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Quoted Micro 28 August 2017
NEX EXCHANGE
Good Energy (GOOD) and Ecotricity have come to an agreement that means the latter has withdrawn its requisition of a general meeting. No details were released about the reasons behind the withdrawal.
Cadence Minerals (KDNC) is in talks to sell part of its 16.1% stake in AIM-quoted Bacanora Minerals (BCN) to a strategic investor group. Bacanora’s main interest is in the Sonora lithium project in Mexico.
Blockchain investment company Coinsilium Group Ltd (COIN) has formed a Gibraltar-based subsidiary called Terrastream Ltd, which plans to develop blockchain platform for a token-based alternative funding system. Gibraltar is expected to be the first jurisdiction to develop a regulatory framework for distributed ledger technology and the blockchain. A token sale will help to finance the development work. The initial focus is likely to be the resources sector.
MetalNRG (MNRG) has added additional ground to its licence in Australia. The new area will be called Palomino North.
All Star Minerals (ASMO) has extended the terms of the convertible loan note issued to Valiant Investments have been extended so it matures in May 2018. The annual interest charge is 20% and the conversion price is 0.1p a share. The maturity dates of other loan notes totalling £110,000 have been extended to January 2018. The interest rate and conversion price are the same. Shares have been issued to satisfy past liabilities on these loan notes.
AIM
Warehouse REIT has issued the AIM prospectus for its placing, offer for subscription and intermediaries offer to raise up to £150m. An existing portfolio of warehouse assets will be acquired for £108.9m, based on a 7% net initial yield, and there are other potential assets being assessed. A dividend of 5.5p a share is being targeted for the year to March 2019.
Utilitywise (UTW) has confirmed that trading last year was in line with expectations so pre-tax profit is likely to decline from £8.2m to £4.7m.
Palace Capital (PCA) has sold a Bristol property for £2.25m, which is its net asset value, following the loss of one of its tenants, Blafour Beatty. The property was acquired as part of a portfolio from Quintain in 2013.
Scientific Digital Imaging (SDI) is acquiring Applied Thermal Control, a manufacturer of chillers, coolers and heat exchangers, for up to £1.2m.
Management Resource Solutions (MRS) says that its chief executive Joe Clayton has left the company. He was appointed chief executive at the end of 2016. In the year to June 2017, MRS generated revenues of A$52.2m and the loss for the year will be higher than expected. Exceptional costs will also be higher than thought initially. MRS had cash of A$2m.
Gatemore Capital has increased its stake in DX (DX.) from 21.3% to 23.8% following the resumption of trading in the shares.
Redx Pharma (REDX) will be paying unsecured creditors in full. The process has begun but it will take some time. This brings the reintroduction of trading in the shares nearer.
Home improvements products provider entu (UK) (ENTU) is appointing an administrator because it has not agreed a refinancing with a potential financial backer. The trading businesses will be sold. Trading in the shares was suspended on 24 August. entu raised £32.8m when it joined AIM in October 2014.
Kin Group (KIN) has been unable to secure the funding it requires and an administrator has been appointed to the main subsidiary. Kin Group will not get anything from a sale of the subsidiary and it will become a shell. There will still be a requirement for a fundraising for the shell to be viable.
365 Agile (365) has left AIM because it has been unable to secure a reverse takeover. Potential acquisitions are still being assessed.
Mercantile Ports and Logistics Ltd (MPL) has signed up the first customer for its Mumbai port facility. This should generate £4.7m for each one million tonnes handled, with the payment raised by 7% a year. Two million tonnes of cargo have been contracted for the first year, with a guaranteed minimum of 750,000 tonnes, and the figure will rise for each of the next two years reaching three million tonnes in the third year, with a minimum of two million tonnes. Operations should commence in December. The share price rose by two-thirds to 8.13p.
Sula Iron & Gold (SULA) has raised £900,000 at 0.146p a share but £500,000 of this figure will be part of an equity sharing agreement. Sula is gambling that it will receive £500,000 or more as part of the equity sharing agreement and this will paid on a monthly basis until September 2018. The benchmark price is 0.161p a share so each month the share price has to be at least that level for Sula to at least receive that amount owed. The board members have agreed to halve their salaries.
