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Andrew Hore – Quoted Micro 20 April 2020
AQUIS STOCK EXCHANGE
EPE Special Opportunities (ESO) increased its NAV by 54.6% to 317.18p a share in the year to January 2020. The main gains are from fully listed Luceco (LUCE), although the share price has fallen back since then, and Whittard of Chelsea. Whittard closed its 49 stores during March. The focus is conserving cash to find existing investments rather than new investments.
Cadence Minerals (KDNC) says that DEV Mineraco, the owner of the Amapa iron ore project, has been given permission to ship iron ore from the company’s port in Brazil. The stockpile has 1.39Mt of iron ore and the cash generated will help to bring the mine back into production. Cadence owns 30% of Yangibana rare earth deposit, which has received environmental approval for mining.
SulNOx Group (SNOX) says it is taking longer than expected to conclude a deal to sell its diesel conditioner through a major UK fuel distributor. The plan is to undertake engine trials with major engine manufacturers. COVID-19 has led to delays in getting trials underway.
First Sentinel (FSEN) is raising £151,000 at 20p a share. This will provide additional working capital.
Gunsynd (GUN) is consolidating 85 existing shares into one new share.
Ganapati (GANP) has gained shareholder approval to leave AQSE by 15 May.
AIM
In changing times there is one thing that can be relied on and that is Immunodiagnostic Systems Holdings (IDH) putting out its trading statement after 4.30pm on a Friday. Never one to disappoint, Immunodiagnostic Holdings has done it again. Full year revenues were 2% ahead at £39.3m. Cash was maintained at £27.6m.
Nu-Oil and Gas (NUOG) is planning to acquire a Europe-based plastic recycling and processing business. The group would then become a consolidator under the current management. The deal has not been finalised and trading in the shares will be suspended until an acquisition document is published or the deal is called off.
Aquis Exchange (AQX) increased revenues by 73% to £6.9m and the loss was reduced to £800,000. There was £11m in the bank at the end of 2019. The market share of pan European trading increased from 3.8% to 4.62%. Market volumes have increased following the COVID-19 stockmarket concerns.
Cyber security services provider ECSC (ECSC) is raising £500,000 at 55p a share. This will make sure there is enough cash to keep the business going even if there is an extended disruption to trading.
Parcel and freight delivery company DX (DX.) says activity has been reduced by one-third. Net debt was £8.9m at the end of March. Profitability has been delayed until 2020-21.
A circular has been posted by Nostra Terra Oil and Gas (NTOG) for a general meeting on 13 May. The first resolution is for the removal of Matt Lofgran from the board and the other two resolutions provide the company with the ability to issue shares.
Bluejay Mining (BJAY) has signed a memo of understanding with a company that will take 50% of the production of the Dundas Ilmenite project.
Construction consultancy services provider Driver (DRV) was not impacted by COVID-19 in the first half and the recovery in pre-tax profit should be as expected. Business in April and May remains encouraging. Net cash is £3.3m. There will be no interim dividend.
Oil and gas producer Empyrean Energy (EME) has raised £411,000 at 3.5p a share and plans to launch an open offer to existing shareholders. It is not going ahead with a previously announced placing. The additional cash is required to pay Empyrean’s share of the costs of two wells drilled at the end of 2019. The 1C contingent resource estimate for the Mako gas field, where Empyrean has a 8.5% stake, has been increased by 76% to 323bcf. A production rate of 150 MMscf/day could be achieved.
Beeks Financial Cloud (BKS) has acquired network monitoring and trade analytics software provider Velocimetrics for an initial £1.3m. The maximum earnout payment is £4.55m. This adds real-time transaction tracking technology to Beeks’ software.
Cake Box (CBOX) was growing strongly before COVID-19 hit the cake retail chain. Store closures in the second half of March reduced annual like-for-like sales growth to 2%. Pre-tax profit will be in the range of £4.1m to £4.3m. There will not be a final dividend.
Circle Property (CRC) says its NAV has increased by 4.7% to 290p a share at the end of March 2020. The focus on office properties has helped. Loan to value is 40%. A maintained dividend has been indicated by the board.
Kodal Minerals (KOD) has been granted a further three-year term for two of the gold concessions in the Ivory Coast.
Intelligent Ultrasound (MED) has raised £5.2m at 10.5p a share to bolster its balance sheet ahead of the commencement of royalties from its AI software. The cash will finance further development. There was already net cash of £7.3m at the end of 2019, although some of this cash will already have been used.
Jubilee Metals (JML) has recommenced mining at the Inyoni Surface PGM and chrome project and the Windsor JV PGM project.
MAIN MARKET
Sure Ventures (SURE) says that 25.9%-owned investee fund Sure Valley Ventures has made a follow-on investment in Admix, which provides advertising services in video games. Sure has a 7.02% stake in Admix.
Engineering and construction services provider NMCN (NMCN) says that it continues to work on around two-thirds of its current projects. There will be no final dividend for 2019. Net cash was £25.8m at the end of 2019. A further trading update is planned for 23 April.
Rainbow Rare Earths (RBW) says that production at the Gakara mine is increasing and 100 tonnes of concentrate has been exported since February.
Andrew Hore
Andrew Hore – Quoted Micro 20 January 2020
NEX EXCHANGE
NQ Minerals (NQMI) generated gross revenues of A$15.5m and gross profit of A$7.4m from Hellyer gold mine in the fourth quarter. Full year revenues were A$53.9m and operating profit was A$12.2m. The profit grew steadily quarter by quarter. NQ has raised £311,000 at 7p a share. In December, £300,000 was raised at 6.5p a share.
Clean Invest Africa (CIA) says that is subsidiary Coaltech has signed a memorandum of understanding with the Uzbekistan ministry of innovation and development and Uzbekistan Railway. The coal fines project could have an initial value of $16m. A plant would be built to process coal fines into coal pellets. Coal mining is an important industry in Uzbekistan. There will be feasibility studies and the development of a business plan. This deal comes via the joint venture with Creon Investments, which is focused on Russia and former Soviet Union countries.
