on the Black Sea coast. Via Developments (VIA1) has issued a further £70,000 of debenture stock.
AIM
The TLA Worldwide Award for contempt for investors goes this year to Real Good Food (RGD) after it announced it requires substantially more cash at 1.04pm on 22 December. That is the last half day of trading before Christmas. The three main shareholders will subscribe for £3m of loan notes with an annual interest of 10%. This should be refinanced via a share or convertible issue. Net debt was £35.8m at the end of September 2017. Hugh Cawley will become an executive director. The interim loss was £6.66m. Food ingredients returned to profit, helped by the acquisition of Brighter Foods, but the performance of the other parts of the business slumped.
Golden Saint Resources (GSR) intends to change its business by acquiring EMS Wiring Systems for shares and selling the mining assets. Trading in the shares is suspended ahead of due diligence and a share consolidation. EMS is a profitable supplier and installer of cabling, WiFi, CCTV, displays and building management systems in Asia and it intends to expand in Africa and South America. The new name would be Golden Saint Technologies Ltd.
Cradle Arc has a 60% stake in a producing copper mine in Botswana and a gold development project in Zambia. The expected admission date to AIM is 10 January.
Mirriad Advertising (MIRI) was valued at £63.2m at its placing price of 62p. The in-video advertising technology company raised £24.2m net of expenses. Potential customers are expressing interest in the technology and the cash will finance an increasing rate of growth. In 2016, revenues were £700,000.
Antibody development services provider Fusion Antibodies (FAB) raised £5.5m at 82p a share and by the end of the week the share price had doubled. Belfast-based Fusion will invest in the expansion of laboratory space and additional sales and marketing.
Close-ended investment company CIP Merchant Capital Ltd (CIP) raised £55m at 100p a share prior to Christmas. CIP will focus on quoted companies with a market value of less than £500m that have good fundamentals, which need help to improve operational effectiveness or management support to enhance growth. There should also be potential for a future exit. No more than 20% of funds will be invested in an individual company.
Software supplier Pelatro (PTRO) raised £3.8m at 62.5p a share when it joined AIM on 19 December. That valued the company at £15.2m. The company’s mViva software is developed in India and used for marketing by telecommunications companies.
An introduction at 20p a share valued Panthera Resources (PAT) at £12.4m. The main asset is a 70% stake in the Bhukia gold project in India. The company’s share of the JORC inferred resource is 1.22 million ounces. There are also gold exploration assets in Burkina Faso and Mali.
Video games development services provider Sumo Group (SUMO) floated on 21 December at 100p a share and ended the week at 113.5p a share. Sumo raised £38.5m and it was valued at £145m at the placing price.
Fletcher King (FLK) reported a dip in revenues from £1.68m to £1.49m, while pre-tax profit declined from £163,000 to £148,000. The interim dividend is unchanged at 1p a share. There were lower revenues from rating appeals and valuations but one or two SHIPS properties should be fully-let and sold by the end of the financial year.
NWF Group (NWF) says that its feeds division is benefiting from the recovery in the milk price and past capital investment. The fuels division continues to make progress but food distribution performance has been below the first half of last year. The interims will be published on 30 January.
Online gaming firm Nektan (NKTN) is raising £1.76m at 21p a share. That was a one-fifth discount to the market price. There are £10m convertible loan notes 2020, where the conversion price is a 25% premium to the previous placing, so it is currently 26.25p a share. The cash will be invested in technology and geographic expansion. In the year to June 2017, Nektan more than doubled its net gaming revenues to £13.3m.
Telecoms infrastructure equipment supplier Filtronic (FTC) expects a sharp fall in interim revenues from £21.6m to £12.8m and operating profit halved to £900,000. There have been delays in defence orders. Net cash was £2.9m at the end of November 2017. The interims will be published on 30 January.
Kodal Minerals (KOD) says that initial results from its drill programme at the Bougouni lithium project are expected very shortly. There was £4.09m of cash at the end of September 2017.