Verditek (VDTK) has secured a deal that will mean that 51%-owned Greenflex Energy will provide its solar technology to power digital advertising boards in bus shelters in Italy. This is a trial contract won via competitive tender and starting with one bus shelter and then rolling out to a further 20. The customer is Media One, which operates more than 5,000 digital advertising boards.
Finsbury Food (FIF) is closing the loss-making pastry products maker Grain D’Or,which has failed to improve despite cost controls. Grain D’Or was acquired as part of the £56m Fletchers acquisition in 2014 and last year generated revenues of £28.5m.
Church & Dwight has terminated its CSD500 condom licensing deal with Futura Medical (FUM) after just over four years. The licence covered North America and part of Europe. The rights will be returned to Futura by November. New partners will be sought.
Green & Smart Holdings (GSH) says that biogas project development is on track and the company could pay a maiden dividend for the 2017-18 financial year.
Investment in the business has held back first half progress at packaging manufacturer Robinson (RBN) and underlying pre-tax profit fell from £580,000 to £364,000. It was also difficult to pass on plastic resin cost increases. Full year profit is forecast to fall from £2.2m to £1.2m.
Bushveld Minerals Ltd (BMN) has retired its $3m prepayment facility, which was used to buy part of its 78.8% stake in Strategic Minerals Corporation, with Wogen Resources. Vametco Alloys has increased its facility from $6m to $11m. Vametco’s Nitrovan vanadium will be marketed by Wogen around the world outside of Japan and Taiwan.
Filta Group Holdings (FLTA) is acquire drain services provider Grease Management for up to £1.11m. Annual revenues are £1.28m and three-quarters are recurring. Post-acquisition cost savings of around £100,000 could nearly double the profit contribution.
Cancer drug developer Sareum (SAR) says that its full year profit will be better than expected. The cash pile will also be higher than forecast.
Sphere Medical Holdings (SPHR) is ditching its AIM quotation as part of a funding deal with Woodford Investment Management and the Wales Life Sciences Investment Fund, which will invest £5m in convertible preferred shares. Other investors will invest up to £3m. The convertibles will be issued at 2.82p each and can be swapped for one ordinary share. Sphere will be re-registered as a private limited company, which makes it possible for Woodford to invest more.
MAIN MARKET
Nanoco Group (NANO) is attracting interest in its cadmium-free quantum dots following the EU’s plans to ban cadmium in displays from October 2019. However, revenues are slower in coming through than hoped.
Photovoltaic silicon wafers supplier PV Crystalox Solar (PVCS) still had net cash of €27.9m at the end of June 2017. Running down inventories has offset the loss of €5.4m. A decision should be made by the arbitration tribunal concerning a customer that did not purchase the wafers it was contracted to buy by the end of September.
Packaging company Macfarlane Group (MACF) increased its revenues from £81.5m to £89.8m, while pre-tax profit jumped from £2m to £2.54m with the improvement coming from the distribution business. Net debt was £14.6m at the end of June 2017, while the pension fund deficit was cut from £14.5m to £13.4m. The interim dividend was increased from 0.55p a share to 0.6p a share.
Following the ending of bid talks for Quarto (QRT), Liontrust has cut its stake from 12.65% to 7.54%. Cavendish Asset Management has taken its stake to 5.18%, while two directors have also made small purchases.
Shares in standard list hostels operator Myanmar Strategic (SHWE) started trading on 22 August. The placing price was $10 and the shares are trading at $9.5m – a bid/offer price of $7/$12.
Standard list shell Boston International (BIH) is in talks to acquire Cornhill FX Holdings. This is part of the strategy to acquire operations in the foreign exchange sector. Legal and financial due diligence is being undertaken. Cornhill Capital is Boston’s broker.
Andrew Hore
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 10 July 2017
NEX EXCHANGE
Coinsilium Group Ltd (COIN) has sold its remaining stake in nanopayments software and blockchain company SatoshiPay to AIM-quoted Blue Star Capital (BLU) for €725,000 (£650,000), which has been raised through a placing at 0.2p a share. Blue Star Capital owns 31.1% of SatoshiPay. Blue Star Capital has granted Coinsilium 85 million warrants, of which 42.5 million are exercisable at 0.6p and 42.5 million at 0.8p. Coinsilium has made a gain of 362.6% on its initial SatoshiPay investment in less than two years, even before any longer-term upside from the warrants.
