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Quoted Micro 27 February 2017
NEX EXCHANGE
Capital for Colleagues (CFCP) says that one of its employee-owned investee business FJ Holdings has sold its businesses and been placed in administration. Capital for Colleagues had not been kept up to date with these moves. The loans to FJ and its subsidiary Ham Baker Adams plus the FJ share stake were valued at £1.3m at the end of November 2016, which included a £790,000 valuation for the share stake. That investment is equivalent to one-quarter of Capital for Colleagues’ NAV, suggesting a pro forma NAV of about 40.5p a share if the investment is completely written off. That is well below the current share price.
Ace Liberty & Stone (ALSP) says that the £3.55m sale of Hume House in Leeds announced in January 2016 has not been completed. Hume House was acquired for £1.67m in March 2014 and annual rental income is £188,000. Ace has raised £4.55m from the sale of Bridge House in Luton, which was acquired for £2.75m in November 2014, and been occupied by HM Revenue & Customs for more than three decades.
Middle East-focused investment vehicle Indigo Holdings (INGO) has made its first investment ten days after it joined NEX on 10 February. There was net cash of £818,000 at the time of flotation and €176,800 (£150,000) was spent on a 5% stake in Iranian car ride sharing app Carvanro. Indigo believes that the growing younger population in Iran will be receptive to the service. The app was launched in mid-2016 and registered users and completed rides are growing month-on-month.
Queros Capital Partners (QCP) has issued an additional £960,000 (£950,400 net) of 8% bonds 2025. That takes the bonds in issue to £2.625m. The cash will initially be used to provide bridging loans as Queros seeks to acquire social housing projects in the longer term. NQ Minerals (NQMI) has raised a further £82,000, having raised £128,750 at 0.8p a share last week. IMC Exploration (IMCP) has issued 2.5 million shares at 1p each to pay for professional fees and converted a Wilhan loan note into 3.2 million shares at 2p each. .
Peterhouse has replaced Grant Thornton as corporate adviser to Chinese medical products and services provider MiLOC Group (ML.P). Director Dennis Ow has satisfied a HK$500,000 loan by transferring 177,353 shares previously pledged as collateral, taking his stake to 0.44%.
Impact investing company Menhaden Capital (MHN) has decided to delist from the NEX Exchange Main Board in order to reduce costs but retain its premium listing on the London Stock Exchange.
AIM
Fishing tackle and products retailer Fishing Republic (FISH) is on course to increase pre-tax profit from £305,000 to £404,000 in 2016. Year-on-year revenues were 40% ahead, suggesting a figure of around £5.8m. A new store was opened in Mildenhall at the end of 2016 and another in Milton Keynes in January 2017. Two more, in Reading and Ipswich, are planned before the end of the fourth quarter. These stores will all be ready for the 2017 fishing season. Online sales have fallen but a greater proportion of them are direct through the company’s website which has improved gross margin. Last year’s share issue has diluted earnings per share but investing the cash in new stores will help to compensate for that. The 2016 figures will be published before the end of April.
Software robotics company Blue Prism (PRSM) says that its revenues were strong in the first quarter and it already expects full year revenues to be well ahead of expectations.
North Italy-based gas producer Saffron Energy (SRON) joined AIM on 24 January and ended the day at 7.38p. Saffron raised £2.5m at 5p a share. The cash will finance the development of three gas fields.
Gold recovery services and mining company Goldplat (GDP) increased its revenues in the first half even though gold sales were lower due to delays in selling gold from the Ghana plant, which did not get the required licence to sell the gold until the end of the period. The gold has been sold in the second half. First half revenues were still higher because of a 15% rise in the gold price achieved and currency movements. There was still £885,000 in the bank at the end of 2016. A full year pre-tax profit of £1.94m is forecast as the benefits from the investment in the Kilimapesa gold mine start to show through. Further capital investment will be required for the Kenyan mine and the gold recovery activities.
