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Andrew Hore – Quoted Micro 4 November 2019
NEX EXCHANGE
Chapel Down Group (CDGP) has managed to generate 92% of 2018’s record harvest in volume terms for the company’s wines. This was achieved even though the weather was not as good this summer. Some vineyards produced their first crop and are still maturing.
Belvedere Leisure Resorts plans to gain a quotation on the NEX Growth Market for its bonds on 22 November. The company is a subsidiary of Belvedere Leisure Park, which owns a site in Dumfries & Galloway with planning permission for a lodge park resort of 444 holiday lodges. The park will be built by Landal GreenParks. The bonds will offer a coupon 6.25%. An initial £10m of bonds will be admitted with a maximum of £25m expected to be raised.
First Sentinel (FSEN) is seeking shareholder approval to issue Green Finance preference shares, which would be quoted on NEX. The cash raised will be invested in the renewable energy sector. A general meeting will be held on 18 November. Warrants have been exercised at 10p a share and this has raised £400,000 for First Sentinel.
Mechanical and electrical design and installation company Field Systems Design Holding (FSD) reported a decline in revenues from £25.9m to £21.8m in the year to May 2019. Higher gross margins meant that the decline in the pre-tax profit was limited and it fell from £625,000 to £553,000. Water generated four-fifths of revenues, up from 48% the previous year. There are no solid spending forecasts, as yet, for the latest water capital investment period for between 2020 and 2025. This causes some medium-term uncertainty. The order book is worth £8.2m, compared with £12m one year earlier. There is a pension surplus.
KR1 (KR1) has made three more investments in blockchain-related tokens. A $100,000 cash investment and payment for advisory expertise will earn 1.017% of Vega tokens issued. Vega is developing a decentralised and censorship-resistant blockchain trading platform. A further $266,220 has been invested in Edgeware smart-contract platform tokens and they will be locked up for 12 months. KR1 will receive 1,000 Ether and this will translate into 3.8 million Edgeware tokens. KR1 has spent $50,000 on a minimum stake of 0.625% in Commonwealth Labs, which is helping to market the Edgeware platform.
Allenby Capital has published a research note on cannabis products supplier Sativa Investments (SATI) and it forecasts revenues of £1.64m in 2019 and £5.15m next year. This will not be enough to make Sativa profitable. Allenby believes that it may have to raise £6m next year to cover its cash outflows and maintain net cash. Sativa has changed the brand name from George Botanicals to Goodbody Botanicals.
Imperial X (IMPP) has raised £347,000 at 2.5p a share. This represents 27.3% of the enlarged share capital.
NQ Minerals (NQMI) increased lead concentrate production at the Hellyer mine from 5,452 tonnes in the second quarter to 6,656 tonnes in the third quarter, but zinc and pyrite concentrate production declined. However, recovery levels have improved for both lead and zinc.
BWA Group (BWAP) intends to sell its investments in Prepaid Card Services and a mining project in Cameroon. They are in the balance sheet at a value of £608,000. The focus will be gold explorer Kings of the North. St-Georges Eco-Mining is converting £300,000 of the £2.45m of convertible loan notes at 0.5p a share. This is equivalent to 23.75% of the enlarged share capital. The loan notes were issued to acquired Kings of the North Corp. BWA is still waiting for £88,000 of the £100,000 of convertibles issued for cash.
Black Sea Property (BSP) has published its 2018 accounts, but it will have to publish its interims before trading in the shares recommences. Management says that it is addressing the accounting concerns of its auditor BDO. The NAV was 0.95 cents a share at the end of 2018.
Asia Wealth Group Holdings (AWLP) reported a drop in revenues from $1.24m to $797,000. This meant that the company fell into loss. There is $726,000 in the bank at the end of August 2019.
Ganapati (GANP) improved its interim revenues from £2.19m to £2.33m, but higher admin expenses meant that the reported loss more than trebled to £8.5m. The company continues to develop its online gaming platform.
TechFinancials (TECH) has completed the sale of a loss-making asset for €100,000.
Queros Capital Partners (QCP) is asking shareholders to approve the ending of the NEX quotation. The general meeting will be held on 14 November.
AIM
Duke Royalty (DUKE) has made a follow-on investment in Lynx Equity, to help the company to finance the purchase of Denmark-based steel staircases supplier Sundby Trapper. This means that Duke has exposure of £12m in Lynx and it will receive annual distributions of £1.6m.
Space management software supplier Smartspace Software (SMRT) is paying £3.2m in cash and shares for Australia-based Space Connect, a provider of cloud-based workplace management software for room booking, desk management, catering and workspace analytics. This will save up to £1.2m a year on product development over two years. The software can be rolled-out in the UK. Smartspace made an interim loss of £4m.
An investor group intends to increase its stake in Petrel Resources (PET) from 29.99% to 51% via a share issue at 1.25p each. They will offer potential oil and gas-related investments to Petrel.
Cabot Energy (CAB) has decided to ditch its AIM quotation on 3 December, but it intends to have its shares matched on Asset Match. This will have to be approved by shareholders. The Canada-focused oil and gas company wants to reduce its overheads.
RedT Energy (RED) plans to merge with Avalon Battery Corporation and combine the best features of each company’s technology. Bushveld Minerals (BMN) is providing an interim loan facility prior to the raising of £23m of new funds.
Avingtrans (AVG) is already reaping the benefits of the acquisition of Booth Industries, thanks to a £7.2m safety doors contract from the government. That means that £12m of orders have been won since the purchase in June.
Safestay (SSTY) is buying a hostel in Athens for €1.5m. The hostel has been operating since 2008 and has an 18-year lease. Safestay has also completed the purchase of the Best Western Glasgow City hotel for £3.15m and this will be transformed into a 200-bed hostel.
MAIN MARKET
Stevia producer PureCircle (PURE) has won a legal decision in its patent litigation with SweeGen, which challenged the patent. It will pursue Federal District court litigation against SweeGen. The patent is for the process of producing Reb M stevia sweetener via bioconversion. The shares remain suspended because it has not published the results for the year to June 2019.
Meditor is considering a 5p a share offer for carpets retailer Carpetright (CPR) and without this offer thee would need to be a refinancing of £80m of debt and additional working capital.
Motor dealer Lookers (LOOK) has warned that its 2019 figures will be even worse than previously thought and chief executive Andy Bruce and chief operating officer Nigel McMinn have left the board. The pre-tax forecast has been cut from £38.7m to £15.5m, compared with £53.9m in 2018. Third quarter new car unit sales fell by 3.2% (on a like-for-like basis), compared with the market decline of 0.6%.
InnovaDerma (IDP) is launching a new topical product in Superdrug before the end of June. The full details will be announced nearer the launch.