Via Developments (VIA1) has secured an exclusivity agreement to acquire land in Luton, Bedfordshire for £8.25m. The residential development site has planning permission for 200 apartments. A non-refundable deposit of £50,000 has been paid.
Capital for Colleagues (CFCP) has invested £400,000 in Employee Owners Group Ltd, whose main business is timber frame buildings supplier Carpenter Oak, in return for a 30% stake. The cash will be used to grow the business which currently supplies around 90 frames a year.
First Sentinel (FSEN) has raised £700,000 at 11p a share and made three investments, including £35,000 at 7p a share in fellow NEX-quoted company Milamber Ventures (MLVP). The two firms are already working on an investor event at the Century Club, Shaftesbury Avenue in London on 11 July. First Sentinel plans to sell the Milamber shares in the market. First Sentinel has also invested $300,000 in a 13%, one year loan note for Red Rock Resources (RRR) with two year warrants exercisable at 2.2p a share, compared with a market price of 0.75p. The third investment is in newly floated AIM copper mining company Phoenix Global Mining (PGM), where First Sentinel invested £81,000 at the placing price of 4p a share.
Blockchain investments company Kryptonite 1 (KR1) has raised £750,000 at 2p a share. Chinese medicines firm MiLOC Group Ltd (ML.P) has raised £99,000 at 28.5p a share.
AIM
Premier Technical Services Group (PTSG) is acquiring Brooke Edge Industrial Chimneys Ltd for an initial £14m, plus £1m in acquisition costs, and the building services provider has raised £15m in a placing at 120p a share. There is deferred consideration of £6m payable in three yearly instalments, which fits with the owners staying on with the business for at least three years. The acquisition made a profit of £2.1m on revenues of £10.6m last year. This consolidates Premier’s position in lightning protection services, while specialist earthing and surge protection will be added to the group’s range of services. Although the acquired business has similar margins to Premier, it has lower margins than the same businesses already owned by Premier. This means that continued growth in revenues could be complemented by improvements in margins providing even faster profit growth. According to Numis, he acquisition will enhance earnings per share by 5% to 8.7p in 2017 and 12% to 9.2p in 2018.
Blur Group (BLUR) has managed to raise £1.7m at 1.75p a share in an oversubscribed placing that more than trebles the number of shares in issue. There is one warrant for every four shares with an exercise price of 3.5p. Robert Keith has increased his stake to 25% following the placing. The need for the cash is reflected in the low issue price, which is more than 40% below the all time low market price.
Superyacht painting and maintenance services provider GYG (GYG) joined AIM on 5 July and the share price has already risen from 100p to 120p. GYG raised £6.9m before expenses.
Thor Mining (THR) will start a drill programme for the Pilot Mountain tungsten project in August. Thor expects the results in the near future from a 50 hole drilling programme on the Dundas gold project in Western Australia. Further opportunities are being assessed.
Portmeirion Group (PMP) says that its sales were 16% higher in the first half of 2017 but excluding home fragrance products manufacturer Wax Lyrical, which was acquired in May 2016, the sales are 3% higher due to a boost from sterling weakness. Churchill China (CHH) continues to grow it exports and this has been helped by weaker sterling comparatives in the first half of 2017.
Walker Greenbank (WGB) has received its final insurance payment of £2.4m relating to the flood of its fabric printing factory at the end of 2015. This takes the total payment to £19.3m.
Home improvement products supplier entu (UK) (ENTU) is undertaking a strategic review. There are already plans to cut costs and improve efficiency but entu needs to secure long-term financing to improve the balance sheet. There could also be disposals of businesses.
Sula Iron & Gold (SULA) has completed six holes of the phase 3 drilling at Sanama Hill at the Ferensola gold project in Sierra Leone. So far, 2,000 metres out of a total of 5,000 metres of drilling has been completed. Part of the drilling will include further exploration of the new southern target. The assay results will be available at the end of July.
Veltyco Group (VLTY) says that first half trading is significantly ahead of market expectations. This is not the first time that Veltyco has beaten expectations and even before this the full year pre-tax profit was expected to jump from €1.74m to €4.62m.
TechFinancials Inc (TECH) expects to make a first half loss. Senior management has taken a 20% pay cut. There is still $5.8m in the bank.
