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Quoted Micro 22 July 2024
AQUIS STOCK EXCHANGE
M3 Helium, where Voyager Life (VOY) has an option to acquire the company, says two samples from the Rost well at Fort Dodge in Kansas showed 5.1% helium. Two other samples were above 4.8% helium. These are highly commercial levels.
Marula Mining (MARU) is acquiring Northern Cape Lithium and Tungsten, which holds prospecting rights over land in the Northern Cape province in South Africa. This is north of the Blesburg lithium and tantalum mine.
Substrate AI (SAI) increased interim revenues by 256% to Euro9.09m and it moved from loss to positive EBITDA.The figures were slightly lower than forecast.
Hydro Hotel, Eastbourne (HYDP) increased interim revenues from £1.8m to £1.96m and reduced its loss from £171,000 to £77,000. There was a decrease in repair costs.
Ormonde Mining (ORM) investee company TRU Precious Metals Corp says its exploration programme at the Golden Rose project in Newfoundland is underway. The programme will investigate copper, nickel and zinc.
ProBiotix Health (PBX) nearly doubled interim revenues to just above £1m and reduced the loss. A US partner has obtained positive clinical results for IBS and antibiotic recovery for a probiotic containing the company’s LP (LDL). The share price rose 7.14% to 3.75p.
Automotive electrification Equipmake (EQIP) revenues are improving, but the loss has increased. In the year to May 2024, revenues were 60% ahead at £8.1m. There was £2.5m in cash at the end of May 2024. There are plans to reduce costs and focus on higher margin technology. The share price increased 5.56% to 4.75p.
Inqo Investments (INQO) has invested in Flybox Budongo, which has developed a modular containerised system to produce Black Soldier Fly eggs and five-day old larvae that can convert organic waste into animal feed.
Valereum (VLRM) says blockchain consulting firm Antier will collaborate in the development of the V-Wallet that will form part of the VLRM Market’s ecosystem. This should be launched later this year and will enable uses to buy, sell and hold multiple cryptocurrencies. The share price fell 13.3% to 3.25p.
Gunsynd (GUN) says investee company Metals One has published a JORC inferred mineral resource of the P5 area of the Finland – Black Schist project of 29Mt. There is 1.8Mt attributable to Gunsynd, which owns 6.25% of a subsidiary of Metals One, and that company has an option to buy back the stake.
Christopher Potts reduced his stake in Shortwave Life Sciences (PSY) from 11.65% to less than 3%.
AIM
A new sensor contract for security technology provider Spectra Systems (SPSY) has led Zeus, the new broker following the takeover of WH Ireland’s broking business, to upgrade its forecasts. The contract is with an existing central bank customer. This was expected, but it is likely to be more profitable than anticipated. The 2024 pre-tax profit forecast is raised from $10m to $12m and the 2025 figure increased from $14m to $25.5m. However, the 2026 figure has been cut from $18m to $16m.
Building products manufacturer Alumasc (ALU) has done better than expected in the year to June 2024. Organic growth was more than 6%, even though the construction market fell 2%. Cavendish has raised its pre-tax profit estimate from £12m to £12.6m, it has also edged up the 2024-25 forecast from £13.1m to £13.5m. All three divisions have done better. Net debt is £6.9m and could halve by next June.
Chain and transmission equipment manufacturer Renold (RNO) beat upgraded full year expectations and there is another upgrade for the year to March 2025. Last year, pre-tax profit improved from £18.6m to £22.1m even though there was a small decline in revenues. Efficiency improvements are increasing margins. Net debt has fallen to £24.9m after acquisition payments and share buy backs. There was £36m in cash generated from operations. A 0.5p/share dividend has been declared. The 2024-25 pre-tax profit forecast is £22.8m.
Intelligent Ultrasound (IUG) rose on the back of the news that it is selling its Clinical AI operations to GE for £40.5m. The consideration is equivalent to 12.4p/share. So far, £12.2m has been invested in the development of AI. There are plans to return a substantial amount of this cash to investors. This deal does not include the NeedleTrainer and NeedleTrainer Plus products or the simulation business. The remaining business had annual revenues of £10m last year. Lower simulation sales meant that the latest interim revenues fell from £6.1m to £5.3m. That includes £1.5m from Clinical AI, compared with £2m for the whole of the previous year.
