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Andrew Hore – Quoted Micro 19 March 2018
NEX EXCHANGE
Formation Group (FRM) has been repaid its £5m loan for a development in Wembley and it retains a 40% share of the profit of the development. This cash has been used to invest in acquired a 3.44% stake in Proton Partners International, which has an operational proton beam therapy centre in South Wales with two more sites planned. A treatment unit in Abu Dhabi is expected to be launched in 2019.
Capital for Colleagues (CFCP) has loaned £600,000 to TG Engineering, which supplies steel and aluminium components to the aerospace and scientific sectors. The Dorset-based company will be 35%-owned by Capital for Colleagues and 20%-owned by the employee share ownership trust. The rest of the shares will be owned by the original founders and management.
IMC Exploration (IMCP) intends to focus on its main projects in Ireland. The interim loss was reduced from £99,000 to £75,000. There was net debt of £35,000 at the end of 2017.
Block Commodities (BLOC) has agreed to acquire a 21% stake South African fertiliser and plant products wholesaler VIPA Holdings. Block is paying £150,000 for new shares and acquiring £610,000 worth of existing shares in return for 748.5 million Block shares. VIPA is loss-making following the withdrawal of a major international trading partner. The ongoing focus will be fertiliser and the investment in Advanced Agricultural Holdings will be unwound with the 221.6 million shares issued as initial consideration returned to the company.
Primorus Investments (PRIM) has invested £500,000, at £22 a share, in Engage Technology Partners. This follows an initial subscription of £400,000 at £15 a share. Primorus owns 3.6% of Engage, which builds SaaS-based employee workflow software.
Hellenic Capital (HECP) had £272 in the bank at the end of 2017, but since then £179,000 has been raised at 0.5p a share. There was £120,000 generated from operations in 2017 but that was due to a £143,000 increase in creditors. An investment property in Leeds is in the books at £204,000, while the NAV was £58,000 at the end of 2017. The property is being sold for £235,000 and a £5,000 non-refundable deposit has been paid.
Globe Capital Ltd (GCAP) has raised £500,000 via subscription at 0.75p a share. The cash will finance a new office in Dubai. Valiant Investments (VALP) has raised £51,000 at 0.15p a share. The 84.7%-owned Flamethrower has acquired National-Preservation.com, which focuses on British railway heritage, and has nearly 10,000 registered users. Equatorial Mining and Exploration (EM.P) has raised £40,000 from an issue of 5% unsecured irredeemable convertible loan notes and a further £10,000 could come from the exercise of warrants. Via Developments (VIA1) has raised a further £590,000 from a debenture issue, taking the total raised to nearly £6m. The accounting reference date is being changed from March to September.
In 2017, Walls and Futures REIT (WAFR) achieved a total return on its portfolio of 11.5%, ahead of its benchmark total return of 7%.
DHAIS (DHAP) is leaving NEX on 18 April, nearly ten years after joining the market. The business is being streamlined and the focus is organic growth of the hearing aid operations. Shareholders owning 78.9% of DHAIS agree to the withdrawal so the company does not have to hold a general meeting.
AIM
Diurnal Group (DNL) is raising up to £11m at 190p a share in order to finance the launch of the Alkindi hormonal disease treatment for children in Europe and complete the development of Chronocourt in Europe and start a phase III study in the US. IP Group is converting its loan into shares.
Shares in VR Education (VRE) immediately went to a premium when trading commenced. It raised £6m at 10p a share and the share price ended the week at 12.25p. More than two million shares were traded during the week.
1Spatial (SPA) has sold Enables IT back to the founder for £1, while retaining a 19.9% stake. 1Spatial has also injected £150,000 into the business and loaned a further £85,000. The group will be able to focus on its geospatial data operations, which are performing better than expected. 1Spatial is on course to approach breakeven in the year to January 2019.
Marshall Motor Holdings (MMH) is outperforming new and used car markets, although like-for-like sales are still lower. Profit is expected to decline this year but Marshall should be able to continue its progressive dividend policy. There is a significant capex programme but the sale of the leasing business means that net debt is £2.2m.
Pennant International Group (PEN) already has nearly all of the £20.5m revenues forecast for 2018 covered by orders. Pre-tax profit is forecast to improve from £2.1m to £3.5m.
Amryt (AMYT) says that sales of Lojuxta were higher than expected last year. The figure was €11.9m, against the forecast €10.5m. There is still €20.5m in the bank.
Futura Medical (FUM) announced positive pharmacokinetic results for higher doses of the MED2002 erectile dysfunction treatment. This will enable US phase III trials to start later this year. There is £8.36m in cash plus tax credits due.
TechFinancials Inc (TECH) says that Cedex Holdings, where it could acquire a majority interest, has launched its token pre-sale event. One Ethereum (equivalent to £437) will equal 900 CEDEX coins. The blockchain-based online diamonds exchange says that there is strong pre-sale demand.
Genedrive (GDR) has started to sell its Genedrive HCV ID kit in the EMEA region. Sales in Asia Pacific should start in the next few weeks.
Consumer security software provider Kape Technologies (KAPE) improved its pre-tax profit from $4.8m to $6.7m. There is net cash of $69.5m. A 2018 profit of $8.3m is forecast.
Trevor Brown gas cut his stake in Feedback (FDBK) from 11.5% to 9.75%. Lindsay Melvin has taken on the role of finance director.
MAIN MARKET
Advanced foams supplier Zotefoams (ZTF) continues to benefit from investment in capacity and there is more to come. There was growth from all divisions and a good spread of revenues from different sectors. In 2017, revenues were 22% higher at £70.2m, while underlying earnings per share were 14% ahead at 16.6p. The dividend is 3% higher at 5.93p a share. The partnership with Nike to develop footwear technology and supply materials is yet to make a significant contribution.
BATM Advanced Communications (BVC) returned to profit last year and both its telecoms and biomedical divisions have good growth prospects. There is $24m in cash in the bank.
Sportech (SPO) has ended its formal sales process because no suitable offers were received. Trading has been poor and there will be asset write-offs in the 2017 figures. Andrew Gaughan has been appointed as chief executive.