The chairman and chief executive of Rainbow Rare Earths (RBW) have acquired 5.46 million shares at 3p each and they have a combined shareholding of 27.5%. Further cost reductions have been identified for the Gakara project in Burundi. A further 100 tonnes of rare earth oxides concentrate were shipped in October. Production levels will fall in the short-term as the production focus moves to a mechanised operation.
Cryptominer Argo Blockchain (ARB) has doubled its mining equipment order and changed the machines it is buying. The cost has been reduced from $13.1m to $9.51m. The machines are more efficient. The current machine orders will increase capacity by 240%.
Resources cash shell Mila Resources (MILA) is still seeking a deal. There was £429,000 in cash at the end of June 2019. Another shell, Bermele (BERM), is also still seeking a deal. It had £682,000 in cash at the end of July 2019.
Blencowe Resources (BRES) is acquiring the Orom graphite project in Uganda for £2m in shares at 6p each. This is subject to a fundraising.
Iconic Labs (ICON) slipped out its results for the 18 months to June 2019 at 6.28pm on 31 October. They show a £6.12m loss, of which, £308,000 was from continuing operations. Net liabilities were £1.67m.
Andrew Hore
Andrew Hore Quoted Micro 4 March 2019
NEX EXCHANGE
Proton Partners International (PPI) joined NEX on 28 February and from day one it became one of the largest companies on the market. The introduction price was 225p, valuing the proton beam therapy provider at £334m, and the share price ended the week at 2275p (210p/245p). Woodford-related interests own 41.9% of Proton (www.proton-int.com) and they invested £20m at 200p a share on admission and promised to invest up to £80m at a maximum price of 176p each. Woodford received a further £1m worth of shares at 200p each in consideration for these arrangements. Proton is four years old and it has completed three centres offering proton beam therapy for cancer patients with another planned in Liverpool. Each cancer centre has cost between £35m and £42m. There is also a cancer diagnostics subsidiary. In the eleven months to January 2019, revenues were £1.11m and the loss was £18.6m.
Formation Group (FRM) owns 4.35 million shares in Proton Partners International, which it acquired in March 2018 at 115p each. The 225p a share flotation price means that the value of the 2.85% stake has nearly doubled to £9.78m. At Formation’s AGM, the resolutions to reappoint Grunberg and Co as auditor and for the board to authorise its remuneration were not passed. Michael Kennedy has resigned from the board.
Trading in Dozen Savings (DS01) 5% secured bonds March 2020 commenced on 1 March. So far £91,000 worth have been issued. The plan is to raise up to £7m. The company has been created to offer the bonds to customers of its financial services-focused parent company, Project Imagine (www.projectimagine.com). The bonds cost £100 each and the price at the end of the first day of trading was £107.50 (£90/£125). The FCA has granted Project Imagine an e-money licence and an investment licence.
IFA consolidator AFH Financial (AFHP) says that trading is in line with expectations in the first four months of the year. Past acquisitions are achieving more than 90% of their deferred consideration targets.
Field Systems Designs (FSD) reported a lower profit in the six months to November 2018 because of delays in energy form waste business. Two of these projects have still not been completed. Sales to the water sector have been strong, but they are likely to decline as the latest water regulation AMP6 period. In the six months to November 2018, revenues were flat at £11.8m, but pre-tax profit fell from £168,000 to £46,000.
Sandal (SAND) reported a dip in interim revenues from £1.88m to £1.73m and that led to a swing from profit to loss. EnergieMiHome home automation product sales were lower than expected but the products are being sold in more outlets.
Ace Liberty and Stone (ALSP) has spent £6.17m on two properties that are both let to the Communities and Local Government department, as Jobcentre Plus centres, on leases with an unexpired term of 8.4 years. The property in Bolton cost £2.54m and has a net initial yield of 7%. The Northampton site cost £3.63m and has a net initial yield of 6.75%.
Milamber Ventures (MLVP) says that investee company Essential Learning has been placed in liquidation after problems with historic data led to the company losing its government-funded training contracts. Milamber invested £228,000 in Essential in a two year period and provided services worth £270,000. It also issued £100,000 worth of shares to Essential minority shareholder Goldvista Properties. Goldvista has loaned Milamber £310,000 and this is likely to be converted into shares. Goldvista’s £6,000 loan to Essential has been written off. The shares issued to Gravity Investment Group for a 15% stake in Essential have been cancelled. Milamber is conducting due diligence on apprenticeship training businesses.
Inqo Investments Ltd (INQO) has raised £1m at 90p a share and the cash will be used to invest in healthcare, education and eco-tourism businesses in Africa that are two-to-three years from profitability and have a positive social impact.
Trading in Via Developments (VIA1) debentures has been suspended because the accounts for the year to September 2018 have not been published.
Karoo Energy (KEP) says it intends to move to AIM “as soon as practically possible”. A general meeting has been called for 18 March in order to gain shareholder approval to issue shares at the time of the move.
Altona Energy (ANR) has left AIM and the board intends to visit a vanadium mine in China that could become part of a joint venture. Altona still intends to invest in the Arckaringa coal project in South Australia.
John Eckersley is stepping down as chief executive of Capital for Colleagues (CFCP) in order to focus on his role as managing partner of Castlefield Partners and Alistair Currie will become chief executive.
AIM
Internet of Things products supplier LightwaveRF (LWRF) is raising up to £3m through a placing, subscription and open offer at 8.5p a share. Year-on-year growth in sales in the first quarter was 156% taking the figure to £1.15m.
Churchill China (CHH) and Portmeirion (PMP) have bought the stake in ceramic materials supplier Furlong Mills that was previously owned by Dudson. Churchill has paid £454,000 for 9.5%, which takes its stake to 55.6%. This means that Furlong will be consolidated in Churchill’s figures. In 2017, revenues were £8.6m and pre-tax profit was £500,000. Portmeirion spent £363,000 to take its stake to 44.4%.
President Energy (PPC) is raising up to £6.5m at 8p a share, including a £2.8m debt for equity swap by the chief executive, to invest in its gas infrastructure and accelerate its drilling programme.
Itaconix (ITX) has secured an exclusive global supply agreement with Nouryon for bio-based polymers used in hair care, skin care and cosmetics. This contract comes after a joint development agreement with Nouryon and follows the previous supply agreement for polymers used in detergents. Nouryon will sell the polymers to its own customers in the personal care sector for use in their consumer products.
Audioboom (BOOM) is raising £1.5m at 1.3p a share and this cash will enable the podcast company to make upfront payments for content. Audioboom says that it is on course to achieve higher revenues in 2019 than in the 13 months to December 2018. The success in generating revenues and orders is helping to attract content providers.