Ganapati (GANP) says that its Malta-based subsidiary has signed a two-year endorsement agreement with Welljam, which owns the rights to Usain Bolt’s services and image rights. Ganapati has is launching the first official Usain Bolt online slot game when the Tokyo Olympics are held during the summer. Usain Bolt will be attending the ICE London iGaming event in February. There are initial licence payments for image rights during the development of the slot game and a share of future revenues.
Ananda Developments (ANA) says that its investee company iCAN Israel-Cannabis has raised money via a convertible that places a pre-money valuation of $20m on the company. Ananda invested $200,000 in a convertible loan in August 2018 and $100,000 of the loan has been converted into 120 shares worth $200,000 at the latest valuation. DJT Plants, which is 50%-owned by Ananda, has received planning permission for the construction of a facility for cannabis plant breeding and propagation.
Property investor Ace Liberty and Stone (ALSP) reported a dip in pre-tax profit from £334,000 to £306,000 in the six months to October 2019. The NAV improved from £21.2m to £21.9m over the six month period, even though £349,000 was paid in dividends.
Imperial X (IMPP) has switched its investing strategy back from medicinal cannabis to energy-related businesses. The focus is building a royalty stream from oil and gas interests.
Mark Leigh is taking over from Claire Spencer as finance director of Newbury Racecourse (NYR).
Broadband-focused shell SAPO (SAPO) has raised £27,500 at 2.75p a share.
Diverse Income Trust has reduced its stake in TechFinancials (TECH) to below 3%.
Lawyer Gateley (GTLY) generated organic growth of 10.5% in the first half and it is on course to meet analyst expectations for the full year. The main first half growth was in the corporate and pensions businesses. The most recent acquisition will take annualised non-legal revenues to 12% of the group total. A full year pre-tax profit of £21.3m is forecast.
Regional legal business Knights Group (KGH) increased interim revenues by one-third to £32m through a combination of acquired and organic growth. Underlying earnings were 9% ahead at 5.95p a share. Net debt was £17.1m at the end of October 2019. The interim dividend was raised by 83% to 1.1p a share, although Knights was not quoted for all the comparative period. Two Birmingham-based firms have been acquired since the period end.
Legal firm Ince Group (INCE) raised £12m at 45p a share. The share price has more than halved since the beginning of the year. The January 2019 placing was at 140p a share. There are plans to raise £2m by a one-for-8.398 open offer and £2m via an offer to staff. The cash will enable the working capital facility to be reduced and finance investment in building up staff numbers. Net debt was £10.4m at the end of September 2019.
Pharmaceutical services provider Ergomed (ERGO) has acquired Ashfield Pharmacovigilance Inc for $10m and this will be earnings enhancing in 2020. The deal boosts Ergomed’s position in pharmacovigilance services and gives it a stronger position in the US. Ashfield has annual revenues of $11.6m and contracted future revenues of $9.8m.
Dekel Agri-Vision (DKL) has established a 50/50 renewable energy joint venture with Green Enesys that will operate a 36MW hybrid power (solar and biomass) project in Ivory Coast. This should reduce costs at the palm oil project in Ayenouan. There could be other potential power projects in the region. Dekel is benefiting from the recovery in the crude palm oil price. It produced 37,649 tonnes of crude palm oil in 2019, even though poor weather led to disappointing fourth quarter production. Later this year processing of cashew nuts should commence.
Biopesticides developer Eden Research (EDEN) generated revenues of £2m in 2019, down from £2.8m, and an operating loss of £1.4m. Product revenues grew even though the summer weather restricted usage of Botrytis.
Lettings agency The Property Franchise Group (TPFG) is setting up a financial services division. Acquisitions are planned and the first is a 72.25% stake in Auxilium Partnership, which is the business of newly appointed financial services director Mark Graves. This has been a source of growth for rival Belvoir (BLV).
D4T4 Solutions (D4T4) has confirmed that its second half trading is much stronger than the first half thanks to the contracts won by the Celebrus data analysis software business. The financials sector has been a productive customer base for Celebrus. D4T4 is increasingly winning SaaS business and this could hold back short-term growth, which could lead to the trimming of 2019-20 forecasts.
Instem (INS) continues to increase its recurring revenues. The pharma software company generated organic revenues growth of 12% in 2019. Pre-tax profit is expected to be £3.3m. Net cash was £5.9m. A jump in profit to £4.7m is forecast for 2020.
Estate agency Winkworth (WINK) says 2019 profit was modestly ahead of expectations and a total dividend of 7.8p a share is proposed, which is higher than forecast.
Telit Communications (TCM) did better than expected in 2019 and excluding the former automotive activities revenues grew by 8%. The internet of things technology developer is forecast to make a 2020 pre-tax profit of £20.1m.
Pharma data analytics firm Diaceutics (DXRX) generated more cash tan expected last year and made a small profit. Thee was cash of £11.7m at the end of 2019. The 2020 pre-tax profit could be £800,000.
Barkby Group (BARK) has exchanged contracts on a development site in Huntingdon, which has a gross development value of £10.7m.
Risk management software developer KRM22 (KRM) says 2019 revenues were slightly lower than expected at £4m. Delayed contracts are expected to be signed soon.
Telematics firm Quartix (QTX) managed to maintain revenues at £25.6m in 2019 and a small increase is expected in 2020. The mix of revenues has changed with fleet generating 80%, up from 73%, thanks to growth in the US and France. Insurance revenues fell as expected as low margin business was shed. Pre-tax profit is still expected to decline from £8.2m to £6.6m in 2019, with a further fall to £6.3m forecast for 2020. The dividend is expected to be reduced from 12.4p a share to 12.1p a share, although it will not be fully covered by earnings.
Base Resources (BSE) has increased production guidance for the Kwale mine with midpoints of 78,000t for rutile, 345,000t for ilmenite and 30,500t for zircon. There is a lack of supply of rutile and ilmenite, so this is good news. This should provide a strong boost to profit.
Pressure Technologies (PRES) has been fined £700,000 and will have to pay prosecution costs of £169,000 following the guilty verdict relating to a fatal accident at one of its sites in 2015. The first instalment of £215,000 is due in April with a further six equal instalments payable every six months between July 2020 and January 2023.