Flying Brands Ltd (FBDU) has acquired Imaging Biometrics for $68,134 in cash and 11 million shares at 4p each, plus $75,000 to cover debt obligations. The final 6.2 million of these shares will be paid by the end of September 2018. The Wisconsin-based company has been managing the CE marking and FDA clearance process for Flying Brands’ StoneChecker visualisation software, as well as commercialising perfusion software IB Neuro, which provides additional information about tumours.
World Trade Systems (WTS) has submitted its application to the International Stock Exchange.
Hemogenyx Pharma (HEMO) announced a collaboration that will generate $250,000 for the blood stem cell-based treatments developer. The partner is a US-based leader in the field of blood cancer treatment and the deal involves the development of a type of humanised mice.
Andrew Hore
Andrew Hore – Quoted Micro 27 November 2017
NEX EXCHANGE
Kryptonite 1 (KR1) has invested $986,000 in DOT tokens, which are related to the Polkadot Project. A total of $150m was raised to finance the development of a decentralised protocol that allows trust-free movement of tokens and data between blockchains., that will also be able to create new parachains instead of starting a new community. The project is expected to go live by the end of 2019. Kryptonite 1 has sold Melon, Omisego and FunFair tokens in order to raise just over £290,000. That is a gain of around £270,000.
Via Developments (VIA1) has agreed to sell Plymouth Grove, Manchester for £2.5m. A non-refundable deposit of £250,000 has been paid and the deal should go through by the end of November. The property was originally acquired in June 2016 for £1.625m, although there will have been additional investment in development since then. In March, Via Developments announced a previous exclusivity agreement to sell which was dependent on planning permission. There was a refundable deposit of £100,000 for that potential deal. It is unclear whether the deals are related.
Health and care properties developer Ashley House (ASH) has welcomed the increased funding for health and housing schemes announced in the Budget. News that the government will not cap rents in the supported living sector has improved sentiment. Financial closure is anticipated on two projects in the next few weeks. Management continues to seek additional finance.
Block Energy (BLOK) has published its Schedule 1 notice for its proposed move to AIM. This is expected by 7 December.
Sandal (SAND) says that trading is in line with expectations with Energie MiHome sales trebling. By the end of 2018 the energy efficiency products should be generate as much in revenues as the power connections division.
There were 300,000 shares taken up in the Hellenic Capital (HECP) open offer but £250,000 was raised because the rest of the shares were placed.
Primorus Investments (PRIM) has raised £1m at 0.2p a share, which was a small premium to the previous closing price. The cash will finance further pre-IPO investments. Turner Pope has been appointed broker.
Trading in the shares of Churchill Mining (CHL) should recommence when the figures for the year to June 2017 are published. That should be before the end of November. Pala Investments has subscribed for £500,000 of 10% convertible loan notes, which have a conversion price of 2.976p a share. Pala holds 21.3% of Churchill and full conversion of the loan notes would take the stake to 29.3%. Pala is also entitled to receive 25% of any proceeds from the claim for unlawful expropriation of the East Kutai coal project. Churchill is hopeful of overturning an unfavourable ruling on the case.
Etaireia Investments (ETIP) has issued shares valued at £21,750 at 0.09p a share in settlement of an outstanding loan from Blue Oak Assets. The deferred payment of £20,000 for the purchase of Pacha Cleator from Oliver Fattal has been satisfied by a share issue at the same price. That takes his stake to 9.96%.
Ken Riley is no longer finance director and company secretary of WMC Retail Partners (WELL) and Nigel Higgs has taken over as interim finance director.
AIM
Accrol Group Holdings (ACRL) is raising £18m at 50p a share, which should be enough to keep the toilet roll business going. A restructuring of the business is underway and health and safety procedures are being reviewed. The bank facility has been extended until 2021. The share price fell by more than two-thirds when the suspension was lifted and ended the week at 37.5p.
Immunodiagnostic Systems Holdings (IDH) published its interims at 4.30pm on Friday. That means that the share price reaction will be on Monday. There were no shares traded in the diagnostic services provider on Friday. Revenues were 4% lower at £18.7m. Growth in automated business revenues partly offset lower licensing revenues. Pre-tax profit excluding restructuring costs fell from £1.77m to £1.11m. Net cash is £28.3m. The average number of assays per instrument has increased from 3.8 to 4.3. Reg Duval stepped down as chief executive at the end of October after seven months in the job. Jaap Stuut took over the role. He talks about improving the sales team.
Sutton Harbour (SUH) has agreed a 29.5p a share bid for 70% of the shares of the harbour operator and property developer from FB Investors. That will cost £19.9m. A shareholder can accept for more than 70% of their shareholding but they could be scaled back. FB Investors is subscribing £2.75m for new shares at the same price.
Boku Inc (BOKU) had a successful first week on AIM with the share price rising from the 59p placing price to 81p. That values the developer of technology enabling payments via mobile at around £170m.
Contact centre services software provider Netcall (NET) says the integration of the MatsSoft acquisition is progressing well and trading is strong in the first four months of the financial year. The dividend will return to a normal level this year having been enhanced in the past few years. This year’s dividend is expected to be 1.2p a share.
Angle (AGL) is included in a €6.3m study to develop liquid biopsy services that is being headed by Philips. This is a four year research project.
Jon Fenton has stepped down as chief executive of Van Elle Holdings (VANL) ahead of a requisitioned general meeting on 15 December.
Amiad Water Systems (AFS) has been granted a licence by Dow Technologies to use its TEQUATIC PLUS filter. Amiad will take over the manufacturing of the product and pay Dow 3.75% of revenues generated.
First Property Group (FPO) has already invested £51m for the new Fprop Office LLP but there is more than £200m more to invest. Annualised management fees are £2.64m and full investment of the new vehicle will significantly increase that figure.
Audio equipment supplier Focusrite (TUNE) increased its full year pre-tax profit by one-third to £9.5m. There was particularly strong growth in the US.