Vela Investments (VELA) has subscribed for £300,000 of convertible loan notes from fully listed Liberia-based gold explorer Hamak Gold (HAMA) by issuing 2.42 million shares at 0.012375p. This is an opportunistic, short-term investment because it does not fit the core investment policy. The loan notes are redeemable on 16 July and the annual interest rate is 10%. The conversion price is the lower of a 25% discount to the average market price for five days prior to conversion and 3p/share. The Hamak Gold share price is 1.075p. Hamak Gold hopes to take advantage of a narrowing of the share discount to the NAV of Vela Technologies, which is currently around two-thirds.
Maritime AI technology services provider Windward (WNWD) sparked a second upgrade of forecast revenues for this year following its interim trading statement. Interim revenues were 37% ahead at $17.6m. Net cash has fallen from $17.3m to $13.8m over the six-month period.
Caspian Sunrise (CASP) shares have returned from suspension following publication of 2023 accounts. Average oil production fell 16% to 1,800barrels/day last year. Current aggregate production is 2,300 barrels/day from the BNG contract area, which is being sold for up to $88m, which is above the previous expectation of $83m. Production is expected from Block 8 and West Shalva later this year. The board will consider special dividends and share buy backs.
Surface Transforms (SCE) has recovered from its recent all time low after it confirmed revenues guidance of £17.5m for 2024, although the figures will be second half weighted. Interim sales were £4.6m. Pre-production engineering revenues will be recognised in the second half. Capacity is being increased. The ceramic brakes technology company could become cash generative during 2025.
Kyrgyzstan miner Chaarat Gold Holdings (CGH) is the latest company to announce the intention to cancel its AIM quotation. This is a condition of a recapitalisation proposal that will more than halve existing liabilities to less than $20m. The maturity date of the convertible loan will be extended from July 2024 to December 2025. There will also be an additional facility of $5m that can be drawn down. The $550,000 of salary owed to former executive chairman Martin Andersson will be paid in shares. The AIM departure is expected to be on 16 August.
Destiny Pharma (DEST) is leaving AIM to make it easier to fund the XF-73 post-surgical infection prevention treatment through access to private capital. It has been difficult to secure a commercial partner for XF-73. Destiny Pharma needs to find funding for a phase 3 study.
Publishing software and services provider Ingenta (ING) has won three new contracts. Two of these are follow-on contracts with existing customers. These are multi-year contracts worth mor than £500,000. The largest contract is a three-year deal to migrate, host and support an existing customer’s Vista deployment onto Ingenta’s dedicated infrastructure. This worth £1.4m over three years.
MAIN MARKET
ACG Acquisition (ACG) has agreed the reverse takeover of the Gediktepe polymetallic mine in the Balikesir province of Turkey from conglomerate Calik Holding. The mine is producing gold and silver, and production of copper and zinc will start in 2026. The deal is valued at £290m in cash and shares.
Tertre Rouge Assets (TRA) has not been able to raise the funds for its planned acquisitions. The company plans to delist on 15 August.
Andrew Hore
Quoted Micro 29 April 2024
AQUIS STOCK EXCHANGE
Marula Mining (MARU) says its partner NyoriGreen Mining was granted eight new graphite mining licences in the Nyorinyori and NyoriGreen projects in Tanzania. The licences last for seven years. One licence application is outstanding. Trading in the shares has commenced on the A2X stock exchange in South Africa.
Watchstone Group (WTG) had cash of £6.5m at the end of March 2024, which is an £800,000 reduction over three months. Net assets were 14p/share at the end of 2023, so this will be slightly lower now. Management is seeking to conclude its remaining litigation and return cash to shareholders. It can appeal the case it lost against PwC.
