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Andrew Hore: Quoted Micro 29 October 2018
NEX EXCHANGE
Auxico Resources Canada Inc (AUAG) has added a NEX quotation to its year-old Canadian Stock Exchange listing. Auxico has mineral properties in Colombia and Mexico. There is already a UK investor base.
Chapel Down Group (CDGP) had a bumper 2018 harvest that was 125% ahead of the previous best, thanks to the hot summer. Some vineyards produced their first crops.
Ace Liberty and Stone (ALSP) is paying this year’s dividend in three instalments: October, April and July. The first interim will be 0.83p a share and the ex-dividend date is 25 October. The sale of Hume House in Leeds has been completed for £3.9m, compared to a cost of £1.67m in March 2014. A 37-storey building will be constructed on the site.
Eight Capital Partners (MORE) is investing £250,000 in AIM-quoted Imaginatik (IMTK) with £160,000 subscription for shares at 1.1p a share for a 29.7% stake, and £90,000 in convertible loan notes with an annual interest rate of 7.5%. Eight Capital is issuing up to £2.5m of convertible bonds at 95% of their nominal value. The annual coupon is 5%. One warrant will be granted for every two shares issued.
Trading in the shares of Etaireia Investments (ETIP) has been suspended ahead of a potential acquisition of property assets from the Oyston family.
Gunsynd (GUN) will get a 4% stake in Human Brands when, or if, it floats on the standard list. Previously it would have been a 1% stake. Gunsynd has £289,000 invested in drinks distributor Human Brands loan notes.
Founder Sebastian Snow has resigned as creative director of pubs and inns operator Barkby Group (BARK) and Lana Snow has also left the group. Occupancy rates were good in September and there is significant demand for the Christmas period.
Ganapati (GANP) reported a reduction in interim loss from £4.54m to £3.56m, although total income was flat at £2.19m. There was cash in the bank of £2m at the end of July 2018. This could be added to by an initial coin offering by Malta-based blockchain subsidiary GanaEightCoin Ltd next spring.
NQ Minerals (NQMI) has raised £81,250 at 15p a share to provide further working capital.
The chairman and chief executive of DXS International (DXSP) have both bought shares in the healthcare technology company. Bob Sutcliffe bought 100,000 shares at 8.515p each, while David Immelman bought 20,538 shares at 8.66p each, which takes the chief executive’s stake to 10.3%.
Sativa Investments (SATI) has signed an option on a 298,806 square foot glasshouse for growing medicinal cannabis. Mark Blower is becoming a non-executive director.
Melissa Sturgess has acquired 590,000 shares in Ananda Developments (ANA) at 0.4496p each. The executive director of the cannabis-focused investment company owns 47.8 million shares. Ananda joined NEX on 4 July having raised £930,000 at 0.45p a share. The share price ended the first day at 0.975p and it has more than halved since then.
AIM
Chris Marsh has resigned as finance director of Patisserie Holdings (CAKE) having been suspended on 9 October. Previously undisclosed LTIP share awards have been revealed.
GB Group (GBG) has acquired Australia-based ID verification services provider Vix Verify Global for £21m. This has led to a 2.7% upgrade in the 2019-20 forecast earnings per share. Third quarter trading of the existing business was in line with expectations with organic growth in revenues of 11%.
Avingtrans (AVG) is acquiring Texas-based Tecmag Inc for $243,000. Tecmag manufactures instrumentation for magnetic resonance imaging and nuclear magnetic resonance systems. This fits well with Avingtrans’ magnets business in the sector.
Energy supplier Yu Group (YU.) has shocked investors with accounting changes relating to accrued income and increases in impairment charges for trade debtors. This will slash £10m for this year’s profit turning it into a loss. There is £11.5m in the bank at the end of September 2018.
1Spatial (SPA) reduced its loss n the first half and is on course to cut its full year loss from £1.5m to £1m. The geospatial data services provider should move into profit next year.
HaloSource Corporation (HALO) says it has sufficient working capital until the end of the year, but up to $5m is required to add a further 12 months. The company expects to generate revenues of $2m-$2.5m in 2018 and the target is to treble that figure in 2019, which would reduce the loss.
EKF Diagnostics (EKF) says the record date for the distribution of shares in Renalytix AI is 23 October and the shares will start trading on 2 November.
Nexus Infrastructure (NEXS) expects 2017-18 profit to be in line with expectations and order books are strong. Infrastructure services provider Tamdown’s revenues will be slightly lower due to planning delays with the growth coming from utility connections business TriConnex. Net cash is £20m.
RA International (RAI) has won a $9.1m contract with URS Group Inc. This is a new client. The contract covers construction services for an asphalt runway in Somalia and lasts for 11 months.
Data analysis software and services provider D4T4 Solutions (D4T4) trebled its interim revenues to £14m, although the comparatives were weak. Net cash is £12.2m.
Gfinity (GFIN) is raising £6m at 8p a share and this cash will further develop the esports activities and the UK Elite series. The 2017-18 revenues were 82% ahead at £4.3m and losses continue.
Angling Direct (ANG) is taking advantage of its strong position in the fishing tackle retail market by raising £20m at 92.5p a share, which compares to the July 2017 flotation price of 64p a share. The cash will finance the opening of 20 stores and the launch of European websites. This accelerated investment means that Angling Direct will fall into loss this year.
Velocity Composites (VEL) has managed to trade in line with downgraded forecasts for the year to October 2018. Revenues will be slightly above £24m and there is net cash of £3.6m. The company is seeking a new chief executive and the former incumbent has left the board.
The cancellation of a contract and the failure to gain backing for an acquisition have hampered the progress of Image Scan Holdings (IGE) in the year to September 2018. Revenues fell from £5m to £3.5m, although the gross margin improved from 39% to 48%. Pre-exceptional profit will slump from £480,000 to £45,000. That was before the £245,000 cost of the failed acquisition. There was £780,000 in the bank at the end of September 2018. Sarah Atwell-King has been appointed finance director.
VR Education (VRE) has been hit by the delayed launch of its Titanic VR product on PlayStation. This should still happen this year, but 2018 revenues will be well below expectations. The timing of the launch will determine the outcome for the year. The ENGAGE platform will be launched before the end of the year as anticipated. Non-executive director Mike Boyce is helping out with sales.
SkinBioTherapeutics (SBTX) increased its research and development spending from £157,000 to £416,000 in the year to June 2018. The cosmetic application has started a human study and data should be available between November and April 2019. A clinical trial for an eczema treatment could start before the end of 2019. There was £3.2m in cash at the end of June 2018.
Rare books trader Scholium (SCHO) says it will move into loss in the first half, but it expects to make a higher full year profit than the £38,000 reported last year. Start-up Mayfair Philatelics is losing money but three auctions are taking place in the second half.
AfriTin Mining Ltd (ATM) is making progress towards production at its Uis tin project in Namibia. The first phase plant being constructed will be able to process 500,000 tonnes of pegmatite in order to produce 720 tonnes of tin concentrate a year. AfriTin has the cash required to reach production.
