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Quoted Micro 12 September 2022
AQUIS STOCK EXCHANGE
Samarkand (SMK) has been hit by a large cash outflow, which means that the China-focused e-commerce technology and brands retailer requires a cash injection of up to £3m via an open offer at 55p a share. Covid lockdowns in China have delayed progress and hampered the ability to supply products. In the year to March 2022, revenues fell from £20.6m to £16.6m, although if one-off revenues in the previous period are excluded then there was a 12% improvement. There was an initial contribution from the Zita West supplements brand acquired last year. Nomad software platform revenues were 18% ahead at £7.5m.
Aquis Stock Exchange owner Aquis Exchange (AQX), which is also quoted on AIM, has relaunched the EU dark pool trading operation it acquired from UBS as the Aquis Matching Pool.
BWA Group (BWAP) has been granted a new licence for Dehane 2 at the Dehane heavy mineral sands project in Cameroon. Results from granulometric test work at the Nkoteng heavy mineral sands show rutile is the most abundant mineral.
More news about the investee companies of Evrima (EVA) this week. Eastport Ventures Inc, where it owns 6.85%, has entered a letter of intent with TSX-V listed Auston Capital concerning a possible merger.
Marula Mining (LON: MARU) says that initial test work at the Blesberg lithium and tantalum project in South Africa shows an average lithium grade of 6.1%. Tantalum was also identified.
SulNOx Group (SNOX) has signed a memorandum of understanding with Rominserv, a subsidiary of Rompetrol. The Romanian company is considering using SulNOx products in its refinery processes.
MiLOC Group Ltd (ML.P) has received a civil judgement against subsidiary Star C, which has to return £166,000 to one of its distributors.
Ananda Developments (ANA) subsidiary DJT Plants is working on self-crossing cannabis strains to create stable strains. So far, it appears that self-pollination of cannabis plants can be achieved. Field trials for growing cannabis have been successful.
Coinsilium Group Ltd (COIN) says its advisory clients Blvck Paris and Metalinq Labs are joining together to launch a collection of wearables. The Metalinq technology can be used to convert 2D designs into multi-metaverse 3D designs.
Wishbone Gold (WSBN) raised £2.375m at 10.35p a share and the share price fell below that level. This cash will finance expansion of exploration activities in Australia. Significant copper and gold grades have been found at the Halo project in Queensland. There are also zones of high gold silver and coper at Grassy Oaky. A high-resolution gravity survey is commencing at the Red Setter gold copper project.
EPE Special Opportunities Ltd (ESO) reported a decline in NAV to 231.9p a share by the end of August 2022.
AIM
Online musical instruments supplier Gear4Music (G4M) warned that trading has been tough in recent months. The first quarter to June 2022 was encouraging but spending in July and August was weaker than expected even if the hot weather is taken into account. September is showing signs of improvement. Guidance has been lowered with pre-tax profit expected to slump from £5m to £1.1m with a possible recovery to £3.3m next year.
Online competitions organiser Best of the Best (BOTB) is linking up with Globe Invest Ltd, the family office of Teddy Sagi the founder of gaming technology firm Playtech (PTEC), to grow international income. Globe Invest will also buy a 29.9% stake from the directors and related parties at 400p a share. They intend to enter a licensing and distribution agreement and a marketing collaboration agreement. Globe Invest will licence the Best of the Best business model outside of the UK.
Cosmetics supplier Warpaint London (W7L) says trading is ahead of market expectations with sales of at least £61m and underlying pre-tax profit of more than £9m. The previous pre-tax profit forecast was £8.23m. There could be additional gains from foreign exchange.
Franchised lettings and estate agency business Belvoir Group (BLV) did well in the first half considering the ending of property buyer incentives. In the six months to June 2022, revenues were 12% higher at £15.4m. There was a 1% improvement in the underlying business with the rest of the growth coming from acquisitions. Underlying pre-tax profit fell from £4.9m to £4.2m as the cost base returned to normal. Net debt is £2.5m and the interim dividend is maintained at 4p a share.
Premium bricks maker Michelmersh Brick (MBH) increased interim revenues by 14% to £34m, while pre-tax profit was 9% ahead at £6.1m. Production efficiencies helped to offset some of the cost increases. A price rise has been pushed through in July. Overall brick stocks remain at low levels. Management has secured 90% of energy costs for this year and 50% for 2023. Net cash was £9.9m at the end of June 2022. The interim dividend is 13% higher at 1.3p a share.
Sylvania Platinum (SLP) announced a doubled final dividend of 8p a share alongside its results for the year to June 2022. There has already been a special dividend of 2.25p a share and a $7.1m share buyback. Production declined and selling prices for platinum group metals were lower in the year to June 2022. Even so, net profit was $56.2m and Sylvania Platinum has been able to finance the cash distributions and plough money back into development. The benefits of that investment will show through in 2023-24. There is still $121m of cash in the balance sheet, although the dividend will reduce that.
Avacta Group (AVCT) says the US Food and Drug Administration (FDA) has granted orphan drug designation for the lead preICISIONdrug soft tissue sarcoma treatment candidate, AVA6000. This provides tax credits and other incentives, plus seven years of market exclusivity in the US, if the drug is improved. There is an ongoing phase I clinical trial.