Safestay (SSTY) has acquired second hostel in Barcelona for €2m. Safestay has eleven hostels and acquisitions have gathered pace following a £12.6m sale and leaseback deal.
MAIN MARKET
Share trading will commence on 12 July in standard list shell Rockpool Acquisitions, which is seeking to acquire a Northern Ireland-based company. Rockpool is raising £1.085m at 10p a share, having previously issued 1.875 million shares at 8p each.
RockRose Energy (RRE) has raised £8m at 150p a share and it continues to progress the acquisition of oil and gas assets.
Gresham Technologies (GHT) says that revenues will be 26% higher in the first half of 2017. Eight new Clareti Transaction Control software clients have been signed up in the first half. Net cash is £7.7m.
Quarto Group Inc (QRT) has sold its New Zealand business, which was the last non-publishing business owned by the group. Quarto will receive $600,000 over two years plus 50% of debtor receipts for the next year. Quarto is also entitled to 15% of pre-interest profit for three years.
Andrew Hore
Quoted Micro 19 June 2017
NEX EXCHANGE
Newbury Racecourse (NYR) says that raceday attendances are 29% so far this year and no meetings were lost to the weather. Conference and events revenues have been maintained despite the refurbishment of the racecourse. Occupancy levels are building up at on-site hotel The Lodge. The Rocking Horse nursery has increased revenues by 29%. The pre-parade ring and saddling boxes are completed and the Owners’ Club conference and wedding venue will be finished in the late summer. Further improvements will begin later this year. The first home owners have moved into the residential development, which will take until 2021 to complete. Newbury is involved in the new racecourse controlled betting pool from July 2018.
Coinsilium Group Ltd (COIN) has signed a memorandum of understanding with hedge fund HyperChain Capital. This will lead to co-investment opportunities in blockchain companies. Singapore-based HyperChain predominantly invests in tokens, which has proved more profitable than direct investment in companies in recent times – see Kryptonite 1. The two investors are each invested in social trading crypto platform CoinDash, which is about to launch a token offering.
Kryptonite 1 (KR1) has made a profitable turn on tokens in blockchain-related investments, some of which were acquired four months ago. The company sold 6,407 Melonport tokens for £33.17 each, raising £212,520, compared with the buying price of £3.87 each providing a profit of just over £187,000. The 2,105,254 tokens acquired in the Golem project were sold for an average price of 27p each – 27 times the original investment – raising £569,418 and representing a gain of just over £548,000. Kryptonite 1 has tax losses, which it should be able to use to offset against the total gains of £735,000. A small amount of the cash raised has been reinvested in 126,796.5 tokens in the initial coin offering of the Mysterium project – a peer-to-peer, server-less virtual private network.
Property investment company Ace Liberty & Stone (ALSP) is paying an interim dividend of 1p a share. The shares go ex-dividend on 22 June.
Peterhouse has resigned as corporate adviser to African Potash Ltd (AFPO), which has also completed the acquisition of a 21% stake in Advanced Agricultural Holdings in return for 221.6 million African Potash shares (11.8% of the enlarged share capital).
NEX Exchange Company of the Year
Here are the companies on the shortlist for NEX Exchange Company of the Year which will be awarded at the 2017 Small Cap Awards on 22 June.
Adnams (ADB)
£33.6m @11750p (11500p/12000p)
Brewer and distributor Adnams has been around the longest of the five nominees for this award and it is also much larger than any of the others. Adnams, which sponsored last year’s Tour of Britain cycling event, continues to invest in its brewery with beer sales moving above 100,000 barrels in 2016. More of that beer is being sold in kegs. The £7m investment in the brewery is almost complete.
In 2016, revenues improved from £65.7m to £70.3m, while pre-tax profit increased from £4.07m to £5.02m, predominantly down to a rise in asset disposal gains from £625,000 to £1.43m. The NAV has fallen to £27.5m because of an increase in the pension liability. There is a dividend of 150p per B share and 37.5p per A share.
So far this year, sales of beers and spirits continue to grow and Adnam’s pubs are trading well, although the sale of smaller pubs will reduce the profitability of this part of the group. Currency movements, the sale of the UK distribution rights for Lagunitas beers and the renovation of the Swan Hotel will hamper overall progress in the first half. This year there will be the first beer duty tax increase in four years.