A strong performance from manned guarding meant that Croma Security Solutions (CSSG) increased its full year revenues by 59% to £35.1m and pre-tax profit was 400% higher at £2m. There were some one-off boosts during the year. Net cash was £2.1m. The dividend has been increased from 0.5p a share to 1.6p a share.
Property investment adviser First Property Group (FPO) has reduced its stake in Fprop Opportunities to 44.3% so it will no longer be consolidated in the group’s results. The plan is to lower the stake to below 30%. Fund management will be a greater contributor to profit.
More cash is required at meat and delicatessen products retailer Crawshaw (CRAW) for restructuring purposes and it also still needs a new nominated adviser.
Kemin Resources (KEM) will leave AIM on 29 October because it has not been able to find a replacement for Strand Hanson as nominated adviser. JP Jenkins Ltd will provide a trading facility.
OnTheMarket (OTMP) has signed up Belvoir Lettings (BLV) to its online platform. All Belvoir’s sales and lettings properties will be on the platform.
StatPro Group (SOG) says annualised recurring income has increased by 3% to £54.8m.
MAIN MARKET
Communisis (CMS) is recommending a 71p a share cash offer by consumer communications services provider OSG, which values the target at £153.8m. The combined business would be able to develop internationally because of OSG’s global strength.
WideCells Group (WDC) has signed a partnership deal with stem cell extraction and storage company Smart Cells. The deal is with the healthcare insurance subsidiary CellPlan, whose insurance plans will be offered to Smart Cells’ 60,000 clients.
Hemogenyx Pharma (HEMO) has signed a second agreement with US biopharma company Orgenesis Inc. The deal involves the development and commercialisation of the company’s Human Postnatal Hemogenic Endothelial Cell (Hu-PHEC) technology, which could develop cancer-free, patient-matched blood stem cells after transplantation into a patient. Like the previous agreement, Orgenesis will provide a convertible loan of $1m and this can be converted into shares in the Hemogenyx subsidiary that owns the technology. Orgenesis will pay a 12% royalty on net revenues generated by the technology.
North Midland Construction (NMD) says that full year revenues will be better than anticipated at between £340m and £345m, with net margins between 1.7% to 1.8%. The order book for delivery in 2019 is £222m. A new single identity for the group will be launched in November. HR director Karen Morris has bought 8,172 shares at 550p each.
Andrew Hore – Quoted Micro 9 July 2018
NEX EXCHANGE
Ananda Developments (ANA) joined NEX on 4 July having raised £930,000 at 0.45p a share. Ananda is the latest medicinal cannabis-focused investment vehicle. The pre-money valuation was £500,000 There are already potential investments being assessed and management has built up relationships with businesses in Israel and Canada. A reverse takeover valued at up to £10m appears most likely.
Medicinal cannabis business investor Sativa Investments (SATI) has acquired PhytoVista Laboratories from a company owned by Sativa boss Geremy Thomas. Sativa is paying £235,000 in cash and £200,000 in shares at 4p a share. PhytoVista operates a laboratory that tests cannabis oils and hemp products. Because of the demand for the shares, the shareholders originally subject to the orderly market arrangements will be allowed to trade in the shares with the consent of Peterhouse.
KR1 (KR1) has made four more investments. The company invested £593,000 in Dfinity network tokens. Dfinity is developing a supercomputer to host the next generation of software and it is expected to offer unlimited capacity. A further £100,000 has been invested in the Flying Carpet Project, which is involved with a communication protocol for devices, such as drones and automated cars. The number of tokens that the cash will represent has not been decided. A 1.25% stake has been acquired in Connext Inc, which is developing a payment hub, for $50,000 and the same amount of money has acquired a 10% stake in Blocksmith. There is a 12-month option to acquire a further 5% of blockchain system development agency Blocksmith for $100,000
Ace Liberty and Stone (ALSP) has increased its dividend by 25% to 1.25p a share. The shares go ex-dividend on 12 July. This will cost £500,000. Property acquisitions have been completed in Oldham and Wigan. The total cost is £6.4m and the rental income is just over £597,000.
Monreal (MORE) has left AIM and joined NEX. Monreal has net cash of £730,000 and the plan is to invest in private technology, media and telecoms businesses.
Tectonic Gold (TTAU) has received a refund of €289,000 (£256,000) from the French tax authorities. This relates to the 2009 tax year and Tectonic hopes to get a €416,000 (£368,500) refund for the 2010 tax year. VSA Capital has been appointed as financial adviser and joint broker.
Ganapati (GANP) is launching blockchain-enabled casino games and plans to issue a utility token, which will be called G eight C, through an initial coin offer. Pre-sales of the tokens should start in the fourth quarter of 2018.
EcoVista (EVTP) has raised £300,000 at 0.035p a share.
There have been previously unreported trades by a broker in Karoo Energy (KEP), All Star Minerals (ASMO), Valiant Investments (VALP) and Clean Invest Africa (CIA).
AIM
Film and video localisation services provider Zoo Digital (ZOO) continues to gain momentum. Content owners can sell programmes in additional territories because using Zoo’s services means that it is economic when it was not in the past. That means that the addressable market is even bigger because it includes back catalogue that would not have been localised previously. In the year to March 2018, revenues rose from $16.5m to $26.8m and Zoo moved into profit. That pre-tax profit is expected to more than treble to $1.8m this year.
eve Sleep (EVE) is growing but not at the rate that was hoped for and the chief executive and founder has stepped down. That was inevitable considering the ridiculously high valuation put on the company when it floated and how it has not justified that level of optimism. The mattress supplier grew sales by 61% in the first half when the market had expected more than doubled sales. A new distribution agreement with beds retailer Dreams should help supplement growth in the second half. Even so, eve Sleep is not expected to make a profit until 2020.
Sinclair Pharma (SPH) has received a bid approach from Huadong Medicine and discussions are at an early stage. Both companies supply aesthetic products. Sinclair says first half revenues outside of the US grew by 18% and overall sales improved from £20.1m to £21.3m. US sales fell from £2.5m to £800,000 following the split from the company’s former partner. The direct sales operation in the US is beginning to generate revenues. Net debt was £14.8m at the end of June 2018.
Integumen (SKIN) is not proceeding with the reverse takeover of biomaterials company Cellulac but it hopes to acquire a minority stake. The 2017 accounts have still not been published.
Digital imaging technology developer Kromek (KMK) increased its revenues by nearly one-third to £11.8m in the year to March 2018 and the loss was down from £3.79m to £2.34m. There is £7.7m in the bank and that should be enough to enable Kromek to reach a cash generative situation. The medical business is growing particularly well, while nuclear detection has good prospects for medium-term growth.
Telematics firm Quartix (QTX) reported first half revenues grew by nearly 10% and flat profit. Insurance business is declining because of competitive pricing so all the growth is coming from overseas fleet business. Full year earnings per share are likely to be flat. The forecast dividend of 13.5p a share would not be covered by earnings of 12.8p a share.
Defence equipment and services supplier Cohort (CHRT) managed to improve its pre-tax profit from £14.5m to £15.5m even though the defence market was tough. Management believes that the order book has fallen due to delays to projects. The dividend was raised from 7.1p a share to 8.2p a share.
