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Sharepickers – Alan Green discusses Crimson Tide #TIDE, Warpaint #W7L, Electric Guitar #ELEG & Silver Bullet Data #SBDS
Sharepickers – Alan Green discusses Crimson Tide #TIDE, Warpaint #W7L, Electric Guitar #ELEG & Silver Bullet Data #SBDS with Justin Waite
Quoted Micro 6 May 2024
AQUIS STOCK EXCHANGE
Good Life Plus (GDLF) has traded strongly since joining Aquis and raising cash for marketing. The luxury prize draw company increased the number of subscribers from 21,000 at the end of 2023 to 30,000. Churn has been reduced.
Invinity Energy Systems (IES) raised £56m at 23p/share with £25m committed by the UK Infrastructure Bank and £3m from Korean Investment Partners. There is also an open offer to raise up to £6.6m. The share price slipped 6.12% to 23p. IES will use £30m to increase capacity ahead of the launch of the latest version of the Mistral flow battery.
KR1 (KR1) gained shareholder approval for the market acquisition of up to 14.99% of its shares. NAV was 132.05p/share at the end of March 2024, down from 134.6p/share one month earlier. There was £1.96m in income from digital assets during the month.
Apollon Formularies (APOL) has sent a general meeting notice for 28 May to gain approval of the cancelation of the Aquis quotation. The company is selling its IP to a Canadian company.
Rogue Baron (SHNJ) has acquired Eight Vodka for £70,000 in shares at 0.5p each. Eight Vodka is distilled eight times in Ecuador.
Trading in Silverwood Brands (SLWD) was restored following the completion of a capital reduction. Phoenix Asset Management increased its stake from 0.94% to 29.9%. In the first quarter a rebranding of Balmonds has disrupted sales. The costs of acquiring Cosme Science hit profitability of Sonotas.
One Health Group (OHGR) says it did better than expected last year with annual revenues improving from £20.5m to £23m. Net cash was £4.7m at the end of March 2024. There was a 13% increase in NHS patient referrals for treatments. New five-year contracts have been secured with the two largest customers.
RentGuarantor Holdings (RGG) says first quarter revenues were 62% ahead and the number of tenant contracts was 38% higher.
Investment company MaxRets Ventures (MAX) reported net assets of £19,000 at the end of October 2023, down from £497,000. There was no new investment during the year. A transformative acquisition is being sought.
Hydrogen Future Industries (HFI) more than halved the interim cash outflow from operating activities to £234,000. Ther was £263,000 in the bank at the end of January 2024, but £612,000 has been raised since then. Testing of the prototype wind turbine and the electrolyser has gone well.
Substrate AI (SAI) generated revenues of $8.6m in 2023. There was $4.42m in the bank.
Hacienda Management has taken a 7.48% stake in Supernova Digital Assets (SOL). Pete Mills increased his stake in Oscillate (MUSH) from 3.02% to 4.03%. DXS International (DXSP) chairman Robert Sutcliffe bought 100,000 shares at 1.46p/share.
AIM
Trinity Exploration & Production (TRIN) has agreed a bid from fellow AIM-quoted Trinidad oil and gas company Touchstone Exploration (TXP), which is offering 1.5 shares for every Trinity share. The Trinity shareholders will own one-fifth of the enlarged company. The combined group will be in a stronger position to make investments in new production. The Touchstone Exploration share price is 4.85% lower at 39.25p, valuing each Trinity share at 58.875p – the share price is 50% higher at 54p.
Alpha Financial Markets Consulting (AFM) has confirmed that BridgePoint Advisers has made a bid approach and Cinven is considering making a bid. Revolution Bars Group (RBG) has received interest from Nightcap (NGHT), which is assessing the situation and options include a bid or acquisition of some sites or subsidiaries.
