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Andrew Hore Quoted Micro 2 September 2019
NEX EXCHANGE
SG Recruitment Ltd (SGRL) generated revenues of £777,000 in the 15 months to March 2019. The nursing staff provider lost £2.63m. Since the year end, more contracts have been signed with NHS hospitals, as well as with a hospital in the UAE. The staff offered to hospitals have all obtained qualifications in English and 76% end up being employed. Most of the previous debt has been converted into shares, so net debt was £91,000 at the end of March 2019.
Lombard Capital (LCAP) reported an increase in net liabilities from £234,000 to £537,000 at the end of March 2019. There were £750,000 worth of bonds issued during the period.
PCG Entertainment (PCGE) hopes that the acquisition of Vox Markets and Align Research should be closed in early October. Previous operations have been provided for in full and have been sold. There was £14,000 in the bank at the end of March 2019.
A new investor to Walls and Futures REIT (WAFR) has subscribed £100,000 for shares at 70p each, which is a one-third premium to the market price at the time. Westerby Trustee Services Ltd owns 3.8% of the company on behalf of Westerby Private Pension (R Prest).
Cadence Minerals (KDNC) says that the judicial restructuring plan for the Amapa iron ore project has been approved by the Sao Paulo commercial court. This will enable Cadence to acquire a 20% stake in Amapa. A further $3.5m investment will take the stake to 27%. Cadence plans to consolidate 100 existing shares into one new share. Shareholders will be asked to approve the proposal at the AGM on 20 September.
Paul Tuson is stepping down as finance director of Rutherford Health (RUTH) and the reappointment resolution was withdrawn from the AGM agenda.
Sativa Investments (SATI) has opened its third Goodbody CBD Wellness store in Bristol, following store openings in Bath and Cirencester. It is seeking franchisees to roll-out further stores around the country.
Panther Metals (PALM) chief executive Darren Hazelwood has acquired 18.87 million shares at 0.3p each. That takes his stake to 10.3%.
First Sentinel (FSEN) has raised £59,000 at 14p a share via a placing with D Beta One EQ Ltd.
AIM
President Energy (PPC) insists that it will continue to be profitable even though the Argentinian authorities are attempting to fix the price that producers can sell oil and the dollar exchange rate used for the price for a 90-day period. President has decided to delay its well drilling programme until the first quarter of 2020 and the focus will be gas wells. Gas sales from four wells in Estancia Vieja and Las Bases will commence production by the end of September. A new gas pipeline should be completed by the end of the year. finnCap has withdrawn its forecasts.
Order books and production volumes are ahead of last year at gift wrap and greetings products supplier IG Design (IGR) thanks to a combination of organic growth and last year’s US acquisition. IG is on course to increase pre-tax profit from £30.3m to £36m.
Online musical instruments retailer Gear4Music (G4M) says that it has taken actions that are already helping to improve gross margin.
Cambridge Cognition (COG) says sales are lower than expected. The digital neuroscience services provider says that full year revenues will fall from £6.13m to around £5.5m. The loss will be around £2.8m. First half revenues were £2.1m and the loss was £1.74m. There is a strong order book, so this augurs well for next year.
Adamas Finance Asia Ltd (ADAM) has funded the second tranche of the investment in Infinity Capital Group. The $2m is being funded equally by Adamas and a Hong Kong family office.
MAIN MARKET
Blockchain Worldwide (BLOC) intends to move to AIM if its acquisition of media-focused artificial intelligence and machine learning company Entertainment AI goes ahead.
At a general meeting, shareholders in Tex Holdings (TXH) approved the 2018 report and accounts and directors’ remuneration report, but they did not approve the reappointment of Scrutton Bland as auditors.
Argo Blockchain (ARB) is reaping the benefits of its investment in crypto mining equipment. The cost of 1,000 machines has already been recouped and Argo is on course to recoup the cost of a further 2,267 machines.
Ross Group (RGP) did not generate any revenues in the six months to June 2019 and the loss was £3.15m. Ross acquired start-up operations during the period. They will supply Chitin.
Asian consumer businesses investor Symphony International Holdings (SIHL) increased its NAV by 14% to $560.4m in the six months to June 2019.
George Bennett has become chief executive of Rainbow Rare Earths (RBW) and Martin Eales has left the board. In the year to June 2019, Rainbow sold 850 tonnes of concentrate from the Gakara project, although bad weather hampered production in the fourth quarter. Sales prices have declined.
China-focused healthcare investment company Cathay International (CTI) reported a decrease in revenues from $49.2m to $38.3m. There was a $7.9m gain on the sale of shares in Zhejiang Starry Pharmaceutical, but that was not enough to cover the operating loss and interest costs.
OTHER MARKETS
Britdaq-quoted Staminier Ltd has secured a three-year option over 13 acres of land near to the south terminal of Gatwick Airport and it wants to build a car park with 2,200 spaces. In July, Staminier acquired a majority stake in eco-friendly housebuilder Eco-Space 41 Ltd. There is a four-year option to acquire the other 49% for £750,000. The strategy is to acquire businesses at a discount to their intrinsic value. There are plans to move to a more liquid stockmarket.
Asset Match will provide a trading facility for shares of former AIM company Albert Technologies Ltd. The first auction will be during September.