Parity (PTY) has won a two-year contract with the Department for Education for the digital transformation of the Funding and Contracting Service, which makes £6bn of payments each year. The deal could be worth up to £4.5m. Matthew Bayfield has taken over as chief executive of Parity from Alan Rommel, who is chief operating officer. Bayfield plans to focus more on the data consultancy activities.
Westmount Energy Ltd (WTE) is nearly doubling its shareholding in JHI Associates Inc to 3% and the investment is 81.8% of Westmount’s gross assets. JHI’s main asset is a 17.5% carried interest in the Canje block, offshore Guyana, which is operated by ExxonMobil. The first well could be drilled by early next year.
Verona Pharma (VRP) used up £18.1m of cash in its operating activities in 2018. There is still £64.5 in the bank. Verona generated positive data for ensifentrine (RPL554) used as a treatment for COPD in a phase IIb clinical trial. The focus is COPD and further trials for cystic fibrosis are unlikely in the short-term. Financial resources will be focused on progressing the nebulised ensifentrine to a phase III study. Verona is likely to seek partners for its dry powder and pressured meter dose inhaler formulations. The results of the part one of the dry powder inhaler clinical trial for COPD could be available before the end of the first quarter. The second phase should then commence with results expected in the second half of the year.
Trading in Herencia Resources (HER) shares has been suspended because it appears that pre-conditions for the financing that has been negotiated are not likely to be met. More cash is required to enable the company to continue trading.
Telematics supplier Quartix (QTX) increased its fleet sales, but insurance business fell and overall revenues profit are set to decline in 2019. In 2018, revenues were £25.7m and pre-tax profit was £8.1m, but that figure is forecast to fall to £6.5m this year.
VietNam Holding Ltd (VNH) has published a prospectus for its move to a premium listing, which should happen on 8 March.
Adamas Finance Asia Ltd (ADAM) has commenced a share buy back scheme for up to $500,000 of shares at a maximum price of 79 cents a share, which is a 25% discount to pro forma NAV. Adamas has separately agreed to buy back 730,529 shares at 10 cents each. The first tranche of 159,847 shares has been issued to China Aerospace for its stake in Hong Kong Mining.
NetScientific (NSCI) says that it will not get the required backing for the resolution to cancel the AIM quotation, so it has adjourned its general meeting. Shareholders owning more than 30% are against the plan.
MyCelx Tech (MYX) has raised $1.83m at 230p a share in order to finance the potential increase in demand for water treatment services.
Telit (TCM) has sold its automotive division for $105m and has received $67.5m in cash, but it has granted the buyer a loan of $38.5m for a six week period because other debt finance was not obtained in time.
MAIN MARKET
Air Partner (AIR) says that its pre-tax profit will be at least £5.8m in the year to January 2019. The charter division was boosted by strong demand for freight and commercial jets. The consulting and training division has won new contracts.
G3 Exploration Ltd (G3E) plans its third demerger in its time as a quoted company. This time shares in Green Dragon Gas, which owns its producing assets, will be distributed to shareholders. Green Dragon Gas will then either be sold or float on the Hong Kong Stock Exchange.
Wealth manager Walker Crips Group (WCW) says that political uncertainty has hit broking commissions and the launch of new products, which means that the 2018-19 results will be lower than for 2017-18. Chief executive Sean Kin Wai Lam has bought 15,000 shares at 28p each.
Laura Ashley (ALY) has rejected the bid approach by Flacks and says that the indicative offer of 2.748p a share fails to provide a fair value for shareholders.
London Finance and Investment Group (LFI) has a 43.8% stake in NEX-quoted Western Selection. In the six months to December 2018, NAV fell from 65.4p a share to 62p a share. The interim dividend is unchanged at 0.55p a share.
BigDish (DISH) has launched a new restaurant bookings website and upgraded its technology. It is also widening its coverage to include Southampton.
Path Investments (PATH) says that the period of exclusivity included in its heads of agreement with ARC Marlborough has been extended to 29 March. The plan is to acquire ARC, which has a nickel and cobalt project in Queensland, via a share issue.
Oil and gas firm Curzon Energy (CZN) has raised £95,000 at 1.58p a share, which is a 21% premium to the market price. The cash will be invested in a gas project in Texas.
Andrew Hore
Andrew Hore – Quoted Micro 11 June 2018
NEX EXCHANGE
There are eight companies in the running for the NEX Exchange company of the year at the Small Cap Awards. The awards will be held at The Montcalm Hotel, Marble Arch.
Kent-based wines maker Chapel Down Group (CDGP) has built up a significant presence in the English wines market. The company has a winery in Tenterden and it is building a new brewery for its beer operations. Chapel Down reported a 15% increase in annual sales to £11.8m. Wine sales were one-fifth higher at £8.12m with cider and beer sales, via associate Curious Drinks, were 7% ahead at £3.68m. Operating profit improved from £346,000 to £470,000 but there was a much larger loss from the Curious Drinks associate so pre-tax profit was lower. The new brewery should be open in the first quarter of 2019.
Cyber security technology developer Crossword Cybersecurity (CCS) is still at a very early stage of its development but it more than doubled its revenues in 2017. The loss still increased from £950,000 to £1.24m despite the improvement in revenues from £345,000 to £737,000. The cash outflow was £1.06m, which left £490,000 in the bank. Since then, £2.16m was raised via a placing at 270p a share. Crossword has interests in a number of early stage businesses, including CyberOwl, a joint venture between Coventry University and Crossword, which has backing from Mercia Fund Management. CyberOwl is developing network security software for target-centric monitoring.
Field Systems Designs Holdings (FSD) has one of the longest track records on NEX and it has its highest share price in more than one decade of trading. Field Systems designs, installs and supplies electrical, instrumentation and control systems, for the water, power and transport sectors. In the six months to November 2017, revenues jumped from £8.47m to £12m, while pre-tax profit improved from £114,000 to £211,000. There was £3.34m of cash in the bank and NAV was £3.31m, which is more than the market capitalisation.
KR1 (KR1) has had a successful year buying and trading various coins and tokens. The KR1 share price has more than quadrupled over the past year. KR1 generated gains of £4.3m on its trading in digital coins and tokens during 2017. There was also a total unrealised gain of £10.8m on these investments and a £1.18m foreign exchange gain. The total pre-tax profit was £14.5m, with a tax charge of £2.87m.
Dairy and livestock services provider National Milk Records (NMR) was originally part of the Milk Marketing Board and after it was spun off it joined the forerunner of NEX. National Milk Records generated revenues of £5.32m in the three months to March 2018. This means that revenues are £1.51m ahead so far this year, although the comparatives are weak. Herdwise, the screening service for Johne’s disease and other testing services are providing growth with a small improvement from milk recording services. Rising milk supply has started to hold back milk prices.
