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Quoted Micro 24 October 2022
AQUIS STOCK EXCHANGE
Chapel Down Group (CDGP) had a bumper grape crop in terms of quality and yield. Chapel Down has 750 acres of vines and the harvest was more than 2,000 tonnes, up from 1,400 tonnes last year, with a particularly good crop for sparkling wines. The English sparkling wine market grew by 29% in 2021More than two million bottles of many types of wine can be made from the harvest. A further 38 acres of vines were planted this year with 118 acres planned. More land is being sought. Management wants to double the size of the business by 2026.
Property investor Ace Liberty & Stone (ALSP) launched an open offer to raise £4.56m at 25p a share, which is a big discount to the market price. The share price fell 25.8% to 47.5p. The open offer closes on 14 November and enables existing shareholders to finance the strategy to buy additional properties. Management believes that economic uncertainty will provide opportunities to acquire high yielding properties.
Ananda Developments (ANA) has changed the acquisition terms for the 50% not owned in DJT Plants. The purchase price has been cut from £7.3m to £3.2m, which is payable in shares at 0.925p a share giving the seller Anglia Salads 29.9% of the enlarged share capital. That is double the current share price. The chairman’s £2.3m loan to Ananda will be swapped for convertible loan notes and warrants. DJT is analysing its 2022 field trial crops to determine the amounts of cannabinoids and terpenes contained in the cannabis flowers. This will help the company to decide which cultivars to use. There are international growers interested in purchasing seeds from DJT.
Love Hemp (LIFE) says it will sell all LH Botanicals products and LH Botanicals Ltd, which is owned by Love Hemp chief executive Tony Calamita, does not sell these products and has never traded. An application has been filed to strike the company off the company register.
Hydrogen Utopia International (HUI) has secured a convertible loan facility with Conrad Griffiths, owner of 9.45% of the company. The €650,000 facility is interest free until the beginning of 2023 when the annual interest charge is 5%. The repayment date is 31 December 2025. The conversion price is 20p – based on the exchange rate of €1.14/£.
Invinity Energy Systems (IES) has secured the sales contract for a 10MWh VS3 flow battery system for a solar microgrid in southern California.
Goodbody Health Ltd (GDBY) has signed an agreement with Allied Pharmacies that will add 17 clinics to its network offering diagnostic testing and adds services such as ear wax micro suction.
SulNOx Group (SNOX) has signed up South Africa-based bus company Lowveld Bus Service, which will use SulNOxEco fuel conditioner in its fleet of more than 170 buses.
VVV Resources (LON: VVV) has appointed Jim Williams as an executive director. He was previously a chief executive of AIM-quoted Arian Silver Corporation, which is now known as Alien Metals (UFO). David Rigoll and Simon Clarke have left the board.
Chris Akers has upped his stake in Quetzal Capital (QTZ) from 22% to 23.4%. Investee company Tap Global has added GBPT stablecoin to its cryptocurrency trading platform.
Harry Hyman has increased his stake in Oberon Investments Group (OBE) from 3.08% to 4.15%. Phoenix Asset Management Partners has taken a 16.5% stake in Silverwood Brands (SLWD).
AIM
Semiconductors designer EnSilica (ENSI) generated more than 50% of its revenues from its design and supply division for the first time last year. Revenues increased from £8.61m to £15.3m with design and supply’s contribution jumping from £2.82m to £8.02m. This is down to contracts starting to move from the design to supply stage. A loss was turned into a pre-exceptional profit of £165,000. That is before R&D tax credits of £683,000. EnSilica capitalised £2.2m of development spending last year.
Latest new AIM admission Sondrel (SND) raised £20m at 55p a share and the price rose to 58p in early dealings. The semiconductor designer will spend the money on employing more engineers and accelerate sales. There are more than £300m of revenue opportunities for designing semiconductors. If selected, Sondrel can expect to supply the semiconductor for five years plus. The medium-term target revenues are in excess of £100m.
Revolution Bars (RBG) is acquiring Peach Pubs for £16.5m. Peach Pubs has 21 food-led pubs in the south of England and the Midlands. There should be £1.5m of cost savings from combining the businesses at a minimal cost, but they will not be fully achieved until 2024-25. finnCap has adjusted its 2022-23 forecast for Revolution Bars due to higher energy costs, so the earnings estimate has been reduced by 69% to 0.5p.
Affimer technology developer Avacta (AVCT) is acquiring in vitro diagnostics distributor Launch Diagnostics for £24m, plus up to £13m in performance related earn outs. This acquisition is part of the strategy to build up a European distribution business. Kent-based Launch Diagnostics is a profitable business that supplies diagnostic reagents and instrumentation for pathology applications. A placing at 95p a share will raise £7m and a three-for-365 open offer could raise up to £2m more. A £55m convertible bond issued at 95% of par could raise £52.5m and it is convertible at a 25% premium to the 95p a share placing price.
Gear4Music (G4M) edged up interim revenues by 2% with the growth coming from Europe and the rest of the world. The musical instruments retailer is upgrading its websites and trading is improving, although gross margins are lower.
Tatton Asset Management (TAM) generated inflows of £907m in the six months to September 2022. Assets under management have reached £11.3bn, with a further £1bn of assets under influence. There was an 11% improvement in earnings to 9.8p a share and the interim dividend 10% ahead at 4.4p a share. Inflows are expected to slow and full year expectations have been trimmed, but earnings should improve from 18.6p a share to 19.8p a share.
Logistics Development Group (LDG) has raised its stake in cakes maker Finsbury Food (FIF) from 4.4% to 6.77%. A further £4.17 has been invested at an average of 81p a share. The previous investment was at 69.5p a share, which was just above the low for 2022. Richard Griffiths increased his stake in Logistics Development Group from 7.04% to 8.71%. Logistics Development Group should have received more than £31m for its stake in CareTech.