Cambria Automobiles (CAMB) managed to edge up its pre-tax profit last year even though trading becoming tougher in the second half. The motor dealer is expected to report a lower profit of £9.5m this year but it has a strong balance sheet and it is investing heavily in new sites for upmarket brands that will not fully contribute until next year.
Premier African Minerals (PREM) raised £1m via PrimaryBid at 0.4p a share, which was double the amount it was originally asking for. The cash will be used to develop mining projects in Zimbabwe and Benin.
Professional services provider Progility (PGY) put out its full year figures late on Friday. There was still time for the share price to fall by 0.2p to 1.25p. Progility did move back into profit in the period but it was a modest one. There was a warning that progress may be held back this year by operational efficiency improvements.
TechFinancials Inc (TECH) is selling non-core businesses for $400,000 and reinvesting the cash in the development of technology to integrate blockchain-based currencies into its systems.
African Alliance is planning to invest £2.4m at 11p a share coal bed methane projects developer Tlou Energy Ltd (TLOU) conditional on a listing on the Botswana Stock Exchange before the end of the year.
Thor Mining (THR) is making a $125,000 (£95,000) payment to Pacific Gold and Royalty Corporation in settlement for the $1.5m (£1.13m) payment that would have had to have been made when the Pilot Mountain tungsten project in Nevada comes into production. Thor is still fully funded well into 2019. Metal Tiger has taken its stake in Thor to 9.77% after exercising 16 million warrants.
MAIN MARKET
Cash shell Landscape Acquisition Holdings (LAHL) raised $500m at $10 a share but the share price fell below the placing price when dealings commenced. The focus is hospitality, land-based gaming and real estate businesses in North America and Europe.
Rockpool Acquisitions (ROC) has secured a potential reverse takeover target. It is lending an initial £543,000 to Northern Ireland-based renewable energy firm Greenview Gas and this will be used to buy two companies. The deal includes an option for Rockpool to acquire Greenview paid for by a share issue.
Creightons (CRL) increased its pre-tax profit by one-fifth to £956,000, helped by an improvement in gross margin. An interim dividend of 0.15p a share is proposed.
IT services provider Triad Group (TRD) made further progress in the first half. In the six months to September 2017, revenues dipped from £14.8m to £14.2m, while pre-tax profit moved from £668,000 to £737,000. There is £2m in the bank. An interim dividend of 0.5p a share has been declared.
Andrew Hore
Quoted Micro 13 November 2017
NEX EXCHANGE
Blockchain investment company Coinsilium Group Ltd (COIN) has signed a memorandum of understanding with UMT United Mobility Technology, which has shares traded on the Frankfurt Stock Exchange and owns 3% of Coinsilium, to collaborate on the development of blockchain-related mobile payments services for the business to consumer market. Coinsilium will advise UMT on the potential uses of digital tokens. The initial agreement is for three months.
Hellenic Capital (HECP) has launched a one-for-three open offer at 0.5p a share that will raise £250,000. The minimum subscription is 100,000 shares and the closing date is 22 November. Each share comes with a warrant for an additional share.
Early stage investor Primorus Investments (PRIM) has invested a further A$75,000 in Melbourne-based Fresho at A$0.38 a share. Online food ordering business Fresho was seeking A$1.5m but eventually raised A$2m. Primorus initially invested at A$0.27 a share and it owns 3.1% of Fresho, which is valued at nearly A$500,000 at the placing price. Fresho is moving towards cash flow breakeven in Australia earlier than expected and the $4m in the bank will help the company to launch operations in New Zealand and Singapore.
Kryptonite 1 (KR1) has generated £750,000 at 6p a share in order to invest in more blockchain token issues. Smaller Company Capital has increased its stake to 4.59% and one of its owners and Kryptonite 1 non-executive director Jeremy Woodgate owns 1.27%.
NQ Minerals (NQMI) has raised a further £150,000 at 8.5p a share and a holder of convertible loan notes has converted into 350,000 at a price of 8p a share.
Early Equity (EEQP) has raised £590,000 at 0.6p a share and issued 30 million shares to pay for 60,000 units in Yicom Global. Early Equity owns 47.1% healthcare products importer Yicom.
Lombard Capital (LCAP) has issued a further £45,000 of 7.5% convertible loan notes 2020, with 450,000 warrants, exercisable at 10p a share, attached. That takes the convertible loan notes in issue to £195,000.
Peter Hain, Simon Dorling and Declan O’Brien have all stepped down from the board of African Potash (AFPO).
AIM
Tracsis (TRCS) had a much better second half as predicted at the interim stage. In the year to July 2017, revenues improved by 6% to £34.5m, while pre-tax profit was 14% ahead at £4.6m. The total dividend was increased from 1.2p a share to 1.4p a share. There is £15.4m in the bank. The main growth in the rail technology division was from Ontrac software business, while revenues from traffic and data were flat, although there was growth if the former Australian operations are excluded. Profit should edge up this year but it will do even better if further large contracts are secured.
Castleton Technology (CTP) reported a rise in interim EBITDA from £2m to £2.3m and strong cash flow is reducing borrowings. Net debt was £8m at the end of September 2017. Castleton provides software to social housing operators and they are signing up for multi-year contracts.
Oxford Pharmascience (OXP) is demerging its assets into an unquoted vehicle and retaining a quotation as a shell. Management believes that it will be better for the business to be private in order to commercialise the OXPzero technology and existing investors will still have an interest. The shell will have few limitations in terms of the sectors that could provide an acquisition but there is board experience in pharma and technology. There was still £20.6m in the bank at the end of October and the shell will retain more than £19m. The company will change its name to Abaco Capital.
AfriTin (ATM) has completed its spin-off from Bushveld Minerals (BMN) and a placing raised £3.5m with a further £1m coming from convertible loan notes. The main asset is the Uis tin project in Namibia.
City Pub Group has confirmed plans to join AIM by the end of November. The company has 34 pubs in southern England and it wants to raise £30m. The business was founded in 2011 by experienced pub group operators, including David Bruce, who previously sold Capital Pub Company to Greene King for £93m.