Capital for Colleagues (CFCP)
£6.9m @45p (40p/50p)
Employee ownership-focused investment company Capital for Colleagues has not had a smooth ride in the past year with a major investee company going bust but it is still able to attract more cash from investors. Capital for Colleagues raised £1.44m at 42p a share from its recent open offer and a further £980,000 in a placing at the same price.
One of the group’s employee-owned investee companies FJ Holdings sold its businesses and was placed in administration. Capital for Colleagues was not kept up to date with these moves. The figures for the six months to February 2017 show the aftermath of this loss. The profit from ongoing activities improved from £40,000 to £159,000 but the write-off for FJ of £1.32m, more than one-fifth of the previous asset value, meant that there was a loss of £1.16m. The NAV fell to 43.5p a share at the end of February and this will be slightly diluted by the subsequent fundraising.
There remains strong demand from companies wanting to encourage employee ownership and the Capital for Colleagues management has, excluding FJ, a good record.
Chapel Down Group (CDGP)
£94.9m @94p (90p/98p)
English wines producer Chapel Down has been one of the most high-profile companies on NEX. Revenues grew by one-quarter to £10.2m in 2016. The Tenterden-based wine business grew revenues by 22% and the brewing operations increased revenues by one-third.
Brewer Curious Drinks separately raised money to build a new brewery but Chapel Down still effectively controls the business – although it is now classified as an associate in accounting terms. The Ashford brewery will be open in mid-2018 and this will free up space for wine making at Tenterden.
Continuing operations moved from an underlying pre-tax profit of £156,000 in 2015 to £340,000 in 2016. Gross margins on the wine business improved from 40% to 43%. More premium wines are being launched this year.
Some of the Chapel Down vineyards were hit by frosts in late April but there will be firmer evidence of any effect this month. However, management says they were the worst April frosts in two decades.
Crossword Cybersecurity (CCS)
£6.2m@195p (190p/200p)
Crossword Cybersecurity is developing cyber security products with six UK universities. A blockchain-related Ministry of Defence smart documents contract was won with the University of Warwick and cyber risk product, Rizikon, which uses expertise from City University, has started to generate revenues.
Crossword is also involved with CyberOwl, a spin-out from Coventry University that is commercialising research into the early warning of cyber attacks. CyberOwl has been selected to join GCHQ’s Cyber Accelerator.
In May, Crossword Cybersecurity took advantage of the high profile of cyber security problems to raise cash at a large premium to the market price. Crossword raised £145,000 at 230p a share. Brenlen Jinkens took up 50% of the new shares and he has 5.13% of the company.
In 2016, revenues jumped from £21,000 to £345,000 but the loss increased from £755,000 to £950,000 – even after £78,000 of R&D tax credits. There was £1.55m in the bank at the end of 2016. AIM-quoted Iomart is cooperating with Crossword on launching the Nixer machine learning Denial of Service (DDoS) platform on the market.
Sandal (SAND)
£4.9m @ 29.5p (28p/31p)
Sandal is a developer and manufacturer of energy efficiency and other electronic products. It has signed a number of agreements with retailers and distributors for its Energenie MiHome range, which is also being integrated with a number of home automation systems, including those of Google and Amazon. Retailers selling the company’s products include Argos, Sainsbury, Robert Dyas, Shop Direct Group and Ocado.
Recently, Sandal signed an agreement with Spanish smart home technology business Momit, which will redesign its smart thermostat so that it is compatible with the Energenie MiHome platform. This is part of Momit’s strategy to enter the UK market. The redesigned product should be launched in September and, along with related radiator valve sales, could add £500,000 to Sandal’s annual revenues.
In the six months to November 2016, revenues were 13% ahead at £1.88m, with Energenie MiHome products growing revenues by 74%, and the pre-tax profit has improved from £7,000 to £35,000. Further growth is expected in the second half as home automation becomes a more mainstream product area.
AIM
PrimaryBid.com is helping Myanmar International Ltd (MIL) to raise between $3m and $5m. The Myanmar-focused investment company is offering shares at $1.18 each – a 9.2% discount to the market price. Myanmar wants to widen its shareholder base. The proceeds are expected to be invested within six months. This is the 23rd offer by PrimaryBid and it closed at 5pm on 18 June.