Electric Guitar (ELEG) moved from the standard list to AIM following the reverse takeover of 3radical on 3 May. It is the first in a planned series of acquisitions in the digital marketing sector, where regulatory and market changes, such as the blocking of third-party cookies, provide significant growth opportunities. 3radical was acquired for 61.2 million shares valued at £1.28m. A fundraising generated £1.32m at 2.1p/share and that valued the company at £4.7m. 3radical was set up by the founders of campaign management software provider Alterian at the end of 2011 The shares had been suspended at 2.1p and they fell to 1.8p when trading recommenced on AIM.
Multi-channel retailer TheWorks.co.uk (WRKS) moved from a premium listing to AIM. The board felt the company was too small for the cost and regulatory burden of the Main Market. One of the attractions of AIM is that the company will no longer be classified as a Public Interest Entity and it will be able to choose an auditor from a wider range of firms. Singer forecasts a slump in pre-tax profit from £10.1m to £1m in the year to April 2024.
Cornish Metals (CUSN) has published a preliminary economic assessment of the South Crofty tin project in Cornwall. There is an after-tax NPV8 of $201m at a tin price of $31,000 /tonne. Pre-production capital requirement is $177m, which is higher than previous estimates, and there should be 14-year mine life. Life of mine all in sustaining cost is estimated at $13,661/tonne. Planned first production is in 2027.
Horizonte Minerals (HZM) has enough cash until 17 May and senior lenders have agreed to extend waivers on loans, including deferring interest payments, until 15 May. These lenders have security over the company’s assets. Horizonte Minerals has guaranteed the debt of the subsidiary that owns the Araguaia project. Discussions with creditors and investors continue in an attempt to achieve some recovery value for creditors. That may include the disposal of the Araguaia project. None of the proposals are likely to recover value for shareholders.
Arrow Exploration (AXL) grew average production from 1.3mboe/day in 2022 to 2.2mboe/day in 2023 and revenues increased from $28.1m to $50.6m, which was slightly lower than forecast. There was cash of $13m at the end of 2023 and this fell to $12m at the end of March 2024. Production has reached 2.9mboe/day in March, while drilling activity will lead to further increases in the medium-term. Canaccord Genuity has cut its 2024 revenues forecast from $103.9m to $98.6m and net cash is expected to be $17m at the end of 2024.
Trading at property services provider Kinovo (KINO) is ahead of expectations with organic growth of 23% in the year to March 2024. Underlying pre-tax profit should be more than £6m, excluding costs related to the DCB contracts, which were guaranteed by Kinovo when it was sold, still to be completed.
Mark Halpin has stepped down as chief executive of managed IT services provider CloudCoCo (CLCO) and MXC Guernsey, which holds a 10.6% stake, has extended its loan notes to 31 August 2026 in return for a £550,000 fee. The amount outstanding on the loan notes is £5.85m. MXC can also appoint an executive director and Ian Smith becomes interim chief executive. The shares returned from suspension following the release of figures for the year to September 2023 showing revenues 7% ahead at £26m. The loss was flat at £2.6m. There was a cash inflow from operating activities. Net debt was £6.3m at the end of September 2023.
Brake discs developer Surface Transforms (SCE) raised £6.5m fundraising at 1p/share. There will be a one-for 1.76036319 open offer at the same price. That could raise £2m. The cash will finance the scale up of manufacturing. Factory capacity will be increased to £75m. This year’s revenues are forecast to be £17.5m.
Gift wrap and stationery supplier IG Design (IGR) did better than expected in the year to March 2024 with margins recovering and pre-tax profit improving from $9.2m to $25.9m, compared with a forecast of $20.5m, even though revenues fell. Net cash nearly doubled to $95m. It appears the recovery is gathering pace. Management believes that margins could return to previous levels this year and an operating margin of more than 6% in 2026-27, suggesting a pre-tax profit of around $50m.
IT distributor Northamber (NAR) is acquiring Tempura Technology and Tempura Communications, which distribute unified communications products, for £6.02m in cash and 181,818 shares. There is £2.64m of the cash consideration contingent on EBITDA in the years ending June 2025, 2026 and 2027. This is a profitable business that has been growing organically.