Technology business investor Mercia Technologies (MERC) reported flat NAV of 40.7p a share but it has a number of investments that could mature over the next couple of years and their valuations could be upgraded. Mercia nearly covered its expenses with its revenues. There is still £52.9m of cash that can be invested.
Waste to energy plants developer Powerhouse Energy (PHE) has raised £694,000 at 0.5p a share. Powerhouse had £750,000 in the bank at the end of 2017 but there are still significant cash outflows.
Direct carrier billing company Boku Inc (BOKU) appears on course to make a £2.7m pre-tax profit this year. Boku processed $1.5bn worth of transactions in the first half and revenues should be nearly $17m. There was $30m in the bank at the end of June 2018.
Churchill China (CHH) says that first half trading is stronger than expected on the back of growing sales in Europe. The interims will be published on 30 August.
EQTEC (EQT) has secured $3.2m (£2.4m) in new loan facilities from Cuart Investments Fund and associates. This will be drawn down in two instalments. Origen Capital put together the lenders and it is subscribing £1.15m at 0.6p a share. Existing lenders have agreed to capitalise £693,000 of interest. This means that the previous loan facility has ended.
MAIN MARKET
Shefa Yamim (SEFA) has made a high grade spinel discovery. The northern Israel-focused gemstone explorer has found nine different gemstone minerals.
Software company Gresham Technologies (GHT) is paying up to €8.5m for B2 Group, which will add €1.4m in revenues and should be earnings enhancing in its first full financial year. The customer base includes banks, insurers and asset managers. Gresham expects its own first half revenues to be 5% lower due to a weak performance in Australia. Net cash was £6.8m at the end of June 2018.
Electronic Data Processing (EDP) has recommended a bid from a company owned by Kerridge Commercial Systems. The cash offer is 91p a share and values the enterprise resource planning software provider at £11.9m.
Andrew Hore
Andrew Hore – Quoted Micro 29 January 2018
NEX EXCHANGE
Hydro Hotel, Eastbourne (HYDP) generated a 10% increase in turnover to £3.52m, but there was a decline in pre-tax profit from £224,000 to £156,000 in the year to October 2017. This is blamed on the increase in the minimum wage and the fact that more bookings are coming from online travel agents. The total dividend was unchanged at 21p a share. There is £1m in the bank. The public rooms’ refurbishment is complete and the hotel has gained 4* status. Exterior repair work and bedroom refurbishments continue.
Coinsilium Group Ltd (COIN) has launched a private fund for digital tokens. The Gibraltar-based fund will hold tokens issued to Coinsilium. The value of the digital tokens received in 2017 is $822,000. If digital tokens that will be received over the coming two years are included the total value is $5.34m. The advisory business has advised on four token issues and there are four more to be completed.
Capital for Colleagues (CFCP) says that its investee company Cotswold Valves has acquired Flow Capital Company Ltd. Capital for Colleagues has made a working capital loan of £300,000, on top of an existing £50,000 loan. Capital for Colleagues also owns 49% of Cotswold Valves.
Ganapati (GANP) says that its slot game Pikotaro’s Pineapple Pen has been selected as one of the ten finalists at the Global Gaming Awards. The result will be announced on 5 February.
Globe Capital (GCAP) has raised £100,000 from a 6% convertible loan note. The conversion price is 0.5p a share.
AIM
MayAir Group (MAYA) is recommending a 120p a share cash bid from Poly Glorious, which is ultimately owned by Jiang Li. That is below the 130p a share floatation price less than three years ago. The air purification equipment manufacturer is valued at £50.4m. The current chief executive and other management are taking shares in the acquisition vehicle, which is already involved in air conditioning industry in China. MayAir has been hit by increased competition.
Learning Technologies Group (LTG) reports that 2017 profit and cash was much better than forecast. Pre-tax profit is set to more than double to £13m and net cash was £1m. The e-learning business appears to have made good progress integrating NetDimensions and it is assessing other international acquisitions.
The decline in underlying profit at compliance and energy services provider Lakehouse (LAKE) was slightly lower than expected. There was still a fall from £7.5m to £5.5m and a cut in dividend from 1.5p a share to 0.5p a share. Net debt was £1.3m but there might be additional working capital requirements this year. Profit is on course to recover this year but dividend expectations have been downgraded. Property services and construction remain the weaker parts of the business but the core operations are growing.
MYCELX Technologies (MYX) says that orders from Saudi Arabian chemicals company SABIC boosted 2017 revenues. These revenues were generated late in the year. This has increased estimates by 20% to 30%. This means MYCELX will be cash flow positive. This year’s revenues should at least be maintained at 2017 levels.
Castleton Technology (CTP) has won two contracts, one of which is a renewal with Places for People, worth £1.2m and both incorporate a range of the modules provided by the housing association-focused business.
Composite materials supplier Velocity Composites (VEL) sparked a 2017-18 earnings per share downgrade from 8.5p to 5.5p following its 2016-17 figures. This is due to cost increases with the concomitant revenues not set to show through for another year at least.
Ideagen (IDEA) grew revenues by 43% to £17.2m in the six months to September 2017. The document control and compliance software supplier is on course to increase full year profit from £6.9m to £9.7m. Recurring revenues generated 63% of total interim revenues.
MAIN MARKET
Blockchain Worldwide (BLOC), the renamed Stapleton Capital, has changed its investing strategy to cover the blockchain technology industry. Management claims to have already seen a number of exciting blockchain opportunities.
Standard list cash shell Derriston Capital (DERR) still had £2.17m in cash at the end of 2017. Derriston has been seeking an acquisition for more than one year but it has not yet identified a suitable target.
Avocet Mining (AVM) has delayed completion of the sale of Resolute (West Africa) for a further five days to 30 January.
Andrew Hore
Andrew Hore – Quoted Micro 4 December 2017
NEX EXCHANGE
VI Mining is planning to join NEX this month. The Peru-focused miner is acquiring two gold mining assets in tandem with the flotation. VI will raise up to £10m in cash at 500p a share and issue a further £10m worth of shares as part of the initial payment, along with some of the cash, for the two mining assets at Rosario and Minaspampa. VI has debt facilities in place. There is a capital expenditure and working capital commitment of £30m for Minaspampa and the mine could be in operation by next August. Rosario requires £15m of capital spending and working capital and already has licences and infrastructure. Annual gold production of 83,720 ounces from the two mines could yield a $43.5m annual profit based on a $1,300/ounce gold price. That is expected to be the initial production and it could end up quadruple that level. Two tolling projects could also generate cash for the group and the first could be up and running in a few months time. VI would be valued at £535m at the flotation price. This is backed up by a Daniel Stewart estimated valuation of £557.8m. The board will retain 73% of the company. The plan is to move to the Main Market in 12 months or so. The free float will need to be increased in order for it to be at least 25% when the move is made.
NQ Minerals (NQMI) has published the competent person report on the Hellyer gold project in Tasmania. This indicates that the project has a NPV of $113.2m. The processing facilities are being refurbished and operations are expected to commence in 2018 following the approval of the environmental management plan.