Conygar Investment Company (CIC) is selling its investment property portfolio to Regional Commercial Midco, which is owned by Regional REIT, for £129.8m – a few hundred thousand pounds ahead of its book valuation. Regional REIT will issue 26.3 million shares at 106.347p a share and assume bank debt and repayment of zero dividend preference shares. Shareholders will have to approve the transaction. Conygar will be able to focus on its development assets.
Vernalis (VER) made further progress in building sales of the Tuzistra cough treatment in the first few months of the cough season. In the six months to December 2016, revenues were one-third higher at £800,000 and the second half could be stronger. Growth in Tuzistra sales was not enough to offset declines elsewhere and total revenues fell from £6.1m to £5.6m. There could be two additional cough treatments on sale next year if the FDA approvals are achieved. Net cash was £74.2m at the end of 2016.
Security technology and services supplier Synectics (SNX) reported a 4% rise in revenues to £70.9m last year but higher margin gaming contracts meant that there was a sharp bounce back in profit. Net cash was £2.17m at the end of November 2016. This year’s underlying pre-tax profit is expected to grow from £2.6m to £3m, although this represents slower growth than originally expected.
Cairn is resigning as nominated adviser to CloudTag Inc (CTAG) on 10 April but the company has managed to raise £975,000 at 3.75p a share via Novum Securities at a cost of £58,500. Trading in the shares was subsequently suspended pending an announcement. CloudTag will need to find another nominated adviser to continue on AIM.
International benefits insurance provider GBGI Ltd (GBGI) joined AIM on 22 February when it was valued at £130.4m at 150p a share. The share price was unchanged at the end of the week. GBGI intends to pay a dividend equivalent to 60% of distributable profit.
Stellar Diamonds (STEL) is raising £324,500 from a placing at 5.5p a share and up to £250,000 from an open offer at the same price. Once the placing is completed the shares will return from suspension. The cash will help to pay creditors and be used to progress the Tonguma project in Sierra Leone. Further cash will be required.
Timber processing and renewable energy business Active Energy (AEG) is in discussions to acquire further timber assets in North America and Europe. AEG WoodFibre generated lower revenues in 2016 because of weak demand from MDF manufacturers in Turkey after the coup. A new softwood processing plant should be up and running in April. The CoalSwitch division will be the main focus of growth this year.
SigmaRoc (SRC) says that its maiden acquisition Ronez has been integrated more quickly than it expected. The new systems should be up and running by the end of April and the back office systems budget should be halved. January sales volumes were ahead of budget and the first quarter order book is strong for the Channel Islands-based construction materials supplier. SigmaRoc has secured a £2m revolving credit facility from Santander and a £18m term facility is being negotiated. These two facilities will last until 2021.
Northland has increased its profit forecasts for online gaming marketing business Veltyco Group (VLTY). The 2016 pre-tax profit estimate has been raised from €1.35m to €1.99m, which is in line with the recent trading statement. The 2017 profit forecast has been raised from €3.18m to €4.27m and for 2018 from €4.21m to €5.44m.
Savannah Resources (SAV) has raised £2.24m at 5.25p a share and it has letters of intent for a further £1.01m from the chairman and a major investor, Al Marjan, which will maintain its stake at 29.9%. Savannah has reduced its full year loss from £3.1m to £1.8m and there was £700,000 left in the bank at the end of 2016. This year Savannah expects to complete the scoping study for the Mutamba heavy mineral sands project in Mozambique, where it has signed a consortium agreement with Rio Tinto, and start mining copper in Oman. Savannah is also defining drill targets for Lithium in Finland.
Premier African Minerals (PREM) is on course to get production restarted at the RHA tungsten mine. Underground mining contract terms have been agreed with delivery of up to 16,000 tonnes of ore each month.
Edenville Energy (EDL) has raised £2m at 0.8p a share, with every two new shares eligible for a warrant exercisable at 1.08p a share over the next 18 months. The cash will be used to acquire capital equipment and finance other costs of developing the Rukwa coal project in Tanzania. Commercial mining should begin by the end of the first quarter of 2017. Edenville has relinquished its uranium prospecting licence to concentrate on Rukwa.