Tlou Energy Ltd (TLOU) has completed core-hole drilling at two locations at the Lesedi project and a third hole will be completed early next year. Coal samples are being assessed. The results will help to plan the first phase of development drilling. The Botswana Public Officers Pension Fund has taken a 5.84% stake.
Tri-Star Resources (TSTR) is raising up to £4.42m via a 2.250106-for-one open offer at 0.01p a share. That is a 92% discount to the market price and excess applications can be made. The cash is required for part pre-payment of $6m of loan notes issued to Odey Asset Management that carry an annual interest rate of 25%. That cash was used to finance a $6m mezzanine loan to the Oman antimony roaster project. First production should be in the second quarter of 2018. The cost of the project has increased from $96m to $110m. There should be £250,000 left for working capital for Tri-Star and $740,000 of loan notes still in issue. The first dividend from the Oman antimony roaster is expected for the year to December 2020.
Legendary Investments (LEG) has acquired a 9.7% stake in Crowd for Angels in return for 248.3 million Legendary shares at 0.145p each. Crowd for Angels intends to launch a £50m Liquid Crypto Bond. Legendary is swapping its interest in Manas Resources for a 2% stake in Circle Oil Tunisia, formerly a subsidiary of AIM-quoted Circle Oil, which has been liquidated. The stake in Manas was valued at £100,000.
Ambrian (AMBR) has failed to secure short-term financing or defer payment of interest on its convertible loan notes. Grant Thornton will be appointed as administrator. In October, a general meeting removed former chief executive Jean-Pierre Conrad as a director, having been given three months notice in August by subsidiary Ambrian Metals because he had lost the confidence of the board. Conrad was a large holder of convertibles. Ambrian has cement interests in Mozambique and there have been problems in moving cash.
Kromek (KRK) is on course to achieve full year revenues of £12.5m. This is without any contribution from the framework contract from the US authorities for radiation detector systems, which could be important in the future. There should be £14m of cash left by the end of the financial year.
Uranium Resources (URA) has sold its mining assets and is changing its name to URA Holdings. Melissa Sturgess and Peter Redmond have joined the board and £900,000 raised at 0.45p a share.
Redhall Group (RHL) says that its subsidiary Jordan Manufacturing has won business for specialist handling and containment systems for nuclear material at Sellafield. This could be worth £18m over three years.
Prospex Oil and Gas (PXOG) is acquiring up to 49.9% of the Tesorillo gas project in southern Spain. The purchase is in three stages and will cost €2.05m in total.
Problems with labelling in China have held up the fulfilment of demand by Concepta (CPT) for its fertility products. This means that 2017 revenues will be around £100,000 and sales delayed until the first quarter of 2018.
Integumen (SKIN) has raised £500,000 at 1.5p a share. This will help to fund the recently acquired Stoer range of male cosmetics and the commercialisation of the Visible Youth cosmeceutical range. Management is assessing all the group product lines because some are taking longer to generate significant revenues. Integumen intends to set up a joint venture to distribute Champion Shave products in the UK and Ireland.
The One Media iP (OMIP) share price more than doubled to 10p following the news that Lord Michael Grade and former Pinewood boss Ivan Dunleavy are joining the board as non-executives. They are also investing £375,000 at 2.5p a share.
Cross-border payments technology provider Earthport (EPO) says that 2017-18 revenues could be up to 15% lower than expected due to contract delays and a change in strategy by a client. Cash flow breakeven is still achievable during 2018-19. Hank Uberoi is moving from chief executive to executive chairman and a permanent replacement as chief executive has yet to be found.
Escape the Room experiences provider Escape Hunt (ESC) is adapting its strategy to focus on city centre sites. Five leases have been signed and three are being negotiated.
The People’s Operator (TPOP) has successfully raised £2.82m at 0.1p a share. Aidan O’Hara acquired an 8.78% stake prior to the placing. Trading in the shares has been suspended because of concerns over trading prior to the completion of the placing.
