Home » Posts tagged 'FLOW'
Tag Archives: FLOW
Andrew Hore – Quoted Micro 12 November 2018
NEX EXCHANGE
Crossword Cybersecurity (CCS) plans to raise up to £2.25m prior to a move to AIM at the end of this year. The cash will be invested in sales and marketing, product development and working capital.
Primorus Investments (PRIM) says that investee company Stream TV Networks has secured a deal with Beijing Optical and Electrical, which will use Stream’s 3D display technology in large flat TV and monitor screens. Primorus has invested £1.4m in Engage Technology, which has 75 corporate clients for its construction software and a further 17 that are contracted but not yet live. Revenues are growing more slowly than hoped. Engage is talking with partners and potential corporate investors.
Angelfish Investments (ANGP) is increasing its shareholding in YBOO from 20% to 35% for an investment of £400,000. A working capital loan of up to £1.5m with an annual interest charge of 10%.
Inqo Investments Ltd (INQO) reported an increase in interim revenues from R7.65m to R8.37m and the loss declined from R4.52m and R4.12m. At the end of August 2018, net cash was around R11.5m. The South Africa-based social impact investor generated the majority of its revenues from Kuzuko Lodge with a contribution from Bee Sweet Honey.
KR1 (KR1) says that its investee company Volt Ltd has raised $2m. KR1 has converted loan notes and has a 7.94% in institutional digital asset custodian Volt valued at $1.4m. The initial investment of £200,000 acquired a 5% stake in September 2017.
MetalNRG (MNRG) has completed the acquisition of the Gold Ridge project in Arizona from Winston Gold for £530,000. The final payment is funded by shares at 1.75p each. The project area includes three former producing mines. There is potential for the discovery of further gold mineralisation.
Auxico Resources Canada Inc (AUAG) has raised $315,000 at 20 cents a share. This cash will fund geological work and the evaluation of opportunities in Colombia.
Healthperm Resourcing Ltd (HPR) is changing its name to SG Recruitment Ltd.
AIM
Gresham House (GHE) is acquiring investment manager Livingbridge for an initial £30m. Up to £10m more could be payable depending on performance. This deal will help to widen the customer base and provide product development opportunities. The combined group will have assets under management of more than £2bn. A placing raised £11.7m at 448p a share. The deal is immediately earnings enhancing even before cost savings. Gresham House Energy Storage Fund has raised £100m and will invest £57.2m in a portfolio of energy storage assets in development.
Castleton Technology (CTP) increased interim revenues by one-fifth to £12.9m and there was a 5% improvement in earnings per share. finnCap forecasts an improvement in full year earnings per share from 5.2p to 5.9p. The provider of software and managed services plans to pay a maiden dividend for this financial year.
Transportation software and services provider Tracsis (TRCS) has reported figures in line with recently upgraded forecasts. In the year to July 2018, revenues improved from £34.5m to £39.8m, mainly organic growth, while pre-tax profit rose from £7.6m to £8.5m, helped by a one-fifth increase in software sales. There is £22m in the bank to finance further acquisitions.
AdEPT Technology (ADT) has acquired unified communication services provider ETS Communications for £2.5m less net debt at the end of October 2018. This deal will be immediately earnings enhancing. Thebank facility has been increased to £35m in order to fund further acquisitions.
International benefits insurance provider GBGI Ltd (GBGI) is recommending a $1.515 a share cash offer from Elm Bidco. This values GBGI at $131.8m (£101.6m). There has been modest growth in earnings per share since GBGI floated at 150p a share in February 2018. Adividend of 1.4 cents a share was paid in June.
Myanmar-focused social media platform operator MySQUAR Ltd (MYSQ) is investigating into the use of proceeds of two recent fundraisings. Approximately £900,000 was paid out of company funds to former directors and third parties. Staff are being made redundant and additional cash is required. Trading in the shares is suspended. The nominated adviser SP Angel and joint broker Daniel Stewart have resigned. Piers Pottinger has stepped down as a director.
Floorcoverings manufacturer Victoria (VCP) has reassured investors about trading and the share price has started to recover. Victoria is not issuing a bond to refinance its debt because the potential pricing was unfavourable. Invesco has increased its stake to 22.1% and The Spruce House Partnership has built up a 13.6% stake.
Estate agency Purplebricks (PURP) has grown interim revenues in the UK by one-fifth. Trading in Australia is tough, and it is still early days in the US. Net cash was more than £100m at the end of October 2018.
First Derivatives (FDP) increased its underlying interim pre-tax profit by 15% to £10.6m. The interim dividend was 10% higher at 7.7p a share. The software and consultancy company with the fastest growth coming from licences for Kx software.
URA Holdings (URA) has gained EIS approval for the funding for its proposed reverse takeover of personalised digital entertainment content provider Entertainment AI. Complexities of the deal have been solved and documentation is progressing. URA has until 20 December to complete a reverse takeover.
Interim revenues and pre-tax profit at Best of the Best (BOTB) will be better than expected and this has led to a full year pre-tax profit upgrade from £1.4m to £1.6m, which is the same as the year before. The online competitions operator will be hit by the increase in remote gaming duty from 15% to 21% from October 2019. This will mean that 2019-20 forecasts will have to be reassessed.
Polarean Imaging (POLX) says that its phase III non-inferiority clinical trial of its Xenon polariser is up and running. Enrolment should be completed in the second quarter of 2019. A new order has been received to upgrade the polariser at SickKids Hospital in Toronto.