Oil and gas explorer and producer Empyrean Energy (EME) is raising £420,000 at 9p a share and chief executive Tom Kelly has contributed £200,000 of that cash. The placing was at a 9% premium to the market price. The cash will be spent on drilling offshore of Indonesia. There is a potential resource upgrade for the Mako gas discovery in Indonesia.
Mereo BioPharma (MPH) says that there have been positive results from the phase 2b study of Setrusumab in adults with osteogenesis imperfecta. They show that it is helping to build bone. A study with children is planned. A meeting with the FDA is due in the coming weeks. Earlier this year, Mereo signed a licence agreement for the use of Navicixizumab in ovarian cancer with Oncologie Inc. An upfront payment of $4m is due.
Nutrition provider Science in Sport (SIS) expects to report 2019 sales of £50.5m with underlying growth of nearly one-quarter. The fastest growth is outside of the UK. River and Mercantile has taken a 5.5% stake.
MAIN MARKET
Shareholders in AIM-quoted Anglo African Oil and Gas (AAOG) have agreed to the sale of 80% of its Congo subsidiary to Zenith Energy (ZEN) and it is waiting for government approval. There is a put and call option over the other 20%. If the call option is exercised Zenith will pay £1m in shares. If the production at the Tilapia oilfield averages at least 4,000 barrels of oil per day for 30 consecutive days, the put option can be exercised and Zenith would pay £2.5m in shares.
Endeavour Mining Corporation has ended its merger discussions with gold miner Centamin (CEY) blaming a lack of information. Endeavour still believes that a combination would be positive. Centamin is raising its final dividend to 6 cents a share, taking the 2019 total to 10 cents a share, up from 5.5 cents a share. Net cash was $348m at the end of 2019. The higher gold price will further boost cash generation. A new chief executive still has to be appointed.
Standard list cash shell Trident Resources (TRR) has £3.29m in cash at the end of October 2019, which is similar to NAV. Management is assessing a few mining project acquisition opportunities.
Stevia sweeteners producer PureCircle Ltd (PURE) says that shareholders owning more than 10% of the share capital have put forward three proposed directors to be voted on at the AGM on 10 February. The company is happy for Sridhar Krishnan, Lai Hock Meng, a former PureCircle director, and Oliver Maes, who was previously a PureCircle director, to be appointed to the board.
Books publisher Quarto (QRT) is raising £13.9m at 68p each. The open offer is underwritten and it will help to reduce the debt burden.
Menswear retailer and hirer Moss Bros (MOSB) Total sales were 3% lower in the 24 weeks to 11 January, but gross margin improved. Hire revenues fell by 17.7%. Cash is £12m.
OTHER MARKETS
Pallets manufacturer RM2 International (RM2) intends to move from AIM to matched bargains market Asset Match (www.assetmatch.com).
Andrew Hore
Andrew Hore – Quoted Micro 19 November 2018
NEX EXCHANGE
Renewable energy supplier Good Energy (GOOD) has traded slightly ahead of expectations and been cash generative in the first ten months of 2018. Customer numbers have remained flat. The financial year should be in line with expectations. This reassurance led to a 17% increase in the share price, although it is still more than two-fifths lower than one year ago.
Capital for Colleagues (CFCP) has made a further investment in TG Engineering Ltd, which makes steel and aluminium components for the aerospace and medical sectors. A loan of £150,000 takes the total loan to £625,000, alongside a 35% stake.
MetalNRG (MNRG) has raised £159,500 from a placing at 1p a share and the exercise of warrants. This will fund the investment in the uranium mine in the Kyrgyz Republic, over which MetalNRG has an option, and progress work at the Gold Ridge project in Arizona. There was £77,000 in the bank at the end of August 2018.
NQ Minerals (NQMI) has produced its first lead, gold and silver concentrate from the Hellyer polymetallic project in Tasmania. This has been delivered to Traxys Europe and payment has been received.
Tectonic Gold (TTAU) has mapped a large intrusive intersection of two major crustal faults at Mount Cassidy. This could a significant intrusive related gold system.
Clinical support systems provider DXS International (DXSP) has set a target of achieving a six-fold increase in turnover over the next five years and it believes that post-tax profit could reach £7m a year. This would come on the back of past investment in developing new products, two of which have been launched recently.
Ganapati (GANP) says that its Malta-based subsidiary has signed a games licence agreement with NYX Interactive for the supply of gaming software. After the initial software is supplied, Ganapati will supply one game each month for three years.
TechFinancials Inc (TECH) will receive a $867,000 dividend from 51%-owned Asia Pacific-focused subsidiary DragonFinancials.
Frontier IP (FIPP) has raised £2.49m at 65p a share from existing and new investors and this will finance an expansion of the management team and provide working capital for the business. The value of the company’s investment portfolio has increased by one-third to £9m and there was £1.1m in the bank at the end of June 2018. The NAV increased from £11.8m to £12.7m. The cash should last into 2020 even if there are no proceeds from investment realisations.
SVS has pulled the £532,000 placing at 8.5p a share for TomCo Energy (TOM) and resigned as broker. SVS says that there has been a material change because of the suspension of the field test on the Holliday block in Utah. Trading in the shares has been suspended. TomCo has cash of £250,000.
There were disappointing phase III trial results for the Hutchison China Meditech (HCM) drug Fruquintinib, which did not achieve the primary endpoint in treating non-small cell lung cancer patients. That knocked nearly one-fifth off the share price.
AB Dynamics (ABDP) continues to grow strongly and is already planning to add to its capacity at its new site. Forecasts were raised for the automotive testing and simulator systems supplier earlier in the year and the full year outcome was a 51% increase in revenues to £37.1m and a jump in underlying pre-tax profit from £5.9m to £8.6m. A profit of £10.4m is expected this year.
Eve Sleep (EVE) is changing its focus following the appointment of a new chief executive. The mattress supplier will focus less on heavy marketing for one-off purchases and instead expand its range and generate repeat purchases. Lower marketing spending will reduce the growth rate of revenues. There was £7m in the bank at the end of October 2018 and the company wants to raise a further £15m.