A €51 a share cash bid has been recommended by Taliesin Property Fund Ltd (TPF) and this values the company at €260m. The bid enables investors to liquidate their holding in the Berlin property investor at a premium to NAV. Taliesin floated in 2006 at €10 a share.
West African Mineral (WAFM) is disposing of its iron assets through a share distribution of the company holding the assets to its shareholders. They will receive one share in Ferrum Resources Ltd for each West African Mineral share they own. A general meeting will be held on 18 January to agree to the plan. Loans to Ferrum have already been written off but a sale of the assets could spark all or part of the repayment of the $4m loan. West African Minerals will have £2.1m in the bank and it wants to move to the standard list and seek life sciences acquisitions. The company will change its name to OKYO Pharma Corporation.
Property investor Caledonian Trust (CNN) increased its NAV from 152.9p a share to 161.7p a share in the year to June 2017.
TechFinancials Inc (TECH) will receive a total of $1.46m in dividends from two subsidiaries. One of these subsidiaries is part of the previously announced disposals that should generate $400,000.
All bar one of the directors of BOS Global Holdings (BOS) has left the board. Trading in BOS shares has been suspended because of the uncertainty of its financial position and because the annual report has not been published.
MAIN MARKET
Contango Holdings (CGO) is moving ahead with the possible acquisition of Consolidated Growth Holdings’ interest in a near-term producing mining asset in Zimbabwe. The purchase would be funded at 5p a share, which is a 33% premium to the suspension price. Contango hopes to complete the reverse takeover by the first quarter of 2018. Contango floated on the standard list on 1 December.
Shefa Yamim (SEFA) has joined the standard list. The Israel-based gemstones explorer raised £4.15m at 110p a share and was valued at £15.3m on flotation. The cash will be used to fund further exploration of the Kishon Mid Reach project and production could commence within 24 months.
Dukemount Capital (DKE) reported an interim loss of £113,000 due to the costs of being a listed company. There was £230,000 in the bank at the end of October 2017. Supported living property developer Dukemount has completed a 50-year agreement to lease on the first property it acquired with a supported living housing association. This should generate £234,000 a year and is linked to CPI. It will take 18 months to complete the development but institutions may acquire the lease before then. A second project has also been secured with more under negotiation.
Spinnaker Opportunities (SOP) has raised a further £170,000 at 5p a unit. The unit is one ordinary share and 0.5 of a warrant exercisable at 7.5p a share. The current NAV is 4.2p a share. SI Capital has been appointed as joint broker.
Standard list shell Fandango Holdings (FHP) still had £468,000 in the bank at the end of August 2017. There is currently no industrial or services acquisition under consideration.
Avocet Mining (AVM) has agreed the sale of its Burkina Faso assets for $5m. There will be $2.5m paid on completion and the rest will be deferred over seven years. Avocet will have no trading business. Given Avocet’s debt, if it is wound up there will be little or nothing for shareholders.
Bluebird Merchant Ventures Ltd (BMV) has returned from suspension following publication of its annual report. Chief executive Colin Patterson says he will fund the Gubong gold project through to the completion of the report on feasibility. He and fellow director Aidan Bishop are taking their remuneration in shares.
Andrew Hore
Andrew Hore – Quoted Micro 20 November 2017
NEX EXCHANGE
Clean Invest Africa (CIA) raised £530,000 at 0.4p a share and joined the NEX Exchange Growth Market on 14 November. The founders subscribed for shares at 0.25p each during September and October. The expected admission price was 1p and the share price ended the week at 1.45p (1.3p/1.6p). That values the company at £2.26m. There is £512,000 in the bank after expenses of £63,800. Clean Invest Africa is focused on renewable and clean energy projects and technologies that will aid the development of Africa. Executive coach Rene Carayol has a 6.28% stake.