Coinsilium Group Ltd (COIN) has acquired a 30% stake in Startup Token, which provides advice to start-ups undertaking token offerings. Coinsilium is paying £361,000 in cash and shares at 8.5p each. Coinsilium is also providing a six month loan of $100,000 that can be converted into a further 6.4% of Gibraltar-registered Startup Token.
IMC Exploration (IMCP) has started drilling on PL 3729 in County Clare, which adjoins the Kilbricken zinc deposit. A feasibility study has commenced on PL 3850 in County Wicklow. IMC’s partner Koza has completed an exploration targeting report on other licences and prioritised further exploration.
Ganapati (GANP) has agreed to supply online games to Bethard Group. Ganapati will initially supply eight games and then one each month.
Hearing and mobility products retailer DHAIS (DHAP) has delayed its figures for the year to June 2017 because it wants to ensure it has support from its main funder.
Welney (WENP) had a cash outflow of £19,000 in the year to June 2917 and most of that was covered by loans from related parties and a further £11,000 has been loaned since the year end. These loans will not be called in for at least 12 months. Net liabilities are £197,000. The board is assessing potential deals.
African Potash (AFPO) has entered into a joint venture with SG Inc to develop fertiliser opportunities in the Republic of Congo. A blockchain joint venture has also been announced with FinComEco Ltd and this will develop platforms for agricultural markets in Africa. There is a plan to offer microloans to farmers. The company intends to change its name to Block Commodities Ltd.
Forbes Ventures (FOR)
AIM
Pebble Beach Systems (PEB) continues to underperform and it is not likely to get the $1.75m it is still owed by xG Technology for the sale of Vislink. The broadcast software supplier requires its banks support and needs to appoint a new management team. Talks with potential bidders did not yield an offer. This year’s revenues will be slightly lower than last year
Versarien (VRS) has a strong balance sheet after the recent fundraising and it is generating interest for its Nanene graphene product. The carbide business has won a significant aerospace order. The 167% growth in revenues to £4.38m in the first half was mainly down to the acquisition of a plastics business. A US sales office has been established.
Mortice (MORT) reported strong revenue growth but cost pressures on a particular contract held back profit. The security and facilities management business reported a 17% rise in first half revenues to $106.3m. The contract is being sorted out and house broker finnCap still expects full year profit to improve from $5.4m to $7m.
Anti-microbial drugs developer Destiny Pharma (DEST) has secured a deal with former AIM company China Medical Systems Holdings Ltd (CMS), which is now listed in Hong Kong, for a £3m cash injection into the company and a strategic partnership that gives CMS rights to Destiny’s drug candidates pipeline in China and some other Asian countries. CMS will carry out research and development and the commercialisation of any drugs in its territories. Destiny will make a margin on manufacturing products and receive payments based on sales milestones.
Tri-Star Resources (TSTR) is investing a further $6m in its Oman joint venture. This is in the form of a mezzanine loan to the company where Tri-Star has a 40% stake. The interest rate is 15% and payable on redemption – the loan term is five years. The cash will help to finance the development of the antinomy roaster in Oman. The capital budget was recently increased to $96m.
Recruitment has started for a pharmacokinetic study into the Futura Medical (FUM) erectile dysfunction treatment, MED2002. This will help to determine dosages for a phase III study. The UK and Netherlands regulatory agencies have been supportive concerning a possible switch from prescription to over the counter.
Veltyco (VLTY) has yet again announced that its figures will be better than forecast. The online gaming marketing business says that profit is likely to be much higher than expected.
ECSC Group (ECSC) is the perfect example of how a share price can get carried away on the back of general news. The share price is one-quarter its peak after publicity about cyber security and hacking. Trading is in line with previously reduced expectations following cost cutting and the securing of two managed services contracts.
Belluscura has pulled its flotation after failing to gain the EIS/VCT approvals in time and because it could not get the valuation it wanted.
The founder of Focusrite (TUNE) and a relation have sold eight million shares at 315p a share. They still retain a 38.3% stake in the audio equipment supplier.
Active Energy Group (AEG) expects its Utah-based Coal Switch plant to be completed this month. The production capacity is five tonnes of the coal replacement fuel per hour. Once the plant is up and running and proves the viability of the process there should be other plants built in 2018. The plant is modular so it is easy to increase capacity.
Trading in the shares of Graphene NanoChem (GRPH) has been suspended ahead of the proposed acquisition of CG TekBuild, which is involved in modular buildings. The deal is dependent on £18.2m of debt being converted into shares. The proceeds of the sale of non-core activities will be used to pay other creditors. The company believes the acquisition will help it to apply it graphene technology in building materials.
ITM Power (ITM) has £20.2m of projects under contract and a further £22.4m in negotiation. The figure under contract is similar to two months ago but the under negotiations figure is one-third higher.
Defence and petrol stations structures supplier MS International (MSI) reported sharply increased interim profit from £610,000 to £1.64m as revenues increased by two-fifths to £34.6m. Net cash is £14.5m. Most of the growth came from the petrol station branding business and this more than offset the decline in profit from defence. The interim dividend was increased from 1.5p a share to 1.75p a share.
Precision optical components supplier Gooch and Housego (GHH) reported slightly better than expected full year figures. Revenues were 30% ahead at £112m and underlying pre-tax profit improved from £14.2m to £16.1m. Acquisitions helped to fuel significant growth in aerospace and defence. There was also increased demand from the subsea telecoms market and other industrial applications. The life sciences division still needs bulking up.
Timber supplier James Latham (LTHM) reported a 7% increase in interim revenues to £107.3m but a decline in margins meant that pre-tax profit was 12% lower at £6.7m. The interim dividend was unchanged at 4.5p a share and net cash declined to £11.6m due to capital spending. The pension deficit has fallen from £16.6m to £8.5m. A slight fall in full year profit to £13.4m is expected.
MAIN MARKET
Ingredients supplier Treatt (TET) is raising £21.6m at 410p a share to speed up its growth in the US and finance the relocation of facilities in the UK. The new facility will help to improve efficiency. In the year to September 2017, revenues were one-quarter higher at £109.6m and pre-tax profit improved by 46% to £12.9m.
Torotrak (TRK) has been unable to secure the finance it requires. The vehicle technology developer is considering selling its technology and IP or it may have to appoint an administrator.
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 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
Quoted Micro 3 July 2017
NEX EXCHANGE
A 40%-owned subsidiary of food and logistics company AfriAg Global (AFRI) has signed a deal with LGC Capital, which is quoted on TSX and acquired former NEX-quoted Leni Gas Cuba but it is no longer purely focused on Cuba, to create a 50/50 joint venture to grow and distribute medical and recreational cannabis products in southern Africa. David Lenigas is a director of both companies.
MetalNRG (MNRG) has obtained the right to acquire 100% of exploration licence applications, which are known as the Palomino cobalt project in Western Australia, in return for A$15,000 and one million MetalNRG shares at 1.5p each. Once the licences are granted a further two million MetalNRG shares will be issued. MetalNRG has formed a cobalt business. The cobalt price has moved from $24,000/t to $59,000/t in the past year.