MAIN MARKET
Small company-focused investment company Athelney Trust (ATY) has increased its dividend by 8.8% to 8.6p a share, although NAV growth was more modest at 2.5%. Last year, Athelney did not do as well as AIM or the FTSE Fledgling index which each grew by around 15%. Athelney is more exposed to the commercial property market than AIM or the Fledgling index. Property shares were hit by the EU referendum and did not clawback their falls by the end of the year. Athelney takes a long-term view and it has still outperformed AIM since 2005. The focus remains companies that are steadily growing profitability and dividends. Realised capital gains were £294,000 in 2016, helped by takeovers of Premier Farnell, UK Mail and Wireless. A stake was acquired in Lavendon last year and that is being taken over. The NAV was 251.1p a share at the end of 2016. Having raised £407,000 at 233.2p a share last April, Athelney still had invested most of the cash and had £59,000 left in the bank – slightly higher than a year earlier. The NAV had slipped to 250.4p a share by the end of January.
Standard listed and TSX Venture Capital Market-quoted Zenith Energy (ZEN) is selling its operations in Argentina so that it can concentrate on its operations in Italy and Azerbaijan. Production was suspended in 2015 because a storage tank owned by the state oil company collapsed so oil could not be transported. The operations are being sold for a nominal sum because investment is required and the buyers are taking on environmental responsibilities.
Standard list shell Sealand Capital Galaxy Ltd (SCGL) is acquiring SecureCom Group for 10 million shares and £1m in cash. Sealand had £600,000 in cash at the end of June 2016 and it is raising a further £1.4m (1.27m net of expenses) at 20p a share. The November 2015 flotation price was 10p. SecureCom also brings cash with it and pro forma cash is £3.26m and there is subscription money owed to the company of £8.58m. The pro forma NAV is 3.87m because of the heavy losses incurred by SecureCom, which has spent large amounts on sales and marketing of its instant messaging and communications products n the Asia Pacific region.
Andrew Hore
Quoted Micro 26 September 2016
ISDX
Brewer Shepherd Neame (SHEP) reported record results for the year to June 2016. Revenues increased by 1% to £139.9m, while underlying pre-tax profit was 11% higher at £10.3m. The growth in revenues and profit came from the managed pubs business. The brewing division reported a lower profit due to the loss of the Kingfisher brewing contract and higher costs of the water treatment plant. The final dividend is 3% higher at 22.05p a share, making a total for the year of 27.5p a share.
Crossword Cybersecurity (CCS) is starting to build up its revenues from products created in partnership with a number of UK universities. Distributors are being appointed for the cyber risk product Rizikon which is based on research by City University. In the six months to June 2016, revenues were £164,000 – eight times the previous twelve months. The loss was £403,000. There was £668,000 in the bank at the end of June 2016, which is slightly more than the cash outflow in the first half. Boss Tom Ilube was on the panel for the cyber security seminar held at ICAP’s headquarters last Wednesday.
Blockchain businesses investor Coinsilium Group Ltd (COIN) reported revenues of £196,000 and a loss of £270,000, including an impairment charge of £120,000, in the first half of 2016. There was nearly £164,000 in the bank at the end of June 2016. There are investments valued at £1.67m in the balance sheet.
Residential property developer Via Developments (VIA1) has issued a further £1m of 7% debentures 2020. This takes the total issued to £4.5m.
London Nusantara Plantations (LNPP) has identified potential oil palm estates investments in east Malaysia. The company has acquired an 11% stake in 404 hectares of land to use for oil palm cultivation. There is nearly £162,000 in the bank. Acquisitions will be funded by a mix of debt and equity.
Incubator company Milamber Ventures (MLVP) has become involved with 15 companies and one of these, Knowledge Motion, has signed a seven figure deal with Pearson. Milamber has the rights to 5% of Knowledge Motion. There was £289 in the bank at the end of March 2016 and the NAV was £291,000. Since then, a further £45,000 has been raised. Service and success fees plus grant-related revenues mean that this years revenues should be much higher than the £70,000 reported in the year to March 2016.