Learning and development products and services provider Mind Gym (MIND) generated interim revenues 11% ahead at £26.8m with the majority coming from the US. Net cash is £4.5m. The interims will be published on 2 December. A full year pre-tax profit of £2.87m is forecast.
Advanced Oncotherapy (AVO) has raised £6m at 25p a share from Odey Asset Management. The subscription was at a 12% premium to the market price.
Mattress supplier eve Sleep (EVE) has appointed an administrator.
Anthony Laiker has left the Vela Technologies (VELA) board and sold his 6% stake. He was reappointed to the board in July having been a director between 2013 and 2020.
MAIN MARKET
Kitchenware retailer ProCook Group (PROC) says revenues continued to decline in the second quarter, but the rate slowed and there has been growth in early October. Freight costs are falling offsetting the change in exchange rates. Fackelmann Gmbh owns a 9% stake.
LED lighting and wiring accessories supplier Luceco (LUCE) says destocking has happened faster than expected, so the 2022 profit outcome will be lower than anticipated. Underlying operating profit is expected to be £20m-£22m in 2022. Net debt was £46.5m at the end of September 2022.
Carclo (CAR) says interim sales were ahead of the same period last year and slightly better than expectations. However, operating profit is slightly lower than previously. The life sciences division has grown even though two product launches were delayed. There was also increased demand from the aerospace sector.
Motor dealer Lookers (LOOK) outperformed the UK car market in the third quarter and pre-tax guidance has been increased to no less than £75m. Last year’s pre-tax profit was £90.7m, but that benefited from government assistance and a strong used vehicle market. However, a lack of available new cars to sell is holding back the performance of all motor dealers.
An administrator has been appointed to Toople (TOOP) after it failed to secure financing for a proposed acquisition.
Andrew Hore
Quoted Micro 13 June 2022
AQUIS STOCK EXCHANGE
Psych Capital (PSY) floated on Aquis so that it can take advantage of the opportunities in the fast-growing psychedelic medicines sector. Management is seeking to invest in early-stage companies, where it can obtain a significant minority stake. Psych Capital raised £810,000 at 5p a share. Pro forma net assets are £2m. Psych Capital has cash of £872,000 following the flotation. There is an investment in Awakn Life Sciences Corp that was valued at £584,563 at the end of June 2021. The share price is declining, and it has reached C$0.96, valuing the stake at around £260,000 at the current exchange rate. The share price fell to 4p on 9 June before recovering to 4.75p (3.5p/6p). There is limited liquidity in the shares with a free float of around 11%. Fellow Aquis company Oscillate (MUSH) holds a 16.15% shareholding in Psych Capital. Chris Akers has increased his stake in Oscillate from 9.02% to 11.4%. He also has a 4.96% stake in Psych Capital.
Capital for Colleagues (CFCP) improved interim revenues from £198,000 to £216,000, while recognised fair value gains declined from £1.04m to £297,000. There were 14 investments at the end of the period and net assets were 68.38p a share at the end of February 2022.
Rural Broadband Solutions (RBBS) had 2,851 monthly fee-paying clients by mid-May. There was net cash of £1.2m at the end of 2021 and infrastructure funding is being negotiated.
Newbury Racecourse (NYR) reopened its hotel in January and more than 105,000 racegoers have visited the racecourse so far this year. There have benefits from the catering deal with Compass and new media rights arrangement start at the beginning of 2024, which will benefit that financial year. More will be spent on prize money. Newbury is debt free, and a special dividend has been paid out of proceeds from the sale of land for housebuilding. Annual dividends may recommence next year.
Quantum technology investment company Quantum Exponential (QBIT) has made three investments at a total cost of £1.16m since it floated. There are discussions with more potential investments. There has been further progress towards setting up a fund. Anthony Lyall has been appointed as investment manager and Anna Spandl as investment analyst.
Altona Rare Earths (ANR) says that it is on track for a maiden JORC resource statement for the Monte Muambe rare earths project in Mozambique. Four new drilling targets have been identified.
Ananda Developments (ANA) had net liabilities of £288,000 at the end of January 2022. There should be further news concerning the purchase of the other 50% of DJT Plants.
Tectonic Gold (TTAU) expects to deploy drill rigs in Queensland in the next few weeks following the rainy season.
RentGuarantor Holdings (RGG) has raised £1m from a 6% unsecured loan note issue, with chief executive Paul Foy subscribing for 50% of the issue. The cash will be spent on hiring staff and marketing.
Wishbone Gold (WSBN) has commenced drilling at the Wishbone II gold copper project in Northern Queensland.
Chapel Down Group (CDGP) non-exec Jamie Brooke has bought 327,000 shares at 30.48p each. Jonathan Neame has sold 2,000 shares in Shepherd Neame (SHEP) at 806p each.
Oberon Investments has increased its stake in TruSpine Technologies (TSP) from 7.93% to 10.9%.
EPE Special Opportunities (ESO) had a NAV of 307.13p a share at the end of May 2022.
Former Aquis-quoted proton beam therapy provider Rutherford Health is being placed in liquidation. There are Rutherford Cancer Centres in Newport, Reading, Liverpool and Northumberland, plus a community diagnostics centre in Somerset. It is unclear whether there will be any buyers interested in these assets. Schroder UK Public Private Trust (SUPP) bought the remaining Woodford stake at the end of 2019. It was valued in the books at £22.8m, which will be written off. That will reduce NAV by 2p a share.
AIM
Like-for-like sales growth at City Pub Group (CPC) was 5% in May and 20% ahead over the Jubilee Bank Holiday. Management took a decision to minimise price rises so that food and drink is still relatively affordable. Two new sites have been opened with two more opening over the next few weeks.