Ormonde Mining (ORM) investee company TRU Precious Metals, which is a gold and copper explorer in Newfoundland, will carry out an exploration programme at the Golden Rose project. TRU still has C$2.3m in cash and this will fund the programme. The timing of drilling is being decided.
Kasei Digital Assets (KASH) has increased its NAV to £3.68m at the end of March 2024 having closed its position in GBTC after the announcement of spot bitcoin ETFs and reinvested some of the cash in spot bitcoin.
Ora Technology (ORA) reported a £699,000 cash outflow from operations in the six months to January 2024. The company is developing a digital carbon trading platform. There was £314,000 of cash left at the end of January 2024.
EDX Medical Group (EDX) is eligible for the Apex segment of the Aquis Stock Exchange and trading will start on the segment on 29 April.
Hydrogen Future Industries (HFI) withdrew resolution four from its AGM. This was designed to gain shareholder approval for the 2024 incentive plan. Some shareholders were against the plan. Timothy Blake, who owns one-quarter of the company, has become chief executive but he will not be on the board. Fungai Ndoro has left the board.
Vinanz Ltd (BTC) has installed the first ten S21 Bitmain Antminer 200 Terahash/second miners. These are some of the fastest miners in the world. More of these machines will be acquired.
Equipmake Holdings (EQIP) has appointed Tony Ratcliffe as finance director, replacing Steven McGillivray.
Investment Evolution (IEC) has raised £160,000 at 20p/share. This will fund US consumer loans while the company makes progress with issuing its bonds.
Supernova Digital Assets (SOL) non-exec bought six million shares at 0.19p each. Saral Global VCC – Aftermarket Investments cut its stake from 11.5% to 10.4%.
Winforton Investments increased its stake in Good Life (GDLF) from 17.9% to 18.6%. Odd Asset Management raised its stake in skin treatments developer Incathera (INC) from 11.8% to 16.4%. Harry Hyman has raised his stake in Oberon Investments (OBE) from 4.98% to 5.29%. Peter Mills has taken a stake in Oscillate (MUSH) that is just above the 3% reporting level. Barry Hersh has reduced his shareholding in Global Connectivity (GCON) from 7.98% to 6.97%.
AIM
In the year to January 2024, geospatial data company 1Spatial (SPA) improved underlying pre-tax profit from £1.8m to £2.1m. The SaaS-based products are at an early stage of commercialisation, and it will take time for growth in business to show through in recognised revenues. The 1Streetworks product has already been taken up by UK Power Networks. The company generates cash from operations, but this did not cover capitalised development spending, which meant that 1Spatial’s net cash was reduced to £1.1m. Capital spending should have peaked. This year there should be enough cash generated to cover the development spending.
US-based uranium and critical minerals producer Energy Fuels is offering 0.026 of a share and an unfranked dividend of A$0.065 for each Base Resources (BSE) share. That is currently equivalent to A$0.302/share. This is a recommended bid and values Base Resources at A$375m. Two major shareholders owning 51.3% in total intend to support the bid. This will help to fund the development of Base Resources’ Toliara rare earth project in Madagascar.
Filtronic (FTC) has secured a £15.8m order for E-band amplifiers from SpaceX, which is part of a five-year strategic partnership. SpaceX is receiving warrants over up to 10% of the telecommunications technology developer. The first tranche is exercisable when £30m of orders have been made for E-band amplifiers and the second when there is a similar level of orders for other products. This sparked an upgrade by Cavendish, which raised its 2023-24 pre-tax profit forecast by one-third to £3.3m and the 2024-25 figure by 180% to £6.4m.
Donald McGarva is stepping down as chief executive of Aferian (AFRN) and leave the video streaming technology developer in October. This follows a trading statement revealing that 2023-24 revenues and EBITDA would be at the lower end of the previously suggested ranges of $47m-$48m and $1.6m-$2.6m respectively. There are delays in purchases of Amino video streaming devices. Costs have already been reduced and a further $3m will be cut. Management hopes to extend the borrowing facility of $16.5m that matures in November.