Genedrive (GDR) has raised £5.6m after expenses from a placing at 23p a share, jointly run by Stanford Capital Partners and Peel Hunt, and an issue of loan notes to the British Growth Fund. There was £3.53m in the bank at the end of June 2018. The funds will finance the launch of the Genedrive HCV-ID kit for hepatitis C diagnosis and further assay development for antibiotic induced hearing loss and tuberculosis.
Trakm8 (LSE: TRAK) slipped out its interims on a Friday, albeit at 7am and not at Immunodiagnostic Systems Holdings (IDH) o’clock (around 4.30pm). In the six months to September 2018, revenues fell 38% to £8.84m and even excluding contract manufacturing, which is not done any more, the decline is 26%. Recurring revenues fell by 7%. Even taking the most flattering figures, a pre-tax profit of £363,000 last time was turned into a £2.46m loss. Net debt more than doubled to £5.73m.
Marshall Motor Holdings (MMH) is going to make a better full year profit than expected despite the disruption of new testing rules. That has helped used car sales. The 2018 pre-tax profit is still expected to decline from £29.1m to £25.7m, but that is an improvement for the continuing operations.
Beximco Pharmaceuticals (BXP) has increased its first quarter revenues by 26%, although some of the improvement came from Nuvista, which did not contribute in the corresponding period. Pre-tax profit was 17% higher at BDT973 million. Beximco reported a 37% increase in export sales for its last financial year and they accounted for 12% of total sales. There are five treatments with US approval and it will take time to build up sales. The plan is to eventually generate two-fifths of revenues from exports.
Trinidad-focused oil and gas producer Touchstone Exploration Inc (TXP) generated $9.12m from operations in the nine months to September 2018, up from $2.22m in the corresponding period last year, thanks to higher production and selling prices and slightly lower operating expenses. This cash has been used to increase development spending.
Wynnstay Properties (WSP) is increasing its interim dividend by 8% to 7p a share. The NAV was760p a share at the end of September 2018 and 99% of the property portfolio is let. There was a decline in income due to disposals.
AIM shell Stirling Investments (STRL) had £7.7m of cash at the end of September 2018. Management includes ex-Melrose management. The share price has fallen from 100p to 74.5p, which is less than the cash per share.
IFA Lighthouse Group (LGT) has signed an agreement with Tavistock Investments (TAVI) for the use of the latter’s investment products, which will be offered by Lighthouse as well as its own Luceo Asset Management products. Tavistock raised £1.2m at 3.28p a share and Lighthouse subscribed for £1m of the total.
Event driven marketing technology services provider Mporium Group (MPM) has raised £2.3m at 5p a share.
Mercantile Ports and Logistics (MPL) is raising £27.75m at 2p a share and could raise a further £2.07m via an open offer.
Fastjet (FJET) has raised £9m at 1p a share in order to keep itself going. There has also been a £3.16m subscription from Solenta Aviation and £19.1m worth of shares have been issued to acquire four Embraer 145s from Solenta and settle various fees, charges and loans. A further £4.1m could be raised via and open offer at 1p a share. This should finance the airline business for 2019.
Empyrean Energy (EME) has raised £1m at 10p a share and this will provide working capital.
Allenby Capital has resigned as nominated adviser to CSF Group (CSFG) and will step down at the end of 2018. CSF has been turned down by potential replacements and trading is likely to be suspended at the end of 2018 and the quotation cancelled at the end of January 2019.
Rasmala (RMA) plans to cancel its AIM quotation and tender for up to 20% of tis share capital at 150p a share.
MAIN MARKET
Resources-focused standard list shell Cobra Resources (COBR) floated on 15 November when it raised £523,500 at 1.5p a share. The share price ended the week at 1.75p. The board believes this is a good time to identify and acquire undervalued base and precious metals projects, which are already have a good management team and are well on the way to becoming a producing asset. There could be direct investments or farm-ins. There are 59.9 million warrants exercisable at 2p each.
The former Golden Saint Resources, now known as Golden Saint Technologies (GST), is planning to join the standard list. A placing at 0.75p a share will raise £911,000, of which £270,000 will go to pay directors fees that are owed. The rest will pay other costs. The company has switched from diamond exploration to an installer of network and connectivity products.
Trifast (TRI) reported interims in line with expectations and the fastenings supplier is on track to improve full year pre-tax profit from £22.2m to £23.1m. Management is cautious about the UK, but two-thirds of revenues are overseas.
Andrew Gaughan is stepping down as chief executive of Sportech (SPO) in February. The chairman will take up an executive position for an interim period and he purchased 250,000 shares at 40.6p each. The potential acquisition of ilottery provider Lot.to Systems was also announced with a strategic alliance initially put in place.
Avation (AVAP) has announced a 2 cents a share interim dividend. The aviation leasing business estimates that in the six months to December 2018 leasing revenues will increase from $41.7m to $57.8m and, along with a disposal gain, this means that interim profit will be better than expected and much higher than the $7.3m achieved in the first half of the previous year.
IQ-AI (IQAI) has made its first commercial sale of StoneChecker Software to a South Korean hospital.
BigDish (DISH) is building up resources to grow its business in the UK next year. The restaurants platform is considering selling its Asian business.
Bluebird Merchant Ventures Ltd (BMV) has completed a $380,000 placing at 2.5p a share. Each of the new shares has a warrant exercisable at 2.5p, which has to be done if the share price trades at 3p a share or above for ten consecutive days.
Andrew Hore
Andrew Hore – Quoted Micro 20 August 2018
NEX EXCHANGE
Health and community care properties developer Ashley House (ASH) reported a much-improved profit for the year to April 2018. There was a strong second half performance because of the completion of four schemes. Full year revenues were flat at £18.5m, while pre-tax profit jumped from less than £100,000 to £1.8m, although that includes a £500,000 write back of a previous impairment charge. Net debt was reduced from £2.5m to £1.5m. The housing and health property pipeline is valued at £206m, covering 22 schemes. The F1 Modular business lost money last year but trading appears likely to improve.