Disruptive Capital says that it is not going to make on offer for Stanley Gibbons (SGI) because it was not given the information it required, although the stamps and coins dealer has effectively put itself up for sale. A strategic review has commenced and the formal sale process is part of this.
Wynnstay Properties (WSP) has kept up its record of increasing its dividend. The 19% rise took the total dividend to 15.75p a share. The NAV was 15% ahead to 674p a share at the end of March 2017.
Home improvements company entu (UK) is taking longer to turn around than was hoped. There were problems with installation capacity, which is not enough to meet demand but there are also problems with the supply chain. The underlying interim loss is likely to be similar to the restated loss in the first half of 2016. There will also be a full year loss. Net debt was £6.5m at the end of April 2017. The boilers and energy switching businesses have been closed and the LED business scaled back.
FIH Group (FIH) reported a 4% increase in 2016-17 revenues to £40.5m, while underlying pre-tax profit fell from £3.1m to £2.4m. The profit decline was not as great as originally expected.
Egdon Resources (EDR) is acquiring a 50% interest in PEDL278 in the East Midlands, with the other 50% being acquired by the proposed operator IGas (IGAS). The licence area includes a tight gas discovery from 1985.
Keras Resources (KRS) says drilling at the Warrawoona gold project in Australia, which is now part of Calidus Resources, has commenced. Calidus Resources is about to join ASX.
Savannah Resources (SAV) has received approval in principle for a tailings storage facility at the abandoned Lasail West pit in Oman. There is still potential for further copper mineralisation at the Lasail copper mine. It is taking longer than expected to gain licensing approval for the copper mine development at Mahab 4 and Maqail South. Mining should still start in the first half of 2018.
Italian PR firm SEC (SECG) reported a decline in revenues in 2016 as markets are growing slowly and competition is fierce. There was also a lack of large one-off events. Revenues fell from €21.2m to €18.5m, while pre-tax profit has slumped from €3.25m to €734,000.
Starcom (STAR) has secured a three-year, $1.5m equipment and tracking order. Shiptek Solutions is paying $1.2m for Tetis R container tracking units and there should be at least $250,000 of income from online tracking services over three years.
MAIN MARKET
IT consultancy and resourcing firm Triad Group (TRD) believes that the appointment of Arden as broker in February “is a significant step in returning the group to its former glory”. In the year to March 2017, revenues improved from £28.3m to £30.9m and pre-tax profit increased from £863,000 to £1.52m. Net cash was £2.24m. Triad intends to build up business outside of the public sector and increase exposure to new technologies, such as blockchain. Triad is returning to paying a dividend with the latest pay out of 0.5p a share. The ex-dividend date is 10 August. The trustee in the bankruptcy of former boss Mira Makar has been selling down her shareholding, which was over 21% but it has been reduced to 17.4%. The share price has held up over the past couple of months despite this.
Storage and communications semiconductors developer CML Microsystems (CML) increased full year revenues by one-fifth to £27.7m and organic growth was 14%. Underlying pre-tax profit improved from £3.5m to £4.3m. The dividend was increased to 7.4p a share. R&D investment continues to increase but there is plenty of cash to fund this. Net cash was £12.5m at the end of March 2017.
Industrial fasteners supplier Trifast (TRI) increased its pre-tax profit by more than one-quarter to £20.5m, which was better than expected. Growth is coming from the top 25 key accounts and new product launches.
Flying Brands Ltd (FBDU) has completed the acquisition of kidney stone analysis company Stone Checker Software in return for the issue of eight million shares at 3p each and been readmitted to the standard list on 16 June. A placing raised £550,000 at 3p a share. Stone Checker was previously 50%-owned by AIM-quoted Feedback (FDBK), which licenced its TexRAD software to the company for use with kidney stones.
North Midland Construction (NMD) has been awarded a joint venture infrastructure contract for Severn Trent Water on the Birmingham Resilience project worth more than £100m. This contract will be split between North Midland and its joint venture partner. The scheme starts in the third quarter of 2017 and this means that the 2017 figures will be ahead of expectations.
Jacek Slotala has stepped down as a director of fully listed shell Highway Capital (HWC). He joined the board in December 2015. Trading in the shares has been suspended since 22 September 2016. Highway has been seeking a significant acquisition for approaching two decades.
Andrew Hore