Learning and development products and services provider Mind Gym (MIND) fell into loss in the year to March 2022. Revenues were 24% ahead at £48.7m with US revenues growing even faster. Repeat revenues from customers that have bought products and services in the past three years were 86% of the total. Overheads are higher as management anticipates future growth in demand. There were also £500,000 of non-recuring costs. The investment in digital products and services will pay off in future years when profit is expected to grow sharply.
Greater demand for foreign exchange helped Ramsdens (RFX) to move back into profit in the first half. Jewellery retail and precious metals buying also grew revenues significantly. There was modest growth in pawnbroking revenues although the growth in the loan book means that there will be a higher rate of increase in the second half. Overall revenues were £29.3m, up from £19.3m, and there was a pre-tax profit of £2.2m.
Nexus Infrastructure (NEXS) improved interim revenues from £63.7m to £80.3m and the order book is 7% higher at £306.7m. Civil engineer Tamdown’s revenues were more than one-quarter higher while utilities connections business TriConnect reported a small increase in revenues. The biggest increase came from the eSmart Networks business, but that is still less than 11% of group revenues. Nexus is on course to improve full year pre-tax profit from £2.5m to £5.7m.
Open Orphan (ORPH) has an order book worth £64.25m at the end of May 2022. Open Orphan secured a £14.7m contract for an influenza characterisation study and a follow-on human challenge study. The second half is expected to be stronger than the first and the clinical trials services provider should move into profit this year.
Electrical goods retailer Marks Electrical (MRK) reported its first full year results since flotation last November. In the year to March 2022, revenues increased 44% to £80.5m. Underlying earnings were 5.01p a share and the maiden final dividend is 0.67p a share. The company is gaining market share in the domestic appliance and televisions markets and revenues have grown by one-fifth in the first couple of months of this financial year. Brand recognition is improving, but the overall market is likely to be tough. Expanding the product range is helping growth.
Interims from Hercules Site Services (HERC) reflect a period of consolidation for the staffing business. In the six months to March 2022, revenues improved from £14m to £20m, while pre-tax profit slumped from £954,000 to £31,000. Overheads were £2m higher in anticipation of growth in the coming years. The large staff supply contract for HS2 started later in the reporting period and demand will continue to grow. More suction excavators are being delivered and utilisation rates are high.
Greenland-focused AEX Gold Inc (AEXG) has signed non-binding terms for the creation of a joint venture with ACAM that will hold the group’s strategic mineral assets. ACAM will invest £18m for a 49% stake and AEX Gold will inject the non-gold assets and cover site support, logistics and overhead costs. There is an agreement to inject a further £10m on a pro rata basis as long as certain milestones are achieved. AEX Gold’s core asset is the 100% interest in the Nalunaq project, which includes a former producing gold mine.
Plant-based polymers developer Itaconix (LSE: ITX) had already warned that due to destocking 2021 revenues would fall from $3.29m to $2.6m, which is still double the 2019 figure. Itaconix remains lossmaking, but revenues should be much higher in 2022 due to the increased number of products using its ingredients. Revenues are expected to jump back to $4.7m and the loss could halve to $1m.
Rockwood Strategic (RKW) has acquired a 8.75% stake in window ventilators and parts manufacturer Titon Holdings (TON).
Northbridge Industrial Services (NBI), which is set to change its name to Crestchic, says that trading at the core power reliability business is better than the recently upgraded expectations. Previously full year earnings of 12.1p a share were forecast and this was raised to 13.4p a share.
STM (STM) pre-tax profit halved to £1.2m in 2021 and it is expected to recover to £2.9m this year. This will be helped by the completion of investment in IT that brings the personal pension businesses onto one platform. A flow of new SIPP business is anticipated.
Coral Products (CRU) has announced a final dividend of 0.2p a share, taking the total for the year to 1.1p a share. At 17.5p, the yield is 6.3%.
Eve Sleep (EVE) is outperforming a market that has fallen by 29% in the UK in the first four months of 2022 and by 37% in France. More funding is required even though Eve Sleep and a US-based investor was interested in bidding for the mattress supplier. Talks have ended but management is considering its options.
MAIN MARKET
Citius Resources (CRES) has an initial agreement for the potential acquisition of AUC Mining, which has the Kamalenge gold project in Uganda. The proposed £2m cost would be paid in shares at 4.625p each. More cash would have to be raised at the same time. Trading in the shares was suspended at 3p.
Standard list shell GS Chain (GSC) shares have reached a new high of 6.55p, having risen steadily since flotation on 13 May via an introduction at 1p a share. Net assets were less than 0.18p a share, so the share price is at a substantial premium.
Premium listed Ross Group (RGP) shares jumped from 1.45p to 1.7p following a placing raising £163,000 at 1.79p a share, which is still a premium to the higher market price. The previous placing in October was at 2.8p a share. Ross Group is effectively a shell that has an investment in an aquaculture business and is trying to develop its supply chain management business.
Andrew Hore
Andrew Hore – Quoted Micro 7 September 2020
AQUIS STOCK EXCHANGE
Daniel Thwaites (THW) had net debt of £65.4m at the end of March 2020 and this increased to £71.8m at the end of June following the closure of the company’s pubs and hotels. There is £12m of headroom in the current facilities but management is considering increasing the borrowing facilities. The sites were reopened on 4 July or shortly after. There has been steady growth in sales.
Altona Energy (ANR) has signed heads of agreement to acquire up to 75% of the Chambre rare earth project in southern Malawi. There is a backlog of exploration licence applications following recent elections. The trading suspension will end when new funds are raised. A funding will be launched via investment platform www.NRPrivateMarket.com once an exploration licence is granted in Malawi or heads of agreements are signed for another deal.
SulNOx Group (SNOX) has received a requisition from two shareholders (James Redman Jr and Sungold Escrow Nominees Ltd) for a general meeting. They own more than 5% of the company. A date for the general meeting has to be announced within three weeks.