White Fox Ventures Inc is subscribing for $2.35m of shares in Australian minerals explorer NQ Minerals (NQMI) in seven tranches over six months. The issue price is 11.1 cents (8.4p). White Fox has already subscribed for $150,000 worth of shares. White Fox (www.whitefoxventures.com) is an OTXQB-traded company and this is the first of a number of strategic investments planned by the company. The company is also seeking acquisitions and its current activity is educating people how to make money.
AIM
Electricity and gas supplier Yu Group (YU.) could reach profitability in the second half of 2016. Even before it moved into profit Yu is paying a maiden dividend of 0.75p. A growing dividend is planned. Yu is still building up its revenues and they were £5.1m in the first half of 2016 but higher operating expenses meant that there was an underlying interim loss. Yu could become highly cash generative. It is expected to end 2016 with cash of £6.6m and this could rise to £10.3m a year later.
Bond International Software (BDI) has recommended the increase Constellation Software bid of 115.5p a share, which is near to the 116p-118p a share the company expects to distribute to shareholders if it were wound up. The bid provides a certain outcome whereas there is a risk that the total distributions could be lower. However, if there is a majority vote at the upcoming general meeting to agree to the sale of the remaining businesses the offer will lapse. That would mean that the proposed acquirer would have to be paid up to £350,000 due to the deal falling through.
Sinclair Pharma (SPH) was undergone significant changes in the past year but it has still to enjoy the benefits of some of these. It does have cash of £24.4m following the disposal of non-core activities in order to concentrate on aesthetic treatments. Sales are growing internationally but the taking over of distribution in Brazil and the US distribution deal for Silhouette InstaLift will make more significant contributions in a year or two. The latter will require a lot of investment in the coming year or so but it should help Sinclair to move into profit in 2018.
Structural steel supplier Billington Holdings (BILN) is continuing its recovery and the acquisition of Shafton Steel Services, which is based five miles away from the head office, enables Billington to increase its capacity. In the six months to June 2016, revenues improved from £24.5m to £27m, while pre-tax profit edged ahead from £1.7m to £1.74m after redundancy costs. The pre-tax profit margin is back above 6% but there is still more potential for recovery. Strong cash flow meant that cash more than doubled to £6.24m. There will be some additional capital investment required to increase capacity. The order book continues to grow.
Mobile payments processor MiPay (MPAY) is being used to process an increasing number of transactions, although interim revenues were affected by a change in terms with a large customer. The good news is that although revenues were 7% ahead at £1.6m, gross profit was one-third higher. Combining that with lower overheads means that the operating loss was reduced by three-quarters to £250,000. Clients are attracted by MiPay’s ability to reduce the risk of fraud. There should be £3m of net cash at the end of 2016. MiPay could make a small profit in 2017.
Fund manager Miton Group (MGR) increased its funds under management to £2.54bn by the end of June and that was despite an outflow from the CF Miton UK Value Opportunities Fund. The figure has risen further to £2.71bn since then. In the six months to June 2016, pre-tax profit recovered from £800,000 to £3.1m. Net cash was £18.4m at the end of August 2016.
Mortice Ltd (MORT) says that its UK facilities management business has been appointed to a £60m framework contract with London Universities. The contract for cleaning and associated services is for a three year period. Those companies on the framework will be invited to bid for individual contracts. Mortice’s subsidiary is the only company that has been appointed to all three parts of the framework.
Fishing tackle and consumables retailer Fishing Republic (FISH) grew its first half revenues by one-third to £2.5m. This was via a combination of organic growth and new store openings, although these newere sites are still building up trade. Online sales were weaker as management moved the focus away from third party sites to its own branded website. That will help margins in the medium-term. Underlying pre-tax profit edged up from £149,000 to £157,000. Two more stores will open in the second half. Investment in new stores will hold back this year’s profit whih is expected to rise from £305,000 in 2015 to £404,000. Earnings per share will decline because of the recent share issue but that cash is being put to work and the benefits should show through next year.