Energy saving electrical products supplier Sandal (SAND) reported flat interim revenues of £1.88m but it masks the growth in the sales of MiHome products. This growth will continue in the second half. The interim pre-tax profit edged up from £35,000 to £44,000. Sandal secured a term loan of up to £500,000 from major shareholder Greenbrook Industries Ltd and £250,000 was used to buy back 862,068 shares from Greenbrook. The shares were cancelled and this will enhance earnings per share.
Daniel Thwaites (THW) is a brewer, hotels and pubs operator that has been trading for more than two centuries. It has also been on NEX for more than two decades, since the London Stock Exchange closed rule 4.2, which was a matched bargains facility for unquoted companies. Some of these former rule 4.2 companies moved to AIM, while others, including a number of regional brewers, moved to Ofex/NEX. In the six months to September 2017, revenues improved from £44m to £48m and underlying pre-tax profit were flat at £5.9m. The shares are trading at a near-50% discount to NAV.
Walls & Futures REIT (WAFR) is an ethical housing REIT and it is also on the shortlist for the impact company of the year. The company develops new housing for people with learning and physical disabilities or needing extra care. Earlier this year, Walls and Futures raised £80,000 from an open offer at 94p a share. In 2017, Walls and Futures achieved a total return on its portfolio of 11.5%, ahead of its benchmark total return of 7%. Walls and Futures has joined the MSCI IPD UK Residential Property Index.
The winner will be announced on Thursday 14 June.
Cannabis investment company Sativa Investments (SATI) is widening its remit. It is asking shareholders to agree to investments outside of Canada.
Ace Liberty and Stone (ALSP) has completed the acquisition of offices in Leicester for £4.385m. The Leicester Crown Prosecution Service pays an annual rent of £290,000.
St Mark Homes (SMAP) is paying a maintained interim dividend of 5.5p a share and the ex-dividend date is 5 July. The dividend will cost £247,000. The carbon emissions trading business has also started electronic currency mining.
China CDM Exchange Centre Ltd (CCEP) reported a small dip in revenues from £898,000 to £888,000 but it managed to increase its profit from £2,000 to £35,000.
Karoo Energy (KEP) has secured Contax Partners as technical partner and project manager for the shale gas project in Botswana. Contax will accept £800,000 worth of shares in Karoo as payment for services. Karoo hopes to apply for admission to AIM by 1 July.
Wishbone Gold (WSBN) says full production at its Honduras processing plant has been delayed because permits have not been received for the processing of larger amounts of gold ore.
EPE Special Opportunities (EL.P) had an NAV of 228.16p a share at the end of May 2018.
AIM
Property investment adviser First Property Group (FPO) reported flat pre-tax profit of £9.23m in the year to March 2018. The final dividend is 3% higher at 1.18p a share. The underlying NAV rose from 47.6p a share to 53.1p a share. Third party assets under management were 45% higher at £454m, which is mainly down to the new office fund. Progress this year will be held back by the departure of the tenant in a building in Poland. Some of the space has already been re-let and the rest should be during the year.
Pawnbroker Ramsdens (RFX) continues to grow on the back of strong foreign exchange revenues. Last year, they were 26% higher at £11.3m. Group revenues were 16% ahead at £39.9m, while underlying pre-tax profit rose 60% to £6.5m. Net cash was £12.7m, although that does include foreign currency stocks. The total dividend was 6.6p a share.
Gooch and Housego (GHH) increased interim revenues by 7% to £55.6m and underlying pre-tax profit was13% ahead at £7m. Aerospace was the main growth area as subsea telecoms demand was weak. The photonics and optical equipment company is on course for a full year profit of £18.5m.
Artilium (ARTA) is recommending a cash and shares bid from Pareteum. The offer is 0.1016 of a Pareteum share and 1.9p in cash for each Artilium share, which values the telecoms software supplier at £78m. The offer follows a strategic alliance between the two companies that was announced last year.
IT managed services provider Redcentric (RCN) says that some public sector contracts have been cancelled and there will be upfront costs for a new contract with the NHS in Yorkshire. That means that 2018-19 EBITDA will be 10% lower than previously forecast.
Imaginatik (IMTK) has completed its strategic review and the chairman and chief executive are both leaving and they are waiving compensation. This will help to reduce annual costs by £750,000. The business is no longer up for sale because no suitable bid was received. Annualised revenues are £2.8m and the innovation software business could move into profit after a full year’s benefit of the cost savings. Former chairman Matt Cooper has sold £225,000 worth of shares at 0.5p each and reinvested the cash in a new £225,000 convertible, interest free loan note. Octopus has reduced its stake from 27.2% to 7.1%.
Mass spectrometry instruments supplier Microsaic Systems (MSYS) has raised £5.5m at 2p a share and an additional £102,000 via a PrimaryBid.com offer.
Trading in cash shell Monreal (MORE) has been suspended because the former Cogenpower has not completed a deal. The board is asking for shareholder approval to move to NEX after the AIM quotation is cancelled on 3 July. The investment strategy will focus on technology, media and telecoms.
Education-focused virtual reality content supplier VR Education (VRE) has delayed the full launch of the latest version of its Titanic VR product until August but it is not expected to affect full year expectations. Work has started with the BBC on 1943: Berlin Blitz.
Driver Group (DRV) continues to improve its margins and profit helped by the growth of the Diales expert witness business. Middle East revenues were lower but profit was higher, while high utilisation rates in Asia Pacific meant that was a sharp swing back to profit in the region. Underlying pre-tax interim profit doubled to £2.1m om the six months to March 2018 and Driver ended the period with net cash of £800,000. The sale and leaseback of the company’s head office was completed in April and net cash is forecast at £5.5m for the end of September 2018. A full year profit of £3.5m, up from £2.5m, is forecast. A return to dividend payments is a possibility in the next year or so.
Rose Petroleum (ROSE) has enough cash to push forward with the exploration of its Paradox basin acreage in the US. Rose is still earning its 75% working interest in the acreage and it has already received interest from potential farm-in partners that could help finance the first well, which could cost $7m-$8m. A competent person’s report will provide an updated resource in the next few weeks.
The smart machines division was behind the small improvement in profit at Vianet (VNET) in the year to March 2018. That was helped by a contribution from the Vendman acquisition. The smart zones drinks dispensing technology made a slightly lower contribution to profit as it lost more pub customers but the US side is making progress. Research and development spending on technology peaked at £1.5m last year and should fall this year. Net cash fell to £1.27m because of the extra spending but the dividend was maintained at 5.7p a share. The investment should start to pay off this year and pre-tax profit is expected to rise from £2.7m to £3m.
MAIN MARKET
LED lighting supplier Luceco (LUCE) is closing its loss-making US business at a cost of £2m. The US business lost £1.9m last year. Luceco announced an operating profit of £14.2m in 2017.