US Oil and Gas (USOP) has raised $382,000 at 31p a share. This follows a fundraising in July of $577,000 at 30p a share. The cash will be spent on exploration.
Andrew Hore
Ian Pollard – Wizz Air #WIZZ Beats The Budgets
Wizz Air Holdings plc WIZZ which was named The Best Low-Cost Airline of the Year in the CEE region in 2018 and also received the Best Cabin Crew award, continued growing in March.15 New routes were opened and a number of new aircraft were brought into service.Seat capacity rose by 6.9%, passengers by 9.9% and load factor rose by 2.6ppts to 94.1%. At least it is good to see the former budget favourites being given not only a run for their money but lessons in customer service as well as the real meaning of “budget” .
Wizz Air also provides a trading update for the year to the 31st March 2019. Demand across the Company’s markets remains robust. It experienced an excellent operational performance in March with only one cancelled flight compared to 68 in March 2018. On time-performance also improved by 10ppts to 85%. The new financial year has started well with Revenue per Available Seat per Kilometre forecast to grow 4% year-on-year in the first quarter. Net profit for the year is expected to be in the upper half of its guidance range of between €270m and €300m.
Gear4music plc G4M updates that for the 13 months from 1 March 2018 to 31 March 2019 sales increased by 36% with continuing strong growth in the UK and Europe. Active Customer numbers increased by 53% to 727,400. Decisive management action has been taken during the period to solve the problems of lower gross margins and with a strong emphasis on margin growth, the Group is expected to return to a more profitable growth trajectory during the new financial year. The momentum in sales growth has continued both in the UK and Europe. In only six years revenues have grown from £12m to £110m.
Hydrogen Group plc HYDG is delighted to report a strong performance in 2018, with underlying profit before tax up by 264,% and basic earnings per share moving from a loss of 4.4p per share to a positive 7p. Shareholders get their rewards with a final dividend of 1p per share taking the total for the year to 1.5p, a rise of 88%. Continued growth is confidently expected for this current year.
Intercede Group plc IGP announces that it received a large US Federal Government order totaling $4.3m on the 29 March 2019. Revenues for the year ended 31 March 2019 are expected to be in excess of £10.0m, which is ahead of market expectations and approximately 10% higher than the previous financial year. A return to profitability is now expected at both operating profit level after 2018″s: £4.5m operating loss) and after interest and tax.
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Andrew Hore – Quoted Micro 7 January 2019
NEX EXCHANGE
VI Mining (VIM) has not made the required $2.19m loan repayment to Tassili by the end of 2018. Tassili also has right of refusal over the first 24,000 ounces of gold production. The loan is secured by a charge over the VI subsidiary that owns the interest in the Ora Pesa concession. VI had to secure additional funding because it could not draw down from a facility provided by chief executive David Sumner the $7m required in August 2018. The lack of cash has held up bringing Ora Pesa in to production and recommencing mining at Minaspampa.
Angelfish Investments (ANGP) has converted its £150,000 loan to Wallet Ads into a 20% stake in the company, which can deliver more than ten million personalised updates per hour for a campaign. The terms of the £150,000 convertible loan to Rapid Nutrition have been amended. Rapid Nutrition is still set to float in London, but it has been further delayed. The loan will be repaid in nine equal monthly instalments of £16,667 starting at the end of January. Interest will be charged at an annual rate of 15%. Interest owed up until the end of February 2018 has been settled by the issue of 50,000 Rapid Nutrition shares at 13.4413p a share and a further 200,000 shares have been issued as a fee for the amended terms. Rapid Nutrition is quoted on the Zurich-based SIX Swiss Exchange and the last share trade was at €0.17. The share price was more than €1 in 2017.
MiLOC Group Ltd (ML.P) has secured an agreement with China Post Advertising, which will help it to promote Aaron Kwok’s AKFS+ hair care products and future celebrity branded products. China Post has more than 50,000 outlets.
Natural resources investor Hot Rocks Investments (HRIP) used £49,000 in cash in operating activities in the six months to September 2018. The NAV is £804,000 and that includes nearly £48,000 of cash.
AIM
Musical instruments retailer Gear4Music (G4M) continues to be hampered by pressure on margins although sales are increasing. Management had expected this pressure to have ended prior to Christmas but it has continued and on top of this were problems at the warehouse with the increased demand. In the four months to the end of December 2018, sales increased by 41%. Peel Hun has cut its 2018-19 pre-tax profit forecast from £2.6m to £800,000 and this took the shine off the premium rating of the shares.
Trading in the first quarter at Cambria Automobiles (CAMB) is ahead of the same period last year. The new car market was hit by changes in emissions regulations and new vehicle sales were one-quarter lower, but gross profit per unit was much higher because of new franchises with the likes of Bentley and McLaren. There will be more upmarket vehicle franchise openings in February. This offset the effect of lower new vehicle sales and there was a similar experience with used cars, although overall like-for-like profit improved. Aftersales profit also improved.
Digital music distribution technology developer 7digital (7DIG) could lose its contract with Juke GmbH for the Juke music service, which was expected to generate revenues of £4m this year. The service could be closed or reorganised so 7digital takes on more responsibility. 7digital also owes HMRC £417,000 and one of its subsidiaries has been served with a winding-up petition. This tax should be paid before the hearing of the petition on 16 January. 7digital has reduced its annualised cost base by £6.2m and it is winning new contracts.