Remote tracking technology developer Starcom (STAR) has signed a deal with a distributor in North Africa covering Helios Advanced and BIO CAN fuel sensors. This year’s group revenues are expected to improve from $5.4m to $5.9m. Starcom has raised £400,000 at 2p a share.
Broadcast software provider Pebble Beach Systems (PEB) has won two new contracts that will underpin forecasts for 2018 and 2019. The two orders have a total value of £2m.
Zoo Digital (ZOO) reported interims in line with expectations. Revenues were 17% ahead at $14.9m and the main growth has come from dubbing services. The loss was slightly higher at $159,000. A major subtitling customer will increase its demand in the second half. The full year, underlying pre-tax profit is forecast to improve from $500,000 to $1.8m.
Recruitment company Kellan Group (KLN) plans to cancel its AIM quotation and the general meeting vote already has backing from the owners of 70% of the shares. The shares are tightly held and liquidity is limited.
Fastjet (FJET) says that it can continue operating in November, but it will require more cash.
Crawshaw (CRAW) has called in administrators to itself and four subsidiaries. Thirty five stores have closed and 19 are still trading. Administrators have also been appointed to Flowgroup (FLOW) because it could not find a suitable acquisition.
MAIN MARKET
Path Investments (PATH) says it is not proceeding with the farm-in for the Alfeld-Elze II licence having failed to raise the cash it required and reach agreement on the transaction structure. The deal would have led to a move to AIM. Trading in the shares remains suspended.
Beauty and personal care products supplier InnovaDerma (IDP) expects interim revenues to be similar to last year, while full year revenues are expected to increase from £10.7m to £14.4m. finnCap forecasts a rise in pre-tax profit from £700,000 to £1.7m.
Consumer goods supplier UP Global Sourcing (UPGS) reported revenues for the year to July 2018 fell by one-fifth to £87.6m and underlying pre-tax profit decreased from £10.7m to £5.6m. The main decline was due to discount retailers seeking tougher terms and delayed sales to a European retailer. Online sales increased and this helped to maintain margins. Brands include Salter kitchenware and Constellation luggage. The Kleeneze brand is being relaunched. Non-executive chairman Jim McCarthy has acquired 135,000 shares at 39.3p each. Equity Development forecasts a rise in earnings per share from 5.4p to 5.6p, while dividend per share should rise from 2.7p to 2.8p.
Trading in Blockchain Worldwide (BLOC) shares has been suspended ahead of a proposed acquisition of Chorum Group.
Shareholders have agreed to Titon Holdings (TON) moving to AIM on 10 December.
Andrew Hore
Andrew Hore – Quoted Micro 26 February 2018
NEX EXCHANGE
Blockchain technology investor Coinsilium Group Ltd (COIN) is advising Tutellus Technologies on its upcoming token generation event. Tutellus matches students with teachers in the Spanish-speaking world. The Tutellus token will be used as a medium of exchange for the new blockchain-based platform. Richard Lloyd has been appointed as adviser to Coinsilium’s Gibraltar-based subsidiary TerraStream, which is developing a token offering platform. TerraStream intends to raise cash via a token offer but it is waiting for a more specific set of regulations from the Gibraltar Financial Services Commission that should be published in the second quarter.
IMC Exploration Group (IMCP) has decided to focus on the flagship project in gold project at Avoca, Wicklow and the Kilbricken zinc deposit in County Clare. IMC plans to relinquish five licences.
Natural resources investing company MetalNRG (MNRG) has appointed Rolf Gerritsen as chief executive and he is subscribing for 2.5 million shares at 2p each, combined with 2.5 million warrants exercisable at 3p each. The former chief executive Paul Johnson is acquiring the same number of shares on the same terms. MetalNRG is progressing the potential standard listings of a number of resources businesses and it will retain stakes. MetalNRG is also seeking to move to the standard list.
Health staff recruiter Healthperm Resourcing Ltd (HPR) generated revenues of £250,000 in 2017. There were 130 candidates deployed. The company intends to double its number of employees by the end of June 2018. New contracts have been won in the Middle East and with Walsall Healthcare NHS Trust and these candidates will be found this year. The 2017 figures should be published in May.
AIM
Gooch and Housego (GHH) says that it is experiencing exceptional demand for critical components for microelectronic manufacturing and this has offset any slowing in demand for high reliability fibre couplers. Trading is in line with expectations and there will be a second half weighting to the year’s figures. US tax changes will reduce the deferred tax in the balance sheet by £500,000 and cut the effective rate of tax to around 23%.
Lighthouse Group (LGT) is doing particularly well at the moment. The IFA significantly increased its business from affinity groups and average revenues per adviser rose by nearly one-quarter to £122,000. Assets under management are starting to build up and the fees from these will begin to become more important. In 2017, pre-tax profit improved from £1.9m to £2.5m and net cash was £8.7m. The dividend was raised from 0.27p a share to 0.42p a share.
Scotland-based Springfield Properties (SPR) reported maiden interim results. Revenues were 10% higher at £54.8m and pre-tax profit was £3.1m, up from £2.6m. The fastest growth came from the affordable homes division. The private housing side is waiting for planning permissions for planned villages in Scotland but existing permissions mean that the second half has significant contracted revenues. Even though Springfield was quoted for a few weeks of the period it is paying a 1p a share interim dividend.
Saffron Energy (SRON) has asked for trading in its shares to be suspended because there have been changes to the proposed acquisition of south east Asian oil and gas assets. A supplementary admission document is likely to be required.