Brewer Daniel Thwaites (THW) reported an improvement in interim revenues from £44m to £48m but pre-tax profit was flat at £5.4m, excluding movements on interest rate swaps. The interim dividend is unchanged at 1.1p a share. Net debt rose to £60.9m due to hotel acquisitions and capital investment. Most of the growth in revenues has come from the hotels and inns businesses. Management says that it is aware of some weakening in its consumer markets.
Metal NRG (MNRG) lost £59,000 in the six months to August 2017 but there was still £273,000 in the bank. The focus is cobalt and investments have been made in Western Australia and Nevada. There are further potential investments in Australia and North America. Management plans to announce how it will increase its profile and the liquidity of its shares.
African Potash Ltd (AFPO) is raising £400,000 at 0.025p a share and the cash will finance the development of the African fertiliser trading business and an eVoucher payment system using blockchain.
AIM
Science in Sport (SIS) has secured £14m via a placing at 70p a share in order to expand geographically and in terms of sports. A further £1m could be raised through a one-for-32 open offer at the same share price. The cash will be used to expand the company’s online presence in the US and new product development. The US expansion will be predominantly via Amazon initially and this will require additional stock levels. The SIS.com ecommerce platform will also grow. A move into football will increase the addressable market. Losses are expected to continue for at least two more years.
Zoo Digital (ZOO) is already getting the initial benefits from its film and video dubbing service ZOOdubs. This has widened the scope of the business and helped interim revenues to grow by 63% to $12.7m. A full second half from ZOOdubs will help achieve full year revenues of $26m and that should move Zoo digital into profit in the year to March 2018 even though costs are being increased ahead of expansion in revenues. Localisation services are generating more than two-thirds of revenues with subtitling service ZOOsubs also growing its revenues. ZOOscripts is being developed to provide scripts and metadata that can be used by the other services.
Floorcoverings manufacturer Victoria (VCP) has agreed to acquire floor and wall ceramic tiles manufacturer Keraben Grupo for £246.5m. A placing is raising £180m at 783p a share.
Meat and dairy products supplier Zambeef (ZAM) achieved its downgraded forecast for last year but there has been a further downgrade for 2017-18. Revenues were 17% higher at $255.8m but profit slumped to £200,000. Sales are expected to be flat this year but a recovery in pre-tax profit to $4.2m is anticipated. Non-executive director Tim Pollock, who is investment director for food and agriculture at CDC Group, will take over as joint chief executive from Carl Irwin at the end of March.
President Energy (PPC) is beginning the workover programme of four wells on Puesto Flores, which will cost $2.2m. The payback should be less than 12 months, assuming an oil price of $55/barrel. This is one of the reasons behind the expected increase in forecasts sales from $20.6m in 2017 to $69.5m in 2018, which will enable a 2018 pre-tax profit of $10m.
SRT Marine Systems (SRT) expects a strong second half following a 10% rose interim revenues to £2.9m but a higher loss of £1.6m. That excludes a £1.5m impairment charge for a large Asian contract that has been delayed until 2018-19. finnCap expects the maritime awareness technology developer to report flat full year pre-profit of £1.5m but that requires £12m of revenues in the second half. That requires project milestones to be achieved.
AB Dynamics (ABDP) continued to grow its business at the same time as starting to move into new premises. In the year to August 2017, the automotive testing systems and measurement products supplier increased revenues by one-fifth to £24.6m. Underlying pre-tax profit improved from £4.72m to £5.94m. The total dividend has been raised by 10% to 3.331p a share. Net cash was £9.6m.
Versarien (VRS) wanted to raise £1.2m via institutions and PrimaryBid.com at 18p a share and it ended up accepting £2.9m. Back in March, £1.5m was raised at 15p a share in the same way. The advanced materials company has announced a collaboration with a global consumer goods company on the development of the Nanene graphene nano-platelets in polymer structures. The first purchase order has been made.
GCM Resources (GCM) has completed the appointment of Northland as nominated adviser and joint broker. GCM wants to raise £2m via an offer at 34.4p a share through PrimaryBid. The cash will be used to provide further funding for the development of a mine mouth power plant proposal and for working capital.