European Lithium (EUR) has appointed Kimon Gkomozias to the board as part of its strategic agreement with EV technology metals project developer Talaxis. He will help European Lithium obtain funding. A placing is planned to raise $2m at 4.5 cents a share.
Cadence Minerals (KDNC) has obtained agreement in principle for the bank creditor settlement relating to the Amapa iron ore project.
EPE Special Opportunities (ESO) has made a £1.9m investment in Atlantic Credit Opportunities Fund (ACOF), a distressed credit fund. EPE’s investment advisor Epic Private Equity intends to acquire a controlling stake in Atlantic Capital Management, which manages ACOF.
Forbes Ventures (FOR) has set up Forbes Ventures Cell 1 Ltd to acquire UK-issued litigation funding loans. The rights to these loans will be assigned to and securitised by Malta-based Forbes Ventures CC1, which is planning to raise money via a bond issue. A Forbes subsidiary will receive a fee of 2% of the funds raised.
World High Life (LIFE) is assessing investment targets in the medicinal cannabis sector. This includes areas such as synthetic cannabinoids.
Trading in the shares of Sativa Group (SATI) has been suspended while Stillcanna awaits the approval of the Canadian Stock Exchange for the takeover of Sativa. The enlarged group plans to gain readmission to the Acquis Stock Exchange as Sativa Wellness Group Inc.
Alfred Henry Corporate Finance has been appointed as Eastinco Mining and Exploration (EM.P) corporate adviser.
Sumner Group Health Ltd (SGRL) has confirmed its withdrawal from the market on 8 September.
AIM
Capital equipment supplier Mpac (MPAC) has continued to secure orders even with the disruption caused by COVID-19. Interim revenues fell by one-fifth to £36.6m, but services revenues continue to grow. Underlying pre-tax profit fell from £4.5m to £2.5m. The order book is worth £45.4m. Net cash was £22.5m at the end of June 2020. Full year pre-tax profit is expected to fall from £7.5m to £5.2m.
CyanConnode (CYAN) was hit by delays to contracts in the 15 months to March 2020, but it appears to have a strong base for the current financial year. The smart meter technology developer is still losing money, but it has shown that it can manage its cash effectively by gaining advance payments on orders. Net cash was £1.2m at the end of March 2020.
Mattress supplier eve Sleep (EVE) says current trading is ahead of expectations and the full year loss is expected to be slightly lower than previously. Net cash of £5m is forecast for the end of 2020.
Cake Box (CBOX) has made a strong start to the new financial year. The franchised retailer of egg-free cakes is even offering a special dividend of 3.2p a share. Equity Development forecasts a rise in earnings per share from 7.8p a share to 9p a share in the year to March 2021.
7Digital (7DIG) has raised £6m at 2.25p a share, having sought a minimum of £5m. The streaming technology developer will be able to take advantage of opportunities in areas such as home fitness and social media.
Musical instruments retailer Gear4Music (G4M) has continued its sales momentum in the new financial year. There will be an interim trading statement on 22 October.
Driver monitoring systems developer Seeing Machines (SEE) has unveiled a new product strategy. This involves a focus on a chip whose performance is optimised by a neural processing unit called Occula. It will be made easier for automotive clients to integrate this technology. There are also plans to licence the Occula technology.
Nostra Tera Oil and Gas (NTOG) is acquiring a 100% working interest in the Caballos Creek oil field in Texas, which has an economic life of between 16 and 32 years. The cost is $425,000 and there should be a two-year payback. There are proved reserves of 92,100 (69,300 net) barrels of oil equivalent. Current production is 30 (22 net of royalties) barrels of oil per day, which increases Nostra Terra’s production by 25%.
Matthew Freud increased his stake in Reach4Entertainment (R4E) to 19.99% before trading on AIM ended.
Omega Diagnostics (ODX) has CE-marked Mologic’s lateral flow antibody test for COVID-19, which picks up infection at an earlier stage than most tests.
Allergy Therapeutics (AGY) has in-licensed the virus-like particle vaccine technology from Saiba and DeepVax for use in solid tumours, atopic dermatitis, asthma and psoriasis. This broadens the scope of the group, but it continues to focus on allergy treatments.
MAIN MARKET
Consumer products supplier Creightons (CRL) increased full year revenues by 9% to £47.8m, while an improved profit margin meant that pre-tax profit increased from £2.87m to £3.55m. A final dividend of 0.5p a share is proposed.
Papillon Holdings (PPHP) has signed heads of agreement to acquire gold assets in Africa. It plans to acquire 100% of Kilmapesa in Kenya and 70% of the Kakamoeka gold project in Congo Brazzaville. They could provide near-term gold production.
Andrew Hore
Andrew Hore – Quoted Micro 27 July 2020
AQUIS STOCK EXCHANGE
Healthcare IT provider DXS International (DXSP) moved from loss to profit in the year to April 2020. Revenues were slightly lower at £3.28m, while a loss of £200,000 was turned into a pre-tax profit of £239,000. There was £1m in the bank at the end of April 2020, following the recent fundraising. There has only been a marginal drop in revenues due to COVID-19 and growth should return later in the year. Chairman Bob Sutcliffe has bought 46,153 shares at 6.5p each.
KR1 (KR1) has raised $493,000 from the sale of Nexus Mutual tokens. They cost $79,000. KR1 still owns three-quarters of the tokens it originally acquired in the blockchain-based mutual insurance company.
Gunsynd (GUN) has bought a stake in Eagle Mountain Mining at A$0.13 a share. The £110,000 investment in the ASX-listed company provides exposure to copper exploration. The cash will finance exploration at the Oracle Ridge copper mine project.
Clean Invest Africa (CIA) has raised £150,000 at 1p a share. The new shares come with warrants exercisable at 2.75p each.
The Tasmanian government has transferred the mining lease to the Beaconsfield gold mine to NQ Minerals (NQMI).