Gas and electricity supplier Flowgroup (FLOW) has secured £5m of additional funding from Palm Ventures and Lombard Odier Asset Management to provide seasonal working capital. Cost savings are on track but the market remains competitive.
Ultimate Sports Group (USG) has decided to stop marketing spending on the UltimatePlayer.me children’s sport platform due to disappointing take-up. There will be a £521,000 write-off relating to this platform. There was £130,000 in the bank at the end of 2017 and Ultimate has raised £537,500 at 5p a share, although this will require a capital reduction. Richard Bernstein is acquiring nine million shares and David Kyte the other 1.75 million shares. Eurovestech-boss Bernstein has been engaged to find a suitable business to acquire and a successful transaction would net him a fee of 1% of the value of the acquisition.
Fintech business TruFin (TRU) joined AIM on 21 February, when it raised £70m at 190p a share. The share price ended the week at 214p.
Stanley Gibbons (SGI) has secured a £19.4m investment from Phoenix UK Fund to shore up its poor balance sheet. This will leave Phoenix with a majority stake, but it will take out the RBS debt.
CCTV technology business Synectics (SNX) improved its pre-tax profit from £2.6m to £3m last year, despite strong comparatives in the key gaming sector in the previous year. Oil and gas improved its contribution but trading in transport was hit by the lack of new buses being bought by companies. Synectics expects flat pre-tax profit of £3m for the year to November 2018, due to additional development spending, but a sharp jump to £4m is forecast for next year.
Tristel (TSTL) has been hit by tough trading conditions in surface cleaners in the NHS and investment in gaining approvals have also held back profit. The international business goes from strength to strength and this helped interim pre-tax profit to grow to £2m. US EPA approvals for surface cleaners could be gained by May but then state by state approvals are required so revenues will not flow through until 2019. Approvals for endoscope cleaning products require FDA approval and will take longer.
Drilling results from the APTA deposit at the Anza project in Colombia that is 100%-owned by Orosur Mining Inc (OMI) have been positive. High grade gold mineralised intercepts currently cover a strike extent of 1.5km and a depth of 275 metres. Results are awaited on five more holes and six holes will be drilled on Charrascala deposit.
Kin Group (KIN) says it will not make an acquisition by 28 February so trading in the shares will be suspended. There are talks with potential acquisitions and £800,000 remains in the bank.
MAIN MARKET
London and Associated Properties (LAS) is selling the Brixton markets to Market Village for £37.25m in cash. This compares to book value of £24.5m. The net income is £1.2m a year. London and Associate Properties had net assets of £38m, which is equivalent to 44.5p a share, at the end of June 2017. The share price is at a one-third discount to the June 2017 even without any profit on the disposal and gearing should fall to below 100%.
Macfarlane Group (MACF) increased pre-tax profit by 19% to £9.3m on the back of a 9% increase in revenues. The profit growth came from the packaging distribution division with the manufacturing division making a lower contribution. The full year dividend was raised from 1.95p a share to 2.1p a share. The pension deficit has been cut from £14.5m to £11.8m.
BATM Advanced Communications (BVC) had a strong second half and 2017 revenues were much better than expected. EBITDA is expected to jump from $2.8m to $7m. The growth is coming from both the networking and biomedical divisions.
Precious stones explorer Shefa Yamim (SEFA) says that Macquarie University has confirmed the existence of moissanite coupled with titanium-rich corundum in its licence area volcanic rocks and this augurs well for the potential of the Kishon Mid-Reach project.
Andrew Hore
Quoted Micro 25 September 2017
NEX EXCHANGE
Shepherd Neame (SHEP) improved both beer volumes and like-for-like sales in its managed pubs last year. The first phase of investment in the brewery has been completed and new beer brands have been launched to replace the contract brewing of Asahi lager, which comes to an end next February. In the year to June 2017, revenues were 12% ahead at £156.2m, while underlying pre-tax profit was 8% higher at £11.2m. The total dividend has been raised by 3% to 28.35p a share, which is more than twice covered by earnings. Net debt was £60.1m because of investment in the brewery and pub acquisitions. In the first ten week of this financial year, like-for-like managed pub sales were up by 1.5% and beer volumes were ahead by 4.4%. Graeme Craig has resigned as brewing and brands director. Peel Hunt has become corporate broker.
Equatorial Mining and Exploration (EM.P) had £5,000 left in the bank at the end of June 2017 but since then £40,000 has been raised via loan securities. Equatorial has signed a three year exploitation rights agreement covering an open cast coal mine in central Nigeria, which will be called the St Leonard mine. The mining will be outsourced and production should build up over a six month period.
Kryptonite1 (KR1) is investing £200,000 in Vo1t Ltd, a digital custodian of bitcoin assets, for a 5% stake. Kryptonite1 is the first beta client.
Walls & Futures REIT (WAFR) says the refurbishment of the first supported housing investment in Stroud is complete and the first residents will move in during October. There is a pipeline of other supported housing projects.
Lombard Capital (LCAP) has identified an investment product around which it intends to build a business. This involves the provision of reinsurance to reduce the risks relating to investments secured on Senior Life Settlement (SLS) policies. The details of the product are still to be finalised. Lombard has issued a total of £150,000 of 7.5% convertible unsecured loan notes 2020, out of a potential £3m note issue. The conversion price is 10p a share and there are ten warrants for each £1 loan note exercisable at the same share price.