Ananda Developments (ANA) has acquired $200,000 of convertible loan notes in iCAN Israel-Cannabis Ltd, which focuses on medicinal cannabis. This is the first investment for Ananda and the convertibles have an annual interest rate of 6%. The interests of Ananda director Charles Morgan have assigned $100,000 of the convertibles to the company. iCan has subsidiaries involved in organising cannabis symposiums and cannabis-based research services, plus a 5% stake in CannRx Technology Inc, which has developed liquid soluble cannabinoids for use in treatments, and a 20% stake in CMTREX, which is developing a trading platform for cannabis.
Nigel Wray has reduced his stake in High Growth Capital (HASH) from 5.99% to 4.72%. Healthperm Resourcing Ltd (HPR) non-executive chairman David Sumner has bought 29,230 shares at 190p each, taking his stake to 84.7%.
Early Equity (EEQP) says trading in the company shares will resume on 28 August. Trading had been suspended on 16 May. The resumption follows an agreement with NEX Exchange that will change how shares are distributed to related parties. Early Infinity Holdings (EI) is the exclusive distributor for Yicom Global, where Early Equity is a 47. 1% shareholder. EI’s agents sell the products in Malaysia and elsewhere in south east Asia. EI incentivises its agents by gifting them shares in Early Equity. These were deemed to be a gift rather than a trade, so they were not reported. A new nominee company with two trustees that are not shareholders in Early Equity has been set up. This will hold shares for the benefit of agents of EI. Agents will receive a warrant certificate. These agents own 46.7% of Early Equity and shares equivalent to 6.29% of the company will be transferred to the nominee company. Early Equity previously announced that it wants to move to a standard listing. The company’s NAV was £1.54m, including £429,000, at the end of 2017.
Coinsilium Group Ltd (COIN) is investing $125,000 in Bundle Network Ltd, which is developing an online platform that enables the trading of cryptocurrencies. Coinsilium will also receive Bundle Network crypto tokens.
MetalNRG (MNRG) has paid a $50,000 option fee, which could lead to the company gaining a 51% stake in a new company that holds the rights to the Kamyshanovskoye uranium project in the Kyrgyz Republic. The project has an inferred uranium resource that could be worth $144m at $26/lb, plus exploration upside. International Mining Company owns 100% of the project and it would be put into a new vehicle, where MetalNRG would inject cash to gain its majority stake. MetalNRG has 90 days to undertake due diligence and review data. If the option is not taken up the option fee would be converted into a 2.5% stake in the new vehicle.
VI Mining (VIM) is starting its drilling campaigns at minas Pampa and Rosario de Belen, while the vendors are in discussions about changes in the terms of the deals. The timing of the due payment has been extended while the talks continue.
Panther Metals (PALM) has appointed Ariana Resources (AAU) boss Dr Kerim Sener as a non-executive director.
Ecovista (EVTP) is asking for shareholder approval for a resolution that will enable it to issue up to 3.486 billion shares so that management can continue with its strategy.
AIM
Gatemore Investments has increased its stake in TLA Worldwide (TLA), the company famous for issuing a profit warning after the market closed prior to Christmas 2016, from 7.4% to 12.2%. Bart Campbell has stepped down as executive chairman of TLA, but he will continue to receive his monthly salary until the end of the year.
Last year, revenues fell by nearly one-third to £24m at microwave electronic products supplier Filtronic (FTC) but it had already been flagged. The ending of a low margin contract meant that pre-tax profit fell from £2.16m to £1.23m, although that includes exceptional finance charges of £486,000 due to exchange rate movements. The broadband and wireless divisions are being merged because they have similar customer bases. There is net cash of £3.6m plus available bank facilities. Investment in new products continues and there is long-term demand from investment in 5G networks and security-related areas.
Marshall Motor (MMH) reported a decent set of figures given the tough new car market, which is exacerbated by the decline in diesel car sales. There was a small dip in continuing revenues but underlying pre-tax profit edged up to £16.4m. Used vehicle profit improved. The dividend is maintained at 2.15p a share. Trading will be even tougher in the second half, partly due to testing regulation changes, and full year profit is expected to decline from £29.1m to £24.2m. There is a strong balance sheet with a NAV of £201m.
Zamano (ZMNO) has ended discussions with its potential reverse takeover target. This means that cash is likely to be returned to shareholders.
Condor Gold (CNR) has been granted an environmental permit for developing a processing plant for the La India project by the Nicaragua authorities. Gold production could be 80,000 ounces a year from a single open pit. Accounts for the six months to June 2018, show cash of £1.57m.
Abzena (ABZA) is recommending a 16p a share cash bid from Astro Bidco, which values it at £34.4m. The life sciences company joined AIM four years ago when it raised £20m at 80p a share. It needs additional finance pumped into the business.
Oil and gas producer Empyrean Energy (EME) has received a $906,000 tax refund from the IRS from the 2016-17 tax year.
SalvaRx Group (SALV) is selling its business to a Toronto-quoted company in return for shares, most of which will be distributed to shareholders. The 94.2% stake in cancer drugs developer SalvaRx Ltd is being swapped for 757.9million shares in Portage Biotech Inc, which are deemed to have a value of $67.5m. SalvaRx shareholders will receive 18 Portage shares for each SalvaRx share they own if they approve the disposal. SalvaRx will retain around 100 million Portage shares and become a shell.
ClearStar (CLSU) has been named as preferred contract labour screening provider for Gulfstream Aerospace. This should contribute to a reduction in loss this year.
Premier African Minerals (PREM) has raised £750,000 at 0.18p a share. Premier plans a drilling programme of up to 2,750 metres to expand the resource base at the RHA Tungsten mine. The cash should last until the end of 2018.
MAIN MARKET
Tex Holdings (TXH) reported a slump in interim pre-tax profit from £423,000 to £96,000 even though there was a small reduction in admin expenses. There was a much better contribution from the plastics division but that was more than offset by the slump in profit by the engineering division due to delays in orders. Metal fabrication and powder coating business Argento UK has recently been bought. The interim dividend is unchanged at 2.5p a share.