Peter Gyllenhammar has built up a 8.35% stake in Stratex International (STI) and Bob Foster has returned as interim chief executive. He will review the strategy of the company. The takeover of Crusader Resources is not going ahead. The sale of the Goldstone Resources stake raised £550,000 and there was £6.08m in the bank at the end of June 2017. Gyllenhammar is more likely to be interested in the cash rather than the mining operations. The current capitalisation of Stratex is similar to the pro forma cash and around one-third of NAV.
Versarien (VRS) raised £2.9m instead of the £1.2m it was seeking one week ago. The cash was raised at 18p a share and the share price has risen to 24p. The cash will be used to purchase capital equipment.
Pre-IPO investment company St Peter Port Capital (SPPC) has concluded a strategic review just over 13 months after it commenced. The formal sale process has been terminated. The plan is to realise investments in an orderly manner. The NAV was 25.3p a share at the end of September 2017.
Redx Pharma (REDX) has returned from suspension having come out of administration. The share price almost halved to 17.5p. Chief executive Neil Murray has been given the push, or stepped down as it is described in the announcement, and Iain Ross has taken over as executive chairman. Dominic Jackson has been appointed as finance director. Hopefully, this will mean that Redx is better run than it was before. A phase I trial for the lead cancer asset is due to start in the first quarter of 2018 and initial phase 1a results should be available by the end of 2018. There is £13.6m in the bank and no debt.
BOS Global Holdings (BOS) is facing a battle with its former boss. The workflow efficiency software provider has received a general meeting requisition from interests related to former managing director Michael Travia, who recently stepped down from the board. He wants to be reappointed to the board and have Adam Webb removed from office. These are two of the eleven proposals put forward.
Trading in the shares of Red Emperor Resources (RMP) on ASX has been suspended because it does not have sufficient operations to warrant a listing. There are plans to increase the company’s stake in an exploration block in the Philippines and there are also potential oil lease acquisitions in California.
Shari’a-compliant investment company Tejoori Ltd (TJI) is cancelling its AIM quotation ahead of returning cash to shareholders. The company’s investments have been sold and there is $17.6m in cash.
Beximco Pharma (BXP) is commencing the export of Sotalol Hydrochloride, which is a generic version of heart drug Betaplace. This is the second product to be exported to the US. Interim pre-tax profit improved by 13% to £27.5m on the back of double digit sales growth.
Amphion Innovations (AMP) has a 26% stake in Polarean Imaging Ltd, which is planning to float on AIM. Polarean is a clinical stage medical imaging business and it is expected to be valued at $29m before new money. This compares with a valuation of $22m at the time of the previous fundraising during May. That would mean that the Polarean stake is worth more than Amphion’s current market capitalisation.
SkinBioTherapeutics (SBTX) says that its SkinBiotix technology has passed all three necessary toxicity tests. This will enable human studies to begin next year.
Connemara Mining Corp (CON) has completed five holes at the Meeneragy gold project and they demonstrate the presence of a significant gold bearing system in the area. Survey data should be processed by next February.
Coal bed methane projects developer Tlou Energy (TLOU) has commenced core hole drilling at the Lesedi project in Botswana. A seismic survey is almost complete. The focus is increasing gas reserves and contingent resources. The data will be used to provide information for when development starts.
WynnStay Properties (WSP) increased its NAV to 685p a share at the end of September 2017 and the interim dividend has been raised by 18% to 6.5p a share. There was a gain on sale of properties in Colchester and Gosport as well as a 16% increase in property income to £1.12m.
TLA Worldwide (TLA) has agreed a renewed senior debt facility of $28.75m from SunTrust Bank. This was announced at 8.48am on 9 November. This contrasts with the profit warning released at 6.26pm on the last day of trading prior to Christmas 2016.
Snoozebox (ZZZ) has appointed Moore Stephems as administrator and trading in the shares has been suspended. Snoozebox is moving towards cash breakeven but the main lender, SQN Asset Finance Income Fund, has not agreed to a suitable debt refinancing plan so the company cannot continue to trade as a going concern. Panmure Gordon has resigned as nominated adviser and broker.
Thor Mining (THR) has raised nearly £494,000 from the conversion of warrants, at 0.9p each and 1.25p each, so far in November 2017. A placing recently raised £565,000 so there is plenty of cash to move ahead with exploration activities.
InterEnergy Holdings has decided not to become involved with a bid for Rurelec (RUR) as part of the consortium headed by Peter Earl. He had approached InterEnegy about the provision of loan finance. The bidding consortium subsequently pulled out of the potential bid until the full effect of the problems at Rurelec’s Patagonian power station are known.
MAIN MARKET
PV Crystalox Solar (PVCS) has won an award of €34m plus interest from the International Court of Arbitration of the International Chamber of Commerce. This relates to a supply agreement with a PV company, which failed to purchase wafers in line with its contract. The customer has to pay up but it can also ask for the delivery of 22.9 million wafers that are due under the contract.
Sportech (SPO) is seeking potential offers by January 2018. A distribution of cash to shareholders is still planned for this year. Annualised cost savings of at least £2m have been identified. Trading remains in line with expectations.
Illustrated book publisher Quarto Group (QRT) has ditched its dividend after a second half upturn was not strong enough to achieve profit expectations. Full year revenues will be lower. Year end net debt will be higher than at the end of 2017. Bid talks appear to have hampered the business. The children’s and foreign rights businesses are strong. The focus is to achieve 60% annual recurring revenues.
Gemstones project developer Shefa Yamin plans to join the standard list and the Israel-based company will use the money raise to finance further exploration and to complete the pre-feasibility study at the Kishon Mid-Reach project. There are plans to set up an internet platform to sell the gemstones, some of which are unique to the area. The Carmel Sapphire brand has been registered for dark blue sapphires. Several potential primary and secondary deposits have been identified. Bulk samples are being taken, so far 11,000 tonnes have been sampled, and there are plans to delineate a mineral resource. Production is targeted within the next 24 months.
Symphony International Holdings (SIHL) had a diluted NAV of $1.146 a share at the end of September 2017. This was after a $0.10 a share dividend. The shares are trading at a one-quarter discount to NAV.