Primorus Investments (PRIM) is investing $200,000 in Stream TV Networks Inc, which has developed a glasses-free 3D technology. The strategy is to licence this technology for TVs and smartphones, followed by PCs and other uses. Stream is valued at $336m and plans to join Nasdaq in 2018. Primorus still has £350,000 in the bank.
AIM
Electronic coupon and loyalty technology developer Eagle Eye (EYE) reported faster than expected growth in revenues in the year to June 2017 and they are likely to grow by around one-third in the first quarter of this financial year thanks to the new John Lewis contract. Full year revenues improved from £6.5m to £11.1m, while the underlying loss was slightly lower at £3.8m. Recurring revenues were 68% of the total and this percentage is likely to increase. There was £3.7m left in the bank and there is likely to be net debt by the end of June 2018.
Safestyle UK (SFE) is not immune to the tough consumer climate but it still performed well in the first half of 2017. There was a small increase in interim revenues to £82.1m but there was a 15% fall in underlying pre-tax profit to £9m. The full year profit forecast is £16m, down from £20.4m. This means that the forecast dividend is flat at 11.3p a share. Safestyle is taking share in the replacement windows market and new manufacturing facilities will make it more efficient.
Bango (BGO) says that end user spend via its mobile billing platform doubled to £92.3m in the first half of 2017. This prompted Cenkos to lower its forecast loss for 2017 from £800,000 to £600,000 and raise its 2018 profit forecast from £1.1m to £1.5m. There is room for improvement if there is further roll outs around the world by Amazon.
Electricity supplier Flowgroup (FLOW) continued to make significant losses in the first half of 2017 but it has raised £25m to improve the strength of its balance sheet. The rate of customer acquisition will be lower but Flowgroup should make more money from the customers it does obtain. Breakeven is possible by the end of 2018 and there could be positive cash flow in 2018.
MAIN MARKET
Macfarlane Group (MACF) has acquired Nottinghamshire-based packaging distributor and manufacturer Greenwoods for up to £16.75m, which was partly funded via an oversubscribed £8m placing at 66p a share. The deal helps Macfarlane move into the clothing and apparel sector. The acquisition will be earnings enhancing in its first full year.
Sportech (SPO) is undergoing a strategic review and it expects to update shareholders on 9 November. Chief executive Ian Penrose, who is leaving at the end of 2017, and his wife have sold 300,000 shares at an average price of 95.2916p each, which takes their stake to 561,800 shares.
Last Thursday, telecoms-focused cash shell Stapleton Capital (STC) joined the standard list. Stapleton raised £1.5m, £1.4m net, at 5p a share. The potential acquisition would be valued at between £2m and £3m. Cash shell Baskerville Capital (BASK) started trading on the standard list last Friday, having raised £1.8m, £1.65m net, at 5p a share. The focus of the Chris Akers-backed shell is on companies in the technology sector that have strong management and the potential for scaling up their business. Rodger Sargent is a director of Stapleton and Baskerville, and he was previously a founder of the shell that became Satellite Solutions Worldwide (SAT).
Standard list shell Spinnaker Opportunities (SOP), which is focused on the energy and industrial sectors, still has £1.1m in the bank. Management is pressing ahead with discussions for the acquisition of the most attractive of its potential acquisitions.
Intelligent Energy Holdings (IEH) expects its current year revenues to decline from £91.8m to around £21m but the loss after tax should fall from £82.7m to around £24m. If the large Indian contract is excluded then the decline in revenues is from £6.7m to £4.3m. There is still £2.7m in the bank but this will not last long if the loss is not stemmed. The cash burn is currently £1.6m per month, although an R&D tax credit is anticipated in the next couple of months. Management has put the fuel cell technology developer’s assets up for sale. The fact that some of these assets are part of the security of the company’s £30m of convertible loan notes could prove a constraint. There is likely to be little, if anything, left for ordinary shareholders. That led to the share price more than halving to 2.45p.
Andrew Hore
Quoted Micro 29 May 2017
NEX EXCHANGE
Crossword Cybersecurity (CCS) has taken advantage of the high profile of cyber security to raise cash at a premium to the market price. Crossword raised £145,000 at 230p a share. The current mid-price is 195p a share and the most recent trade was at 197p a share last September. Brenlen Jinkens took up 50% of the new shares and he has 5.13% of the company.
Wheelsure Holdings (WHLP) reported a dip in interim revenues due to the lack of funding so the planned £500,000 fundraising should enhance progress. In the six months to February 2017, the loss increased from £126,000 to £159,000 as revenues fell from £133,000 to £94,000.
Mechan Controls (MECP) improved its underlying 2016 operating profit from £518,000 to £594,000 on revenues that were 5% ahead at £4m but there have been significant changes since last year. Nirvana is the only subsidiary left. At the end of 2016, there was £829,000 in the bank and the NAV was £2.41m. Mechan is paying a final dividend of 2.27p a share and the shares go ex-dividend on 1 June. Once all the operations are sold money will be returned to shareholders.
Secured Property Developments (SPD) had cash in the bank of £341,000 and an NAV of £689,000 at the end of 2016. The company is valued at a 47% discount to NAV.
Social housing finance provider Queros Capital Partners (QCP) has raised an additional £875,000 by issuing 8% unsecured bonds 2025. That takes the bonds in issue to £3.5m – from 19 separate placings. So far, short-term bridging loans have generated income to fund the interest payments on the bonds. Longer-term, there are plans to acquire social housing properties.