Talent management technology and services provider NetDimensions (NETD) remains on track to move into profit next year. Higher margin licence sales rose during the first half but overall interim revenues were slightly lower at $10.5m. Recurring revenues are more than two-thirds of total revenues. Full year revenues of $26.6m and a loss of $400,000 is forecast. In 2017, a profit of $1.2m is expected on revenues of $31.5m.
Coins investor Avarae Global Coins (AVR) plans to ditch its AIM quotation and it is offering to buy back 16.16 million shares at 11.5p each. It plans to buy back the same number of shares after it leaves AIM. High quality coin prices are plateauing and a small loss was made in the year to March 2016. There is no dividend. There was a cash balance of £570,000 at the end of March and the NAV was 14.6p a share.
Project management services provider Styles & Wood (STY) is paying an initial £2m in cash and shares for Keysource, which will boost the group’s expertise in projects for critical facilities and data centres. The deal will be earnings enhancing next year. In the six months to June 2016, Styles & Wood improved its underlying pre-tax profit from £200,000 to £500,000, although the business is second half weighted so the full year outcome will be much higher.
MAIN MARKET
AIM-quoted Kibo Mining (KIBO) is reversing the Imweru and Lubando gold projects into standard list shell Opera Investments (OPRA). Kibo will receive 61 million shares in Opera at a notional price of 6p each for the Tanzania-based projects. Imeru could be producing gold in 18 months. An AIM admission document is expected to be published before the end of November and at least £1.2m will be raised at 6p a share. The Opera share price has slumped from 10p to 4.38p since it floated in April 2015. Two previous acquisitions have fallen through. It will be interesting to see whether Opera will change its name to Katoro Gold Mining.
Andrew Hore
Quoted Micro 12 September 2016
ISDX
Mechan Controls (MECP) reported a rise in pre-tax profit from £180,000 to £271,000 on flat revenues of £1.9m in the six months to June 2016. There was £1.08m in the bank. Mechan has declared an interim dividend of 1.1725pa share and the ex-dividend date is 15 September. Trading conditions are better than one year ago and the improvement in the first half is expected to continue in the second half.
Capital for Colleagues (CFCP) has invested £50,000 in return for A shares in IT services provider 2C Services. The A shares have preferential rights to capital in the event of certain exits. Capital for Colleagues has also subscribed for ordinary shares equivalent to 20% of the share capital in return for a nominal sum. The existing investment in The Homebuilding Centre has been converted from £250,000 in loan notes into 250,000 A shares, while further loans of £97,000 have been combined into a three year loan.
Crossword Cybersecurity (CCS) has linked up with AIM-quoted Iomart to work on a machine learning-based way of stopping Distributed Denial of Service (DDoS) attacks. The hosting and managed services business wants to offer the service to its clients so it could be lucrative for Crossword.
Oil and gas explorer Doriemus (DOR), which is also quoted on AIM, has launched a three-for-15 open offer at 0.035p a share to raise up to £865,000. The open offer price is at a 22% discount to the previous closing mid price. The open offer closes on 18 October. The cash will pay for cost overruns of the Brockham drilling and testing programme – Doriemus has a 10% interest – and for further funding of other interests. The directors will be taking up their entitlement.
AIM
SQS Software Quality Systems AG (SQS) is reaping the benefits of its strategy to increase higher margin managed services business. In the six months to June 2016, revenues were 11% higher at €166.6m but underlying pre-tax profit was one-third higher at €11.9m. Net debt was €32.9m, following the acquisition of the remaining 25% of the company’s Indian business, but the second half is always highly cash generative. New sectors are starting to increase their use of software testing services, particularly in the digital area, including mobile payments and smart grids businesses. The US is becoming an increasingly important market and it is expected to overtake Germany as the biggest market.