Quarto Group Inc (QRT) has appointed former finance director Mick Mousley as interim finance director following the departure of Carolyn Bresh. This follows the change of control at the AGM.
Lb-shell (LBP) is asking for shareholder approval for the creation of £435,000 of unsecured convertible loan notes with a conversion price of 0.025p a share. That requires the par value to be reduced to 0.025p a share. Full conversion could mean the issue of shares equivalent to 89.4%. Three directors will own a total of £290,000 of the loan notes. The former Intelligent Energy will offer shareholders the chance to sell their shares for 0.025p each.
Andrew Hore
Andrew Hore – Quoted Micro 5 March 2018
NEX EXCHANGE
VI Mining (VIM) finally made it to NEX on 2 March. The South America-focused miner announced its plans late last year. VI raised £5.36m at 500p a share. That valued the company at £535m. VI is acquiring two gold and silver projects in Peru and owns two toll processing plants.
Mechanical and electrical installation and maintenance services provider Field Systems Design Holdings (FSD) nearly doubled its interim profit. In the six months to November 2017, revenues jumped from £8.47m to £12m, while pre-tax profit improved from £114,000 to £211,000. There was £3.34m of cash in the bank. AMP6 capital spending by water companies has been strong in the period and there are significant waste to energy contracts, although the medium-term outlook for that sector is not as good. Margins remain under pressure.
Energy saving electrical products supplier Sandal (SAND) reported flat interim revenues of £1.88m but this masks the growth in the sales of MiHome products. This growth will continue in the second half. The interim pre-tax profit edged up from £35,000 to £44,000.
Block Energy (BLOK) has completed the sale of its assets in Ghana for $600,000. Block still plans to join AIM.
Milamber Ventures (MLVP) has acquired educational consultancy Vocamedia for up to £165,000, with £60,000 dependent on performance in 2018-19.
Inqo Investments Ltd (INQO) has announced plans to raise a further £2.5m via placings at 90p a share. The first tranche of $1.25m has been raised and this will be used to invest in opportunities in the healthcare, education and eco tourism sectors in Africa. The focus is businesses that are two-to-three years from profit and have a positive social impact. The second tranche of £1.25m should be raised in one year.
Gunsynd (GUN) has invested a further £130,000 in Human Brands by way of a convertible loan note. If Human Brands gets its expected quotation, the loan can be converted at a 55% discount to a three day average volume weighted price. This doubles the investment in the spirits distributor which will also pay (in shares) a fee of 1% of market capitalisation on flotation.
Primorus Investments (PRIM) has sold a 5% stake in Horse Hill Developments to Solo Oil (SOLO) in return for £650,000 in cash and £350,000 in shares. Solo has raised £2m at 3.5p a share.
Wheelsure Holdings (WHLP) is working with Haydale Graphene (HAYD) and the University of Swansea to develop intelligent transport systems using Haydale’s graphene ink sensor technology.
Equatorial Mining and Exploration (EM.P) says that it needs to raise a minimum of £50,000. A trial amount of coal has been sold by the St Leonard Mine in Nigeria. The buyer is negotiating a long-term supply agreement with a minimum tonnage per month. A second mine would need to be opened to satisfy this demand. Equatorial believes it can make a pre-tax profit of £380,000 in 2018 if the supply agreement is secured.
Supported housing provider Walls and Futures REIT (WAFR) has joined the MSCI IPD UK Residential Property Index.
AIM
Content owner One Media IP (OMIP) has weathered the changes to the market due to the rise of music and video streaming and profit should continue to recover this year. In the year to October 2017, revenues were 14% ahead at £2.34m, while pre-tax profit jumped from £30,000 to £298,000. That is still well below the profit made three years ago. Profit could double this year. Michael Grade and Ivan Dunleavy have invested in the company and they should help One Media IP to secure acquisitions and exploit the existing catalogue.
India-focused online retailer Koovs (KOOV) needs more money to continue its expansion. Management wants up to £50m and much of this will go on marketing and promoting the brand. Talks continue but the current cash pile will not last much more than four months. Second half sales are expected to be lower because of the lack of investment in marketing and the full year EBITDA loss will be £14.4m.
Gresham Hose (GHE) increased its assets under management from £363m to £69m. The British Strategic Investment Fund raised £165m in the period and the plan is to try to raise £250m by the end of 2018. The acquisition of Hazel Capital added a further £86m to assets under management. The value of the strategic assets portfolio value was flat due to distributions to investors. Gresham House has a diluted NAV of 211.2p a share. There is cash of £9.8m with more to come from the sale of the last surplus property and deferred consideration from a previous property sale.
Condor Gold (CNR) is confident that it is on the way to gaining a permit to construct a mine at Mina La India in Nicaragua. An amendment has been submitted for the Environmental and Social Impact Assessment and it appears that Condor will not have to move the village. This will make it easier to gain the permit. Once the permit is gained then Condor can push ahead with the construction of the mine, which is in an area where there has been mining in the past.
Management Resource Services (MRS) reported a return to profit in its interim figures. Continuing operations increased revenues from A$20.6m to A$33.6m and a loss of A$745,000 was turned into a profit of A$2.52m. Management says that full year earnings per share should be at least 2p.
TechFinancials Inc (TECH) is closing its loss-making non-core operations having failed to complete their sale because the buyer had not obtained regulatory approval.
Scotgold Resources Ltd (SGZ) has gained planning permission for the development of the Cononish gold mine in Scotland. This is subject to concluding legal agreements.
Lighting supplier Photonstar LED (PSL) is raising £430,000 at 0.15p a share. The cash will help to complete the development of the company’s new building control system.
Musical instruments retailer Gear4Music (G4M) continues to grow particularly rapidly outside of the UK. Overall sales grew 43% to £80.1m in the year to February 2018 with international sales well over two-fifths of the total. Both branded and own-brand sales grew. Investment in growth means that EBITDA will be similar to last year. The results will be published on 15 May.
Saffron Energy (SRON) has withdrawn from the acquisition of Po Valley Operations due to regulatory and tax issues but it is still buying Sound Energy’s Italian assets. A new document should be published in the next few days.
Replacement windows supplier Safestyle UK (SFE) says that orders have been weak so far this year. This means that 2018 revenues and profit will be well below the 2017 figures. Cost savings will help to offset some of the downturn in the second half and the business is still cash generative. A final dividend of 7.5p a share is still planned when the 2017 results are announced.
MAIN MARKET
Founder Laurence Orbach has increased his stake in Quarto (QRT) to 20.1%. Back in October 2017, he owned 15.1%. Orbach was removed from the board in November 2012.
Town Centre Securities (TOWN) reported better than expected interim figures. The property investor’s NAV was 4% higher at 375p a share and the interim dividend was maintained at 3.25p a share.