Vehicles provider for film and TV productions Facilities by ADF (ADF) was hit by the writers’ strike in 2023 and pre-tax profit fell from £4.8m to £900,000. Capital spending was delayed, although net debt increased to £12.9m. There has been a slow start to 2024 as schedules are rearranged. Pre-tax profit could still bounce back to £5m this year.
Audio products supplier Focusrite (TUNE) had already warned that the interims would be weak. In the six months to February 2024, revenues fell from £86.2m to £76.9m and pre-tax profit slipped from £10.9m to £3.4m. Working capital movements led to a large cash outflow so net debt increased to £27.3m, but that should partly unwind in the second half. The decline was in content creation equipment, whereas there was growth in revenues in audio reproduction equipment used for live events.
Sanderson Design Group (SDG) was boosted by growth in high margin brand licencing revenues and that helped to offset the decline in brand sales. Morris & Co was the only brand that did not contract during the year to January 2024. In 2023-24, revenues dipped from £112m to £108.6m and pre-tax profit edged down from £12.6m to £12.2m. North America was the bright spot. Costs have been reduced in the manufacturing operations. Net cash is £16.3m. Pre-tax profit is likely to be flat this year as most markets remain difficult.
Destiny Pharma (DEST) is exploring strategic options for post-surgical infection prevention treatment XF-73, including licensing and securing finance for the phase 3 trial. Potential partners have been put off by the cost of the phase 3 trial and management is reducing the planned cost. There was cash of £6.4m at the end of 2023 and that should last until early 2025.
i3 Energy (I3E) has published annual production guidance of 18,000-19,000 barrels of oil equivalent/day. Capital expenditure is expected to be $50.9m in 2024 and this means that production should be much higher at the end of year. Earnings are set to fall from £11.8m to £4m because of a decline in the gas price – although a recovery is expected. The annual dividend will be lower at 1.026p/share. WH Ireland increased its fair value estimate from 16.2p/share to 21.2p/share.
Chrysalis Investments has issued draft particulars of a claim against Revolution Beauty (REVB) that amounts to £39m plus additional consequential loss of £6.2m. This claim has not yet been filed with the court and relates to buying shares in the company when it joined AIM in July 2021. Chrysalis Investments was unsatisfied with the response it had got from the cosmetics supplier.
Musical instruments retailer Gear4Music (G4M) is benefiting from a focus on margins and reducing net debt. UK sales continue to grow, but they have declined in the rest of the world. Gear4Music returned to profit in the year to March 2024 and pre-tax profit is estimated at £1.4m and it could double next year. Net debt nearly halved to £7.3m. Chief executive Andrew Wass will become executive chairman and Gareth Bevan will take over his previous role.
Trellus Health (TRLS), which develops programmes for managing chronic conditions, still had net cash of $12.2m at the end of 2023 and this should last into the middle of 2025. Revenues were modest at £19,000, but a large-scale pilot was signed with United Healthcare earlier this year and patients are being enrolled. This and other contracts will initially generate modest revenues, but they are important in proving the effectiveness of the company’s technology.
MBU Capital is requisitioning a general meeting at metallurgical coal miner Bens Creek (BEN). It holds 22.1% of the company and wants the general meeting to discuss operational and strategic challenges. The Chapter 11 process continues to be progressed by the US subsidiaries of Bens Creek.
MAIN MARKET
First Tin (1SN) has updated the mineral resource estimate for the Tellerhauser tin project in Germany. Indicated and inferred tin mineral resource has risen by 35% to 138,600 tonnes. Total indicated tin is 37% higher at 45,000 tonnes. Test work at the Taronga in project in Australia indicates improving recovery levels.
Life sciences and aerospace components supplier Carclo (LON: CAR) had a particularly strong fourth quarter, which reflects the focus on improving margins and the financial status of the business. The benefits of the restructuring are starting to show through. Net debt fell from £34.3m to £30.4m at the end of March 2024. The current focus is the US restructuring, and this will benefit profitability this year.
Seraphim Space Investment Trust (SSIT) has sold its early-stage investments to new venture fund Seraphim Space Ventures II, which has the same manager, in return for an investment in the new vehicle. The portfolio cost £3.5m and is valued at £3.8m. That is 1.7% of the NAV at the end of 2023.