Belvoir Lettings (BLV) reported a three-fifths increase in revenues to £4.3m in the first half of 2016 tanks to contributions from acquisitions made in the past year. The Northwood acquisition was made at the end of the period so it will not make a significant contribution until the second half. Like-for-like revenues were 10% higher. Pre-tax profit was 69% higher at £1.3m. The unchanged interim dividend of 3.4p a share is nearly covered by underlying earnings per share.
Motif Bio (MTFB) says that patient enrolment for the phase III clinical trial for the use of antibiotic iclaprim for acute bacterial skin and skin structure infections is ahead of schedule. This means that data should be available in the second quarter of 2017. The results of the second iclaprim trial should be available in the second half of 2017. The convertible promissory notes held by Amphion Innovations have been renegotiated. Instead of converting the accrued interest of $441,000 on the $3.55m of loan notes (maturing at the end of 2016) into shares at 24.47 cents a share, Motif will issue 409,000 shares and pay cash of $314,000. Amphion will also provide $15,500 a month of corporate services if Motif floats on Nasdaq.
Sutton Harbour (SUH) says that it expects the government report on the viability of the reopening of the Plymouth City Airport site to be published in the next few months. This will be followed by an independent government inspector making a decision on whether “safeguarding of the former airport site from redevelopment is sound planning policy following the Examination in Public, currently timetabled for March 2017“. The company’s strategic review is continuing.
Minoan (MIN) is one of the first companies to admit that the vote to leave the EU has hit its business. Along with the political problems in Turkey, the EU vote has knocked £100,000 a month from gross profit. Management does believe that this could be a temporary phenomenon. The latest court action over Minoan’s proposed Greek development is due to happen on 16 September. The judges will determine the arguments against the development after the hearing.
MedaPhor (MED) says that the American Board of Obstetrics and Gynecology has given notice that it will terminate its ultrasound skills training contract because of ongoing litigation over some of MedaPhor’s patents. If the litigation is sorted out then the relationship can be resurrected.
Fishing Republic (FISH) has acquired the Fantackletastic store in Lincolnshire for £150,000 in cash. The 4,000 square feet store is the group’s first in the east Midlands and takes the number of stores owned to 11. In the year to March 2016, the store made an operating profit of £40,000 on revenues of £425,000.
Starcom (STAR) has launched the new version of its Watchlock product but this was too late to benefit the first half figures. Interim revenues slipped from £2.64m to £2.51m, while cost savings meant that the loss was reduced. Starcom has recruited an installation and services company for its Tetis cargo security product.
IPPlus (IPP) is selling its original contact centre business for £6.7m in order to concentrate on its secure payments business. The company’s name will change to PCI-PAL. The sale and leaseback of a property will raise a further £800,000 leaving net cash of £4.8m. A £1m special dividend will be proposed.
MAIN MARKET
New standard-listed shell Vale International Group Ltd (VIG) commenced trading on 5 September. The strategy is to acquire a financial services-focused technology business in Europe or Asia. A placing raised £550,000 at 3.5p a share and the shares have traded at 5p (4.5p/5.5p).
Standard-listed Anglo African Agricultural (AAAP) is raising £475,000 at 0.67p a share in order to pay creditors and finance the growth of food manufacturer Dynamic Intertrade. Cape Town-based Dynamic supplies herbs, spices and seasonings to food manufacturers and the cash will be used to build stock levels and increase production. David Lenigas has been appointed as non-executive chairman and he has subscribed for 22.39 million shares giving him a 12.4% stake. No bids were made during the recent offer period and the strategic review has come to an end.
Andrew Hore
Quoted Micro 4 July 2016
ISDX
Employee-owned businesses funder Capital for Colleagues (CFCP) has invested £500,000 in Anthesis Consulting, a sustainability services consultancy with operations in Europe, North America and Asia. The investment includes £350,000 of shares, which is part of a £1.3m share issue, giving Capital for Colleagues a 3% stake with employees owning 80%. The other £150,000 is in the form of a loan repayable in five years. Anthesis will use the cash to make international acquisitions. Capital for Colleagues had an NAV of 53.66p a share at the end of May.