Serabi Gold (SRB) has announced the conditional acquisition of Chapleau Resources Ltd for an initial $5m, with a further $5m payable in three months and the final $12m when first gold is produced from the Coringa project in Brazil or 24 months from the initial payment. Coringa is relatively near to Serabi’s existing producing gold mine at Palito. Running the two together should reduce the costs of production. The initial payment can come out of existing facilities. Serabi generated revenues of $36.2m and a cash inflow from operations of nearly $7m.
InterQuest Group (ITQ) appears to have set in motion the first stage of plans to leave AIM. That is because it wants shareholder approval to allow it to issue additional shares equivalent to 75% of the issued share capital. The management behind the recent bid for the company own a majority of the shares but need the backing of 75% of the shares voted in order to cancel the quotation. By issuing additional shares InterQuest can dilute the stake of the shareholders that oppose the cancellation of the AIM quotation and management can get what it wants.
AdEPT Telecom (ADT) reported a 36% increase in interim revenues to £22.6m with managed services contributing more than two-thirds of the total. Pre-tax profit increased by 29% to £3.9m. The interim dividend was raised by 13% to 4.25p a share. Full year profit is expected to rise from £6.9m to £8.3m.
Boku Inc develops technology which enables people to pay for services via their mobile. The company is loss-making but it is highly operationally geared so after it covers its costs the profit should grow rapidly. At 59p a share, Boku will be valued at £125.9m. Existing shareholders will raise £30m and the company will raise £15m.
Belluscura has announced details of its plans to join its parent company Tekcapital (TEK) on AIM in early December. Tekcapital’s 47.5% stake in Belluscura will be diluted by a fundraising to generate between £7.5m and £10m. Belluscura has acquired non-core product lines from large medical device companies as well as new IP and technologies.
Keystone Law Group is the latest legal firm to come to AIM. A placing at 160p a share will raise £10m and value the company at £50m. The flotation is due to be completed on 27 November.
Beeks Financial Cloud Group is raising £7m at 50p a share, which values the company at £24.5m. The flotation date is 27 November. Beeks is a cloud-based provider of automated foreign exchange and futures trading.
Ten Lifestyle Group is a lifestyle and travel platform providing concierge services. Corporate clients provide Ten’s services to individual customers. It also expects to join AIM on 27 November.
Mirriad Advertising has developed native in-video advertising technology, which can insert branded advertising into existing content. Revenues are modest and Miriad is still heavily loss-making. IP Group currently owns 38.2%. The flotation is expected on 29 November.
Concepta (CPT) has confirmed a £600,000 order from China for its MyLotus product which provides measurements to help improve the chances of conception. On the back of this, Concepta raised £2m at 7p a share.
Amryt Pharma (AMYT) has signed an exclusive distribution agreement with El Seif in Saudi Arabia for its products.
Africa Oil Corp is subscribing for £8.46m worth of shares in Eco (Atlantic) Oil and Gas (ECO) and this will give it a 19.8% stake. The subscription price of 22.25p a share was at a 28% premium to the closing price on the previous day’s trading. The cash will be used to identify and acquire new oil and gas exploration assets.
MTI Wireless Edge (MWE) has won a $1m contract for military antennas. Along with previous contracts, the revenues will be recognised over the period until the end of 2019. There is potential for larger orders to come.
TLA Worldwide (TLA) reported its 2016 results at 7am on 15 November and the 2017 interims at 7.01am on the same day. That is much better than releasing the profit warning concerning the 2016 figures at 6.26pm on the last day of trading prior to Christmas 2016. Trading in the shares resumed at 2pm on 16 November after the 2016 accounts were posted. The 2017 loss was $9.26m. The interim loss was $3.86m and net debt was $25m with further contingent consideration of $12.2m. The share price slumped to 12p and then recovered to 14p.