Chill Brands (CHLL) has suspended chief executive Callum Sommerton because of allegations about the misuse of inside information. Fieldfisher will carry out an investigation.
Andrew Hore
Quoted Micro 14 March 2022
AQUIS STOCK EXCHANGE
Aquis Exchange (AQX) has announced that it will be joining the Aquis Apex segment with VSA as its corporate adviser. Aquis Exchange will retain its AIM quotation. This follows Invinity Energy Systems (IES), which joined the Aquis Apex segment on 9 March. This includes the ordinary shares that are quoted on AIM, as well as quotations for short-term warrants and long-term warrants that are not traded on any other markets. VSA also plans to create an index that includes all the companies on the Aquis Apex segment called the VSA Capital AQSE Apex Index.
Majestic Corporation (MCJ) is a recycler of electronic waste with a focus on extracting the precious metals from the equipment and it was introduced to the Aquis access segment on Thursday. The share price opened at 30p and then fell back to the introduction price of 25p (20p/30p). The reason for the flotation is to gain access to potential funding via share issues. Gold, silver, copper and other metals can be extracted from the electronic waste. Most of the materials that the company recycles are sent to Japan for processing and re-use in manufacturing. In the six months to June 2021, revenues increased from $14.4m to $15.5m, while pre-tax profit improved from $312,000 to $766,000. There was $1.89m in the bank at the end of June 2021 and an additional $233,000 owed by the chief executive. There are also import loans of $2.11m.
Good Energy (GOOD) investee company Zap-Map has linked up with the RAC so that it can be better placed to help electric vehicle drivers. Zap-Map will be used by 1,600 RAC patrols. The 2021 figures will be published on 29 March.
Goodbody Health Inc (GDBY) says 2021 revenues are expected to be around £17m, helped by PCR testing. That will drop off, but the revenues in the first two months of 2020 were £3.8m. There is likely to be a dip in interim revenues, but new products and services will help growth in the second half. Blood testing services have been launched in the clinic network.
Ananda Developments (ANA) says five seeds of each of 13 strains of cannabis have been planted by DJT Plants. Nine cuttings will be taken from each plant and then replanted. The shareholder circular for the acquisition of the 50% of DJT that is not owned by Ananda should soon be completed.
BWA Group (BWAP) has raised up to £500,000 at 0.6p a share. The cash will be used for exploration programmes at the Nkoteng and Dehane heavy mineral sands areas in Cameroon. This should produce initial mineral resources.
KR1 (KR1) is participating in the Interlay crowdloan and Polkadot (DOT) parachain auction. Interlay is building interBTC a Bitcoin-backed asset that enables interoperability between multiple blockchains while being resistant to censorship. KR1 contributed 250,000 DOT and this will be returned after 96 days. INTR tokens will then be issued. KR1 has also invested $509,224 in Interlay Seed-2 shares. It already owns 1,060 Seed-1 shares.
Altona Rare Earths (ANR) is not going ahead with the Malawi-based Chambre rare earths project joint venture and the potential partner’s representative on the Altona board Hilton Banda has resigned.
Walls and Futures REIT (WAFR) has launched Pax Homes, which provides homes for people with autism and their families.
AIM
Destiny Pharma (DEST) has raised £6m, with a possible £1m more to come from an open offer, at 50p a share. The companies c.diff prevention treatment NTCD-M3 addresses a market worth more than $1bn. There is a good chance that a partner can be secured this year. There is more than one pharma company that is interested. The XF-73 treatment for the prevention of post-surgical infections requires further feedback from the FDA for its phase 3 trial in the US.
MTI Wireless Edge (MWE) is closing its Russian business and that will slow progress this year, but profit should still grow. In 2021, revenues increased 6% to $43.2m, while higher transport costs and exchange rate movements meant that pre-tax profit was flat at $4.04m. Russia accounted for 6% of revenues and 5% of profit. In 2022, pre-tax profit is expected to be $4.55m.