Faroe Petroleum (FPM) continues to reject the bid from DNO. An independent report provides an estimated valuation of between 186p a share and 225p a share. This does not include the previously announced Equinor asset swap or utilisation of Norwegian tax losses. Cash flow of £90m is expected over the next two years. DNO has been buying shares in the market at between 147p a share and 152p a share and it has taken its stake to 30.6% so the 152p a share cash bid is mandatory. This stake plus acceptances takes total acceptances to 43.8%. DNO can improve its offer up until 27 January.
ReNeuron (RENE) has announced the first collaboration for its exosome nanomedicine platform. There is an initial feasibility stage, where no revenues will be generated. If it moves on to the preclinical safety and efficacy stage, then there will be evaluation payments.
Leaf Clean Energy (LEAF) is reducing directors’ fees by 70% and there have also been reductions for the administrator and employees. This is ahead of the hearing of Leaf’s appeal of damages awarded to it in its lawsuit with Invenergy Wind, where a decision is expected later this year. Invenergy is has already paid Leaf $36.4m and a further $14.2m is included in the Leaf balance sheet, but that will depend on the court decision.
Home automation technology developer LightwaveRF (LWRF) increased its first quarter revenues by 156% to £1.15m. That is nearly as much as in the first half of the previous financial year.
Shareholders have authorised the $25m subscription at $1.60 per ADS by Summit Therapeutics (SUMM). Robert W Duggan is subscribing for the shares. The cash will fund the initiation and commencement of patient enrolment for the phase 3 clinical trial of the potential treatment for C.diff.
Tracsis (TRCS) has won a major, multi million contract with a train operating company, covering all its individual franchises. The flow of revenues is difficult to predict.
Alpha FX (AFX) says that its 2018 figures will be ahead of expectations. The growth came in the UK and internationally.
WANdisco (WAND) has secured its first multi-cloud contract, valued at $565,000. The contract with the telecoms company was won with Amazon Web Services.
Richland Resources (RLD) is seeking to obtain investment to recommence mining at Capricorn Sapphire and it is in talks with one party about the sale of the project. The £400,000 convertible loan facility has been extended to the end of February.
Central Asia Metals (CAML) has consolidated borrowings into one facility of $151m, which is provided by offtake partner Traxys. The debt will be repaid monthly within a four year period.
ECR Minerals (ECR) has submitted nine exploration licence applications in the Yilgarn region of Western Australia.
Ethiopian authorities have reconfirmed their support for the development of the Tulu Kapi gold project and KEFI Minerals (KEFI) has taken the first steps for the community resettlement programme.
MAIN MARKET
Circassia Pharma (CIR) has gained shareholder approval for the move to AIM, which will happen on 4 February. Circassia has completed the acquisition of full US commercial rights to Tudorza and the FDA is expected to approve the transfer of the licence by the end of March. There was £41m in the bank at the end of 2018.
Nanoco (NANO) is partnering with Plessey Semiconductors to use quantum dots to shrink microLED pixels by 87%. This will lead to smaller, higher resolution displays.
Gresham Technologies (GHT) has won orders for Clareti software from two major, world banks. Revenues should start to be recognised this year. Over five years the contracts should be worth more than £7m, with £1.8m likely to be recognised in 2019. However, 2018 revenues will be lower than expected at £20m and profit will be below expectations.
Andrew Hore
Ian Pollard – Rightmove #RMV warns of consumer confidence worries
Rightmove RMV provides another warning from the housing industry that all is not well. Transactions in the first half of the year fell by 5% compared to last year and today’s update warns that economic conditions in the UK are such that consumer confidence may be impacted which could in turn affect the level of transactions and the number of agencies it operates.Despite the warning the interim dividend is to be increased by 14% from 22p per share to 25p., after rises of 10% and 14% in revenue and basic earnings per share, whilst underlying operating profit increased by 11%.
BT Group BT Underlying revenue fell 2% in the quarter to the 30th June due to regulated price reductions in Openreach and declines in enterprise businesses offsetting growth in consumer businesses. Adjusted3 profit before tax rose 3% to £816m., which the Chief Executive describes as a good start to the year.
Reckitt Benckiser Gp RB is increasing its interim dividend by 6% to 70.5 p. per share after the second quarter to the 30th June produced a 30% rise in net revenue at constant currency rates and adjusted earnings per share rose by 12%.The full year net revenue target has been increased from +13-14% to +14-15% after growth exceeded expectations.
Pearson plc PSON reports a rise of 46% in underlying operating profit for the half year to the 30th June with good growth in earnings per share. The interim dividend is being increased by 10% from 5p. per share to 5.5p. Expectations continue of a full year decline in net sales in the US.
Gear4music G4M updates that revenue growth continues to be strong and the relocation of the Swedish distribution centre and upgrade to UK distribution facilities are on-track to be delivered ahead of the peak trading period.
Hutchison China Medi HCH reports that it continues to deliver on its clear strategy of “developing its broad pipeline and cultivating and growing its capabilities in global drug discovery and development”. Half year group revenue tumbled from $126m. to $102m and last years net profit of $1.7m was turned into a net loss of $32.7m. for the six months to the end of June.