Nanoco (NANO) expects the first displays using its cadmium-free quantum dots to be launched before Christmas. Volume production is expected at the new Runcorn plant before the end of 2019. The 2017-18 revenues were lower than expected because it could not recognise a payment from a large customer. Net cash is estimated at £7.9m at the end of July 2018.
Dukemount Capital (DKE) reported an increase in full year loss from £177,000 to £286,000. The NAV was £379,000 at the end of April 2018. There is £148,000 in the bank. Dukemount is on the brink of moving forward with its first two supported living developments.
PV Crystalox Solar (PVCS) has settled its claim with a customer. The customer will pay a total of €28.8m, of which the outstanding payment of €14.3m will be paid at the end of November. The customer has also waived the delivery of the solar wafers that were supposed to be supplied.
Andrew Hore
Bovis Profits And Completions Tumble
Bovis Group BVS It is years since a major house builder produced such an appalling set of results. To do so at a time when the industry is in a long term boom illustrates the depth and severity of the problems which Bovis created for itself and to which management was too inept to find solutions. At least it now has a new CEO who has been in post since April and can hopefully start to get a grip on things.
Completions in the six months to the 30th June fell by 6% which is no surprise because at the same time the average selling price of a Bovis home rose by 9%, which the company appears to be trying to claim was not really a price increase as such but due to a change in mix. The result is that half year profit before tax fell by 31% and earnings per share by30%, whilst net debt more than quadrupled to over £32m. The company claims that the disaster is down to operational issues which can be fixed. The interim dividend remains unchanged but as a sweetener to shareholders they are promised that the full year dividend for 2017 will be increased by 5% and that for 2018 it they will get a further 20% increase. In addition, over the three years to 2020, special dividends equal to 134p per share will also be paid.
Since February customer rating levels are said to have improved significantly but they are still down at 74% which means that a quarter of Bovis customers are dissatisfied. One answer the company proposes is to focus on affordable housing and the second is to increase the number of houses built to 4,000 a year. In the current half year it completed 1,512.
Empyrean Energy EME is excited about the prospects for offshore China Block 29/11 and confirms that, based on its internal preliminary analysis, the Block contains prospects of truly significant scale and size. The three priority targets have the potential to contain 591m barrels of oil.
Molins MLN moved back into profit for the half year to the 30th June with last years half time loss of £0.3m being replaced by a statutory profit of £0.9m. Basic earnings per share of 4.3p similarly replaced a loss of 1.5p per share. The company claims that it is now positioning itself for sustained long term growth.
Villas & houses for sale in Greece – visit; http://www.hiddengreece.net
Quoted Micro 7 August 2017
NEX EXCHANGE
Valiant Investments (VALP) has raised a further £52,500 at 0.1p a share and its 84.7%-owned subsidiary Flamethrower has acquired FootballTipsFC.com for £40,000. Subscriptions generate £50,000 a year in revenues for the website which provides football betting tips.
Asia Wealth Group Holdings (AWLP) reported a lower loss in the year to February 2017. Revenues improved from $1.2m to $1.53m, while the loss reduced from $150,000 to $110,000. The main business, Meyer Asset Management, made an improved contribution. The auditor has highlighted that no impairment assessment has been made on the investment in Ray Alliance. There is still $869,000 in the bank, following the acquisition of an investment property for $388,000. Management is assessing acquisitions in the fintech sector.
Block Energy (BLOK) has acquired a producing oil field in Georgia. The 90% working interest in the Satskhenisi production sharing agreement will be acquired for 70 million shares (14.35% of Block), which will be owned by Iksander . The field is near the Norio field where Block already has an interest. The permit runs until 2025 with a potential five year extension. Operating costs are up to $25/barrel and the current production from three wells is 10 barrels a day. The sale price is Brent minus $9/barrel. Block will retain 75% of revenues until more than $10m of capital costs are recovered. The purchase includes $500,000 worth of equipment, which can be used in other fields where Block has an interest.
Via Developments (VIA1) has raised a further £100,000 from a placing of 7% debenture stock 2020. Via has completed the Canal Street development in Manchester and the realised gross development value is £2.28m.
Hellenic Capital (HECP) has acquired an office premises in Leeds for £200,000. This was after the latest interims to June 2017. This is part of the new investing strategy. Net assets fell from £81,000 to £59,000 at the end of June 2017, including cash of £28,000.
Capital for Colleagues (CFCP) has invested an additional £150,000 in portfolio company Computer Application Services. Capital for Colleagues initially invested £150,000 in the Edinburgh-based software company at the beginning of 2016 and the latest investment will double the number of A shares it owns to 300,000.
Ecovista (EVTP) has raised £350,000 at 0.035p a share. This takes the stake owned by Hubwise to 12.45% and Elite CAM Balanced Discretionary Fund to 9.34%
AIM
Asset management performance software provider StatPro (SOG) reported a 23% rise in interim revenues to £21.6m, while underlying earnings per share improved from 1.1p to 1.8p. The interim dividend is unchanged at 0.85p a share. There was an initial two month contribution from the UBS Delta business and the annualised recurring revenues are running at £53.2m, which is before the latest three year contract in Australia. The acquired technology will be integrated with StatPro Revolution.
Telecoms infrastructure equipment supplier Filtronic (FTC) reported a jump in full year revenues from £13.6m to £35.4m thanks to a large order for antennas. There was a swing from a £7m loss to a £2.2m profit. The balance sheet is strong with net cash of £2.6m. Future investment in 5G telecoms infrastructure augurs well for Filtronic. Hargreave Hale has increased its stake from £6.16% to 11.3%.
Real Good Food (RGD) says that its forecast for the year to March 2017 was wrong because two anticipated claims have not materialised and it had incorrectly capitalised certain costs. This will knock £2m off expected profit. This revelation comes a few weeks after Downing invested £2.75m at 35p a share and the share price has subsequently slumped to 20.75p. Payments to Pieter Totte and Peter Salter over a three year period were not separately disclosed. Salter has left the Real Good Food board but Totte continues to survive as executive chairman.
Fairpoint Group (FRP) says it intends to appoint an administrator because of the cost of the lease on its head office costing £1m a year for four years. The IVA and related businesses are still being sold.