Delivered ready meals company Parsley Box (MEAL) is raising raised £5.9m at 20p a share – 90% of the original placing price less than one year ago. An open offer could raise up to £1.1m. Revenues are expected to be flat this year, but if the cash is invested successfully then growth could accelerate.
Restaurants and bars operator Various Eateries (VARE) says trading continues to follow an improving trend following lockdowns in the past two years. In the year to 3 October 2021, revenues were 36% ahead at £22.3m and the total loss was £3.7m. That was after £2.5m of insurance proceeds. One consequence of the Covid lockdowns is that there are more potential sites available at lower rents than in the past. Coppa Clubs are hybrids that offer a bar, restaurant, event space and, on some sites, hotel rooms and more sites are being opened. As yet, Italian restaurants brand Tavolino has not opened any more sites. A new pasta restaurant concept called Noci is being launched in Islington and the prospects will be assessed.
Harvest Minerals (HMI) says that it had fertiliser orders totalling 30,161 tonnes by the end of February 2022. That is one-fifth of the sales target for the whole of 2022. There are plans to increase capacity to 200,000 tonnes a year.
Managed IT services provider CloudCoCo (CLCO) reported flat revenues of £8.1m in the year to September 2021 and reduced the loss. Contributions from recent acquisitions and organic growth will help the figures to improve this year. Monthly profitability is targeted by the end of the current financial year. A contract worth £3m over three years has been secured. Further acquisitions should supplement growth.
ThinkSmart (TSL) reported a small underlying profit in 2021. Net cash is £7m, although the main asset is 618,750 shares in Block Inc following its takeover of Afterpay. The legacy lending business is being wound down and there is still income from operating a call centre for Afterpay. Net assets were equal to 75p a share, but in recent months the Block share price has been in decline, so the NAV is lower.
Concrete levelling equipment supplier Somero Enterprises Inc (SOM) reported profit in line with expectations. Revenues increased from $88.6m to $133.3m with strong growth in North America. The supplemental dividend is 22 cents a share and the total dividend for the year is 50.7 cents a share. Growth is likely to slow this year.
NWF (NWF) is benefiting from the volatility of the oil price and additional demand for the fuels division. There have been no supply problems. Feeds price rises are covering cost increases and raw materials have been forward purchased, while the food distribution business is performing as planned. Full year figures will be significantly ahead of expectations.
MAIN MARKET
Gresham Technologies (GHT) increased full year revenues from £24.8m to £37m in 2021, including a £5.6m contribution from last year’s acquisition Electra. Underlying pre-tax profit improved from £1.8m to £4m. The final dividend was maintained at 0.75p a share. There is cash of £9.1m. The core Clareti financial control and data integrity software generated organic growth of 28%. New customers and existing clients spending more is combining to enable strong increases in Clareti revenues. Contracted revenues for 2022 have already reached £37m compared with a full year forecast of £42m. A 2022 pre-tax profit of £5.1m is forecast.
Codex Acquisitions (CODX) did not get off to a good start when it joined the standard list on Wednesday because its website was not working. Codex raised £850,000 at 10p a share. The share price did go to a premium, but the bid/offer spread was 10p/20p. It appears that there were 50 shares traded during the week. The cash shell has effectively been set up by Codex Capital and most of the shares are owned by eight shareholders, including one of the non-exec directors. The NAV is 8.2p a share. The focus of the cash shell is clean and renewable energy assets, particularly infrastructure assets.
Online furniture and housewares retailer Made.com (MADE) increased full year gross revenues by 38% but it still lost money. A 2022-23 pre-tax profit of £8.3m is forecast, even though revenues growth is likely to be slower than previously thought.
Cloudbreak Discovery (CDL) has secured an option on the Icefall project in British Columbia with 1311516 BC Ltd, which will spend C$700,000 over three years to secure a 75% interest in the project. It will also pay Cloudbreak a total of C$120,000 in cash and issue two million shares.
Fragrant Prosperity Holdings (FPP) is not going ahead with the proposed acquisition of cannabis company CiiTECH.