Heavy mineral sands project developer Kazera Global (KZG) says recent changes at the National Nuclear Regulator in South Africa mean that it will have to provide additional information on how it will meet financial obligations. This should be funded by cash flow. A response is expected shortly and that will allow heavy mineral sands production to start in Alexander Bay, South Africa.
Oil and gas producer Jadestone Energy (JSE) reported a $91.3m loss for 2023 due to asset impairments, lower oil prices and higher interest costs. Capital investment has increased net debt to $110.5m by the end of March 2024. Average production in the first quarter of 2024 was 17,200 boe/day, which was hit by the Australian cyclone season. Production guidance for 2024 is 20,000-22,000 boe/day.
MAIN MARKET
Castings (CGS) did better than expected in the year to March 2024 and Canaccord Genuity upgraded its pre-tax profit forecast from £27.1m to £28.2m. Margins improved in the second half. Net cash is £32m.
Cybersecurity firm Narf Industries (NARF) is accelerating work on capabilities uniquely effective in battling a new generation threat. Developed was funded through a $2.3m contract from DARPA.
Andrew Hore
Quoted Micro 17 January 2022
AQUIS STOCK EXCHANGE
Failed bidder Ecotricity has requisitioned a general meeting at Good Energy (GOOD) in order to remove Will Whitehorn as a director and to stop the company selling generating assets without shareholder approval. The meeting will be held on 11 February. Ecotricity owns 25% of Good Energy. The sale of the generating assets is an important part of the company’s strategy. The cash would be used to reduce borrowings and invest in newer businesses, such as Zap-Map and other digital businesses.
Samarkand Group (SMK) has signed an exclusive distribution agreement with AIM-quoted Venture Life (VLG). The e-commerce technology platform will be the exclusive distributor of mouthwash Dentyl Dual Action and halitosis mouthwash Ultradex in China for an initial term of five years.
Hydrogen Utopia International (HUI) has signed a letter of intent with RZZO, which is a regional municipal waste management company in Ostrow Wielkopolski in Poland. RZZO will provide a plot of land where a HUI waste plastic to hydrogen plant can be sited and also source the plastic waste. They will seek funding from the EU as well as Polish grants. The heat would be fed into a district heating system.
Eastinco Mining and Exploration (EM.P) has identified 11 new pegmatite zones at its HCK joint venture in Rwanda. These are potential tantalum-niobium bearing zones. The sampling should be completed in February.
Apollon Formularies (APOL) has signed agreements with more than a dozen cannabis cultivators. They all have the appropriate licences. It has also set up the Apollon Kannabiz Cooperative to work with local Jamaican farmers. Rod McIllree has been appointed as a non-exec director. He owns 29.1% of Apollon.
Western Selection (WESP) cut its stake in Northbridge Industrial Services (NBI) from 9.65% to 6.21%, while Harwood Capital has raised its stake to 16.9% to 20.4%. Western Selection raised £1.7m from the disposal.
EPE Special Opportunities Ltd (ESO) had net assets of 510.95p a share at the end of 2021.
Sativa Wellness Group Inc is changing its name to Goodbody Health Inc (GBDY).
Dispersion Holdings has changed its name to AQRU (AQRU), which is aligned with the brand of its retail online platform for lending cryptocurrencies.
Rutherford Health (RUTH) will leave Aquis on 25 January.
AIM
Frontier IP (FIPP) says the increase in the value of tis stake in the Nasdaq-listed Exscientia will be an important component of the rise in NAV at the end of 2021. NAV was 69.8p a share at the end of June 2021. A small portion of the shareholding has been sold and further sales are likely. This cash can be ploughed back into Frontier IP and help with new investments.
Legal services provider Gateley (GTLY) reported organic growth of 23% in the six months to October 2021. That partly reflects the weak comparative figures as well as underlying growth. All four divisions grew revenues with only the property division having a small contribution from an acquisition. Utilisation levels improved from 79% to 84%. Underlying pre-tax profit increased from £7.5m to £8.5m. The interim dividend was one-fifth higher at 3p a share. Management is seeking acquisitions to add to organic growth. There is normally a second half weighting to the figures.