Blockchain technology company investor Coinsilium Group Ltd (COIN) says that investee company RSK Labs has raised $3.5m. Coinsilium retains the right to 1% of RSK via a convertible. RSK has developed a sidechain to the Bitcoin that enables smart contracts. There could eventually be scope to handle more than 20,000 transactions per second but that requires the additional investment.
NQ Minerals (NQMI) has raised £751,000 at 0.3p a share. Colin Sutherland has been appointed as finance director.
AIM
Enterprise software provider Sanderson (SND) is growing strongly but the cost of investment in the business will hold back short-term profit. The digital retail division is growing fastest but its operating profit was flat as management investors in order to maintain the strong growth rate. In the six months to March 2017, revenues were 10% higher at £10.9m and operating profit was 5% ahead at £1.55m. There was net cash of £4.51m and the dividend was increased by 10% to 1.1p a share.
Software supplier Cerillion (CER) continues to grow its revenues as it starts to build its customer base outside the mobile sector. In the six months to January 2017, revenues were 10% ahead at £7.5m and underlying profit was nearly one-third higher at £900,000. Orders worth £9.4m were won during the period. The interim dividend was 8% higher at 1.4p a share. Directors’ sold 4.2 million shares at 120p each, which could help to improve the liquidity in the shares.
Redx Pharma (REDX) has failed in its attempt to juggle its cash requirements and its debt and administrators have been appointed. Liverpool City Council has previously extended the maturity date of its £2m loan but Redx did not repay the debt when it became due at the end of March. There is also interest due and that could total more than £1m. Redx nominally raised £12m in February – an equity swap agreement meant that not all of this was raised immediately – but does not appear to have raised enough to pay the loan. That is blatant bad management which has ended up destroying the investments of shareholders. Iain Ross recently took up the role of chairman so it would be unfair to blame him but the other directors, including those that have recently departed, were responsible for running the business properly and they knew when this money had to be repaid. The directors are Dr Neil Murray, Norman Molyneux, Dr Bernhard Kirschbaum and David Lawrence, while Dr Frank Armstrong, Peter McPartland, Dr Peter Jackson, Philip Tottey and Dr Derek Lindsay have resigned since Redx joined AIM. Investors’ should be aware of these people if they are or become involved in any other companies.
Lombard Risk Management (LRM) increased its revenues from £23.7m to £34.3m in the year to March 2017. The pre-tax loss was reduced from £2.2m to £1.6m. The year-end order book was worth £10.1m. Management expects the company to be cash profitable this year. Legislation continues to drive demand for reporting and risk software.
Flowgroup (FLOW) could not find a buyer for its energy supply business at an appropriate valuation so it is raising up to £29m in shares (at 1p each) and bonds, including more than £600,000 raised at 1p a share via PrimaryBid, to finance its development. This is highly dilutive even before any conversion of the bonds at the conversion price of 0.95p a share. Flowgroup also requires £1m to market its Flow boiler in Europe and £4m to end the manufacturing contract with Jabil. In 2016, there was a loss of £23.7m on revenues of £99m. Net cash was £3.7m at the end of 2016. An increasing number of smaller competitors are entering the energy supply market and this led to a reduction in customers. The funding will help Flowgroup to compete and build up its customer numbers.
Big data software supplier Fusionex International (FXI) plans to leave AIM and it already has the backing of shareholders owning 41.9% of the company for the general meeting vote on 15 June. Management blames the lack of liquidity in the shares and paucity of independent research. The also blame political uncertainty in Europe. Fusionex had a gravity defying rating in the first year or so of trading on AIM but the share price is currently less than one-fifth of the peak at the beginning of 2014. The company’s growth strategy will remain unchanged. There are plans to arrange a trading facility in the shares.
Safestay (SSTY) has paid €3m in cash for U Hostels, which operates a 226 bed hostel in Madrid. U Hostels also owns an apartment block near the hostel, where managed apartments are expected to be completed during 2018, and a building in Paris that is being converted into a 260 bed hostel, which has a 12 year lease that can be extended by a further 12 years. Safestay will have to invest up to €2.3m in the Paris development, which should be completed in early 2019. In total, including development spending, the acquisition cost will be up to €6.5m. The original Madrid hostel made a small loss on revenues of €1.3m. Earlier this year, Safestay raised £12.6m from the sale and leaseback of the Edinburgh and Elephant & Castle hostels – the leases are for 150 years.
Strategic Minerals (SML) made a maiden pre-tax profit in 2016. The $351,000 profit was after $691,000 of other income – predominantly the settlement of a rail dispute. The Cobre tailings business continues to generate profit and cash.
Thor Mining (THR) says that the Pilot Mountain tungsten resource inventory has risen to 11.73 million tonnes at 0.28% WO3. This does not include the GunMetal and Good Hope deposits.
Greatland Gold (GGP) has granted access to Newmont to the Ernest Giles tenements for a period of six months and it will have first right of refusal for a disposal or joint venture. An airborne survey has identified new structural targets suitable for gold mineralisation. Metal Tiger (MTR) has exercised 15 million warrants at 0.2p a share.
LED lighting systems developer PhotonStar LED (PSL) cut its full year loss from £3.03m to £1.43m on lower revenues. The first quarter of 2017 was tough but there have been orders for its Halcyon devices. R&D has been reduced.
Fairpoint (FRP) has delayed its full year figures yet again. They are promised at some point in June. If they do not come out then then trading in the shares will be suspended.
Arian Silver Corporation (AGQ) has raised £600,000 has raised at 0.5p a share. The cash will be used for exploration of silver and lithium projects.