Challenger Acquisitions Ltd (CHAL) is diversifying into film conventions. Challenger is loaning £100,000 to a private company that is putting on a film convention in London in 2018. The loan is repayable, with a premium of 40%, by 15 May 2018. The cash will help to finance the venue, staff and guests. Challenger has the right to participate in future events held by the company.
Oxford Biomedica (OXB) is collaborating with a major US biopharma company for research into patients that have abnormal wound-healing responses leading to fibrosis. The collaboration will use the EpiSwitch platform.
Andrew Hore
Quoted Micro 7 August 2017
NEX EXCHANGE
Valiant Investments (VALP) has raised a further £52,500 at 0.1p a share and its 84.7%-owned subsidiary Flamethrower has acquired FootballTipsFC.com for £40,000. Subscriptions generate £50,000 a year in revenues for the website which provides football betting tips.
Asia Wealth Group Holdings (AWLP) reported a lower loss in the year to February 2017. Revenues improved from $1.2m to $1.53m, while the loss reduced from $150,000 to $110,000. The main business, Meyer Asset Management, made an improved contribution. The auditor has highlighted that no impairment assessment has been made on the investment in Ray Alliance. There is still $869,000 in the bank, following the acquisition of an investment property for $388,000. Management is assessing acquisitions in the fintech sector.
Block Energy (BLOK) has acquired a producing oil field in Georgia. The 90% working interest in the Satskhenisi production sharing agreement will be acquired for 70 million shares (14.35% of Block), which will be owned by Iksander . The field is near the Norio field where Block already has an interest. The permit runs until 2025 with a potential five year extension. Operating costs are up to $25/barrel and the current production from three wells is 10 barrels a day. The sale price is Brent minus $9/barrel. Block will retain 75% of revenues until more than $10m of capital costs are recovered. The purchase includes $500,000 worth of equipment, which can be used in other fields where Block has an interest.
Via Developments (VIA1) has raised a further £100,000 from a placing of 7% debenture stock 2020. Via has completed the Canal Street development in Manchester and the realised gross development value is £2.28m.
Hellenic Capital (HECP) has acquired an office premises in Leeds for £200,000. This was after the latest interims to June 2017. This is part of the new investing strategy. Net assets fell from £81,000 to £59,000 at the end of June 2017, including cash of £28,000.
Capital for Colleagues (CFCP) has invested an additional £150,000 in portfolio company Computer Application Services. Capital for Colleagues initially invested £150,000 in the Edinburgh-based software company at the beginning of 2016 and the latest investment will double the number of A shares it owns to 300,000.
Ecovista (EVTP) has raised £350,000 at 0.035p a share. This takes the stake owned by Hubwise to 12.45% and Elite CAM Balanced Discretionary Fund to 9.34%
AIM
Asset management performance software provider StatPro (SOG) reported a 23% rise in interim revenues to £21.6m, while underlying earnings per share improved from 1.1p to 1.8p. The interim dividend is unchanged at 0.85p a share. There was an initial two month contribution from the UBS Delta business and the annualised recurring revenues are running at £53.2m, which is before the latest three year contract in Australia. The acquired technology will be integrated with StatPro Revolution.
Telecoms infrastructure equipment supplier Filtronic (FTC) reported a jump in full year revenues from £13.6m to £35.4m thanks to a large order for antennas. There was a swing from a £7m loss to a £2.2m profit. The balance sheet is strong with net cash of £2.6m. Future investment in 5G telecoms infrastructure augurs well for Filtronic. Hargreave Hale has increased its stake from £6.16% to 11.3%.
Real Good Food (RGD) says that its forecast for the year to March 2017 was wrong because two anticipated claims have not materialised and it had incorrectly capitalised certain costs. This will knock £2m off expected profit. This revelation comes a few weeks after Downing invested £2.75m at 35p a share and the share price has subsequently slumped to 20.75p. Payments to Pieter Totte and Peter Salter over a three year period were not separately disclosed. Salter has left the Real Good Food board but Totte continues to survive as executive chairman.
Fairpoint Group (FRP) says it intends to appoint an administrator because of the cost of the lease on its head office costing £1m a year for four years. The IVA and related businesses are still being sold.
AdEPT Telecom (ADT) has acquired IT services provider Atomwide, which provides services to schools and local authorities, for an initial £12m. This adds 4% to this year’s earnings and 9% to next year’s. It was partly funded by £7.3m convertible loan from Business Growth Fund, which is convertible at 393p a share.
GetBusy (GETB) joined AIM last week and the share price rose to 34.5p. Cloud-based document management software provider GetBusy was spun out of ASX-listed software company Reckon and raised £3m from a rights issue. The two existing software products, SmartVault and Virtual Cabinet, generated revenues of £8m in 2016 – 82% of which is recurring – up from £6.8m the previous year. Accounting firms generate the majority of revenues and GetBusy is trying to expand in other sectors. Next generation software SCIM is being developed in order to make it easier for businesses to interact with customers and become more organised and productive.
Botswana Diamonds (BOD) has raised £543,000 at 1.25p a share and warrants have been exercised at 0.85p a share raising a further £265,000. The cash will finance exploration in Botswana and to assess an inferred resource for Frischgewaagt.
Ascent Resources (AST) has installed the infrastructure at the Petisovci project in Slovenia to enable the gas to be exported.
TechFinancials Inc (TECH) says that 51%-owned DragonFinancials is paying a dividend of $2m and TechFinancials will receive £1.02m. The payment date is 20 August.
Kestrel Partners has slashed its stake in home improvement products supplier entu (UK) (ENTU) from 21.1% to 7.33%. This investment appears a rare mistake for Kestrel which has a good record of building up stakes in technology businesses. Kestrel was still building up its entu stake in the first quarter of this year. The entu share price is around its all-time low so Kestrel will have made a significant loss on this investment. Meanwhile, entu is trying to secure a refinancing but this is likely to mean that the existing shareholders will be left with little in terms of value. The group continues to lose money.