Kryptonite1 (KR1) has invested £384,000 in 73,272,717 FunFair tokens. FunFair enables anyone to launch a blockchain casino. The company has also invested £83,416 in 46,860 Bancor tokens. Instead of an intermediary matching trades, Bancor tokens use automatically executed rules to do the matching.
Block Energy (BLOK) has successfully acquired up to 75% working interest in permit XIf, West Rustavi 12km from Tiblisi in Georgia, from Gerogia Oil and Gas. A $100,000 cash payment will be made for a 5% interest with a further 20% interest costing $500,000 in cash and $1m in shares and it is dependent on a move to AIM. Once the AIM flotation happens, a further $1m payable in three tranches will pay for a further 25% interest. The remaining 25% will be earned by a commitment to a side-track in two specified wells. Further bonus payments totalling $1.25m in cash or shares are payable depending on the achievement of milestones. Block is raising £90,000 at 0.85p a share and £210,000 via a convertible loan and this will finance a competent persons report on the Rustavi block.
Management believes that social media and consumer games apps developer Ganapati (GANP) could move into profit in two years. Ganapati improved revenues from £2.3m to £3.27m in the year to January 2017. The loss increased from £7.47m to £8.73m because of higher costs and interest charges. There was £2.38m in the bank at the end of January 2017.
Via Developments (VIA1) plans to issue up to $4m of 7% debenture stock 2020 with the first tranche expected to be £100,000.
NQ Minerals (NQMI) has appointed Bedford Row Capital Advisers to raise up to £25m through an asset-backed bond. The cash will be used to refinance existing borrowings and to refurbish plant and equipment to enable production at its mine in Australia.
AIM
Robotic software supplier Blue Prism (PRSM) continues to outstrip growth expectations. In the six months to April 2017, revenues increased by 133% to £9.3m but the loss jumped from £1.94m to £3.11m as Blue Prism invests in growing the business. The current run-rate of revenues is £1.72m/month. There was still £10.6m in the bank.
Jangada Mines (JAN) has one of South America’s largest potential platinum group metals projects and it has floated on AIM. There is the prospect of a low cost open pit mine. Previous explorers have already invested more than $35m in developing the potential mine. An updated resource inventory is expected before the end of the year.
Phoenix Global Mining Ltd (PGM) has joined AIM and raised £4.6m at 1p a share, which doubles the shares in issue. British Virgin Islands-based Phoenix (www.pgmining.com) has an option to acquire 80% of the ExGen Resources Inc subsidiary Konnex, which holds the leases to the Empire mine project in Idaho. The plan is to mine 7,000 tonnes of copper a year from an opencast pit with a downstream plant extracting gold and silver. Pre-feasibility study work is already underway.
Bricks maker Michelmersh Brick (MBH) is acquiring Barnsley-based Carlton Main Brickworks for £31.2m. This will increase Michelmersh’s output by 40% to 100 million bricks a year. The acquisition will be significantly earnings enhancing this year. The Dunton brickworks is being sold for £2.68m.
TLA Worldwide (TLA) timewatch: TLA announced that trading its shares was suspended at 2pm on Thursday 29 June. TLA, which is best known for publishing a profit warning at 6.26pm on 23 December 2016, has not been able to complete the auditing and publishing of its accounts by the end of June.
Kromek Group (KMK) has already got the vast majority of its forecast revenues in its existing order book and it is set to reduce its loss this year. Revenues from medical, nuclear and security markets are forecast to grow from £9m to £12.5m and the loss should fall from £3.8m to £2.9m. There is plenty of cash in the bank to cover losses as Kromek moves towards profit.
Niche pharmaceuticals supplier Quantum Pharma (QP.) has sold its non-core biodose services for an initial £1.75m. More importantly this means that the low margin medical adherence division no longer exits and Quantum can focus on the core operations.
Strategic Minerals (SML) says that its Central Australian Rare Earths (CARE) subsidiary plans a three stage exploration programme with stage one including 40-50 drill holes totalling 2,000 metres. This will focus on cobalt and nickel laterites. The second phase will focus on deeper nickel sulphide deposits. Stage three is the sampling of soil for signs of rare earths. This is all fully funded from existing cash and cash to be generated from the tailings operation in the US.
Zoo Digital (ZOO) grew revenues from $11.6m to $16.5m in the year to March 2017. There was an unusually strong second half and Zoo almost broke even compared with a loss of $1.6m the previous year. Demand for localisation services from the likes of Netflix is expanding Zoo’s market and making it less dependent on its main customer. The recent fundraising and loan conversion has significantly reduced debt and net debt is forecast to be less than $1m at the end of March 2018. A small profit is expected this year.
Savannah Resources (SAV) says that metallurgical test work at its lithium project in Portugal demonstrates that a high-grade, low iron spodumene concentrate can be produced. This would be suitable for lithium batteries.
Fairpoint (FRP) says that it will not be able to publish its accounts before the end of June and trading in the shares has been suspended.
MAIN MARKET
Hipgnosis Songs Fund Ltd says that an institutional investor has agreed to subscribe for 20% of the fund which intends to invest in songs and music rights. The offer closes on 5 July. The fund has been set up by Merck Mercuriadis, who has decades of experience in the music industry, particularly managing parts of Sanctuary Group. Former AIM-quoted Sanctuary ran into problems with its accounts when it was quoted and was eventually taken over.
Nanoco Group (NANO) has received its first commercial order for the supply of CFQD resin to Wah Hong Industrial, which manufactures optical films and sheets for displays. The resin will be used to supply films to a manufacturer of TV and monitor products.
Aircraft leasing company Avation (AVAP) has declared an interim dividend of 6 cents a share, up from 3.25 cents a share. The ex-dividend date is 20 July. Revenues for the year to June 2017 are expected to be $94m.
Andrew Hore
Quoted Micro 5 June 2017
NEX EXCHANGE
National Milk Records (NMRP) is raising £7.33m at 65p a share in order to help finance the withdrawal from the Milk Pension Fund. Like Genus, National Milk Records was part of the Milk Marketing Board and that is why it has part responsibility for the Milk Pension Fund. There will be a one-off contribution of £10.1m to the fund and £4.68m will be paid in cash and shares to Genus. National Milk Records is also selling its loss-making generic products reseller Inimex to Genus for a nominal amount and entering a collaboration agreement with the animal genetics company. There would be a requirement to finance the fund up until 2076 if the deal does not go ahead. A New Zealand-based farmer cooperative and Singapore-based fund manager Working Capital Management are among the investors subscribing for the shares.
Contemporary art collector and workspace provider V22 (V22O) moved into profit in 2016. The £1m profit was helped by a £225,000 gain on the sale of half of the option to acquire part of the freehold of its Peckham building and a £225,000 notional gain on the remaining option. There was also other operating income of £621,000. Stripping these items out, there would have been a slightly higher loss. Revenues grew from £822,000 to £1.24m. There was £64,000 in the bank at the end of 2016. NAV, including a valuation of the art portfolio, is 7.31p a share. Demand for studio space is strong at a time when it is become less affordable. This puts V22 in a strong position. V22 has agreed a ten year lease on premises in Shoreditch and is the preferred bidder for a 125 year lease on The Priory in Orpington.