AfriAg Global (AFRI) had £76,000 in cash at the end of June 2020. There are also £1.16m of investments available for sale.
Eurocann International (BUD) has yet to identify a medicinal cannabis business that fits its acquisition criteria and price expectations, although it has made some short-term investments.
Trading in the shares of Lombard Capital (LCAP) has been suspended following a sharp rise in the share price.
AIM
Tungsten Corporation (TUNG) is benefiting from its focus on building up recurring revenues from its e-invoicing platform. Additional products and services are being added to help accelerate growth. As revenues grow they will cover overheads and profit could increase rapidly after this point has been reached.
Frontier IP (FIPP) has raised £2.33m at 55p a share. This will enable the IP investment company to provide bridge finance and invest directly in funding rounds. Frontier also wants to take on more people to help advise and develop investee companies.
In the year to March 2020, Mercia Asset Management (MERC) generated enough income to cover its overheads for the first time. That was with a part-year contribution from Northern Ventures. However, there were fair value write downs of assets of £15.8m. The NAV is 32.1p a share. Funds under management are £658m. Since the year end there was a gain on the disposal of the stake in Native Antigen.
Oil and gas producer Touchstone Exploration Inc (TXP) has confirmed the major potential of the Cascadura discovery in Trinidad. The estimate for 2P reserves is 45 mmboe of gas/condensate. Touchstone’s production could be multiplied by ten. finnCap has set a risked-NAV of 91p a share.
Scientific instruments manufacturer Judges Scientific (JDG) says that first half order intake was 17% lower. North American orders were one-third lower. Like-for-like interim sales were 12% lower. Cash was generated from operations.
Disinfection products supplier Tristel (TSTL) says that full year revenues were one-fifth ahead helped by an additional £1.5m due to COVID-19. Net cash was £6.2m at the end of June 2020.
Synairgen (SNG) says that its phase II trial of SNG001 in hospitalised COVID-19 patient shows a 79% reduction in the development of severe disease and death. Discussions have started with regulators.
Conroy Gold and Natural Resources (CGNR) has secured a joint venture with Anglo Asian Mining (AAZ) to develop a gold mine in Ireland. Anglo Asian is committing to spend €2m for an initial 17.5% stake with an option to spend the same amount to take the stake to 25%. The maximum stake that can be earned is 55%, which would take the Clontibret gold deposit to the point where the mine is ready for construction. Anglo Asian has been issued with 325,000 Conroy warrants exercisable at 16p a share. Sanderson Capital Partners has cut its stake to below 3%.
Bidstack (BIDS) generated revenues of £275,000 in the first half, but the second half is more important. The in-game advertising company is winning business around the world.
Mattress retailer eve Sleep (EVE) generated slightly lower revenues of £12.2m in the first half of 2020, but the loss will be much lower due to cost savings. Cash was generated in the first half and there is net cash of £9.1m. Some competitors are withdrawing from the European market.
MAIN MARKET
Retailer French Connection (FCCN) has reduced costs during a tough trading period. Websites sales were 24% higher in the past 15 weeks. Stores started to reopen on 15 June, but the recovery is gradual.
Standard list shell Auctus Growth (AUCT) had £780,000 in the bank at the end of June 2020.
Bermele (BERM) intends to acquire Singapore-based East Imperial, which sells premium mixers and New Zealand spring water. There is a nine month exclusivity agreement. Trading in Bermele shares is suspended.
Andrew Hore
Andrew Hore – Quoted Micro 1 June 2020
AQUIS STOCK EXCHANGE
Newbury Racecourse (NYR) says that it plans to host racing during June and July, although there will be no crowd. There will be income from media rights and betting shops are set to reopen on 15 June. The Rocking Horse nursery reopens on 1 June, although the hotel at the racecourse will remain closed. The £2.75m loan from Compton Beauchamp Estates has been extended to April 2022. David Wilson Homes is expected to make the next land payment of £10.98m by then. The 2019 audited accounts should be published by the end of July.
First Sentinel (FSEN) is making an investment in proposed Aquis Stock Exchange company Vulcan Industries. It will pay £234,000 for shares at 3p each and is also providing a convertible loan facility of up to £500,000 with an interest rate of 12%. There is an arrangement fee of £50,000 in shares. The initial stake is 4.56% of Vulcan, which plans to be a consolidator in the engineering sector. First Sentinel has raised £117,000 at 21p a share.
SG Recruitment Ltd (SGRL) is supplying hand sanitiser to the NHS and that should generate £650,000 in gross profit in this financial year. The contract lasts for an initial 11 weeks. In the six months to September 2019, gross profit is £288,000.
Cannabis-focused shell Greencare Capital (GRE) says that it remains in discussions with its principle potential acquisition and other opportunities. As lockdown conditions ease the discussions should gain momentum.
Employee-owned businesses investor and adviser Capital for Colleagues (CFCP) doubled unrealised gains from £630,000 to £1.33m at the interim stage and this helped pre-tax profit improve from £585,000 to £1.28m. NAV was 50.17p a share at the end of February 2020, although this figure has subsequently declined. TG Engineering went into administration in April, but this investment had already been written-off.
European Lithium Ltd (EUR) has secured an agreement with Talaxis for help with completing the definitive feasibility study on the Wolfsberg lithium project. Talaxis has expertise in developing electric vehicle technology metals. An introduction fee of 5% is payable for a debt or equity raising, plus a total of up to 36 million shares depending on the achievement of milestones. There is a minimum one-year non-exclusive period. Creditors and short-term loans of $743,000 have been converted into shares.
KR1 (KR1) investee company Argent Labs has raised a further $12m and this puts a value of $260,000 on the stake in the mobile crypto wallet developer.