Thor Mining (THR) is acquiring an interest in Kapunda copper deposit in South Australia. Thor is investing up to A$1.8m in convertible loan notes in a company earning a 75% stake in Kapunda. The initial investment is A$200,000. Conversion of the loan notes could give Thor up to 60% of this company. Due diligence on the US lithium assets has gone well and additional mineralisation has been identified. Director Paul Johnson acquired 500,000 Thor shares at 085p each.
A disposal deal for the interiors division of Stanley Gibbons (SGI) has fallen through because the buyer could not come up with the money. There is a termination fee payable and Stanley Gibbons believes that there are other buyers.
MayAir Group (MAYA) has won a $13.6m order to supply filtration and clean room equipment to a Chinese LCD panel manufacturer and most of the revenue will be recognised in 2017.
Empyrean Energy (EME) has raised £1m at 8.5p a share. Drilling has commenced on the Dempsey 1-15 onshore well in California.
Billington Holdings (BILN) says that its structural steel business has won two contracts worth £14m. One is for a London university and the other is for a distribution warehouse in south west England and some of the work will carry over into 2018.
MAIN MARKET
Diesel engines and parts supplier Associated British Engineering (ABSE) reported a higher loss in 2016-17 and there was also a sharp drop in NAV. The weak oil and gas market continues to hold back the group and revenues fell from £1.77m to £1.04m. The loss increased from £621,000 to £962,000, after a large increase in pension costs. The total cash outflow was just over £1mm similar to the previous year. Cash and financial assets total £968,000. There is a 2.3% stake in AIM-quoted SalvaRx. The initial stake was taken when the company was 3legs Resources. The NAV fell from 73p a share to 50p a share. This is despite a decrease in the pension deficit from £1.93m to £1.38m. There are £3.1m of trading losses and £8.5m of capital losses available but there is no deferred tax asset in the balance sheet.
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 7 November 2016
ISDX
Mechanical and engineering services provider Fluid Systems Designs Holdings (FSD) has successfully diversified into the Energy from Waste (EfW) sector and has won work on major projects. In the year to May 2016, revenues were flat at £14.5m, while pre-tax profit increased £277,000 to £372,000. The AMP6 water investment programme has commenced so demand should start to build up but there was a small reduction in revenues from this sector. New framework agreements are being pursued.
Hellenic Capital (HECP) is changing its investment policy and name. The general meeting to gain shareholder approval will be held on 16 November. The company, whose new name will be City and Commercial Investments, will have a two pronged investment policy: UK property and African natural resources. The idea is to generate steady income from property in order to cover overheads. The company can then focus its remaining capital on seeking out resources projects.
Blockchain technology investor Coinsilium Group Ltd (COIN) has divested its 27.3% stake in TRAC Technology because it no longer meets the company’s criteria. Coinsilium will receive $100,000 – 50% in cash and 50% in 2.6 million shares at 1.6p each in AIM-quoted Kolar Gold Ltd (KGLD), which have to be held for three months. Former Coinsilium director Cameron Parry is chief executive of Kolar Gold, which has also secured a 50/50 joint venture with TRAC to launch an online gold and silver trading and storage platform for the Indian market. Kolar will invest £50,000 in the joint venture. TRAC already stores 120kg of gold and 4.3 tonnes of silver for clients in vaults in London, Geneva, Singapore and Hong Kong.
Valiant Investments (VALP) has raised another £24,000 at 0.1p a share, having recently raised £51,500 at the same share price. Valiant owns 84.7% of Flamethrower, which has acquired Compass Heading, a compass app, for $12,500. Revenues are generated from advertising and in-app sales.
Capital for Colleagues (CFCP) has invested a further £100,000 in existing investee company Anthesis Consulting Group. The investment is part of a larger share placing by Anthesis in order to finance organic and acquisitive growth.
Trading in the shares of Dana Group International Investments Ltd (DANA) has been suspended because it has not released its results for the period from January 2015 to May 2016. There have been problems preparing the accounts for 21.7%-owned investee company Bonyan International Investment. Dana intends to extend the accounting period to June 2016 to align its calendar to Bonyan. Earlier this year, Dana sold its 34.12% stake in Makkah and Madinnah Commercial Investment Company. Khaled Al-Husseini has stepped down from the Dana board, while Firas Baba, the chief operating officer of Bonyan, has become a director of Dana.
AIM
Drug developer Sareum (SAR) has enough cash to finance itself for a couple of years following the licence agreement for its Chk1 inhibitor drug candidate CCT245737 with ProNAi Therapeutics. This deal shows that the strategy to licence drug candidates when they reach the point of clinical trials can work and provide cash to finance other drug candidates. Sareum has a 27.5% interest in Chk1 with co-investment partner CRT Pioneer Fund owning the rest. This deal means that Sareum effectively has cash of £1.55m – including unspent funds in the partnership of around £300,000 – plus the $1.9m (£1.5m) share of the initial payment for the licensing deal. Sareum has already received £900,000 of the initial payment with the rest due to come through in the near future and it could receive up to $550,000 more in the next 12 months if the initial milestone is achieved. There was a £674,000 cash outflow in Sareum’s most recent financial year so this cash pile could last for some time. Sareum continues to develop its TYK2 autoimmune and cancer candidates and it could purchase interests in other potential drug candidates if it can find suitable acquisitions.
Berkeley Energia (BKY) has raised £24.1m ($30m) at 45p a share in order to finance the development of the Salamanca uranium mine, which will cost a total of $100m. The amount raised was at the upper end of the range sought by the company.
X-ray and gamma ray imaging and radiation detection technology developer Kromek Group (KMK) has won a number of new contracts in recent weeks and these underpin the expectations for a reduction in loss over the next two financial years. The latest contract is in the bone mineral densitometry market and it is worth $1.2m over two years – $300,000 in the current financial year. Prior to this there was a $1.6m contract with the US Defense Threat Reduction Agency, which is another two year contract. A loss of £3.7m is forecast for the year to April 2017and that should fall to £2.1m in 2017-18.