Blockchain-focused investment company Coinsilium Group Ltd (COIN) has raised £250,000 at 2.2p a share to finance further investments. In 2016, Coinsilium increased revenues from £12,000 to £209,000. There was a total loss of £738,000, including a £317,000 loss on disposals and investment impairments of £160,000 – admittedly down from £1.31m the previous year. The NAV was £1.43m at the end of 2016.
Kryptonite 1 (KR1) is also seeking blockchain investments. This includes subscribing for shares in Satoshipay. It has also invested in five initial token offerings and three of them are already being traded and have performed well.
London Nusantara Plantations (PALM) is selling its stake in Next Oasis for £124,000. This was in the 2016 balance sheet at a valuation of £112,000 and the proceeds will boost the 2016 cash pile from £83,000. London Nusantara has been quoted for three years and it is still seeking to acquire plantation assets and it has widened its geographic search to Indonesia, as well as considering the palm oil mill sector and generating income from oil palm waste.
Early Equity (EEQP) has signed a memorandum of understanding with Malaysian multi-level marketing business Early Infinity, which has a distribution agreement with healthcare products supplier Yicom, where Early Equity owns 32.1%. The plan is for Early Equity to buy up to 30% of Early Infinity. Trading in Early Equity shares has been suspended.
Ganapati (GANP) has obtained a class 4 gaming licence in Malta and this should widen the potential market for its games. A tech office has been set up in Romania.
Halal services provider DagangHalal (DGHL) has raised £3.1m at 26.5p a share and this will leave managing director Francis Chong with a 29.9% stake. Revenues fell last year and there were significant asset write downs.
Middle East-focused investment company Indigo Holdings (INGO) had £906,000 in the bank at the end of 2016 and it raised £818,000 in February. Around £650,000 of that cash has been invested in three companies.
Restructuring and slow LED product sales meant that Gowin New Energy Group Ltd (GWIN) reported a slump in revenues from RMB652,000 to RMB28,000, while the loss was RMB6.94m. There is RMB2.08m of cash in the bank but there is more than that figure in shareholder loans because of the significant cash outflow during the year.
MiLOC Group Ltd (ML.P) increased its revenues from HK$8.31m to HK$10.9m in 2016 and the loss fell from HK$17.1m to HK$11.5m. The company’s clinics and traditional Chinese medicines generate the revenues and the TCM PLUS skincare products are expected to make a substantial contribution in the future. Last year, there was a large one-off cost relating to TCM PLUS. A hair care range is planned.
Equatorial Mining & Exploration (EM.P) intends to apply for a small scale mining lease for a coal mining prospect in Nigeria. Equatorial lost £1.55m in 2016 but £1.24m of this was a non-cash share-based payment charge. The cash outflow from operations was £383,000. Brett Clark has stepped down from the board following the failure to secure the acquisition of a Mexican gold project.
Healthcare staff provider Healthperm Resourcing Ltd (HPR) reported a £3.1m loss on revenues of £2,000 for 2016 but the business should generate more significant revenues this year. Steve Howson has become chief executive, while the former incumbent David Sumner became non-executive co-chairman. Two groups of overseas recruits have started work in the UK.
Ecovista (EVTP) has raised £470,000 via an issue of convertible loan notes. The conversion price is 0.05p a share. Any loan notes not converted will be repayable on 30 May 2018. Ace Liberty and Stone (ALSP) has raised £64,500 from a placing at 75p a share with most of the shares bought by Bijan Daneshmand, thereby taking his stake to 5.16%.
NQ Minerals (NQMI) lost £2.39m in 2016 but this was before the acquisition of the Hellyer gold mine in Tasmania. The main asset of All Star Minerals (ASMO) is its stake in NQ Minerals. This stake was valued at £414,000 at the end of 2016. The 2016 loss was £187,000, including a £28,000 write down in the NQ Minerals stake.
AIM
Touchstone Innovations (IVO), the former Imperial Innovations, has rejected the bid from rival University-focused technology businesses developer IP Group. The initial approach was made in April and some major shareholders were keen to pursue the merger. The main problems concerned valuation and corporate governance.
It does not appear that Tanfield Group (TAN) is going to be able to sell its 49% stake in access platforms manufacturer Snorkel in the near future because it continues to lose money. The value of the stake in the books is £36.3m – equivalent to 23.2p a share. This value can be achieved if Snorkel makes an annualised trailing EBITDA of $25m in any 12 month period up until September 2018. However, Snorkel is losing money and after September 2018 there is no fixed amount that Tanfield would receive if it sold its stake. Jon Pither has stepped down from the Tanfield board.
Acoustic insulation manufacturer Autins Group (AUTG) has appointed Michael Jennings as chief executive. He has been interim chief executive since February. Interim figures will be published on 13 June.
Draganfly Investments (DRG) has appointed mining engineer Luke Bryan as executive chairman. Edward Bayman will step down as chairman but continue on the board.
Hostels operator Safestay (SSTY) is planning to buy three hostels from Equity Point. The hostels are in Barcelona, Prague and Lisbon and they generate revenues of €1.6m. Safestay is loaning €3.6m to Equity Point and the plan is to swap the hostels for this debt.
Stanley Gibbons Ltd (SGI) has sold its 25% stake in Masterpiece London for £1.4m. The stake was valued in the books at £6,000. This is part of the strategy to focus on stamps and coins.
A general meeting has been requisitioned at Magnolia Petroleum (MAGP) in order to make changes to the board. At the end of May, Nostra Terra Oil & Gas (NTOG) acquired a 10.9% stake in Magnolia from former chief executive Steven Snead but the requisitioner has not been named.
Adams (ADA) has launched an underwritten one-for-one open offer to raise £1.03m at 2.5p a share. The investment focus is the technology and life sciences sectors. Richard Griffiths, who owns 29.9% of Adams, is underwriting the open offer. The announcement says that Adams has four AIM-quoted investments but only one of the companies mentioned, Oxford Pharmascience, is on AIM the others are fully listed.
TLA Worldwide (TLA), which published a profit warning at 6.26pm on 23 December 2016, thinks that it will be able to report its 2016 figures on 30 June. It will need to do this or trading in the shares will be suspended. TLA has warned that it will have to write-off some of the money owed to it.
Pembridge Resources (PERE) plans to move from AIM to the more lightly regulated standard listing. This will enable it to be more flexible in what it invests in and the level of stakes that it acquires. The main hurdle for a standard listing is getting the prospectus approved by the UKLA. Once that is done companies do not have the level of regulation they would if they were on AIM.
MAIN MARKET
Second half trading has been strong for car manuals publisher Haynes Publishing (HYNS). Pre-tax profit is expected to be two-fifths higher than last year. Haynes has benefited from lowering its costs and positive exchange rate movements. The new Haynes OnDemand video service will be launched this year but there will be a write down of the costs of the previous platform in the 2016-17 figures. The full year figures will be published on 13 September.