Formation Group (FRM) has swung from an operating loss of £137,000 to a profit of £175,000 at the interim stage. This was supplemented by a £766,000 gain on financial assets to generate a £941,000 pre-tax profit. There is £5.18m in the bank and net assets were £21.7m at the end of February 2020.
Investment company Forbes Ventures (FOR) says that it expects its litigation funding project to male progress over the next few months. This should generate cash for the business and other projects are being assessed.
Early Equity (EEQP) increased its interim loss from £68,000 to £344,000. Early Equity has suspended its application to the standard list.
AIM
Safestay (SSTY) ended 2019 with 20 hostels across 12 European countries. In 2019, revenues increased by one-quarter to £18.4m and 49% of this comes from outside of the UK. There was a small pre-tax loss, which will increase this year due to closures because of COVID-19. Liberum believes that net bank debt will be £26.3m by the end of 2020. The share price is less than one-third of the NAV of around 56p a share.
In-game advertising technology develop Bidstack (BIDS) has received its first advertising bookings in the US. The company expects significant second half revenues.
Mattress retailer eve Sleep (EVE) says demand improved in April and May putting it in a position to meet full year expectations. A loss of £3.6m is forecast. The online focus has helped because high street retailers have closed. There have also been opportunities to buy TV advertising at attractive rates. The Woodford stock overhang has been cleared.
First quarter trading at fryer management services provider Filta (FLTA) started well and margins were improving. The catering customer base has been hit by the COVID-19 lockdown and Filta is offering additional services. Last year, organic revenue growth was 16%. Net debt was £2.1m at the end of 2019.
MAIN MARKET
Motor dealer Caffyns (CFYN) says it still expects to make a profit in the year to March 2020. Aftersales have restarted and showrooms are set to reopen. There is an annual salary ceiling of £37,500 for all active employees in April. This is being unwound.
Moss Bros (MOSB) bidder Brigadier has decided to withdraw its appeal to the Takeover Panel and the bid needs to be approved by the courts to be finalised.
Path Investments (PATH) has found a new acquisition target to replace the purchase of FineGems. Path is buying a 75% stake in the DT Ultraviolet technology owned by AIM-quoted Zoetic International (ZOE). Path will also acquire the nitrogen reserves and assets owned by Zoetic. The DTU refracking well stimulation technology is cheaper than existing technologies. Path will issue 15 million shares, and 15 million warrants exercisable at 1.5p each, to pay for the assets. Path will also pay a royalty of 5% on DTU revenues.
Cash shell Fandango Holdings (FHP) says the prospectus for the acquisition of an oil well services company is currently being prepared. There will also be a placing.
Avation (AVAP) has ended its formal sales process. Disruption to the aviation sector means that a realistic bid is unlikely.
Cathay International Holdings (CTI) is planning to transfer from a premium to a standard listing even though shareholders did not pass the resolution when it was previously tabled.
Nanoco (NANO) has signed a quantum dot material supply agreement with STMicroelectronics. Initial purchases will generate cash during the rest of 2020.
Seafox international says that is has no longer intends to bid for Gulf Marine Services (GMS).
Andrew Hore
Alan Green talks Metro Bank #MTRO, CyanConnode #CYAN, Eve Sleep #EVE & Team 17 #TM17 on Vox Markets podcast
Alan Green discusses Metro Bank #MTRO, CyanConnode #CYAN, Eve Sleep #EVE & Team 17 #TM17 on the Vox Markets podcast with Justin Waite.
Andrew Hore Quoted Micro 30 September 2019
NEX EXCHANGE
Peel Hunt has edged up its pre-tax profit forecast for brewer and pubs operator Shepherd Neame (SHEP) following the publication of its figures for the year to June 2019. They showed revenues of £145.8m and pre-tax profit of £11.4m, which was slightly better than expected. Brewing profit more than halved to £900,000 after the Asahi contract ended, but this was more than made up for by the contribution from managed and tenanted pubs. Own-brewed volumes have risen by 5.8% in the first few weeks of the year and managed ad tenanted pubs are showing like-for-like income increases. Debt costs will be lower than previously expected so the 2019-20 pre-tax profit forecast has moved from £11.5m to £11.7m, which will allow a slightly higher anticipated dividend of 31p a share – twice covered by earnings. There is potential to acquire more pubs.
In the 17 months to May 2019, pubs operator and automotive dealer Barkby Group (BARK) made a pre-tax profit of £75,000 on revenues of £6.29m. Stripping out the amount acquisitions were made under net asset value and acquisition cost, the profit is £135,000. The addition of pub sites, taking the total to six gastropubs and inns, and the purchase of Centurian Automotive, will significantly increase revenues in the latest 12-month period. The plan is to have up to 12 pub sites within five years.
Karoo Energy (KEP) is changing its name to IamFire and raising £143,000 at 2.4p a share. Burns Singh Tennent-Bhohi has been appointed as an executive director and Jeremy Ross joins as a non-executive. They are both directors of cannabis company Eurocann International (BUD). The existing business is being sold to Noel Lyons and other opportunities in the oil and gas and base and precious metals sectors will be assessed.
National Milk Records (NMRP) has been hit by a cyber attack and this will reduce profit this year. It has interrupted IT operations and EBITDA is set to be 10% lower than expected in the year to June 2020.
WH Ireland has published a broker note on Cadence Minerals (KDNC) and this suggests that the 27% stake in the Amapa iron ore mine in Brazil is a potential company maker, even before any benefits from the lithium project investments. The mine produced between 2007 and 2014 before being closed because of an incident at the port on the Amazon and a falling iron ore price. The total resource is estimated at 245Mt grading 41% Fe, but this figure dates back to 2012. The mine life could be 15 years. Capex of $168m will be required to restart mining and processing. The 27% stake will effectively cost Cadence less than £6m. The other shareholder is Singapore-based commodity trader IndoSino. If other investors are sought, then Cadence has the right to increase its stake to 49%.