WH Ireland has raised its full year forecast for Avation (AVAP) following the publication of interim figures. The 2018 earnings forecast was raised 10.5% to 26.2 cents a share. Interim profit declined by 13% to $7.3m, while earnings per share fell 15%. The transition of an A320 aircraft from Air Berlin to easyJet led to a release of a maintenance reserve but some transactions will not come through until the second half.
Andrew Hore
Quoted Micro 6 November 2017
NEX EXCHANGE
Chapel Down Group (CDGP) says that the 2017 harvest was second best in the company’s history. There was a 10% volume increase on the previous year. The quality was also good. There had been fears for the harvest because of the frost in April but Chapel Down sources from a wide range of vineyards. Chapel Down has completed the acquisition of the 1.6 acre site in Ashford where the Curious Brewery will be developed.
Capital for Colleagues (CFCP) is setting up a joint venture to focus on consultancy and advisory operations so that the core business is purely involved in investment in employee owned businesses. Capital for Colleagues will own 34% of Castlefield Corporate Advisory Partners, with 51% owned by Castlefield Partners and the rest by executives of the joint venture.
Supported housing developer Walls and Futures REIT (WAFR) has delivered its first project and has a pipeline of other projects. The NAV is 94p a share. In the six months to September 2017, there was a £203,000 uplift in property values and that is why there was an interim profit of £127,000. There is £237,000 in the bank.
Mechanical and engineering installation work provider Field Systems Designs Holdings (FSD) reported a 19% increase in full year revenues to £17.2m. The main growth came from the water and sewerage operations and the AMP6 regulatory period is just getting going. Pre-tax profit more than doubled from £308,000 to £672,000.
South Africa-focused investment company Inqo Investments Ltd (INQO) still has R756,000 in the bank following further investments. Kuzuko Lodge continues to lose money but its occupancy and room rates are improving. Investee company Bee Sweet Honey harvest 133 metric tonnes of honey in May and this has generated revenues for Inqo.
Ganapati (GANP) reported a reduced interim loss of £4.54m, down from £8.75m. The online casino software and apps supplier increased revenues from £1.34m to £2.19m. A mobile operating system update has held back revenue generation from the company’s apps.
IMC Exploration (IMCP) has raised £75,000 at 1p a share and issued warrants that could raise a further £150,000 at 2p each. The cash will finance a feasibility study on the licence in Avoca in County Wicklow.
MiLOC Group Ltd (ML.P) has raised £540,000 at 28.5p a share and issued further shares as payments to consultants at 30p a share.
AIM
Sanderson Group (SND) expects its full year revenues to be slightly higher at £21.5m but underlying operating profit is anticipated to rise from £3.69m to £3.9m. That excludes £500,000 of reorganisation and acquisition costs. The digital retail software divisions continues to be the main growth area. The order book of £5.8m at the end of September is much higher than the same time one year earlier. It does include a large order that will be delivered over two financial years. There is more than £6m in the bank.
At last week’s general meeting of Stratex International (STI) the requisitioners were successful with their first and fifth resolutions but not the second. The third and fourth resolutions were conditional on the passing of the first two so they did not go to a vote. Marcus Engelbrecht has left the board and the acquisition of Crusader Resources appears unlikely to go ahead. The requisitioners want to inject joint venture Thani Stratex into the quoted company.
Diversified Gas and Oil (DGOC) completed the acquisition of the Titan oil and gas assets at the end of September. Operating costs have been reduced by 8% to $7.14/barrel of oil equivalent since the first half of 2017, which has helped margins to improve. Trading is in line with expectations.
Billing and charging software provider Cerillion (CER) says that its full year revenues increased 8% to £16.2m. Mobile telecoms operators continue to dominate the business but the customer base is set to broaden.
Sapphire producer Richland Resources (RLD) produced 1.06 million carats from its Capricorn mine in the third quarter of 2017 but this was lower than the 1.2 million carats that was expected because of mine disruption and rehabilitation. Production and operating costs were $0.75/carat. The next sapphire sales are this month. Illegally mined sapphires are holding back prices so only $245,000 was generated from sales in the third quarter as Richland held on to sapphires in order to sell them in the fourth quarter.
Redx Pharma (REDX) has come out of administration. The board will be writing to shareholders laying out its strategy and the suspension of trading in Redx shares could be lifted later this year.
Versarien (VRS) is trying to raise £1.2m via institutions and PrimaryBid.com at 18p a share. Back in March, £1.5m was raised at 15p a share in the same way. The advanced materials company will use the cash to buy capital equipment in order to fulfil the requirements for graphene-related collaborations. There are negotiations with two of the largest consumer goods companies in the world. An order is expected shortly and there are many other discussions ongoing. The Total Carbide business is winning aerospace work to offset the shortfall in demand from the oil and gas sector.
Proxama (PROX) has sold its loss-making digital payments division in order to concentrate on its location sciences technology business. The deal will raise £1m with potential deferred consideration of up to £1m over 18 months. The company will change its name to Location Sciences.
Starcom (STAR) has raised £475,000 at 1.3p a share. The cash will provide working capital for recently announced large orders and to repay $100,000 owed to YA II and $115,000 owed to other creditors.
INEOS has acquired an interest in shale gas licences where Egdon Resources (EDR) is also involved. Egdon plans to increase its onshore UK production this year. INEOS has taken on the obligations of Total to carry Egdon in the PEDL 139 and 140 areas. Egdon owns 14.5% of each of these licences. Egdon also has a £4.85m carry on PEDL209, where Egdon has a 36% interest.
Pakistan-focused coal mine developer Oracle Power (ORCP) says a memorandum of understanding should be signed this month. Oracle will retain a 12.1% stake in the block VI project. Sichuan Provincial Investment Group will take a 78% interest in the project and the other 9.9% will be owned by PowerChina International Group. The gross cost of the project is estimated to be $1.6bn and the debt/equity ratio will be 75/25.
Gordon Dadds (GOR) has made its first acquisition since reversing into Work Group. The lawyer will pay £4m over a five year period for CW Energy. There could be additional payments dependent on performance. CWE is a corporate tax adviser and prior to distributions to partners it made EBITDA of £1.3m last year.
MAIN MARKET
WideCells Group (WDC) has signed a five–year agreement with White Apex General Trading, which will provide the companies stem cell services. WideCells immediately receives £255,000. The agreement covers the stem cell insurance product, stem cell storage and the educational platform Wideacademy. A further £1.5m could be payable if the Wideacademy platform is adapted for Middle East, North Africa and Asia. There could be £250,000 of this paid by the end of this year.