Telecoms services provider Toople (TOOP) is trying to raise up to £2m because it is running short of cash. Members of the PrimaryBid crowdfunding platform have been offered the chance to subscribe for shares at 2p each. A minimum of £1m needs to be raised. Even if the maximum is raised then the cash is unlikely to last long unless the cash outflow is stemmed in the near future.
Acorn Growth has changed its name to Vordere (VOR). This follows the proposed acquisition of German properties, which will be paid for by a share issue at 17p each. The shell company was originally known as Acorn Minerals when it joined the standard list at a placing price of 20p a share in October 2012.
Andrew Hore
Quoted Micro 21 November 2016
ISDX
Crossword Cybersecurity (CCS) has raised £1.4m via a placing and subscription at 190p a share – the same as the current bid price – and the cash will be invested in sales and marketing and further cyber security product development. There was £668,000 in the bank at the end of June 2016. Chief executive Thomas Ilube subscribed for 132,103 shares but his holding has been diluted from 52.6% to 44.4%.
Brewer Daniel Thwaites (THW) made a small loss in the six months to September 2016 due to the impact of a loss on interest rate swaps of £5.7m due to the fall in sterling but the underlying business is still highly profitable. A 5% increase in revenues to £44m led to an improvement in operating profit from continuing operations from £7m to £7.4m. Investment in hotels and bars has offset the effect of the national living wage. However, the loss on interest rate swaps meant that a previous interim profit of £5.7m was turned into a loss of £300,000. An unchanged interim dividend of 1.1p a share was announced. Net debt was £34.9m at the end of September 2016 and more capital investment is planned. There are ongoing plans to relocate the brewery and offices and this should be completed in 2018. Thwaites has been named as preferred partner to redevelop Dee House, a grade II listed Georgian building, in Chester.
AIM cash shell Tengri Resources (TEN) has joined the ISDX Growth Market. The AIM quotation will be retained and it is seeking a technology acquisition. Tengri has paid Robust Resources $200,000 in cash, 4.3 million shares and sold Robust its shareholding in gold explorer Prospech in return for the relinquishment of a loan of $1.02m. Tengri has raised £650,000 from an issue of convertible loan stock – which would be equivalent to 65.5% of Tengri if converted – having previously raised £100,000 from a share issue at 5p a share. A general meeting is planned to reorganise the company’s capital and change the name of the company to Forbes Ventures – the ticker will be changed to FOR. The share price was 1p prior to joining ISDX and it ended the week at 2p (1.5p/2.5p).
Ganapati (GANP), the developer of apps for social media and games, has clarified the bonds it has issued to Japanese investors. They are three-year bonds, not two-year bonds as previously stated, with an option to renew for a further year. EveryMatrix Ltd is in talks with Ganapati’s Malta business to obtain an online casino licence but this will be dependent on Ganapati being granted a licence from the British Gambling Commission and a class 4 licence from the Malta Gaming Authority.
The Italian agent of Tracksure has subscribed for up to 4.55 million shares in Wheelsure Holdings (WHLP) in lieu of its commission on sales up until the end of August 2017. There will be an initial issue of 562,400 shares in lieu of commission of £5,624. Daniel Stewart has taken its fee for the previous fundraising by the company in the form of 500,000 shares at 1p each and 3.52 million warrants to subscribe for shares at 1p each.
FT8 (GFT) continues to assess potential fintech investments and decisions will be made on specific investments before the end of the year. A lack of financial resources remains a constraint. There was less than £3,000 in the bank at the end of June 2016. Opportunities have also been sought in the US that are in a similar sector to Homeland Health Care, where an FT8 investment provides technology for the employee benefits operations.
Hellenic Capital (HECP) has adopted a new pronged investment policy – UK property and African natural resources investments – but it is not changing its name to City and Commercial Investments. Hellenic will wait until it has made investments before deciding on a new name.
Investors have subscribed for just over 50% of the shares in the one-for-three open offer by St Mark Homes (SMAP). This has raised £694,000 at 105p a share.
Greenbrook Industries has increases its stake in Sandal (SAND) to 29.6%. The shares were transferred to Greenbrook as part of loan agreements with Robin Fuller and Kingswood Asset Management.
AIM
Kuala Lumpur Kepong has increased its bid for MP Evans (MPE) from 640p a share to 740p a share, which values the oil palm plantations operator at £415.4m. The bid will be declared unconditional if acceptances reach 50%. The bid has been rejected by MP Evans. This offer cannot be increased unless there is a rival bidder or the target recommends an increased offer. There is scope for a rival bidder.
Transport-related software and services provider Tracsis (TRCS) promised that the second half of its financial year would produce the vast majority of profit and it has delivered. In the year to July 2016, the underlying pre-tax profit improved from £5.6m to £6.7m. There is net cash of £10.7m with potential deferred consideration of £6.15m. The rail technology and services division grew organically and thanks to a contribution from software company Ontrac. The remote control monitoring equipment business generated lower revenues but this year it will benefit from a US contract. Traffic & data services benefited from a contribution from traffic planning services provider SEP in a stronger part of its financial year – the first half included a partial contribution during the off-season. Earnings per share were slightly flattered by a lower tax rate. This holds back potential earnings growth this year to around 9% even though pre-tax profit is forecast to improve to £8m helped by a full contribution from SEP.
Student accommodation developer and manager Watkin Jones (WJG) says that 2015-16 trading was in line with expectations. At the end of September 2016, there was a development pipeline of 21 developments with 6,814 beds. These should be delivered in 2017 and 2018. Management business Fresh Student Living has 12,337 beds under management. The full year figures will be published on 18 January.
Totally (TLY) has acquired sports physiotherapy provider Optimum Sports Performance Centre for an initial £400,000. This is an earnings enhancing deal. There are additional deferred payments of 100% of 2016 EBITDA and 75% of 2017 EBITDA. The total maximum payment is £650,000.
Immobile (IMO) reported a 22% increase in pre-tax profit to £3.3m in the six months to 2016 and the cash pile has reached £17.9m. Immobile provides services to enable mobile and digital commerce. Organic growth was 14% with particularly strong growth in India. Recurring revenues were 94% of the total revenues. The launch of IMIchat provides a further service that can be sold to the customer base. Immobile has won its first US mobile operator client and has yet to see the benefits of this. Kestrel Partners has taken its stake above 5%.
RedstoneConnect (REDS) has paid £2.4m for Commensus, which provides managed IT support services, and this should be earnings enhancing. The deal enables RedstoneConnect to offer cloud-hosting services and provides opportunities for cross-selling.
Sula Iron & Gold (SULA) has launched a placing and open offer to raise up to £1.47m at 0.21p a share. This will help to finance the development of the Ferensola gold project in Sierra Leone. Early next year there will be additional drilling in order to demonstrate the scale of the project.
FIH Group (FIH), formerly Falkland Island Holdings, has achieved 60% of this year’s forecast profit in the first half of the financial year. Normally there is a fairly even split. WH Ireland has maintained its full year profit forecast at £1.85m because the outcome will be dependent on how quickly art logistics services provider Momart fills its additional capacity. Net cash was £4.3m at the end of September 2016. The current share price of 218.5p is similar to NAV, excluding intangibles.