AdEPT Telecom (ADT) has acquired IT services provider Atomwide, which provides services to schools and local authorities, for an initial £12m. This adds 4% to this year’s earnings and 9% to next year’s. It was partly funded by £7.3m convertible loan from Business Growth Fund, which is convertible at 393p a share.
GetBusy (GETB) joined AIM last week and the share price rose to 34.5p. Cloud-based document management software provider GetBusy was spun out of ASX-listed software company Reckon and raised £3m from a rights issue. The two existing software products, SmartVault and Virtual Cabinet, generated revenues of £8m in 2016 – 82% of which is recurring – up from £6.8m the previous year. Accounting firms generate the majority of revenues and GetBusy is trying to expand in other sectors. Next generation software SCIM is being developed in order to make it easier for businesses to interact with customers and become more organised and productive.
Botswana Diamonds (BOD) has raised £543,000 at 1.25p a share and warrants have been exercised at 0.85p a share raising a further £265,000. The cash will finance exploration in Botswana and to assess an inferred resource for Frischgewaagt.
Ascent Resources (AST) has installed the infrastructure at the Petisovci project in Slovenia to enable the gas to be exported.
TechFinancials Inc (TECH) says that 51%-owned DragonFinancials is paying a dividend of $2m and TechFinancials will receive £1.02m. The payment date is 20 August.
Kestrel Partners has slashed its stake in home improvement products supplier entu (UK) (ENTU) from 21.1% to 7.33%. This investment appears a rare mistake for Kestrel which has a good record of building up stakes in technology businesses. Kestrel was still building up its entu stake in the first quarter of this year. The entu share price is around its all-time low so Kestrel will have made a significant loss on this investment. Meanwhile, entu is trying to secure a refinancing but this is likely to mean that the existing shareholders will be left with little in terms of value. The group continues to lose money.
Thor Mining (THR) is acquiring an interest in Kapunda copper deposit in South Australia. Thor is investing up to A$1.8m in convertible loan notes in a company earning a 75% stake in Kapunda. The initial investment is A$200,000. Conversion of the loan notes could give Thor up to 60% of this company. Due diligence on the US lithium assets has gone well and additional mineralisation has been identified. Director Paul Johnson acquired 500,000 Thor shares at 085p each.
A disposal deal for the interiors division of Stanley Gibbons (SGI) has fallen through because the buyer could not come up with the money. There is a termination fee payable and Stanley Gibbons believes that there are other buyers.
MayAir Group (MAYA) has won a $13.6m order to supply filtration and clean room equipment to a Chinese LCD panel manufacturer and most of the revenue will be recognised in 2017.
Empyrean Energy (EME) has raised £1m at 8.5p a share. Drilling has commenced on the Dempsey 1-15 onshore well in California.
Billington Holdings (BILN) says that its structural steel business has won two contracts worth £14m. One is for a London university and the other is for a distribution warehouse in south west England and some of the work will carry over into 2018.
MAIN MARKET
Diesel engines and parts supplier Associated British Engineering (ABSE) reported a higher loss in 2016-17 and there was also a sharp drop in NAV. The weak oil and gas market continues to hold back the group and revenues fell from £1.77m to £1.04m. The loss increased from £621,000 to £962,000, after a large increase in pension costs. The total cash outflow was just over £1mm similar to the previous year. Cash and financial assets total £968,000. There is a 2.3% stake in AIM-quoted SalvaRx. The initial stake was taken when the company was 3legs Resources. The NAV fell from 73p a share to 50p a share. This is despite a decrease in the pension deficit from £1.93m to £1.38m. There are £3.1m of trading losses and £8.5m of capital losses available but there is no deferred tax asset in the balance sheet.
Andrew Hore
Quoted Micro 25 January 2016
ISDX
Goldcrest Resources (GCRP) has secured the acquisition of Taoudeni Resources, which owns the Asheba gold project that is situated at the southern end of the Ashanti gold belt in Ghana. Goldcrest’s non-executive chairman Gavin Burnell is also a shareholder in Taoudeni, which has a non-JORC compliant resource of 176,000 ounces at 1.8g/t. Goldcrest has already conditionally acquired the nearby Akoko gold project, which has a JORC resource of 92,800 ounces at 1.9g/t. The company will seek to generate a JORC-based resource for the combined project. Goldcrest will issue 599.2 million shares for the initial consideration with deferred consideration of 617.7 million and 102.3 million warrants exercisable at 0.05p a share and lasting ten years. ISDX-quoted Hot Rocks Investments will receive 193.5 million of the initial consideration shares, taking its stake to 14.6%, plus 43.2 million of the warrants and is due to receive 320.8 million of the deferred consideration shares. AIM-quoted Sunrise Resources receives 116.6 million shares and 9.8 million warrants. Niall Tomlinson and Dr Ryan Long will join the Goldcrest board. At 0.06p (0.05p/0.07p) a share, Goldcrest is currently valued at £900,000.
A newly formed subsidiary of FT8 (GFT) has taken a 40% stake in BIPS Technologies in exchange for rights to use technology developed by FT8 to make payments and disbursements of employee benefits for healthcare providers and insurers and in this case specifically for the voluntary benefits market in the US. FT8 has also agreed to cover banking fees associated with the administration of a Supplemental Insurance Funds Transfer Program. BIPS will hold the contractual rights to this fund which will service the clients of Homeland HealthCare Inc. A minimum employee enrolment of 75,000 is projected by the end of 2016 and it is projected that it could reach a minimum of 350,000 by the end of 2018. Gross revenue per employee signed up should be just over $1/month. FT8 will not have to provide any additional finance for BIPS. At 0.65p (0.6p/0.7p) a share, FT8 is valued at £4.8m.
Blockchain technology companies investor Coinsilium Group (COIN) has invested an additional $50,000 in data management blockchain company Factom Inc. This takes the total invested to $200,000, which equates to 2% of the diluted share capital of Factom. The Coinsilium share price has recovered to 8p (6.5p/9.5p).