Franchise Brands (FRAN) has announced its first acquisition since it floated in August. It is paying £900,000 in cash and shares for Barking Mad, which provides dog sitting services, and it should be earnings enhancing in the first full year. The business was established in 2000 and it has 71 franchisees covering 75 territories. The deal has led to an upgrade of the 2017 earnings forecast from 2.03p a share to 2.27p a share.
Goldplat (GDP) produced 9,129 ounces of gold in the three months to September 2016. The loss was reduced at the Kilmapesa mine and the new plant should be installed in time to move the mine into profitability in this financial year.
Caledonia Mining Corporation (CMCL) says that this year’s profit is likely to be lower than expected, partly due to a lower grade at the Blanket gold mine in Zimbabwe. WH Ireland has reduced its 2016 earnings forecast from 25.2 cents a share to 17.8 cents a share, which is still nearly double the 2015 level. The profit has also been impacted by the movement the strength of the rand against the dollar and cost of assessing investment opportunities. Gold production is still expected to be 50,400 ounces this year, rising to 60,300 ounces in 2017 when earnings of 41.9 cents a share are forecast.
MAIN MARKET
InnovaDerma (IDP) has entered the US market with its self-tanning brand Skinny Tan. Superdrug started selling Skinny Tan in the UK last February and it has become its best selling tanning brand. Production is being moved from Australia to the UK, which should reduce transport costs by early 2017. In the year to June 2016, revenues jumped from A$1.05m to A$8.4m from seven countries even before sales in the US have started. This enabled the company, which switched from the Marche Libre to the standard list in September, to move from a loss to a pre-tax profit of A$473,000 – or A$411,000 after development costs. Net debt was A$871,000 at the end of June 2016.
OTHER MARKETS
Former AIM investment company Gate Ventures has raised £2.25m at 6p a share, which is double the share price of the last trade on Britdaq. Gate recently invested £380,000 in a fundraising by AIM-quoted Reach4Entertainment. Gate is valued at more than £100m at 3p a share despite its modest asset value.
Andrew Hore
Quoted Micro 10 October 2016
ISDX
Ace Liberty & Stone (ALSP) has acquired 1-5 Upper Market Square in Hanley for £9m. The tenants are Boots and National Westminster Bank. Prior to this deal, property holdings has grown 23% to £29.5m at the end of April 2016, while the NAV is £17.9m. The sale of Hume House for £3.55m – more than double the 2014 purchase price – should be completed by the end of 2016. Economic uncertainty has made it difficult to complete other deals. Management believes it can increase the size of the portfolio to £50m within in the next year without the need for more cash from shareholders.
DXS International (DXSP), which provides software for clinical commissioning groups and GPs. Has reported a one-fifth increase in revenues to £3.25m in the year to April 2016. Pre-tax profit improved from £27,000 to £46,000. Progress has been held back by NHS but DXS continues to investment in developing software in order to widen the range it can offer. There was £315,000 in the bank at the end of April 2016 and debt has been reduced.
Hellenic Capital (HECP) continues to seek an acquisition and it had £82,600 in the bank at the end of June 2016. Mark Jackson of Quetzal Securities, which has acquired a 29.9% stake, partly from director Gavin Burnell, at 0.3784p a share, has been appointed a Hellenic director.
Ganapati (GANP) is not proceeding with the existing application for a gaming licence in the UK and will instead apply via new Maltese subsidiary Ganapati (Malta) Ltd. There will be licence applications to the regulators in the UK and Malta.
Investment company Western Selection (WSE) increased its NAV from 75p a share to 79p a share in the year to June 2016. Since then £520,000 has been raised from selling 200,000 shares in toiletries supplier Swallowfield. That is a gain of £180,000 before expenses. The final dividend is 1.05p a share, making an unchanged total for the year to 2.1p a share.
WMC Retail Partners (WELL) has agreed an extended lease on Cornish World Market on better terms and it will be able to commence the new retail development at the front of the market. More funding will be required for this and WMC is asking shareholders to allow it to issue up to £500,000 of five year secured loan stock. Two related parties will subscribe for £400,000 to replace existing loans. This is part of a £1.96m funding package with £1.26m coming from the bank and £300,000 from the landlord. A capital reorganisation will reduce the par value of the shares from 50p to 5p so that money can be raised through share issues. The general meeting will be held on 21 October.
Angelfish Investments (ANGP) has lent a further £70,000 to 4 Navitas (Green Energy Solutions) Ltd. This takes the amount loaned to the Lancashire-based to £497,500 and this is repayable at the end of 2015. The loans have an interest rate of 12% a year. The cash will be used to acquire composite materials for manufacturing an upgraded version of the 4N-VAWT vertical axis wind turbine designed in partnership with Siemens. The wind turbine is lower cost and smaller.
Employee owned business finance provider Capital for Colleagues (CFCP) has lent and invested more than £5m in its portfolio companies. There have been four main loans and investments in the most recent quarter. The NAV is 54.5p a share.
Kryptonite 1 (KR1) has made its first investment into an initial coin offering (ICO) of SingularDTV. It has invested £5,605 for 462,931 SNGLS tokens that provide a claim to a portion of revenues and IP to show content – there are no voting rights. The tokens can be traded on the Consensys blockchain platform. The idea behind the business is to enable people to directly reward creators of content so that less is taken in fees.
Trading in the shares of DagangHalal (DGHL) has been suspended after three directors failed to be re-elected at the AGM. This leaves three remaining directors. The shares will remain suspended until there is further information about the composition of the board.
AIM
Investment company Draganfly Investment (DRG) is loaning IP developer AltEnergis (www.altenergis.co.uk) £60,000 for one year at an annual interest rate of 8%. AltEnergis was formed in 2011 and lost £53,000 last year. At the end of 2015, net liabilities were £11,000 but there is no value placed on the development of five technologies. The company’s strategy is to develop technologies that will attract deals with multinationals. There is a piezoelectric technology that the company believes can be adapted to use vibrational energy/human movement to recharge a phone on the move. This was developed with Swansea University and Solar Press Ltd. There is a gearbox condition monitoring technology being developed with Oxford University and GSS Avionics. At the time of its 2015 annual report, AltEnergis says that it was hoping to complete a reverse takeover of an AIM-quoted company and raise at least £1m.