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Ian Pollard – easyJet #EZJ, excellent winter performance
Vodafone Group VOD claims that the year to 31st March was one of significant operational and strategic achievement which produced a strong financial performance. In fact it was so strong that revenue fell by 2.2% and in troubled India, Service revenue was down by over 18%. Despite these little local difficulties operating profit rose by 15.4% and the final dividend was increased by 2% to 10.23 euro cents.It also suffered from something called “roaming headwinds”. There is a new entrant in Italy and competitive pressure in Spain but profit growth is expected to continue in the current year.
easyJet plc EZJ produced an excellent performance during the half year to the 31st March with a total profit of £8m, one of its best ever winter trading results. The strong performance was helped by capacity reduction in other airlines but passenger number increased by three million, 8.8%, to £36.8m. Total revenue jumped by 10.5% and revenue per seat was up by 10.9%. Forward bookings for the second half are ahead of last year.
Spirax Sarco Engng SPX updates before today’s AGM that the trading environment remains positive with global Industrial Production growth similar to last year. The currency tailwinds of the last two years have become a headwind during the current year but on an organic constant currency basis, group operating profit for the irst four months of the year is ahead of 2017
Gear4music (Holdings) G4M The year to the 28th February saw revenue rise by 43%, gross profit by 34 % and customers by 39% but pre tax profit slumped by 43% and EBITDA was down by 4%. The year was expected to be transformational with short term profitability implications. The target now is to deliver strong and sustainable revenue and profit growth
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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
Andrew Hore – Quoted Micro 8 January 2018
NEX EXCHANGE
Kryptonite 1 (KR1) has invested $249,000 in a presale of 4,775,686 Simple tokens in a project administered by OpenST Ltd. The plan is for the tokens to be used to enable digital currencies to be launched by businesses. There has also been a $100,000 investment in the presale of tokens in the Props project. That bought 859,569 Props tokens. These tokens are used as a cryptocurrency as part of a decentralised ecosystem of video applications.
DagangHalal (DGHL) has launched its mobile app MEEMBAR (meaning raised platform in Arabic), which is targeted at Muslim travellers, on the Android platform. The app provides details of mosques, hotels and restaurants in an area. The app will become available on the IoS platform later this year. Longer-term, the company wants to introduce the ability to undertake transactions.
AIM…….
Housing developer Inland Homes (INL) ended the year strongly, selling two sites for a total of £12.7m. Inland Partnerships, which develops social housing, has entered into a £29.5m contract to develop 136 homes.
Kestrel Partners has taken a 4.32% stake in telematics equipment and services provider Trakm8 (TRAK).
Gear4Music (G4M) says that Christmas sales grew by 42%. The online musical instruments retailer is still on course for a full year profit of £2.4m.
Peter Scott is taking on the role of chief executive at digital marketing services provider Be Heard Group (BHRD) and David Morrison will replace him as chairman.
Smart metering technology supplier CyanConnode (CYAN) says that its order book is in excess of $100m even though a large order has been delayed. There was £5.5m in the bank at the end of 2017.
Cambria Automobiles (CAMB) has announced a new Lamborghini dealership in Chelmsford on the same site as the Bentley dealership. The showroom should be open by the end of the first quarter. A new site in Hatfield to house the new McLaren dealership and the company’s other dealerships in the area should be completed by the end of the year. Cambria is still cautious about the UK car market. Trading in the first quarter is in line with expectations. Chairman Philip Swatman and his wife sold 100,000 shares at 57p a share, leaving them with 200,000 shares.
Marble quarry operator Fox Marble Holdings (FOX) is raising £2.76m through a placing at 10.5p a share and Indian firm Kesari Tours PVT is investing £2m of the cash. Kesari boss Shailesh Patil has committed to buying a minimum of 3,000 tonnes a year of marble in return for exclusivity in the Arabian Gulf. Fox is also raising £235,000 via a convertible loan note issue and capitalising £783,000 of debt. Directors are also taking part of their pay in the form of shares. Fox will use £1.5m of the cash to repay debt and the rest will go towards expanding production. Total marble production was 8,800 tonnes in 2017. The new processing facility has capacity of up to 440,000 square metres a year so it will be able to cope with much higher quarry production.
Network data processing technology supplier Ethernet Networks Ltd (ENET) has disappointed the market six months after flotation. A customer has chosen to sign up to a different proposal than expected and two other projects have been delayed until 2018. This means that 2017 revenues and profit will be lower than anticipated, although profit will be higher than 2016. In 2016, revenues were $2.16m and operating profit was $339,000, which was exceeded in the first half of 2017 even though revenues were much lower.
Victoria Oil and Gas (VOG) says that its gas supply contract with ENEO in Cameroon has not been extended. This had covered 53% of Logbaba gas sales revenues in 2017. ENEO owes $8.7m.
Churchill China (CHH) says that its 2017 results will be slightly better than expected thanks to strong export sales. Full year figures will be published on 27 March.
Strand Hanson has resigned as nominated adviser to BNN Technology (BNN) following news that the company failed to account for a bonus claimed by Darren Mercer. The £270,000 bonus has been offset against the £450,000 he owes the company. Mercer also claims that the remaining amount of the loan should be reduced.
Corero Network Services (CNS) has gained $400,000 of contracts for its SmartWall cyber security system.
Ultrasound simulation technology provider Medaphor Group (MED) says that 2017 revenues were 27% ahead at £4.2m. The loss will be £2.9m. There was £4.2m in the bank at the end of 2017.