Former chairman Michael Ellis has requisitioned a general meeting at Van Elle Holdings (VANL) so that he and his son-in-law Thomas Lindup can be returned to the board. Both men had left the board of the ground engineering services provider prior to its profit warning in March, which was five months after floating. Ellis also wants to remove chief executive Jon Fenton and senior independent director Robin Williams.
Utilitywise (UTW) has delayed publication of its results because of the requirements for further auditing.
Integumen (SKIN) has acquired the Stoer skincare range for men and its ecommerce platform. This brand complements the Visible Youth brand aimed at women. Integumen is issuing 12.6% of its enlarged share capital in payment for Stoer, which values it at £510,000 at a share price of 2.45p.
Interim revenues fell from £21.9m to £17m at Hornby (HRN) and the loss increased to £5.7m. Net debt was £4.7m at the end of September 2017. A £12m placing and open offer at 29.5p a share will provide cash for investment and to buy a 49% stake in the holding company of Oxford Diecast Ltd, which is controlled by Hornby chief executive Lyndon Davies.
Blue Prism Group (PRSM) has sparked another upgrade with its latest trading statement. The robotic process automation supplier has added more customers and has a 100% renewal rate so full year figures will be comfortably ahead of expectations but the loss will be in line with forecasts. The annual figures will be published on 25 January.
Fishing Republic (FISH) has been hit by increased competition in the fishing market, which has knocked profit margins. There was a decline in like-for-like store sales in October. That means that there will be a loss this year. This has led to the departure of the chief executive and other board members. Chris Griffin becomes acting chief executive and he will conduct a strategic review. His experience should be helpful with online sales, which continue to grow.
Angling Direct (ANG) has acquired North West Angling Centre and Tacklesaver for £450,000 in cash plus stock. They have annual revenues of £1.8m. That takes the number of stores to 20. Angling Direct has reassured the market that trading is in line with expectations.
Oracle Power (ORCP) and its partners have submitted plans to the Pakistan authorities for a 660MW power plant which would eventually become a 1,320MW plant. The coal for the power plant will come from Thar Block VI. If the regulator issues a letter of intent then the partners will have to submit an electricity tariff application and apply for a generation licence.
Film finance provider FFI Holdings (FFI) has acquired digital, post-editing machine rental business EPS-Cineworks for $9.54m. This business fits well with the Pivotal Post post-production business acquired earlier this year prior to flotation.
BOS Global Holdings (BOS) says that Innovation Corporation has asked for security to be provided against its convertible note. Innovation has converted £217,000 of convertibles at 16p a share. That left £1.06m available from the note. Former managing director Michael Travia, who has requisitioned a general meeting to change the BOS board, is associated with Innovation and they have a total stake of 18.9%. BOS admits that its cash position is tight.
MAIN MARKET
Packaging supplier Macfarlane Group (MACF) says it expects full year expectations to be met as the momentum of the first half has continued into the second half. The distribution division increased revenues by 11% in the four months to October 2017 which more than offset a small dip in manufacturing sales. Manufacturing profit will be flat this year but distribution profit will be much higher.
Standard list shell Spinnaker Opportunities (SOP) has viewed potential acquisitions but has yet to find one that fits with its criteria. It is seeking an energy or industrial acquisition valued at between £5m and £30m. There was still £1.1m in cash at the end of October 2017 and the NAV was 4.23p a share.
Telecoms business Toople (TOOP) has more than 1,300 small business customers and it says that “monthly revenues have consistently exceeded £100,000” between June and October 2017. Toople has decided to end its relationship with a third party sales agency and bring sales in-house. The current customer acquisition cost is said to be “within the range previously announced of £40 to £91 per customer” and that is the same as 12 months ago. In the first half, admin expenses were £662,000. There was a £82,000 gross profit on sales of £655,000. Management has tried to keep costs down but revenues do not appear to be significantly higher in the second half based on the above statement. The first half cash outflow from operating activities was £552,000. This may have been reduced in the second half but the outflow is still likely to be significant. There was net debt of just over £300,000 at the end of March 2017 but since then £1.26m net from a fundraising in June. The share price is 1.18p, compared with the 2p fundraising price.