Shares in AIM shell Advance Energy (ADV) were suspended on Friday after the announcement of non-binding heads of agreement have been signed for the acquisition of a European oil and gas company.
VSA published an initiation note on Prospex Energy (PXEN) and the broker believes there is upside from the development of the onshore Selva gas project in Italy, where Prospex owns 37%. First production should be in the middle of next year. Cash is being generated from the El Romeral gas to power project in Spain.
MAIN MARKET
LED lighting and wiring accessories supplier Luceco (LUCE) interim revenues dipped by 2% to £106.4m, but they are still higher than in 2019. There was a sharp drop in pre-tax profit from £16.6m to £4.6m. The interim dividend has been reduced from 2.6p a share to 1.6p a share. DIY demand has fallen back and there was also destocking. The EV business should make a greater contribution in the second half.
Critical Metals (CTRM) has published the prospectus for the proposed acquisition of a 57% shareholding in Madini Occidental, which owns 70% of the Molulu copper cobalt project in the Democratic Republic of Congo. The acquisition is expected to complete on 12 September.
Darktrace (DARK) has ended bid talks. Last year, revenues grew 46% to $415.5m and the AI company moved into profit.
Andrew Hore
Quoted Micro 22 August 2022
AQUIS STOCK EXCHANGE
Invinity Energy Systems (IES) has signed a memorandum of understanding with US Vanadium to create a US-based 50/50 joint venture to build and sell vanadium flow batteries. Arkansas-based US Vanadium produces high-purity vanadium pentoxide and electrolyte for vanadium flow batteries. Invinity Energy Systems has also delivered and installed a 1.8MWh VS3 flow battery system at the European Marine Energy Centre hydrogen R&D facility in the Orkney Islands.
Valereum (VLRM) is swapping its 20 bitcoin miners in the US for a 24% stake in new company Vinanz, which is conditional on the company listing on a recognised stock exchange. The final stake will depend on the money raised at the time of the listing. This will enable Valereum to concentrate on the Gibraltar Stock Exchange when the deal gets regulatory approval.
CBD and hemp products supplier Voyager Life (VOY) generated revenues of £178,000 in the period to March 2022. There is £1.43m in the bank.
DXS International (DXSP) has entered a licence and services agreement with Deontics, which is a clinical AI company. The technology will be integrated into the DXS clinical software.
Shares in TECC Capital (TEC) remain suspended ahead of a readmission document for the proposed EDX Medical acquisition. There was £1.03m in the bank at the end of March 2022.
Goodbody Healthcare (GDBY) increased revenues by £2.55m to £7.4m in the first half of 2022. This was driven by revenues from the testing clinics. The loss grew from £1.27m to £1.41m. There is cash in the bank of £3.74m.
Psych Capital (PSY) investee company Awakn Life Sciences, where Psych Capital owns 426,000 shares, has entered the US addiction treatment and relapse prevention market through a licensing partnership with Revitalist Lifestyle and Wellness Ltd, a ketamine wellness clinic chain. Awakn has a treatment that was validated in a phase II a/b trial, which delivered 86% abstinence for six months after treatment versus 2% before the trial. Revitalist will pay an annual fee and a revenue share per treatment.
Ingraine (KING) says AZD1656, which is being developed as a treatment for people with diabetes suffering from Covid-19, has shown evidence that it activates T-regs that might suppress the inflammation that is the prime cause of tissue damage in autoimmune disease. LANCET eClinicalMedicine is publishing the results of the phase II clinical trial. Ingraine owns 2% of Excalibur Medicines Ltd, which has exclusive rights to AZD1656.
Wishbone Gold (WSBN) has a second drill rig is on site at the Red Setter gold copper project in the Patersons Range area in Western Australia. The drilling has shown the intersection of multiple zones of quartz veining, carbonate and chalcopyrite and pyrrhotite.
Premium Nickel Resources Ltd, where Evrima (EVA) owns 1.11 million shares, has been readmitted to TSX-V after the reverse takeover of North American Nickel Inc. The first assay results from the Selebi nickel copper cobalt sulphide mine in Botswana have been published. There was a positive update for the Molopo Farms complex project in Botswana, where Evrima has an 8.93% project-level interest.
Hydrogen Utopia International (HUI) is starting a US roadshow from 22 August, following the start of trading of the shares on OTCQB Venture Market. Recent US legislation could increase investor interest in the clean energy market.
Altona Rare Earths (ANR) is raising £1.1m at 8p a share ahead of the planned move to the Main Market at the end of September.
Chris Akers has increased his stake in Oscillate (MUSH) from 13.1% to 14.25%. The share price fell 11%.
AIM
Fashion brand Joules (LON: JOUL) was the worst performer of the week, falling by more than one-third. Trading has deteriorated in recent weeks, although wholesale sales are higher. This means that it will not make a profit this year, even if second half trading improves. Peel Hunt has downgraded its forecast for 20222-23 from a profit of £4m to a loss of £4.2m. Jonathan Brown becomes Joules chief executive at the end of September. Talks with NEXT about a cash injection continue.