Mortice (MORT) has won UK contracts worth £2.25m via its Elite subsidiary that take it into new sectors. Elite has won a three year cleaning and waste contract with Surrey and Sussex police and after securing a place on BMW’s approved supplier list a two year contract with the car maker.
Orogen (ORE) intends to acquire Thread 35, which owns e-commerce womenswear brand Sosandar. Orogen is lending up to £250,000 to Thread 35. Sosandar is targeted at 35-55 year old women. Trading in the shares has been suspended.
Active Energy Group (AEG) has entered into an agreement in principle with the Province of Newfoundland and Labrador which will provide a timber licence and a forest management agreement covering 1.2 million hectares. The licence would enable the harvesting of up to 140,000 cubic metres of wood annually.
MAIN MARKET
Thomas Charlton has further increased his stake in North Midland Construction (NMD) taking it to 7.24%. Finance director Daniel Taylor recently acquired 23,321 shares at 305p each. North Midland says that its first quarter profit has increased from £237,000 to £580,000 on a 5% rise in revenues to £62.2m. The main reason behind the improvement was a swing from loss to profit by the telecoms infrastructure division but the construction and water divisions generated a lower profit. Management still believes that margins can be improved. The order book is worth £254m helped by the AMP6 water investment cycle getting going. There is the promise of growing dividends.
Shareholders have agreed to the proposed bonus issue by Sealand Capital Galaxy Ltd (SCGL). On 1 June, existing shareholders will receive nine bonus shares for each one they own, leaving them with ten times the number of shares and the share price would be adjusted from 28.5p to 2.85p. The November 2015 flotation price was 10p (1p adjusted) and earlier this year a further £1.4m was raised at 20p (2p adjusted) a share.
Dukemount Capital (DKE) has signed a binding letter of intent for its first deal with a housing association to develop supported living accommodation. The plan is identify properties worth up to £5m which will be leased to Larch Housing Association on a 50 year lease at 6.5% a year plus inflation. Dukemount floated on 29 March.
Health food products supplier World Trade Systems (WTS) has entered into memoranda of understanding with Germany-based Naturemed and Germany-based Biestmilch, which will help it to widen its product range. Naturemed is a new company but Biestmilch was formed in 1999. Trading in the shares has been suspended for years and it is approaching ten years since there was a trade in WTS shares.
CIC Gold Group Ltd (CICG) left the standard list on 25 May. Management believes it will get a better valuation on another designated exchange.
Andrew Hore
Quoted Micro 15 May 2017
NEX EXCHANGE
Newbury Racecourse (NYR) increased its revenues by 4% to £16.9m in 2016. Underlying trading profit was 8% ahead at £740,000 but there was also a £19.4m gain on the sale of land for housebuilding partly offset by £3.45m impairment charge. The NAV was £44.4m, which is around double the company’s market value. Net cash is £5.4m. The redevelopment of the racecourse continues with the latest phase due to be completed next year.
Good Energy Group (GOOD) has launched a corporate bond. It wants to raise £10m but could raise the subscription level to £20m. Existing bond holders can roll over some or all of their investment into the new bonds. The bonds have a coupon of 4.75% or 5% for customers.
Via Developments (VIA1) has sold all 26 apartments in Napier House in Luton. Deposits of £394,000 and £52,000 of non-refundable reservations have been received. The project should be completed in the first quarter of 2018.
AfriAg Global (AFRI) continues to seek acquisitions in the agricultural logistics sector. In 2016, revenues grew from £1.98m to £3.04m and the loss fell from £96,000 to £9,000. Directors’ fees were reduced from £108,000 to £19,000. The 40%-owned AfriAg (Pty) increased its revenues by 91% to £11.7m but its reported profit dipped from £359,000 to £104,000.
Walls & Futures REIT (WAFR) has completed its first supported housing sector investment. It has bought a grade two listed building in Stroud for £475,000. There will be further investment in improving the property over the next four months. The property will then be let on a 25 year lease to a UK care provider with rents adjusted each year by inflation.
Capital for Colleagues (CFCP) has invested a further £100,000 in space software and hardware developer Bright Ascension. The initial investment was £150,000 and Capital for Colleagues holds 250,000 A shares. The cash will be used for product development and building up the company’s sales infrastructure.
Anna Halpern-Lande, a cleantech sector expert, has joined the board of Milamber Ventures (MLVP). Two new partners have been appointed. Executive chairman Andy Hasoon has converted £50,000 of his director loan into 312,500 shares at 16p each. Two other individuals have taken shares for fees.
Coinsilium Group Ltd (COIN) has invested $75,000 (£60,000) in Coin-Dash, which is developing a social trading platform for cryptocurrency investors. Coinsilium also has an entitlement to an undisclosed number of Coindash crypto tokens.
MiLOC Group Ltd (ML.P) has raised £276,000 at 28.5p a share from four investors. NQ Minerals (NQMI) has raised a further £230,000 for working capital. Valiant Investments (VALP) has raised £22,000 at 0.1p a share, while 84.7%-owned apps developer Flamethrower has paid $25,000 for advertising revenues generating Minecraft Command website.
AIM
TyraTech Inc (TYR/TYRU) is splitting itself into two businesses so that they can each raise finance to accelerate growth. The separation should be complete by the end of the year. TyraTech used up $2.2m of cash in 2016 leaving it with $1.8m, thanks to cash management in the second half. Allenby expects cash to fall to $700,000 by the end of 2017 but in reality management would hope to have raised money for the two businesses before that time. Marketing spending is required to grow the human health business while further product development investment is required by the animal health business.