OTHER MARKETS / UNQUOTED
Fashion On Screen continues to progress towards a floatation on Nasdaq First North in the first quarter of next year. It is also raising money for its first film, Will, which is based on the life of William Shakespeare, via the SyndicateRoom crowdfunding platform. There are at least two other films in development.
Andrew Hore
Quoted Micro 7 November 2016
ISDX
Mechanical and engineering services provider Fluid Systems Designs Holdings (FSD) has successfully diversified into the Energy from Waste (EfW) sector and has won work on major projects. In the year to May 2016, revenues were flat at £14.5m, while pre-tax profit increased £277,000 to £372,000. The AMP6 water investment programme has commenced so demand should start to build up but there was a small reduction in revenues from this sector. New framework agreements are being pursued.
Hellenic Capital (HECP) is changing its investment policy and name. The general meeting to gain shareholder approval will be held on 16 November. The company, whose new name will be City and Commercial Investments, will have a two pronged investment policy: UK property and African natural resources. The idea is to generate steady income from property in order to cover overheads. The company can then focus its remaining capital on seeking out resources projects.
Blockchain technology investor Coinsilium Group Ltd (COIN) has divested its 27.3% stake in TRAC Technology because it no longer meets the company’s criteria. Coinsilium will receive $100,000 – 50% in cash and 50% in 2.6 million shares at 1.6p each in AIM-quoted Kolar Gold Ltd (KGLD), which have to be held for three months. Former Coinsilium director Cameron Parry is chief executive of Kolar Gold, which has also secured a 50/50 joint venture with TRAC to launch an online gold and silver trading and storage platform for the Indian market. Kolar will invest £50,000 in the joint venture. TRAC already stores 120kg of gold and 4.3 tonnes of silver for clients in vaults in London, Geneva, Singapore and Hong Kong.
Valiant Investments (VALP) has raised another £24,000 at 0.1p a share, having recently raised £51,500 at the same share price. Valiant owns 84.7% of Flamethrower, which has acquired Compass Heading, a compass app, for $12,500. Revenues are generated from advertising and in-app sales.
Capital for Colleagues (CFCP) has invested a further £100,000 in existing investee company Anthesis Consulting Group. The investment is part of a larger share placing by Anthesis in order to finance organic and acquisitive growth.
Trading in the shares of Dana Group International Investments Ltd (DANA) has been suspended because it has not released its results for the period from January 2015 to May 2016. There have been problems preparing the accounts for 21.7%-owned investee company Bonyan International Investment. Dana intends to extend the accounting period to June 2016 to align its calendar to Bonyan. Earlier this year, Dana sold its 34.12% stake in Makkah and Madinnah Commercial Investment Company. Khaled Al-Husseini has stepped down from the Dana board, while Firas Baba, the chief operating officer of Bonyan, has become a director of Dana.
AIM
Drug developer Sareum (SAR) has enough cash to finance itself for a couple of years following the licence agreement for its Chk1 inhibitor drug candidate CCT245737 with ProNAi Therapeutics. This deal shows that the strategy to licence drug candidates when they reach the point of clinical trials can work and provide cash to finance other drug candidates. Sareum has a 27.5% interest in Chk1 with co-investment partner CRT Pioneer Fund owning the rest. This deal means that Sareum effectively has cash of £1.55m – including unspent funds in the partnership of around £300,000 – plus the $1.9m (£1.5m) share of the initial payment for the licensing deal. Sareum has already received £900,000 of the initial payment with the rest due to come through in the near future and it could receive up to $550,000 more in the next 12 months if the initial milestone is achieved. There was a £674,000 cash outflow in Sareum’s most recent financial year so this cash pile could last for some time. Sareum continues to develop its TYK2 autoimmune and cancer candidates and it could purchase interests in other potential drug candidates if it can find suitable acquisitions.
Berkeley Energia (BKY) has raised £24.1m ($30m) at 45p a share in order to finance the development of the Salamanca uranium mine, which will cost a total of $100m. The amount raised was at the upper end of the range sought by the company.
X-ray and gamma ray imaging and radiation detection technology developer Kromek Group (KMK) has won a number of new contracts in recent weeks and these underpin the expectations for a reduction in loss over the next two financial years. The latest contract is in the bone mineral densitometry market and it is worth $1.2m over two years – $300,000 in the current financial year. Prior to this there was a $1.6m contract with the US Defense Threat Reduction Agency, which is another two year contract. A loss of £3.7m is forecast for the year to April 2017and that should fall to £2.1m in 2017-18.
Franchise Brands (FRAN) has announced its first acquisition since it floated in August. It is paying £900,000 in cash and shares for Barking Mad, which provides dog sitting services, and it should be earnings enhancing in the first full year. The business was established in 2000 and it has 71 franchisees covering 75 territories. The deal has led to an upgrade of the 2017 earnings forecast from 2.03p a share to 2.27p a share.
Goldplat (GDP) produced 9,129 ounces of gold in the three months to September 2016. The loss was reduced at the Kilmapesa mine and the new plant should be installed in time to move the mine into profitability in this financial year.
Caledonia Mining Corporation (CMCL) says that this year’s profit is likely to be lower than expected, partly due to a lower grade at the Blanket gold mine in Zimbabwe. WH Ireland has reduced its 2016 earnings forecast from 25.2 cents a share to 17.8 cents a share, which is still nearly double the 2015 level. The profit has also been impacted by the movement the strength of the rand against the dollar and cost of assessing investment opportunities. Gold production is still expected to be 50,400 ounces this year, rising to 60,300 ounces in 2017 when earnings of 41.9 cents a share are forecast.
MAIN MARKET
InnovaDerma (IDP) has entered the US market with its self-tanning brand Skinny Tan. Superdrug started selling Skinny Tan in the UK last February and it has become its best selling tanning brand. Production is being moved from Australia to the UK, which should reduce transport costs by early 2017. In the year to June 2016, revenues jumped from A$1.05m to A$8.4m from seven countries even before sales in the US have started. This enabled the company, which switched from the Marche Libre to the standard list in September, to move from a loss to a pre-tax profit of A$473,000 – or A$411,000 after development costs. Net debt was A$871,000 at the end of June 2016.
OTHER MARKETS
Former AIM investment company Gate Ventures has raised £2.25m at 6p a share, which is double the share price of the last trade on Britdaq. Gate recently invested £380,000 in a fundraising by AIM-quoted Reach4Entertainment. Gate is valued at more than £100m at 3p a share despite its modest asset value.
Andrew Hore
Quoted Micro 6 March 2016
ISDX
Brewer Shepherd Neame (SHEP) reported a lower brewing profit but this was made up for by a higher contribution from managed pubs in the six months to December 2015. However, the National Living Wage and other costs will increase by £1.1m in the next financial year and management is cautious about the prospects for consumer spending. Revenues were flat at £73.7m but underlying pre-tax profit improved from £4.73m to £5.07m, helped by lower interest costs. There was also a property disposal profit of £3.6m. Net debt was reduced to £61.4m thanks to disposal proceeds.