Agricultural products supplier and retailer Wynnstay Group (WYN) raised £10.5m in a placing at 560p a share, which was above the minimum price indicated of 550p a share. The plan is to redevelop the Calne feeds site that came with an acquisition earlier this year. This can be developed into a feed mill with a 185,000 metric tonne capacity that produces poultry and ruminant feed. There are also opportunities for further acquisitions.
Online fashion retailer boohoo (BOO) has made a strategic investment in cosmetics supplier Revolution Beauty (REVB), which recently announced a profit warning. boohoo has bought a 7.13% shareholding. Revolution Beauty products are sold through several of boohoo’s websites.
Frasers Group (FRAS) has bid 2p a share for MySale Group (MYSL), which values the retailer at £13.6m. The bid is not recommended.
Newcrest Mining is not taking up the option to acquire a further 5% stake in the Havieron asset, so Greatland Gold (GGP) will retain a 30% stake. The price for the 5% stake had been set at $60m and much of that cash was earmarked to pay off loans from Newcrest. Greatland Gold management says that it is happy to retain the larger stake. The latest mineral resource for the Havieron deposit announced by Newcrest is 5.5 million ounces of gold and 223,000 tonnes of copper.
AI product revenues at Intelligent Ultrasound (IUG) reached £300,000 in the first half. There were royalties from the GE deal and direct product sales. Full year revenues are expected to be £600,000. In the six months to June 2022, group revenues grew 62% to £5.9m, although that includes £1.4m of one-off ultrasound simulation orders from an NHS training initiative. There was a 13% decline in US revenues to £1.1m, but they should recover in the second half. The group remains loss-making and there is cash of £3.5m, which is expected to decline to £1.8m by the end of 2022.
MTI Wireless Edge (MWE) has been winning contracts that should benefit the second half. In the six months to June 2022, revenues improved from $21.3m to $22.7m, while pre-tax profit barely changed from $2.05m to $2.04m, due to a higher interest charge and amortisation related to the recent acquisition of communication and monitoring systems developer PSK WIND Technologies. Russia accounted for 6% of revenues and 5% of profit in 2021.
Full year revenues of digital services provider Made Tech Group (MTEC) were 120% higher at £29.3m and it moved into profit. There was cash of £12.3m at the end of May 2022. The contracted order book is worth £38.2m.
Flexible electrical connectors manufacturer Strip Tinning (STG) shocked the market when it revealed that a Croatian customer wants to terminate a contract from 1 October. This contract for cell management systems for electric vehicles was supposed to be worth €2m a year once peak volumes were hit in a couple of years.
Fishing equipment retailer Angling Direct (ANG) increased interim revenues by 1% to £38.9m, but they weakened in the second quarter and management says that full year revenues will be lower than previous guidance of £82m. That will lead to a sharp reduction in expected EBITDA to between £3m and £3.4m.
In-game advertising services provider Bidstack Group (BIDS) has extended its contract with Sports Interactive, which created the Football Manager game. This is a multi-year renewal of a contract that initially began in 2017.
Specialist recruitment firm Gattaca (GATC) says net fee income grew by 4% to £44m in the year to July 2022. There was an increase in permanent recruitment income offsetting a decline in contract income. There is good demand but a shortage of candidates for the roles.
Frontier IP Group (FIPP) has sold 391,200 ADSs in Exscientia at an average price of $11.97 each. This raised £3.88m. That is £1.85m below book value. Frontier IP still holds 782,400 shares in Exscientia. So far, sales have raised £9.96m compared with a cash cost of less than £2,000.
Property services provider Kinovo (KINO) nearly doubled its operating profit in the year to March 2022. Net debt was reduced to £340,000. First quarter revenues have risen by 28% to £14m and Kinovo has moved into a net cash position. The latest estimate for the liability for DCB, which has gone into administration, is that it will cost £4m plus expenses to complete work, which is lower than previous estimates.
Sustainable energy projects developer SIMEC Atlantis Energy (SAE) finance boss Andrew Dagley was voted off the board at the AGM on Thursday. There were 53.5% of the votes against his re-election. There were also 45% of votes against the audited financial statements for 2021 and 27% against the directors’ remuneration report.
MAIN MARKET
Private equity firm Thoma Bravo LP has made a preliminary approach to artificial intelligence (AI)-based cybersecurity services provider Darktrace (DARK) concerning a possible cash bid. Discussions are at an early stage.
Plant hire company Vp (VP.) has ended its formal sales process after the board unanimously decided to conclude the process.
Flavouring ingredients supplier Treatt (TET) says that profit will be below expectations in the year to September 2022. Restrictions in China have hampered progress, while costs have increased, and sales of iced and leaf tea in the US have been lower than expected. Currency movements have made things worse. The order book is ahead of this time last year.
Mears (MER) has acquired IRT Surveys, which provides data-led services focused on addressing fuel poverty and energy efficiency, for up to £4.1m. The initial payment is £3m, with the rest payable depending on performance over a two-year period. There should be a £200,000 profit contribution this year.
Andrew Hore