Fire and emergency services resource manager AssetCo (ASTO) has still to renew its main contract in Abu Dhabi. The renewal for the contract was due on 17 November and it is still being renegotiated so the contract will continue on existing terms until the new one is finalised. That should be before the end of the year. Trading is in line with expectations and it appears that the contract will be renewed. The £42m claim against former auditor Grant Thornton is still being pursued.
Tanzania-focused Edenville Energy (EDL) says that results of bulk sampling at the Mkomolo and Namwele deposits indicate that the coal is suitable to feed a power plant and requires little or no washing.
MAIN MARKET
Avation (AVAP) says that its dividends will be based in US dollars from now on. Management believes that it will receive proposals for the disposal of 22 ATR turboprop aircraft before the end of 2016. Avation is seeking a price that is well in excess of NAV and the deal will require shareholder approval. That could lead to a special dividend with part of the proceeds invested in further aircraft.
Marketing services firm Creston (CRE) has recommended a 125p a share bid from value investor DBAY Advisors Ltd, which values the target at £75.8m. Shareholders will also keep the 1.42p a share interim dividend. DBAY has been a Creston shareholder for more than two years.
Andrew Hore
Quoted Micro 31 October 2016
ISDX
Via Developments (VIA1) says the Canal Street project in Manchester should be completed next March, while another Manchester site is attempting to gain enhanced planning permission that would enable 71 apartments to be built. Via expects deposits of 15% of the purchase price of the eight flats in Canal Street before the end of 2016 and this should generate £329,000. The Napier House project in Luton has been granted permitted development for 26 one-bedroom apartments. Additional planning permissions for an extra floor and a change to the facade of the building have been submitted. Via has received firm commitments for £1m of additional 7% debenture stock. This will take the debentures in issue to £4.5m.
Ganapati (GANP), the developer of apps for social media and games, reported an increase in its interim loss from £7.47m to £8.41m following the opening of a London office. Revenues fell from £2.3m to £1.34m. A unrealised foreign exchange loss of £5.71m on Yen borrowings. Management hopes that the Yen bonds in issue will be extended when they come up for repayment. There was £1.5m in the bank at the end of July 2016 but Ganapati wants to raise more money via a share issue to invest in further research and development. .
Ashford Borough Council has granted planning permission for the new Curious Brewery on a 1.6 acre site in the town centre. The Chapel Down Group (CDGP) brewing subsidiary raised money to build the brewery through crowd funding.
Miton Asset Management has increased its stake in rail safety products developer Wheelsure Holdings (WHLP) to 10.2% following the latest share subscription. WB Nominees has increased its stare to 9.2%, while JM Finn Nominees has raised its holding to 8.5%. Chief executive Gerhard Dodl increased his shareholding by 500,000 to 4.215 million shares, giving him 2.4% of Wheelsure.
AIM
Symphony Technology increased its offer for the remaining subsidiaries of Bond International Software (BDI) and the 121p a share bid by Constellation Software Inc has lapsed after gaining total acceptances of 47.4%. Constellation says that it will vote in favour of the disposal to Symphony for £22.8m. The proceeds and the other cash held by Bond will be distributed to shareholders as part of a liquidation process. Between 127p a share and 129.5p a share should be distributed with an initial distribution of at least 126p a share. Constellation originally bid 105p a share and it had acquired the majority of its 29.9% stake in Bond at 75p a share back in 2010.
Cyprotex (CRX) is recommending a bid from German drug discovery firm Evotec AG. The 160p a share cash bid values the contract pharma research services business at £41.7m. The share price has not been at the level of the bid since 2014. Cyprotex believes that it needs a partner to help it grow its operations further and Evotec will help it to grow in Europe.
Sunrise Resources (SRES) has revealed details of the results for the phase 2 drilling at the Bay Street silver project in Nevada. There was no positive news from this drilling and further exploration and drilling is required.
Eastern Europe-focused oil and gas explorer Ascent Resources (AST) has raised £3.5m via a placing at 1p a share and a further £1m via a loan note issue. Some of the cash will be used to repay a £871,510 loan facility from Henderson, which has also deferred the redemption of £8.2m of loan notes to 19 November 2019. The rest of the cash will complete the drilling of two wells and connect them with a refurbished central treatment station. This should enable Ascent to commence gas production by next spring and the gas will be initially be sold to Croatia.
South Africa focused miner Ironveld (IRON) is raising £1.8 at 4.5p a share with some of the cash going towards the development of the 15MW DC smelter for the iron, vanadium and titanium project in the Bushveld complex. The cash should last until next June and the shares come with a warrant to subscribe for another share at 6.75p for 12 months after the shares are issued. The Industrial Development Corporation has approved facilities of R244m for the project and negotiations continue for the remaining debt requirements. The total finance required is R841m. An offtake agreement has been finalised for the high purity iron powder that will be produced over a five year period from the commencement of production. Offtake agreements were already secured for titanium and vanadium.
Workforce optimisation software provider eg solutions (EGS) has won its first direct contract in Asia. The £500,000 contract is with a Singapore-based financial business and 50% of this will be recognised in the year to January 2017. This underpins the current expectations.
There has been further good drilling news concerning the Hot Maden project in Turkey, including some improvements in grade, and Mariana Resources (MARL) expects to report the preliminary economic assessment in late November. This assessment will provide the first guidance about the economics of the project.
Futura Medical (FUM) has raised £12m at 57p a share in order to fund the development of its portfolio of products. This includes the commercialisation of erectile dysfunction treatment MED2002 and trials for pain relief products TPR100 and TIB200. There was £2.9min the bank at the end of June 2016. Henderson will maintain its stake in Futura at just below 20%. The CSD500 condom has received European approvals for an extended shelf life of 18 months for the products manufactured in India. The European supplier has applied for the same shelf life extension.
Arian Solver Corporation (ACQ) has extended the exclusivity period for the Notche Buena gold silver tailings project in Mexico until 27 December. Recovery levels have been poor even though gold grades have been commercial so more tests are required. Arian is assessing an advanced silver exploration project in the US.
Share (SHRE) has made another add-on acquisition of customer accounts and the existing business is trading in line with expectations. The purchase of a book of 8,000 customer accounts with £200m under administration should be completed in April 2017. The Share Centre has maintained its market share of a peer group of brokers revenues, excluding interest, at more than 10%. In the third quarter, revenues were 7% ahead, while customer assets have increased by one-third to £3.6bn. Dealing commission and fee income have both grown but interest income fell by more than one-third. Share is still expected to make a small underlying loss this year.
MAIN MARKET
Nasdaq OMX-quoted AB Traction has increased its stake in engineering and environmental consultancy Waterman Group (WTM) to 14.3%. AB Traction went above 3% in April 2013 and has been building up the stake since then. AB Traction (www.traction.se) is an active long-term investor which does not focus on any particular sector. The strategy is to grow NAV.
Andrew Hore