Ecovista (EVTP) is raising a further £252,000 at 0.06p a share. The current share price is 0.075p (0.07p/0.08p). Ecovista is also seeking shareholder approval at its AGM so that any breach of the directors duties caused by previously issuing more shares than they were allowed to will be waived.
Trading in the bonds of recruitment company Positive Healthcare (DOC) has been suspended because £1.75m of the £2m that the company claimed it had raised has not been received. The bond register needs to be rectified and then Positive Healthcare can try to issue more bonds.
Via Developments (VIA1) has raised an additional £206,000 (£204,000 after expenses) from a further issue of 7% debenture stock 2020. This takes the debentures in issue to £1.76m. Via joined ISDX on 5 November having issued £530,000 7% debenture stock 2020. The Manchester-based residential property development funder wants to raise up to £3.5m.
AIM
Empyrean Energy (EME) is selling its 3% interest in the Sugarloaf AMI development in Texas to Carrier Energy Partners II for $61.5m and this should enable a cash distribution to shareholders. If oil prices average more than $55/barrel this year then more could be payable – up to a maximum of $10m. Empyrean expects to pay $3.6m in tax plus $5.2m for outstanding bills owed to the Sugarloaf operator Marathon Oil and it will repay its debt facility of $21.6m. This will leave Empyrean with a 58.1% working interest in the Eagle Pool development project in California, a 7.5% working interest in two producing wells in Sugarloaf block A and a 10% working interest in Riverbend project in Texas. New opportunities will be sought.
Colin Porter is stepping down as chief executive of STM Group (STM) in order to take up a position in the US. He has a 12 month notice period so there is plenty of time to find a replacement. This led to a sharp drop in the share price even though it was confirmed that trading is in line with expectations for a 2015 profit of £2.7m. Alan Kentish will become interim chief executive.
Energy storage technology developer RedT Energy (RED) is raising £3.5m at 6.75p a share – a huge discount to the market price. The share price was just over 10.5p a share a few days before the placing was announced but it fell to 8.38p a share after the announcement – although that is still relatively high compared to the share price in the past three years. House broker finnCap has edged down its target price from 14.5p to 14p. RedT has received an initial $2m from the sale of its US biogas interests so it will have a cash pile to finance the commercialisation of its battery technology.
Big data services provider Fusionex International (FXI) reported revenue growth of 33% to RM70m last year. In the year to September 2015, pre-tax profit rose from RM19.5 to RM24.9m, while earnings per share were 28% higher at RM0.58 (9.4p). There has been criticism of cash generation levels and this led to a slump in the share price. Fusionex says that since September RM23.4m (£3.8m) of the year-end receivables of RM28.5m (£4.6m) has been collected.
Nasstar (NASA) says trading is in line with expectations following a strong second half, helped by the acquisition of VESK. The cloud-based services supplier has renewed the contract with its largest client – there had been some client losses earlier in the year. Net debt of £5.3m at the end of 2015 is slightly lower than expected.
Worldview Capital Management says that it is considering a cash offer for Petroceltic International (PCI). Worldview already owns 29.6% of the Irish oil and gas company, which launched a strategic review before Christmas. Advances have been received for some of Petroceltic’s remaining assets. Petroceltic has received a further waiver of repayments under its senior debt facility until 29 January so that it can continue with its strategic review. The debt facility amounted to $217.8m before Christmas.
Portfolio analytics software supplier StatPro (SOG) has paid an initial $10m for Investor Analytics, a US business that provides cloud-based risk analytics for hedge funds and asset managers. Up to $6m more could be payable depending on winning new contracts. The business has annualised recurring revenues of $4.85m (£3.3m) – out of total revenues of $5m – and should be earnings enhancing in 2016 following integration and annual cost savings of £700,000 – at a cost of up to £1m.
Tissue Regenix (TRX) says that DermaPure, which is used to treat wounds due to diabetes, has generated more than $1m in sales and it is available for reimbursement in 31 states of the US. Tissue Regenix has recruited 20 people for the OrthoPure XM clinical trial designed to gain a CE mark in Europe. OrthoPure XM is designed to repair damaged menisci, which is a condition that could lead to the onset of osteo-arthritis. The patients will be monitored for six months as part of the final information required for the CE mark submission later this year. Consort Medical boss Jonathan Glenn has been appointed a non-executive and Tissue Regenix will benefit from his medical devices expertise.
Condor Gold (CNR) has ended the strategic review it announced last September and it is no longer deemed to be in an offer period. The share price slumped by two-thirds over the period which meant that Condor was valued at $5/resource ounce so a realistic bid is unlikely at the moment. The average NPV of the La India project in Nicaragua is $196m. There are 1,544,000 ounces of inferred and indicated contained gold resources in total. Average annual gold production of 165,000 ounces is anticipated for the first five years and cash costs of production should be less than $700/ounce.
MAIN MARKET
Investment company Highway Capital (HWC) has appointed the chief executive of the Bucharest Stock Exchange as its new chairman. Ludwik Sobolewski was previously the boss of the Warsaw Stock Exchange. This follows the appointment of Dariusz Zych and Jacek Ślotała as directors in November. This suggests an eastern European focus to investments. Dominic Wheatley has stepped down as chairman but remains on the board. The other director, Maciej Szytko, has loaned £120,000 to Highway on top of a previous £30,000 loan. The loan lasts five years, from July 2015, and is convertible at 10p a share. Szytko already has a 29.99% shareholding. At the time of the loan the share price was 16p, while the current share price is 14.5p. Highway moved from a premium listing to the more lightly regulated standard listing in 2013.
Cash shell Falcon Acquisitions Ltd (FAL) has gone to a 70% premium following its flotation on the standard list on 18 January. An initial placing raised £1.6m at 10p, which capitalised the company at £2.04m, and the shares ended the week at 17p. This is based on just over one million shares traded during the week. There is a secondary fundraising that may raise up to £2m at a share price to be set between 10p and 30p. There was already £265,000 in the bank before the flotation so there is cash of £1.65m after costs of £220,000, compared with a market value of £3.47m. The focus is acquiring businesses involved in online, mobile and video broadcasting. Any target is likely to be worth up to £30m.
ANDREW HORE