Cantor Fitzgerald has downgraded its 2017 profit forecast for waste treatment and energy generation plants developer Green and Smart Holdings (GSH) from RM7m to RM6.7m and the 2018 figure from RM16.9m to RM10.8m because of delays to electricity generation projects. Local project finance is taking longer than expected to secure.
Attractions designer Paragon Entertainment Ltd (PEL) chief executive John Dobson has acquired 1.43 million shares at 2.5p each. That increases his stake to 6.55%. This has helped the share price to recover after almost a year of decline following disappointing trading statement.
Babestation producer Cellcast (CLTV) says that it intends to provide for the £495,000 it had invested in the Lexinta fund, which is being investigated by the Swiss authorities. The investment vale had been raised to £754,000 in the last accounts. This appears to be in the trade receivables in the balance sheet last June. There was £862,000 in cash in the bank.
European PR firm SEC (SECG) has acquired 51% of Colombia-based Newlink for up to €2.2m and this could rise to €4.3m if the option to acquire the rest of the shares is taken up in the next five years.
TyraTech Inc (TYR) will buy back $8.4m worth of shares at the tender price of 3p a share.
Oil and gas firm San Leon Energy (SLE) has ended bid discussions with two potential bidders. A potential reverse takeover is still on the cards.
Even though Crawshaw Group (CRAW) says that the performance of its factory shops has been good, like-for-like sales for the delicatessen products retailer have declined. This has led Peel Hunt to increase its loss forecasts for this year and next year as like-for-like revenues are expected to continue to decline.
Egdon Resources (EDR) has had its appeal for planning permission for the Wressle oil development in Lincolnshire. Egdon owns 25% and Union Jack Oil (UJO) has a 15% stake. Egdon has been allow to retain the original planning permission until the end of April.
ReNeuron (RENE) is consolidating 100 shares into one new share. Management hopes that this will help to attract institutional investors. The cell-based therapeutics developer had £45.3m in the bank at the end of September 2017.
Christopher Brown is stepping down as chief executive of TomCo Energy (TOM) but he will remain for the short-term. He has agreed to loan £100,000 to the company.
Packaging machinery manufacturer Molins (MLIN) is changing its name to Mpac following the sale of the Molins tobacco machinery business.
The People’s Operator (TPOP) has returned from suspension having completed its £2.82m fundraising at 0.1p a share. The London Stock Exchange says that the settlement of outstanding trades is occurring and it allowed the restoration in dealings, but it says that it will continue to closely monitor the situation.
BOS Global Holdings (BOS) has appointed Marcus Yeoman, Will Giles and Michael Wilczynski to the board andMark Uren has resigned, which means that it does have the minimum required number of three directors. The finances of the software developer remain uncertain and trading in the shares is still suspended. A general meeting requisition has been withdrawn.
Average oil production from the Trinidad operations of Range Resources Ltd (RRL) in the fourth quarter of 2017 was 629 barrels a day and the current daily production is 703 barrels a day.
Premier African Minerals (PREM) did not meet its guidance on production at the RHA tungsten mine in the last quarter of 2017 and this means that it did not achieve profitable production in December. Premier has said that it would not provide any more cash unless profitability were achieved. Premier is spinning off the Zulu lithium project, which could have a value greater than Premier, and drilling programmes could be funded by offering a stake in the new company.
MAIN MARKET
Cayman Islands-based cash shell AIQ Ltd (AIQ) (ww.aiqhub.com) is joining the standard list on 9 January. AIQ has raised £3.6m after expenses, mainly at 8p a share. The plan is to seek an e-commerce acquisition, which has a strong management and is near to cash generation.
North American oil and gas explorer and producer PennPetro Energy (PPP) acquired Nobel Petroleum UK last May, which gives it a 75% working interest in City of Gonzales petroleum leases in Texas. Nobel has secured £2m in additional funding for the leases. PennPetro joined the standard list and was valued at £17.7m at 25p a share. Former Arsenal managing director Keith Edelman is chairman.
Andrew Hore
Quoted Micro 30 October 2017
NEX EXCHANGE
The government proposal to drop plans to cap housing benefit in the supported living sector to Local Housing Allowance rates is good news for Ashley House (ASH) because the rates would not have been viable. Ashley House has development schemes that could go-ahead following the change of government plans. There could still be other proposals that hamper development in the government paper on funding supported housing that is due to be published on Tuesday but if there are not then Ashley House is in a good position.
Belvedere Capital has subscribed for £31,500 of convertible loan notes in Forbes Ventures (FOR) and the investment is expected to increase to up to £100,000. The initial cash will pay creditors and enable Forbes to issue its interim figures. That is required for trading in the shares to recommence. The interest rate is 1% per month and the conversion price is 0.1p a share. A representative of Belvedere, which is focused on technology investments in northern England, will join the Forbes board as an executive director.
First Sentinel (FSEN) has made a £625,000 investment in standard-listed Curzon Energy (CZN). The shares in the oil and gas company were acquired at the flotation price of 10p each but the share price has fallen back to 8.38p. Curzon has a coal bed methane asset in Oregon.
Middle East-focused investment company Indigo Holdings (INGO) has made four investments, although one of these was earlier this month so it is not included in the balance sheet to the end of June 2017. There was still nearly £241,000 in the bank, prior to investing £10,000 in 3sootjobs, a job search platform in Iran.