Andrew Hore
Alan Green discusses news released by #ESC Escape Hunt, #DEST Destiny Pharma & #KDR Karelian Diamonds on the Vox Market Podcasts
Alan Green discusses news released by #ESC Escape Hunt, #DEST Destiny Pharma & #KDR Karelian Diamonds on the Vox Market Podcasts
Destiny Pharma #DEST – Developing Novel Medicines that Prevent Serious Infections. Alan Green talks to CEO Neil Clark
- Two exciting late stage clinical assets – XF-73 and NTCD-M3
- China Medical Systems – new XF-73 programme in China
- NTCD-M3 Phase 3 studies
- Spore COV – JV progress and Innovate funding
- Cash runway and upcoming value inflection points
Alan Green discusses TSX listed AIS Resources $AIS & Destiny Pharma #DEST on the Stockbox Research podcast
Alan Green discusses TSX listed AIS Resources $AIS & Destiny Pharma #DEST on the Stockbox Research podcast
Alan Green talks Royal Mail Group #RMG, Destiny Pharma #DEST & ECR Minerals #ECR on the UK Investor Magazine podcast
Alan Green joins the Podcast with Jonathan Roy for the weekly instalment of UK equities and market themes.
With the FTSE 100 remaining stubbornly within a tight range, we look back at the appreciation we’ve seen in cyclical shares and whether investors should expect a greater proportion of their returns to be achieved from income in the form of dividends in the future.
Financials, tobacco and some commodity shares are now yielding significantly above 5% and present an attractive allocation possibility for investors.
Having secured promotion to the FTSE 100 we look at Royal Mail and the drivers behind the tremendous run in shares from below 150p to 600p. This was largely down to success inn parcel growth that could waver as the economy reopens so we question their growth strategy going forward.
We discuss Royal Mail (LON:RMG), ECR Minerals (LON:ECR) and Destiny Pharma (LON:DEST).
Andrew Hore – Quoted Micro 6 April 2021
AQUIS STOCK EXCHANGE
Good Energy (GOOD) says that customer numbers have remained stable since September. The 2020 figures will be published on 13 April. There was £18.1m in the bank at the end of 2020. Good has restructured its two renewable generation debts into one debt facility of £39.8m.
Arbuthnot Banking Group (ARBB) has completed the acquisition of vehicle finance provider Asset Alliance Group for £10.1m, which is 50% of the estimated fair value of £20.2m. Arbuthnot raised £8.6m by selling shares in Secure Trust, in which it retains a 5.74% stake.
Greencare Capital (GRE) is investing £100,000 in Clearly Supplements in the form of a 5% convertible loan. The conversion price is a 30% discount to a listing price. Clearly has developed a range of products and is establishing distribution in Asia.
Gunsynd (GUN) has sold three million shares in Rogue Baron (SHNJ) and raised £120,000. Gunsynd still owns 25% of the spirits brands developer and Chris Akers has taken a 3.48% stake. It also has £111,464 of convertible loan notes in Rogue Baron.
TruSpine Technologies (TSP) has raised £585,000 at 10p a share with each share coming with a warrant exercisable at 15p a share. A further £165,000 may be raised. The cash will fund the FDA application and commercial launch for Cervi-LOK.
Interim revenues of Love Hemp Group (LIFE) jumped from £426,000 to £2.38m. There was a loss of £962,000. There was net cash of £79,000 at the end of 2020. The company is moving into new facilities in south London in the middle of this year. Capacity will increase to 500,000 units of cannabidiol CBD products each month.
Tectonic Gold (TTAU) did not generate any revenues in the six months to December 2020. There was a £60,000 loss, although cash used in operating activities was £141,000.
Altona Rare Earths (ANR) can acquire a 71% interest in the owner of the Nankoma rare earths project in Uganda. There is an option to acquire a 51% stake for £1 by the end of June. The option fee is £25,000 in cash and 250,000 ordinary shares. The stake can be increased to 71% by the issue of £15,000 worth of shares.