Primorus Investments (PRIM) plans to consolidate every 20 existing shares into one new share. A general meeting will be held on 16 October. Primorus expects its A$500,000 loan note with Zuuse to be repaid, plus interest, in the next couple of weeks.
St Mark Homes (SMAP) reported an improvement in interim pre-tax profit from £18,000 to £84,000. The housebuilder achieved this improvement because of a much larger share of the operating profit in a joint venture and increased interest receivable. Admin expenses rose even though revenues were lower. NAV is 126p a share.
Recently floated cash shell World High Life (LIFE) plans to acquire Love Hemp in return for £4m in cash and the issue of 30 million shares. A further £2m could become payable in the next three years depending on the achievement of turnover targets. If more than target turnover is achieved in any year then the vendors will receive 5% of the excess. Love Hemp is a supplier of CBD and hemp products and it made a pre-tax profit of £532,000 on turnover of £2.5m in the year to June 2018. World High Life plans to raise up to £5m in order to finance the acquisition.
Ananda Developments (ANA) says joint venture DJT has applied for a licence to grow >0.2% THC cannabis and has been registered with the Drugs Licensing and Compliance Unit of the Home Office. DJT has acquired Aristaeus Elements, which is setting up as a cannabis extraction and processing facility, for £1 and assumption of debt of £51,000 – the deposit paid for the equipment for the plant. The plan is to finance the investment in the facility through debt secured against offtake contracts.
Blockchain-related investment company Coinsilium Group Ltd (COIN) reported a dip in revenues from £1.33m to £109,000, but a reversal of an impairment charge and gains on financial assets meant that it still made a pre-tax profit of £242,000, down from £554,000 the previous year. The non-cash gains meant that cash fell from £592,000 to £475,000 over the six months to June 2019. NAV increased from £2.36m to £2.59m.
First Sentinel (FSEN) reported a fall in interim revenues from £963,000 to £710,000, while the loss increased from £46,000 and £114,000.
Panther Metals (PALM) says that early identification of an area of the Big Bear project in Ontario shows high gold grades. The 100% owned area has been extended via the acquisition of four additional mining claims.
NQ Minerals (NQMI) generated revenues of £14.2m in the first half of 2019. The Hellyer polymetallic mine was not in production in the corresponding period last year. There was still a £17.9m loss because of high admin expenses. There was £65.6m of debt at the end of June 2019 and management believes that it can get more favourable terms now the mine is up and running.
AIM
Domain name registry Minds + Machines (MMX) is improving the quality of its earnings and it is nearer to sorting out legacy problems. Renewal revenues almost cover costs. Interim net revenues increased from $5.3m to $7.4m, while pre-tax profit trebled to $1.8m, helped by a full six month contribution from ICM. A full year pre-tax profit of $4.1m is forecast. Operating expenses should rise much slower than revenues and cash generation should be strong. A $5.1m cash payment will be made in the second half in order to cover those legacy costs. Even after that, the company should have net cash of more than $5m at the end of 2019. Longer-term, Minds + Machines could become a dividend payer.
Pelatro (PTRO) is dependent on fourth quarter licence sales to achieve forecasts following the 14% increase in interim revenues to $2.7m. That means that second half revenues of the telecoms marketing services and technology provider need to be $7.8m to achieve the 2019 target. There are some large potential sales in the pipeline, but delays of a few weeks could mean that they drop into 2020. Repeat revenues more than doubled in the first half because more of the business won has been in the form of revenue gain share contracts that take time to build up and produce revenues over a longer period than a one-off licence, which is recognised as revenue straight away.
Maestrano (MNO) has conditionally agreed to acquire Airsight Holdings, which offers engineering surveying services using Light Detection and Ranging (LiDAR) technology. Airsight had revenues of A$1.04m in the year to June 2019 and it is loss making because of development spending. Maestrano will issue 73.4 million shares to pay for the acquisition. There could be further payments depending on revenues. The Maestrano chairman is a shareholder in Airsight.
Escape Hunt (ESC) increased revenues from £800,000 to £2.2m in the first half of 2019 but it remains loss-making. Franchise revenues were flat, and all the growth came from the operated sites. Escape Hunt has signed an agreement with Proprietors Capital Holdings for the roll-out of franchise sites in North America.
Mattress supplier eve Sleep (EVE) reduced its loss but cash is still flowing out of the business. Net cash was £12.5m at the end of June 2019 and it is expected to be £8m by the end of the year.
MAIN MARKET
S and U (SUS) is adding new motor finance business even though loan standards have been tightened. Motor finance business Advantage Finance is on course to achieve its 20th year of profit growth. Bridging loans provider Aspen made a profit of £502,000 in the first half. Interim pre-tax profit rose by 3% to £17.1m and the dividend was increased by 6% to 34p a share.
Suit hire and retail business Moss Bros (MOSB) broke even, before the IFRS16 accounting changes for leases, in the six months to July 2019, which was slightly better than expected. A full year loss is still expected because despite like-for-like retail sales growth, hire revenues are declining and the IFRS16 changes will knock £2.5m off pre-tax profit. There was cash of £18.2m at the end of July 2019.
finnCap has reduced its 2019-20 forecasts for InnovaDerma (IDP) following its figures for the year June 2019. The beauty and health products supplier increased revenues by one-fifth to £12.9m and pre-tax profit more than doubled to £1.4m. This year’s pre-tax profit is expected to be £2m, down from £2.3m previously, because higher costs relating to marketing more than offset improved sales expectations. To put this in perspective, the 2019-20 pre-tax profit forecast back in August 2018 was £2.6m. InnovaDerma needs to start meeting forecasts rather than having them downgraded on a regular basis.
Tex Holdings (TXH) has appointed Price Bailey LLP. Trading appears to be picking up in the plastics and engineering businesses. There is a record order book of £12m.