Ganapati (GANP) says that it failed to achieve its revenue forecasts in the year to January 2016 because of increasing competition. Revenues were £3.45m, while the loss was £7.82m after a £4.56m write down of intangible assets. Ganapati develops software for social media and consumer games but it has decided to move into offering online gambling software. The company continues to try to gain a licence from the UK Gambling Commission but there are issues that need to be sorted out and there is no guarantee that the application will be successful.
Equatorial Mining & Exploration (EM.P) continues to seek additional funding but it is confident enough to spend money on further surveying of its exploration licences in Nigeria. The interim figures will be published in September.
Blockchain technology investor Coinsilium (COIN) has appointed Mrs Pier Thomas as finance director. She has been awarded options over 2 million shares at a cost of 10p a share – a premium of 156% to the market price at the time of appointment. The options last until 28 June 2019.
Investment company Globe Capital Ltd (GCAP) has refocused its investment policy on the retail and menswear sectors. A 25% stake has been acquired in Sterling Craig, an online retailer of men’s fashion. The investment cost £12,500. The company was incorporated on 11 December 2015 and Sterling Craig’s only director is Terry Burnett. Earlier this year £100,500 was raised and Globe intends to raise more cash in the near future to fund additional investments. There was £19,000 in the bank at the end of March 2016.
A director has acquired a £400,000 convertible loan to Gowin New Energy Group Ltd (GWIN). Chen Chih Lung paid face vale for the loan which is convertible at 0.2p a share.
Energy efficient products supplier Sandal (SAND) has cancelled 130,000 shares that were issued at the time of its flotation because the buyer did not come up with the cash.
AIM
Omega Diagnostics (ODX) says that its Allersys diagnostic instrument is nearing commercial launch with 41 allergens available. The current operations put in a mixed performance in the year to March 2016. Food intolerance sales grew and helped group revenues improve from £12.1m to £12.7m. Pre-tax profit dipped from £1.4m to £1.3m and there is likely to be a further fall to £800,000 this year as the cost base is increased for product launches. Management believes that it has enough cash in the bank for its requirements but it will have to choose what opportunities it focuses on.
Surgical Innovations (SUN) says that sales are growing and it is manufacturing more of the equipment sold. Interim revenues should be at least 10% ahead, suggesting they will be around £2.9m. Growth is coming from the US. That is helping to improve gross margins to more than 25% – they were 8.4% in the first half of 2015 but they had reached 47.3% at the interim stage in 2014. New product ranges will be launched in the second half. At the same time inventory levels are likely to reduce by £500,000 in the first half. Net debt was £2.26m at the end of 2015 and this will reduce further.
Servoca (SVCA) is paying up to £3.1m for Classic Education in a deal that should be earnings enhancing. The initial payment for the Gravesend-based education recruitment business is £1.2m and Servoca believes that the sustainable level of pre-tax profit is more than £400,000. In the year to September 2016, pre-tax profit is forecast to improve from £3m to £3.5m.
Fishing Republic (FISH) has raised an additional £3.75m at more than double the share price at which it floated just over one year ago. Fishing Republic floated at 15p a share and subsequently raised more cash at 16p a share but the latest fundraising was at 35p a share. The cash will help to expand the retail chain and fund further development of the online operation. The share issue does initially dilute earnings but this should change when the cash is invested. The subscribers to the share issue include former Tesco boss Sir Terry Leahy and associates, who will have a combined stake of 15.9% in the company.
Corporation tax software provider Tax Computer Systems is reversing into Eco City Vehicles (ECV) in a deal that places an enterprise value of £73m on the transaction. A placing will raise £45m at 67p a share – after a 50-for-one share consolidation – and MXC Capital is subscribing £8.7m for 20% of the enlarged group, which will be renamed Tax Systems. There are plans for international expansion and a broadening of the product range.
DJI Holdings (DJI) is raising £29m at 95p a share in order to pursue new revenue opportunities. DJI has struck a deal with Xinhuatong, which provides content to the Xinhua News App owned by China’s national news agency, and this provides exposure to mobile. DJI sees itself as an internet technology provider having originally positioned itself as a developer of online lottery products. The share price has strengthened in the past three months but it has only just gone back above the July 2014 flotation price of 100p a share.