Electrical and control systems supplier Field Systems Design Holdings (FSD) had a much stronger six months to November 2015 thanks to additional work from the energy from waste incineration sector. Longer-term, demand from the water sector should build up. There was a jump in revenues from £5.51m to £8.31m, while pre-tax profit improved from £11,000 to £91,000. There was £1.1m in the bank at the end of November 2015. At 15.5p (14p/17p) a share, Field is valued at £900,000.
Energy efficiency products supplier Sandal (SAND) moved back into profit in the six months to November 2015. Overall revenues were flat at £1.66m, although there were much higher sales of Energenie products, while a loss of £129,000 was turned into a profit of £7,000 thanks to lower overheads. Sandal has completed its investment in the Energie MiHome range with ongoing investment focused on linking up with Hive and other smart devices for the home. There was £398,000 in the bank at the end of November 2015.
Leni Gas Cuba Ltd (CUBA) has made two new investments in Cuban businesses. The first is a 49% stake in entertainment consultancy Cuba Professionals Inc for an investment of €180,000 over nine months. A short-term working capital facility of €200,000 will also be prfinance ovided. This cash will go towards a larger office in Havana and recruiting additional staff. The other investment is a 15.8% stake in Australian company MEO Australia Ltd, which is focused on Cuban oil exploration. The £730,000 investment will be used to finance exploration in onshore block 9 in Cuba, where another one of the company’s investments, Petro Australis has and interest. Non-executive director Darren Smith has bought 250,000 shares at 0.8p each. That takes his stake to 4 million shares. Smith did not buy any shares in the subscription at 5p a share when the company joined ISDX. The share price has fallen back to 0.9p (0.8p/1p).
Via Developments (VIA1) has raised a total of £2.5m from ten placings of 7% debenture stock since joining ISDX. Two residential property acquisitions have been made in Manchester and Luton.
Ganapati (GANP) is still attempting to obtain a licence from the Gaming Commission and there have been further delays so the company will require additional cash. Ganapati also needs to further develop its BUZZPOP app and this means that there will be no revenues from the app until 2017. There will be a write-down of intangible assets as a consequence. The share price was unchanged at 60p (50p/70p).
Doriemus (DOR) plans to leave AIM and move to ISDX. This follows the decision to buy a further 60.56% of Greenland Oil & Gas. This means that a reverse takeover will not be completed by 14 March and the AIM quotation will be cancelled. The oil and gas-focused investment company should start trading on ISDX on 15 March.
Cyber security technology commercialisation company Crossword Cybersecurity (CCS) is linking up with the University of Surrey in order to explore opportunities for commercially exploiting technology for advanced information hiding. The university has developed a way of encoding information into the normal ebb and flow of computer systems. A patent has been filed for this research and the plan is to develop a platform that can use the technology.
AIM
Shell company 3Legs Resources (3LEG) has announced details of the reverse takeover of SalvaRx and plans to raise £1.95m at 35.5p a share – post a 100:1 share consolidation. SalvaRx is an immunotherapy business and it owns 60.5% of iOx, which is developing under lice compounds for cancer immunotherapy. The cash raised will help to finance the first human clinical trials, which are being sponsored by Oxford University, for iOx’s lead compound based on invariant natural killer T cells. SalvaRx has invested £510,000 in iOx and is committed to put in a further £1.33m. 3Legs had already acquired 11.1% of SalvaRx, at a cost of £215,000, last September. The rest of the shares will be swapped for 3Legs shares valuing them at £8.8m. New chairman Jim Mellon and his associates will end up with 73% of 3Legs, whose name will be changed to SalvaRx Group.
Property investor Palace Capital (PLA) has bought an office block in Milton Keynes, near to the railway station, for £7.2m. The near-fully let building generates net income of £550,000 a year. This deal will immediately enhance earnings per share and there is potential to increase rents in the short-term.
Sutton Harbour (SUH) has renewed and extended its bank facilities. A new £25m, three year facility with RNS will replace the £22.5m facility due to expire in October. Finance costs are not expected to change significantly. The enlarged facility plus the rolling £550,000 asset lease financing facility will provide more headroom for Sutton Harbour to push ahead with property developments and invest in the harbour infrastructure.
NWF (NWF) has boosted its agricultural business through the acquisition of ruminant feed manufacturer Jim Peet, which supplies 500,000 tonnes a year to cattle and sheep farmers in northern England and south west Scotland, where NWF wants to grow its exposure. There are two factories near Carlisle and Wigton and they fit well geographically with NWF’s existing facilities.
Advanced ultrasound training simulators developer Medaphor (MED) says that its US subsidiary has signed a long-term agreement with the American Board of Obstetrics and Gynecology (ABOG) for the use of its ScanTrainer as the simulator for its obstetrics and gynecology certification exams. ABOG undertakes 2,000 examinations each year. This provides additional confirmation of the usefulness of the technology.
MAIN MARKET
Investment company Athelney Trust (ATY) increased its net asset value by 7.5% to 245p a share last year. The final dividend is being increased by 18% to 7.9p a share on the back of this growth. During the year, Athelney acquired new stakes in two REITs, Safestyle UK, Samuel Heath and Low & Bonar amongst others, while also adding to existing holdings including Begbies Traynor, Juridica Investments and Quarto Group. The disposal of stakes in GLI Finance and Plus500 appears to have been well timed, while Catlin and Nationwide Accident Repair were taken over. There was a dip in the NAV to 235.8p a share by the end of January but that is not surprising given the weak stockmarket. Athelney says that it would not be surprised to see small caps outperforming larger companies again. The original investors in Athelney back in 1994 have enjoyed an annual return of 15.8% net of basic rate tax on their original investment.
Global Resources Investment Trust (GRIT) is changing its strategy to become a more direct investor in resources businesses. This is because it is in default for its 9% convertible loan notes. Prime Star Energy FZE is subscribing £3.9m at 2p a share and RDP Fund Management £1.5m at the same price. There is also an open offer raising up to £300,000 at 2p a share. However, the final proposals are still not agreed and the board is in discussions with the main parties. The company name will be changed to Global Resources International.
Education software and services provider Tribal Group (TRB) is selling its Synergy children;s services management information systems business to Servelec for £20.25m in cash. The business generated EBITDA of £2.3m in 2015. The disposal cash will be used to reduce the requirement for funds in the previously announced rights issue. The plan is to raise up to £21m and the terms will be announced later this month when the 2015 figures are announced. Ian Bowles took over as chief executive on 1 March. There had been plans to move back to AIM but no mention was made of this.
ANDREW HORE