Andrew Hore
Andrew Hore Quoted Micro 15 July 2019
NEX EXCHANGE
AFH Financial Group (AFHP) has raised £15m from a placing of convertible unsecured loan stock in order to finance the acquisition of more IFAs. The loan stock offers a 4% annual interest rate and it matures in July 2024. The initial conversion price is 420p a share, which is a 17% premium to the market price. The annual interest cost is £600,000. Shore expects a pre-tax profit of £17m in the year to October 2019 and then a rise to £20m next year. That is before any acquisitions are made with the additional funds. There are already five potential acquisitions progressing towards completion.
Hydro Hotel, Eastbourne (HYDP) increased interim turnover by 3% to £1.55m. A decline in overheads in the six months to April 2019, due to a lack of repair work compared to the first half of the previous year. This meant that the interim loss fell from £200,000 to £101,000. There is £602,000 in the bank and NAV is £3.17m. Non-executive director CP Freeman has bought 600 shares at 750p each. He has a 1.2% stake.
Capital for Colleagues (CFCP) has invested in South Cerney Outdoor, a recently formed company that has acquired the outdoor experiences business from the Shaw Trust charity. Capital for Colleagues is lending up to £250,000 to the investee company, where the employee owned trust will become a major shareholder.
Coinsilium Group Ltd (COIN) says that its Gibraltar subsidiary has signed an agreement to support and promote RSK Smart Contract Network and RSK Infrastructure Framework blockchains in south east Asia. The 27.8%-owned start-up accelerator StartupToken is also involved in the deal.
EPE Special Opportunities Ltd (ESO) had a NAV of 260.29p a share at the end of June 2019. Since then 280,000 shares have been bought back by the company at an average share price of 205p.
KR1 (KR1) wants to buy back six million deferred shares at 0.2p each.
AIM
In the year to March 2019, Begbies Traynor (BEG) increased revenues by 15% to £60.1m, while pre-tax profit was £7.1m. Net debt was reduced from £7.5m to £6m. Increasing numbers of insolvencies is good news for the business recovery services provider. Pre-tax profit of £8.6m is forecast for this year.
Ultrasound simulation equipment supplier Intelligent Ultrasound (MED) says first half turnover was 25% ahead at £3.1m. This is before the recent AI contract win. There was £3.5m in the bank at the end of June 2019.
Tekcapital (TEK) is raising £750,000 at 8p a share in order to provide further financial backing for its IP companies. Medical devices developer Belluscura could receive FDA clearance for its advanced portable oxygen concentrator before the end of the year. It could be launched in the first half of next year. Nano-particle sized salt developer Salarius has been winning orders.
Ariana Resources (AAU) has reported positive drilling results at the Salinbas gold project in Turkey and there are indications that there is further mineralisation in the vicinity.
Ilika (IKA) had £4m in the bank at the end of April 2019 and that should be enough for the next 12 months as the solid state battery technology developer makes progress with its Stereax battery technology. Projects that could yield deals in the coming months include, condition monitoring devices for wind turbines, track monitoring devices for Network Rail and batteries for miniature medical implants.
Mirada (MIRA) is on course to move into profit in the year to March 2021. The digital TV software provider reported a rise in revenues from $8.82m to $12.3m last year. Even so, the loss was $3.2m. There will be a loss this year, excluding the $1.75m gain on the disposal of the parking payment business. That will help net debt to reduce to $4.1m, despite the loss.
Somero Enterprises Inc (SOM) has reassured investors that it remains on target to achieve previously downgraded forecasts for 2019. Revenues should be $87m and net cash should be $18m at the end of 2019. Interims will be published on 4 September.
Polarean Imaging (POLX) has received an order for the 9820 Xenon Polariser system from the University of Kansas Medical Center. This will be used as part of an imaging research programme. This is the 25th polariser installed or ordered.
Collagen Solutions (COS) has submitted its CE Mark application for the ChondroMimetic regenerative medical device and has received initial questions it has to address. The response is being prepared. Collagen generated revenues of £4.15m in the year to March 2019. The benefits of consolidating collagen manufacturing are coming through.
Woodford Investment Management has cut its stake in eve Sleep (EVE) from 46.8% to 31.2%. Jupiter Asset Management has taken a 15.6% stake.
Oil and gas company Wentworth Resources (WEN) intends to pay dividends based on free cash flow generation. An interim will be announced in September.
FIH Group (FIH) has taken out a £13.9m mortgage on its Leyton warehouse and the interest charge is fixed at 3% for ten years. A new commercial air link has been agreed between the Falkland Islands and Brazil.
MAIN MARKET
Challenger Acquisitions (CHAL) has received a further £18,000 from the owner of Star Sanctum, which takes the total paid to £93,000. Challenger has agreed payments with the developer of the wheel project in Dallas of $26,375 at the end of July and $25,000 at the end of August.
BATM Advanced Communications (BVC) has obtained a listing on the Tel Aviv Stock Exchange. Trading started on 11 July and it expects to become a constituent of the TA-90 index.
Andrew Hore
Brand CEO Alan Green talks i3 Energy #I3E, Eve Sleep #EVE, Catenae Innovation #CTEA & Bidstack #BIDS on Vox Markets podcast
Alan Green CEO of Brand Communications discusses i3 Energy #I3E, Eve Sleep #EVE, Catenae Innovation #CTEA and Bidstack #BIDS with Justin Waite on the Vox Markets podcast. The interview starts at 20 minutes 26 seconds.
Brand CEO Alan Green talks Bidstack #BIDS, Eve Sleep #EVE & Bluebird Merchant Ventures #BMV on Vox Markets podcast
Brand CEO Alan Green discusses Bidstack #BIDS, Eve Sleep #EVE & Bluebird Merchant Ventures #BMV with Justin Waite on the Vox Markets podcast. The interview is 12 minutes 6 seconds in.