S-Ventures (SVEN) has reported figures for the period from its formation on 6 July 2020 to the end of January 2021. There was a £60,000 cash outflow from operations and the company made two investments with another one made since January.
Optiva Securities has been approved as a corporate adviser.
AIM
Parsley Box (MEAL) has got off to a disappointing start on AIM after raising £5m at 200p a share. The shares ended the first day of trading at 185p, before recovering to 187.5p. Parsley Box has a strong brand position in its market niche and Covid-19 lockdowns have helped it to grow its customer base. The company has a range of more than 60 single portion meals, that can be stored in a cupboard and do not have to put in a fridge or freezer. Parsley Box makes more than 900,000 deliveries per month and demand has increased due to Covid-19. There are more than 500,000 registered users and 154,000 of these active customers at the beginning of this year.
ActiveOps (AOM) is a supplier of management process automation software and it got off to a good start after it floated on AIM. The share price has risen from the placing price of 168p to 190p. No new money was raised in the float and there is £8m in the bank. ActiveOps is losing money but its is generating cash. Once customers are gained, they increase their spending over a number of years and this will be supplemented by new customer wins.
Destiny Pharma (DEST) announced positive results of the phase 2b clinical study on the use of XF-73 nasal gel for the prevention of post-surgical infections. The next step will be the design of a phase III study. Discussions are being arranged with the FDA in the US.
Gfinity (GFIN) has completed its strategic review and has decided to continue with its existing strategy of focusing on higher margin revenues. Interim revenues more than trebled and the operating loss fell by nearly three-quarters to £900,000. There is £1.8m in the bank.
Arena Events (ARE) has raised a further £11m at 14p a share, having raised £9.5m at 10p a share one year earlier. The cash will enable management to bid for strategic assets, including Aztec Shaffer, a US company in Chapter 11.
K3 Business Technology (KBT) has written £16.9m off its intangible assets. Ongoing revenues dipped from £50.1m to £48.8m and the software provider made a small profit in the year to November 2020. Recurring revenues are three-quarters of the total.
Itaconix (ITX) increased revenues from $1.29m to $3.29m in 2020. Increased use of its sustainable polymers in detergents, odour control and personal care products is enabling revenues to grow and they will rise further this year. Itaconix is still losing money but it has the cash it requires for the medium-term.
Lawyer Ince Group (INCE) has agreed a £17m, three-year financing arrangement with Investec which replaces the £10m facility with Barclays.
Recent AIM admission TEAM (TEAM) is proposing an all-share offer for Tavistock Investments (TAVI) and shareholders owning 14% of Tavistock have indicated support for the offer from the investment manager.
Energy supplier Yu Group (YU.) generated better than expected 2020 revenues of £101.5m and the loss was reduced. Net cash was £11.7m at the end of 2020. This leaves management in a strong position to increase the scale of the business. This year there will be full contributions from customer books acquired last year. Average monthly new bookings were £10.3m in the second half of 2020.
Time Out (TMO) has raised £17m at 35p a share. This should supply working capital until November 2022.
MAIN MARKET
Macfarlane Group (MACF) is paying up to £4.5m for Cornwall-based protective packaging supplier Carters Packaging. In the year to March 2020, Carters made a pre-tax profit of £500,000 on revenues of £4.2m.
MasMovil has launched a bid for Euskatel, in which Zegona Communications (ZEG) has a 21.4% stake. This values the target at €2bn and the Zegona shareholding at €428m. That puts a value of 170p a share on Zegona.
InnovaDerma (IDP) reported a one-fifth decline in interim revenues to £4.1mand a more than trebled loss of £1m. Management expects trading to be uncertain for the rest of the financial year. The recent fundraising will help to keep the business on a sound footing while it waits for a more substantial recovery.
Andrew Hore
Alan Green discusses Destiny Pharma #DEST, Union Jack Oil #UJO & Power Metal Resources #POW on Vox Markets podcast
Alan Green discusses Destiny Pharma #DEST, Union Jack Oil #UJO & Power Metal Resources #POW with Justin Waite on the Vox Markets podcast.