Simian Global (SMG) says that the exclusivity period for the acquisition of media and advertising company GVC Holdings has been extended to the end of March 2018. A further £50,000, on top of £200,000 already lent, will be provided to GVC at an interest rate of 15%.
Andrew Hore
Quoted Micro 23 October 2017
NEX EXCHANGE
Supported housing developer Walls and Futures REIT (WAFR) has improved its net asset value by 4.4% to 94p a share in the six months to September 2017. Interim figures should be published within a fortnight.
African Potash Ltd (AFPO) has decided not to acquire investment company Onshore Energy Ltd and concentrate on its fertiliser business instead. Progress has been delayed but fertiliser trading has started in Zambia and a 21% stake was acquired in Advanced Agricultural Holdings, which is focused on South Africa. There were no revenues in the year to June 2017, although there was trading income of $9,000, and the loss was $2.27m. There was £11,000 in the bank at the end of June 2017. African Agronomix is earning a stake in the company’s potash interests. Trading will recommence in the shares on 23 October.
Black Sea Property (BSP) has €7m of debt, in the form of a mortgage, from UniCredit Bulbank. This will be used to complete the planned acquisition of the office building in Sofia. The loan lasts for three years from completion of the documentation.
Via Developments (VIA1) has completed the purchase of the development site in Latimer Road, Luton.
AIM
Belvoir Lettings (BLV) has approached The Property Franchising Group (TPFG) about a merger between the letting agents but the reaction has been negative. Belvoir believes that the market is consolidating and it makes sense for two of the major players to come together. The indicative offer is 0.715 of a Belvoir share and 52.2p a share in cash for each TPFG, although the amount of cash could be varied. This values each TPFG share at 130.5p.
eServGlobal Ltd (ESG) is raising £24m at 9p a share with existing retail investors given the chance to clawback £3.4m of the shares. Cash is required to be injected into the HomeSend joint venture so that the 35% stake can be maintained. There will also be costs to rationalising the core business in order to help move it into profit.
Overseas growth dominated the Tristel (TSTL) where full year revenues were one-fifth higher, or 7% excluding the acquisition of the Australian distributor. Tristel has already warned that regulatory approval has been delayed in the US but it can still continue to grow its infection control sales. Animal health and contamination control revenues fell but margins improved. House broker finnCap forecasts an improvement in profit from £4m to £4.4m this year.
Secure payments and contact centre technology provider Eckoh (ECK) continues to add contracts in the US while UK revenues are steady. Seven US contracts worth $5.1m have been won. Eckoh has moved into a net cash position of £1.7m. Interim figures will be reported on 22 November.
Telecoms software supplier Artilium (ARTA) has formed an alliance with NYSE-listed Pareteum Corporation, which involves the sharing of distribution, products and technology. The focus will be Latin America and Asia. A share exchange will mean that Pareteum will own 8.8% of Artilium, which will own 19.9% of Pareteum. Artilium is opening a new office in Germany.
Cloud-based communications software provider Cloudcall Group (CALL) is raising £5.7m at 143.5p a share and the cash will help to finance further growth. Cloudcall wants to take advantage of its partnerships with Microsoft Dynamics and Bullhorn and attract new partners.
Proteome Sciences (PRM) says that its deal pipeline is improving but the adoption of its proteomic services has been slower than hoped. This year the loss will be reduced but it will be higher than previously expected. Proteome has gained Good Clinical Laboratory Practice accreditation which will enable it to take on larger clinical projects.
Sula Iron and Gold (SULA) is evaluating the best way to develop the Ferensola gold asset as well as seeking to bring other assets into the group. There could be a joint venture or farm out at Ferensola and Sula intends to solicit interests from potential partners.
Hornby (HRN) is ending the discounting of its stock but it will still hit the figures for this financial year. New chief executive Lyndon Davies continues to review the business strategy and more will be revealed with the interim figures. The interim chairman is leaving the board.