Mariana Resources (MARL) should have an updated mineral resource estimate for its 30%-owned Hot Maden gold copper project in Turkey. The current estimate is 3 million ounces of gold equivalent at a grade of 11.2g/t. The preliminary economic assessment should be completed before the end of the year.
Constellation Software has launched its 105p a share bid for recruitment software provider Bond International Software (BDI) but the target’s board has not recommended the bid. The deal vales Bond at £44.2m and Constellation already has a 29.6% stake and 100% of the convertible non-voting shares. In 2015, Bond reported a loss of £2m on revenues of £39.7m, while net assets were £34m. Bank debt has subsequently been repaid from the proceeds of the Strictly Education disposal. The other parts of the business are also up for sale.
Medical devices company Tissue Regenix (TRX) has secured a deal with a national US group purchasing organisation for hospitals and physician offices for the supply of wound care product DermaPure, the company‘s first commercial product. The three year contract covers 43 states.
Nostra Terra Oil & Gas (NTOG) is selling its 20% stake in assets operated by Ward Petroleum in the Chisholm Trail prospect in Oklahoma for $2.1m. The book value was $1.7m. These assets generated the majority of 2015 group revenues of £594,000. The cash can be used to acquire other oil and gas assets.
MAIN MARKET
Trading in shares of shell company Flying Brands Ltd (FBDU) has been suspended ahead of the potential purchase of medical technology business Stone Checker Software. The deal is still dependent on due diligence. The share price had halved to 3.25p since the beginning of June.
Global Resources Investment Trust (GRIT) is hoping to raise up to £2.5m through a subscription and open offer at 5p a share. RDP Fund Management is subscribing for £2m worth of shares while the terms and dates for the open offer have yet to be announced. The cash will be used to reduce gearing.
ANDREW HORE
Not Even A Nation Of Shoppers
England used to be a nation of shopkeepers but those days are long gone, thanks to the allegedly super efficient Lidl and Aldi but it now looks like we are not even a nation of shoppers.
The first half results for ASOS ASC has growth in EU and US up by 31 and 34% respectively, leaving the UK trailing behind with a rise of 25%. Alright let us not forget that the EU is a super rich trading area with super rich member countries like Greece, Portugal, Bulgaria etc etc. It leaves Diddy David’s lies about the strength of the UK economy, looking even more threadbare.
Profit before tax at ASOS rose by 18% for the six months to the end of February and active customers rose by 17% as momentum continued to improve.
The shares have done well over the past 6 weeks having risen from 2,600p in late February to 3,450p on Friday last.
Tyra Tech TYR made 2015 a step change year, with revenue up from $4.9m to $7.4m, thanks to Vamousse, its killer head lice treatment and shampoos which have taken the US and the UK by storm, whilst its mosquito repellant is number one seller on Amazon. Market penetration expanded rapidly during the year and by 31st December the company had 34,000 US stores and supermarkets plus another 7,800 in the UK. More expansion in both existing markets and geographically, is promised for the current year.
The company is still making a net loss before tax but 2015 saw this fall from $5.1m to $2.3m The shares had a major collapse in september, falling drastically from 5.40p but recovery was soon under way and they are now at 3.13p
Good times are here, says the chairman of Next Fifteen Comm NFC as revenue for the year to 31st January rises by 18.9%, profit before tax by 28.8% and EBITDA by 31.5%. The dividend is raised by 20% as more is promised for 2016.
The shares of Fishing Republic FISH have doubled since late February with a rise from 16p to a high of 32p but one may wonder if this has been overdone somewhat, as they have weakened on today’s full year results. True second half sales rose by 45%, full year sales by 22% and online sales by 30% but profit before tax and exceptional items rose by only 3%.
The Chief executive says it was an exciting year – let us hope it will not get too exciting.
Looking for villas & houses for sale in Greece; http://www.hiddengreece.net