Supported housing developer Walls and Futures REIT (WAFR) has been granted membership of the Social Stock Exchange. Management hopes that this will help the company attract investors seeking investments with a positive social impact.
Black Sea Property (BSP) has completed the €10.5m purchase of the UniCredit Bulbank office building in Sofia.
AIM
A management review at Real Good Food (RGD) has uncovered further disappointment and there will be a loss this year. All three divisions are growing their sales with overall like-for-like sales 13% ahead but this is not translating into higher profit. A combination of higher commodity prices and disruption from capital investment. Overheads are being reviewed and Real Good Food is also racking up costs relating to its corporate governance problems. The head office is being moved from London to Liverpool. New banking covenants have been agreed but the further downgrades could mean they come under pressure but the food company has the backing of its three main shareholders.
Investment in European distribution centres and a new UK head office held back the first half progress of musical instruments retailer Gear4Music (G4M) but the benefits will start to show through in the second half. There was a small loss in the first half but a full year pre-tax profit of £2.4m is forecast as European sales build up and margins start to recover.
Stratex International (STI) is holding a general meeting requisitioned by shareholders, including AnglGold Ashanti and Teck Resources, on 1 November. The requistioners, which own 24% of Stratex, want to remove the current chairman and chief executive and block the proposed reverse takeover of Brazil-focused Crusader Resources, which was announced in May. They want former Stratex directors David Hall and Paul Foord to return to the board. The two men run Thani Stratex Resources Ltd, which is 30%-owned by Stratex. Institutional Shareholder Services Inc advises voting against the resolutions. Stratex has the backing of shareholders owning 12.1% of the share capital. Earlier this month, Stratex sold its 13.7% stake in Goldstone Resources for £550,000 (1.6p a share).This was valued in the latest accounts at £950,000.
Datatec (DTC) is dropping its AIM quotation and concentrating on the JSE listing. There has been a lack of interest in the shares in London with non-South African investors trading through the JSE. The cancellation becomes effective on 8 December.
It appears easier to push a piano up a steep flight of stairs than for TLA Worldwide (TLA) to bring out its 2016 accounts. The latest management estimate for publication is before the end of November. Former CFO Don Malter is said to have misappropriated $800,000 of funds over three years. It is unclear if any of this is included in the $6.8m EBITDA adjustment for 2016 that was revealed in June. TLA remains best known for publishing a profit warning at 6.26pm on 23 December 2016. It will be interesting to see whether the accounts are published before this date and time in 2017.
Lombard Risk Management (LRM) had a tough first half but it expects to do much better in the second half and move back into profit. Interim revenues fell by 16% as risk management software sales fell. Regulatory reporting software sales improved. A full year profit of £1.8m is forecast.
Zinc Media (ZIN) has acquired Tern Television Productions for up to £5.45m, with up to £2.35m deferred. Tern made a pre-tax profit of £300,000 on revenues of £5.3m in the year to March 2017. Tern specialises in factual programming. A placing at 0.9p a share raised £3.5m.
Systems1 Group (SYS1) had a poor first half with revenues falling and costs increasing. The market research firm reported a 10% decline in interim revenues to £13.8m and a 70% slump in pre-tax profit to £540,000. There was still £3.5m in the bank at the end of September 2017. Rebranding and reorganisation hampered the business at a time when clients were also holding back spending.
Fox Marble (FOX) has sold the first polished marble slabs from its factory in Kosovo. This sale was part of the agreement to supply Marble Dino. Fox recently signed a three year agreement to supply OM Enterprises in India. An advance payment of $500,000 has been received.
Third quarter trading at broking business Share (SHRE) continued to be strong and revenues were 29% higher compared with the third quarter of 2016. Market share jumped to 13.9%.
A new finance director has reviewed the forecasts for Attraqt Group (ATQT) and problems in timing of contracts have been identified. This means that revenues will be 10% lower than expected in 2017, although there will be organic growth. There was £2.3m in the bank at the end of September.
Hardide (HDD) has raised £2.54m at 1.7p a share in order to fund an increase in reactor capacity. Two additional reactors will be installed in the US and other equipment will be installed in the UK and US. The surface coatings business has signed a framework agreement with a North American oil and gas business. Full year figures will be published on 11 December.
Botswana Diamonds (BOD) expects major developments over the coming months. There is enough cash to last into 2018. An inferred resource is expected to be reported for the Thorny River project before the end of the year. Eight kimberlites have been discovered at the Free State project.
Ascent Resources (AST) is raising a further £1.5m via PrimaryBid.com. Ascent is a regular user of the crowdfunding site. The shares will be issued at 1.66p each. Ascent is awaiting a signature on a government document that will enable it to export gas from Croatia.
Internet gaming software-as-a-service provider GAN (GAN) will benefit from the final approval of a bill in Pennsylvania that legalises real money online gaming. The regulated gaming is expected to start early in 2018.
Cenkos has lowered its revenue expectations for Collagen Solutions (COS) following a trading statement. It has knocked £400,000 off its 2017-18 revenues forecast and trimmed forecasts for later years. A profit is not anticipated until 2019-20. First half revenues of the collagen products supplier were flat.
K&C REIT (KCR) is raising £150m at 100p a share, following a ten-for-one share consolidation. The name is being changed to KCR Residential REIT and a move to a premium listing is planned.