Strong trading at Metro Rod and Metro Plumb is the major factor behind the growth at Franchise Brands (FRAN) and the B2C franchise brands are recruiting more franchisees. Full year pre-tax profit is expected to increase from £4.8m to £6.4m. Net cash was £8.6m at the end of 2021.
Corporation Financeiere Europeenne acquired shares in CIP Merchant Capital (CIP) taking its stake to 31.8%. This has sparked a mandatory bid at 55p a share. This is a substantial discount to net assets of 87.6p a share. The plan is to save the costs of being a quoted company.
Cornerstone FS (CSFS) has come to an agreement with Robert Lee concerning the £100,000 convertible loan facility he had promised. Instead of being convertible at a fixed price of 61p a share the convertible could be converted at the average mid-market price of the shares for the five dealing days prior to the drawdown of the loan if this is lower. This will mean that it is much more dilutive unless there is a sharp rise in the share price. The international payments company says 2021 revenues should be £2.3m with more generated by direct sales.
Specialist IFA Frenkel Topping (FEN) is paying up to £10m for Cardinal Management, which provides patient support at hospitals following traumatic events. This provides access to potential clients at an early stage.
Heart disease risk assessment technology developer GENinCode (GENI) has filed a pre-submission for its Cardio inCode-SCORE test with the FDA in the US. This will provide information ahead of a future marketing application. The test combines genetic risk with clinical risk to assess an overall risk of heart problems for a patient.
Oil palm plantations operator Dekel Agri-Vision (DKL) generated record figures in 2021. December crude palm oil production more than doubled and the total production for the year was 39,953 tonnes, up 17.5% on the previous year. Extraction rates are starting to improve. The average crude palm oil price was $868/tonne, which is 44% higher than in 2021. The crude palm oil price is currently more than $1,000/ tonne
Minds + Machines (MMX) decided to return the remaining cash to shareholders and cancel the AIM quotation. There will be 10.4p a share tender offer.
Vector Capital (VCAP) has increased its debt facilities by £5m to £35m. In 2021, the total loan book rose by 27% to £46.3m. This is ahead of expectations.
Capital equipment supplier Mpac Group (MPAC) says it traded in line with expectations in 2021. A pre-tax profit of £8.2m is forecast. The closing order book was £77m. The 2021 results will be published on 14 March.
Holders Technology (HDT) is paying a special dividend of 2p a share on 28 January in addition to a final dividend which will be announced with the 2021 figures. The interim dividend was 0.5p a share. This follows the disposal of some of the company’s PCB assets for around £1.7m.
Mosman Oil and Gas (MSMN) has dropped its plans for a 100-for-one share consolidation after negative feedback from shareholders.
MJ Hudson (MJH) has gained a multimillion contract to advise the ACCESS local government pension scheme over a seven-year period. This covers eleven local authority pension schemes. They have £35bn in pooled assets.
MAIN MARKET
Cash shell Electric Guitar (ELEG) joined the standard list on 11 January. It raised £1.2m at 3p a share and the share price has risen to 3.7p. The current NAV is 1.78p a share, which is effectively all cash. Electric Guitar is a shell seeking acquisitions in the digital advertising sector. There could be opportunities to consolidate smaller agencies. A suitable target will be run by management with a good record, be involved in growth areas, have good quality clients, an existing IT platform and be scalable. It should be near to cash generation. The company acquired would have an enterprise value of at least £5m.
East Star Resources (EST) has gained readmission to the standard list following the acquisition of Discovery Ventures Kazakhstan. A placing raised £3.1m at 5p a share.
Canadian Overseas Petroleum (COPL) has made a significant oil discovery in Wyoming. The discovery has between 1.5 billion and 1.9 billion barrels of oil in place.
PYX Resources Ltd (PYX) has begun sales of rutile from its Mandiri deposit in Indonesia with production of ilmenite and leucoxene starting later in the year.
One Heritage Group (OHG) is acquiring Seaton House in Stockport for £675,000. This is an office building, and the plan would be to convert it into up to 30 apartments. The gross development value is £5.6m.
Andrew Hore