Musical instruments retailer Gear4Music (G4M) is increasing its market share in Europe. In the year to February 2017, revenues grew from £35.5m to £56.1m and pre-tax profit jumped from £600,000 to £2.7m. A new head office has been acquired for £5.3m and a German distribution centre is being opened.
Cosmetics supplier Warpaint London (W7L) has done particularly well since it joined AIM and its figures were better than expected leading to an upgrade for this year. In 2016, Warpaint made a pre-tax profit of £6.7m on revenues of £27m. A 2017 profit of £7.6m is forecast. Growth is coming from the UK and internationally with US revenues starting to build up.
RedstoneConnect (REDS) has raised £6.5m at 1.5p a share and £1.4m of this will be spent on systems integrator acquiring Anders + Kern. This will help the group to sell its OneSpace smart buildings software. A one-for-100 share consolidation is planned.
Motor dealer Vertu Motors (VTU) improved its full year pre-tax profit from £26m to £29.8m and its NAV is 62.3p a share. The share price is trading at a discount to NAV of one-fifth. Aftersales revenues continue to grow and used vehicle sales were strong. The new car market has declined but trading in March and April is in line with expectations.
Cambria Automotive (CAMB) has also performed well even though new and used vehicle volumes declined. Acquisitions helped its revenues to grow by 11% while its pre-tax profit was more than one-fifth higher at £5.6m. The full year profit forecast has been edged up to £11.2m.
The proposed energy price cap has hampered Flowgroup (FLOW) in its attempt to sell its energy business. It is still in talks but appears more likely to require to raise an additional £20m. This would be highly dilutive because it would be at 1.5p a share plus convertible securities. Losses will continue for the next couple of years and Flow is reducing its exposure to the microCHP business.
Arian Silver Corporation (AGQ) has completed initial sampling at its Mexican Salar project and this confirms the presence of lithium. Further tests are required to fully assess the mineralisation.
Savannah Resources (SAV) has lodged the Environmental Impact Assessment for the Mahab 4 copper mine development, having already done this for the Maqail South deposit. Savannah owns 65% of the company that has the licence for the block that includes Mahab 4. The approval process is expected to take three months. An economic study should be completed by July.
Active Energy (AEG) is reducing its exposure to Ukraine and dividing its operations into Advanced Biomass Solutions, which will own the CoalSwitch technology, and Timberlands International for the timber asset management operations. Supplying woodchip from Ukraine to Turkish fibreboard manufacturers is the main revenue generator but exposure to Ukraine has held back the share price. The company’s former chief operating officer may make an offer for the Ukrainian operations.
Draganfly Investments (DRG) has raised £500,000 at 0.5p a share. Pelamis Investments Ltd owns 11.26%.
MAIN MARKET
Waterman Group (WTM) has recommended a 140p a share bid from CTI Technology, which has already acquired 30%. This means that the £43m bid is mandatory. CTI is one of the largest consulting engineers in Japan.
A strong performance in South Korea has fuelled a strong performance from window components manufacturer Titon (TON). In the six months to March 2017, revenues were 29% higher at £14m, while pre-tax profit was 61% higher at £1.18m. The dividend was increased by 20% to 1.5p a share. Net cash is £2.71m.
Storage and wireless semiconductors developer CML Microsystems (CML) says full year trading was ahead of expectations. Revenues grew by one-fifth to £27.6m – organic growth is estimated to be 16%. Pre-tax profit was £4.2m – 5% higher than forecast. There was £12.4m in the bank t the end of the financial year.
World Trade Systems (WTS) has appointed John Hoskinson as a non-executive director. He has experience of mining, energy, property and services sectors. Clio Lee has stepped down from the board. Trading in WTS shares continues to be suspended.
UNQUOTED
Richard Griffiths and Blake Holdings have acquired 11.2% of former AIM-quoted investment company Sarossa for £519,500 (1p a share). This takes the concert party’s stake to 51.9% so it has to make a mandatory bid at 1p a share but that is well below the most recent asset value. At the end of 2016, the NAV was £11.3m or 2.4p a share. That included £3.73m of cash.
Andrew Hore
Quoted Micro 28 November 2016
ISDX
Property investment company Ace Liberty & Stone (ALSP) says that one of its shareholders, Daniel Waylett, agreed to acquire a subsidiary that owns Colebrook Court in 2016. There was no specific date given, although the property was bought for £1.5m in shares during April. The payment for the disposal was £1.553m. Ace has drawn down a secured loan of £13.75m from Lloyds Bank and this has been used to purchase the property acquired last month in Hanley, as well as other existing property investments.
FT8 (GFT) is acquiring 49% of Australian fintech company Billyst Holdings. FT8 is issuing 142.4 million shares at 1p each to Billyst for the 49% stake. This will give Billyst, which is developing debt collection systems, 16.2% of FT8. So far, Billyst, which has not been around long enough to produce figures, has invested £267,000 in its technology. Billyst has agreed to loan FT8 A$500,000 (£297,000), interest free, for 18 months, but it will need to raise more cash to do this. FT8 had less than £3,000 in the bank at the end of June 2016 so it needs more cash.
Wine maker Chapel Down (CDGP) says that it has had its highest quality harvest ever, although yields were slightly lower than expected. The 2016 harvest was the third largest in the company’s history. A good summer made up for some of the shortfall earlier in the year.