The Ottoman Fund Ltd (OTM) has repatriated cash from Turkey and shut three Turkish subsidiaries. This is an important step in winding up the company returning cash to shareholders. The final distribution will be in the range of 1.36p a share to 1.53p a share.
Stellar Diamonds (STEL) has been granted an environmental licence for the Tongo project in Sierra Leone.
MAIN MARKET
Fuel cell technology developer Intelligent Energy Holdings (IEH) is selling its business and being wound up. Convertible loan note holders are likely to get 65% of the principal of the loan notes prior to their cancellation but ordinary shareholders will get nothing. Cash is likely to run out in November. Meditor Energy is paying £19.5m for the remaining business and this will be used to pay the 65% of principal of the loan notes. A Meditor fund owns 85.5% of these loan notes.
Orient Telecoms (ORNT) is a new standard list company that wants to start a telecoms business in Singapore from scratch. The share price ended the first day at 11p (10p/12p) and it remains unchanged since then. The shares are tightly held so any trading activity could push up the share price, so beware of this lack of liquidity. There does not appear to have been any trading activity, as yet.
Aquila Services Group (AQSG) is acquiring development consultancy and financial modelling services business pod. The business made an operating profit of £162,000 on annual revenues of £1.09m. This fits with the group’s affordable housing services operations.
Andrew Hore
Quoted Micro 31 July 2017
NEX EXCHANGE
Kryptonite 1 (KR1) has invested $100,000 in the initial coin offering of the Omisego project, which is being developed to enable decentralised payments and remittances, acquiring 365,199 tokens. A further $200,000 has been invested in a similar offering by the Insurex platform, a marketplace for insurance products, and $100,000 invested in tokens in the Agrello project, which is building an artificial intelligence-based interface for smart contracts.
Good Energy (GOOD) has agreed with Ecotricity that there should be a short deferral of the latter’s general meeting requisition. Good Energy still believes that “any nominee remunerated by Ecotricity” that joined the board would not act independently because of a conflict of interest. An appeal for planning permission for the Big Field onshore wind farm in Cornwall. Good Energy has switched its nominated adviser and broker from Arden to Investec.
e-commerce technology provider Netalogue Technologies (NTLP) says that strong second half trading made up for a weak first half. In the year to March 2017, revenues slipped from £1.12m to £1.04m and made a loss before restructuring coats of £11,000 compared with a pre-tax profit of £70,000 the previous year. This does mean that the second half profit was £221,000. Cash in the bank increased from £549,000 to £614,000, mainly due to lower debtors. There was a net increase in intangible assets of £67,000. New clients include AIM-quoted Conviviality, Enterprise Inns and Marstons. The full benefits of management changes and improved marketing are still to show through in the figures.
Ecovista (EVTP) has sold its subsidiary that owns 2 Willow Cottage and adjoining land near to Stanstead Airport for its book value of £400,000. However, the original cost of the investment was £500,000 and management was hoping to gain planning permission for car storage. It is unclear whether the former subsidiary still owns the same assets or whether any have been transferred elsewhere. The cash will be reinvested in other property.
V22 (V22O) has received planning permission for Silvertown Studios at the Royal Docks in London. V22 owns 51% of the company developing the studios, along with the landowners the Greater London Authority and The Silvertown Partnership, and a private investor owns the rest. There will be up to 200 workspaces and exhibition spaces. This development is part of £3.5bn Silvertown regeneration project.
Online games company Ganapati (GANP) has agreed a debt for equity swap with major Japanese shareholders. Shares will be issued at 52p each and £610,000 of debt will be capitalised. The current share price is 55p (45p/65p).
AIM
Morning sickness treatment Diclectin has not gained marketing authorisation from the Medicines and Healthcare products Regulatory Authority in the UK, which is a blow to the strategy of Alliance Pharma (APH). The effectiveness of Diclectin is being questioned in Canada, where around 50% of pregnant women are prescribed the drug, and it is claimed that there are flaws in the original study of the treatment from four decades ago. In 2015, Alliance in-licenced Diclectin for the UK, and subsequently nine other countries, for £1.5m. Alliance hoped to begin sales in the UK by the end of the year and it was estimated that the potential annual revenues in all the in-licenced markets were £40m.
Fiserv has postponed the court meeting for its 2.9p a share bid for mobile banking technology developer Monitise (MONI) because some substantial shareholders have been unhappy about the level of the bid. The Monitise board still recommends the bid, which values the company at £70m. Full year revenues have fallen from £67.6m to £50.9m and the trend is set to continue. The new FINkit platform has yet to secure a contract.
Mortice Ltd (MORT) reported full year revenues 37% higher at $181m and more than trebled pre-tax profit of $5.35m. Net debt was $13.5m at the end of March 2017. Facilities management services grew revenues the fastest and it moved into profit but security revenues also grew strongly. Around three-fifths of the growth in revenues came through acquisitions but there was significant organic growth particularly in the core Indian business.
Minds + Machines Group (MMX) says that renewal rates for .vip have been 75%. There were 317,000 renewals and new registrations have risen by 49% since the beginning of the year. The .vip suffix accounted for 59% of 2016 gross billings and finnCap estimates that renewal revenues could be $6.1m this year. There will be more news about the strategic review with the interims in September.