BP Marsh (BPM) has increased its NAV from 273p a share to 304p a share in the six months to July 2017. Disposals brought in significant amounts of cash and this is being reinvested. One of the main focuses of the investment is the North American market.
Infinity Energy S.A. (INFT) is in talks to acquire Transgas Ltd from its own chief executive and its family. Transgas owns petroleum exploration licences in south west England. Infinity will issue shares for the purchase if it is agreed and it intends to change domicile from Luxembourg to Guernsey.
Molecular diagnostics firm Genedrive (GDR) has signed a distribution agreement with Sysmex Europe for the supply of the Genedrive hepatitis C (HCV) ID kit, which is designed to be used in a decentralised environment and produce results within 90 minutes. This is the first commercial partner and Sysmex will be responsible for marketing and distribution in the EMEA region. The initial focus will be African companies.
RNA therapeutics technology developer Silence Therapeutics (SLN) is claiming money in the High Court for income it believes it is owed on products sold by Alnylam. The High Court has to determine whether Silence is entitled to supplementary protection certificates, which can give up to five years of exclusivity after a patent expires
Seeing Machines (SEE) believes that it could treble its revenues this year to between A$38m to $A43m and revenues could double again next year. However, cash is in short supply so investment has been curtailed. New investment is being sought. Interest is building in the automotive sector for the FOVIO driver monitoring technology.
Jim Meredith has become executive chairman of Augean (AUG), following the resignation of Stewart Davies as chief executive, and Christopher Mills and Roger McDowell, who stepped down in June 2015, have joined the board as non-executives. Augean continues to have problems with the HMRC regarding its landfill tax assessment and profit will be lower this year and in 2018. A further £1.7m is being cut from annual overheads.
Futura Medical (FUM) has received positive market research from fellow AIM company Cello (CLL) for its MED2002 gel for erectile dysfunction. More than three-fifths of physicians canvassed in the US thought that MED2002 was better than existing treatments. The equivalent figures in Germany and France were 60% and 54% respectively.
Concepta (CPT) has signed up two distributors in China for its MyLotus fertility product. This takes the number of distributors to three and more will be signed up in the coming months. The product is being evaluated for use after a woman has got pregnant.
Sunrise Resources (SRES) has discovered a new deposit at the CS Pozzolan-Perlite project in Nevada. There have also been positive drilling results in the existing deposit areas.
Omega Diagnostics Group (ODX) has signed a three year agreement to supply food intolerance product FoodPrint to a US laboratory testing services provider.
Thor Mining (THR) is moving to a phase of progressing the commercialisation of its exploration interests. There has been a resource upgraded at Pilot Mountain and there will soon be a resource estimate at Kapunda. The options for progressing with the development of the Pilot Mountain and Molyhil projects are being considered. A placing will raise £565,000 at 0.8p a share. There is a warrant with each share which enables the holder to subscribe for a new share at 1.2p.
Strategic Minerals (SML) has entered into a binding term sheet to acquire the owner of the Leigh Creek copper mine project, which is the northern Flinders Ranges in South Australia. It will cost A$1.8m to restart production at the mine. Strategic has to inject A$1m into the holding company, pay A$250,000 in cash and A$750,000 in shares to the current owner and agree a royalty agreement with them which will be capped at A$3.65m. The Cobre magnetite ore operation in New Mexico had a record quarter to September 2017. Revenues were $2.04m, which was more than the first six months of 2017 and for 2016 as a whole. Annual sales should exceed $5m and this provides cash flow for other projects. Strategic had $1.63m in the bank at the end of September 2017. Shareholders have agreed to a new option programme for management.
MAIN MARKET
Sportech (SPO) has put itself up for sale, although the strategic review continues. There have already been four preliminary proposals but no detailed discussions have commenced.
InnovaDerma (IDP) has been criticised by the Advertising Standards Authority for some of its online advertising for Skinny Tan. Trading is in line with expectations.
Andrew Hore