Energy efficiency and electronics products supplier Sandal (SAND) says that trading is in line with forecast. Sainsbury’s will be selling MiHome products in 100 stores prior to Christmas, while Argos will be including them in its catalogue from February. House broker Daniel Stewart expects Sandal to move into profit this year.
Imperial Minerals (IMPP) had £96,000 of cash and financial assets – including a stake in AIM-quoted North River Resources (NRR) – at the end of June 2016, following a £53,000 cash outflow in the previous year. Imperial tried to acquire a Welsh hydro-electric project but there was a problem with the complex ownership of the project. However, management believes that recovering commodity prices could provide potential resources investment opportunities.
South Africa-based social impact investor Inqo Investments (INQO) has been improving room rates and occupancy at the South Africa-based leisure resort Kuzuko Lodge and the second half should be much stronger as tourists benefit from the weak Rand. In the six months to August 2016, group revenues grew from R3.23m to R5.32m, which made an increased loss before an increase in other income from R2.06m to R14m is taken into account. The other income in the recent period was due to the negotiation of loan settlements leading to interest write-backs. Kuzuko Lodge made a reduced loss, while the first revenues from the Bee Sweet Honey investment will not show through until 2017-18.
AIM
The closure of GB Energy Supply could provide opportunities for AIM-quoted energy suppliers Flow (FLOW) and Good Energy (GOOD), which is also quoted on ISDX. GB Energy had revenues of £22.2m in 2015 and it is estimated to have around 160,000 customers. Regulator OFGEM is overseeing a transfer of customers to new suppliers but customers could then choose to change from the suppliers they have been allocated. In 2015, Good had energy supply revenues of £56.6m, while Flow’s were £40.1m.
Belvoir Lettings (BLV) says it is difficult to predict what impact the announcement that letting agents in England will not be allowed to charge fees to tenants. There will be consultation before this change is brought in. Belvoir says that less than 10% of the income of its franchisees is from fees paid by tenants but in terms of Belvoir it is less than 8%. There may be more pressure on smaller, independent letting agents and this may provide acquisition opportunities for franchisees or a chance to grow organically in their existing markets if independents leave the market.
Cough treatments developer Verona Pharma (VRP) plans to gain a US listing in the first half of 2017. The flotation is subject to regulatory approval and market conditions.
Music hardware and software developer Focusrite (TUNE) beat expectations in the year to August 2016. Revenues improved from £48m to £54.3m thanks to a strong fourth quarter with growth being enhanced by the launch of the second generation Scarlett product range (focused on the sub-$500 market). Underlying pre-tax profit rose from £7.2m to £7.7m. The US remains a major market but the company had to improve credit terms to its distributor which hampered cash generation. Even so, there was still £5.6m in the bank. Focusrite wants to grow in Asia where its market share lags the levels in North America and Europe. There are potential acquisitions that Focusrite is keeping its eye on but there is no certainty that there will be any deals in the short-term. A new chief executive has been identified but his appointment is still being finalised. A full year profit of £8m is forecast.
Alternative Networks (AN.) is recommending a bid from former AIM company and rival telecoms and managed services provider Daisy, which is a consolidator in the sector. The bid of 335p a share values Alternative Networks at £165.3m. The company’s directors mention the uncertainty in the telecoms market as part of their reason for recommending the bid.
BP Marsh (BPM) has invested £75,000 in The Fiducia MGA Company, in the form of a 25% stake in the company’s cumulative preferred ordinary shares. On top of this, BP Marsh is lending up to £1.725m to the UK marine cargo underwriting agency. An initial £350,000 will be drawn down and further draw downs are dependent on Fiducia meeting conditions outlined in an agreed business plan. Fiducia founder Gerry Sheehy has more than three decades of experience in the insurance industry. BP Marsh is also keen to expand in the managing general agency business in North America
Jonas Computing (UK) has decided not to make an offer for ServicePower Technologies (SVR) but Diversis Capital may be willing to offer 6p a share.
MAIN MARKET
Standard list cash shell Senterra Energy (SEN) is no longer acquiring sim-card technology business Oasis Smart Sim PTE. The deal was first announced six months ago. The seller has withdrawn from negotiations. The Singapore-based company had 2015 revenues of $13m. Senterra was going to provide a £500,000 loan to the acquisition target but it never lent any money. Senterra continues to seek a technology acquisition rather than the oil and gas acquisition it originally focused on. The share price slumped to 2.5p when it returned from suspension. The flotation price was 5p. There was £1m in the bank at the end of June 2016 – equivalent to 3.7p a share – but that is likely to be lower now.
A winding up order has been issued against Worthington (WRN) following the Pension Protection Fund’s (PPF) rejection of a proposed company voluntary arrangement (CVA). Worthington is seeking a Judicial Review of the PPF decision.
Upland Resources Ltd (UPL) is buying a 10% stake in UK onshore licences, in which the Wressle field is sited, from AIM-quoted Europa Oil & Gas (EOG) for £1.6m in cash and shares plus a further £250,000 in contingent consideration based on the level of production from the Wressle field. Initial commercial oil flows of 500 barrels a day are expected from the North Lincolnshire field early next year. Europa retains a 20% stake. A £2.2m placing at 1.3p a share by Upland will finance the cash consideration and fund some exploration spending. When Upland joined the standard list one year ago it raised £1.3m at 1p a share. There was just over £1m in the balance sheet at the end of June 2016.
Andrew Hore