ANGLE (AGL) says that there were positive results from a 400 patient ovarian cancer study using the Parsortix liquid biopsy technology and a breast cancer clinical study should report in the first half of next year. There are also pilot studies for other cancers. Any single cancer could provide a significant market for the Parsortix diagnostic technology. Sales for research use are taking time to build up but revenues did improve from £361,000 to £398,000. At the end of April 2017, there was £5.5m in the bank with more than £1m of R&D tax credits due to be received. That cash could last one year but this will depend on how quickly the research revenues grow and if there are any potential deals.
Crop enhancement technology developer Plant Impact (PIM) is raising £4m at 31p a share, which was a 6% premium to the market price. This will more than double the existing cash balance of £3.2m. The cash will be spent on R&D and product development.
Gear4music (G4M) says trading is in line with expectations. The musical instruments retailer expects second half weighted revenues this year. First half revenue growth will be modest but full revenue growth of 42% is anticipated. Investment in new European distribution centres will increase costs, including depreciation, and this is forecast to lead to a decline in full year pre-tax profit from £2.7m to £2.4m this year, before increasing to £3.3m the following year.
Quartix Holdings (QTX) reported flat interim revenues of £11.5m and pre-tax profit of £3.4m. The interim dividend of the telematics business has been increased by 9% to 2.4p a share and a special dividend is expected later in the year. Insurance business has recovered so full year revenues could be slightly higher, while pre-tax profit could be flat at £6.7m.
Conroy Gold & Natural Resources (CGNR) is holding a requisitioned general meeting in Dublin on 4 August. Patrick O’Sullivan, who owns 28% of Conroy, wants to remove six directors: Seamus FitzPatrick, James Jones, Dr Sorca Conroy, Louis Maguire, Michael Power and David Wathen and replace them with Patrick O’Sullivan, Paul Johnson and Gervaise Heddle. The three directors not affected by the requisition are Professor Richard Conroy, Maureen Jones and Professor Garth Earls. The indicated resources at Clontibret in Monaghan have been increased by 23% to 310,000 ounces of gold.
Interactive entertainment company Tencent has taken invested £17.7m in Frontier Developments (FDEV) and it is expected to promote games developed by the AIM company. The 9% stake was acquired at 523.2p a share.
MAIN MARKET
Specialist smaller companies-focused investment trust Athelney Trust (ATY) increased its NAV by 7% to 268.7p a share by the end of the first half of 2017. This is after the payment of a final dividend of 8.6p a share. Athelney nearly doubled its money on Lavendon when it was taken over and it has also sold its stakes in Beazley, Hiscox and Novae. New investments include The PRS REIT, Murgitroyd, Safecharge, Hostelworld, Ibstock, Crest Nicholson and Debenhams. According to the company the uncertainty in the country and the economy means that: “A sensible aim would be to try to hang onto the gains made in the first half”.
Senterra Energy (SEN) is being readmitted to the standard list on 31 July as United Oil & Gas (UOG) following the acquisition of UOG Holdings.
Biodecontamination services provider Bioquell (BQE) says that its full year profit will be better than expectations. Bioquell increased its interim revenues by 19% to £14.3m and pre-tax profit more than trebled to £1.4m. Net cash was £11.8m at the end of June 2017, compared with a market value of just over £46m at 199.5p a share.
Sealand Capital Galaxy Ltd (SCGL) has signed a memorandum of understanding to acquire at least 51% of China-based mobile games developer Rightyoo. The acquisition discussions are still at an early stage and the deal has to be approved by the Chinese authorities. Rightyoo has an agreement with communications technology firm Huawei to help it to distribute its games. Management believes that the deal will help to add traffic to Sealand’s social networking platforms.
Andrew Hore
Corporate news review Friday 28th July 2017
Barclays BARC – Reports a 13% increase in half-year PBT to £2,341m reflecting materially lower non-core losses of £647m (H116: £1,904m), while core PBT fell 25% to £2,988m impacted by PPI charges of £700m (H116: £400m). EPS came in at 11.8p, while tangible NAV fell to 284p (Dec 2016: 290p) as profit from continuing operations was offset by decreases across reserves.
BT Group BT.A – Q1 revenues rose 1% and underlying revenues rose 0.2%. Adj EBITDA fell 2% due to increased pension costs, business rates, sport programme rights and investment in customer experience. CEO Gavin Patterson said he is “confident in the outlook for our Company.”
Johnson Matthey JMAT – trading is in line with expectations. Q1 saw low single-digit sales growth at constant rates and double-digit reported sales growth. The restructuring programme announced in June which will deliver £10m cost savings in H2, with a further £15m cost savings in 2018/19.
Gear4music G4M – At today’s AGM the company will report that trading in the financial year to date is in line with Board expectations. Based on the overall performance, the Board is confident of another year of good progress.
International Airlines Group IAG – Results for the six months to June 30, 2017 include Q2 operating profit €805m before exceptional items (2016: €555m), with passenger unit revenue for the quarter up 1.5%, (4% at constant currency). Half year operating profit before exceptional items grew 37.3% to €975m
Rightmove RMV – reports an 11% increase in half-year revenue to £119.5m with underlying operating profit up 11% to £91m. Trading in July has been in line with the strong monthly revenue achieved in the first half of the year. The visibility gives the Board confidence in delivering its expectations for the current year.