Mariana Resources (MARL) has acquired the early stage Bondoukou gold project in Cote d’Ivoire. The deal involves acquiring 80% of the holding company in return for $544,274 in shares plus paying obligations of $89,000 and lending $56,000 to the company to pay other loans. Up to $3.5m more could be paid based on the mineral resource defined. This is based on $0.5/ounce up to one million ounces and $1/ounce after that.
Floorcoverings manufacturer Victoria (VCP) is buying Bradford-based underlay manufacturer Ezi Floor in a deal that will be earnings enhancing this year. Victoria is paying £13m – £6.5m immediately and the rest over four years – with up to £6.5m payable depending on the achievement of targets. Earnings per share forecasts for this year have been upgraded by 4% to 23.8p and by 10% next year to 26.5p a share. Net debt is forecast at £54.7m at the end of this financial year.
Engineer Avingtrans (AVG) has announced details of its tender offer that will pay out £28m to shareholders. Each shareholder can tender up to 50% of their shareholding at a tender price of 200p a share – a 4.2% premium to the share price at the end of September. There is potential to tender more than 50% of a shareholding if others do not tender their full share. There will be 14 million shares left in issue.
DP Poland (DPP) is raising £3.2m at 48p a share. The previous placing was at 15.8p a share. There was still net cash of £5.39m at the end of June 2016 but management wants to accelerate the store opening programme. The new target is 100 stores by 2020. There are currently 29, including 16 corporately managed, in seven Polish cities. The interim loss was £944,000.
Park Group (PKG) is acquiring corporate employee and customer engagement company Fisher Moy International. The two companies have been working together for more than one year. This deal should be modestly earnings enhancing in the first full year and provides a new base in Buckinghamshire.
Digital media provider Milestone (MSG) is collaborating with the Social Stock Exchange, which currently has 44 companies as members. The two organisations will introduce new members to each other , enter joint promotions and also establish an investment fund. Milestone will also offer training expertise.
Versarien (VRS) is acquiring plastics manufacturing business AAC Cyroma in order to develop a graphene-enhanced plastics manufacturing operation. Versarien is paying an initial £1.925m with up to £200,000 more payable depending on profit figures in 2017 and 2018. – 2015 pre-tax profit was £166,000.
MAIN MARKET
Software provider Gresham Computing (GHT) has agreed to pay up to £4.55m for C24 Technologies in order to expand its data integrity business in the financial markets. The deal doubles the customer base and should be earnings enhancing next year. Gresham raised £3.32m at 105p a share.
Industrial fasteners supplier Trifast (TRI) continues to trade strongly in the first half of its financial year and sterling weakness will be a further help in the second half. A new distribution centre has been opened in Barcelona. The profit forecast for the year to March 2016 has been raised from £16.9m to £17.6m to take account of currency movements.
Andrew Hore
Quoted Micro 20 June 2016
ISDX
Residential property developer St Mark Homes (SMAP) is bidding for related company St Marks Contracts Ltd. The recommended offer is a one-for-one share swap. That looks fair as the adjusted NAV of each of the companies is around 128.5p a share. That is after St Mark Homes pays its interim dividend of 5p a share. The directors that the two companies have in common were not involved in the negotiations. The idea behind the deal is that the enlarged group should be able to participate in larger projects.
Equatorial Mining & Exploration (EM.P) says that it has engaged a contract mining company to open up an access road into a planned mining lease in Nigeria in anticipation of its imminent grant, which is subject to a final fee of £15,000. Equatorial needs additional funding for exploration and working capital and it is talking to investors. The company’s activity has been limited in order for it to be able to keep going until finance can be obtained. A half year trading update will be published at the end of this month
Hellenic Capital (HECP) director Gavin Burnell has more than doubled his stake in the investment company, taking it to 29.9%. The recent purchase of 9.5 million shares was at 0.137p each. That is below the current bid price of 0.2p.
African Pioneer (APPP) is asking its shareholders to approve its withdrawal from ISDX. The vote will be held at the AGM on 30 June. If the resolution is passed then trading will end on 1 July.
FIND OUT THE WINNERS OF THE 2016 SMALL CAP AWARDS
AIM
Wireless control technology developer Cyan Holdings (CYAN) is acquiring Connode, which supplies wireless-based technology for smart meters and the internet of things, for £6.8m – £4.3m in cash and £2.5m in shares. This deal provides a European customer base and an opportunity to generate revenues from the smart meter roll out in the UK. Cyan is raising £10.1m at 0.18p a share and this includes a £2m subscription by JS Technical Services, a Thailand-based distributor of Cyan products. The share capital will be doubled following these share issues. Directors and some of the senior management will take their income and bonuses in shares at the same price – expected to be equivalent to £730,000.
Seeing Machines (SEE) has supplied an initial 1,000 Guardian on-road driver fatigue units to a distributor set up by VSI Berhad, the Malaysian business that recently took a 12% stake in the company at 5.2p a share – a significant premium to the current market price. The units will be sold in Malaysia and Singapore. According to finnCap, Seeing Machines should have net cash of A$5m by the end of June 2017 and there are $10m worth of further payments to come from the Caterpillar deal.
Risk management and compliance software developer Lombard Risk Management (LRM) is raising up to £8.76m through a placing and one-for-35 open offer at 8.75p a share. The cash will be invested in developing existing and future software products. A trebled loss of £6.6m is forecast for this year but Lombard is expected to move into profit next year – after capitalised development spending.
Hydro International (HYD) has recommended a £28m bid from Ely Acquisitions. The Hanover Active Equity Fund-backed acquisition vehicle is offering 194p a share in cash for the stormwater and wastewater equipment supplier.
Dekeloil (DKL) is buying out most of the minority interests in the Ayenouan palm oil mill in the Ivory Coast. This will take the Dekeloil stake to 86% and it will be financed by a £12.75m placing at 1.325p a share. The purchase price effectively values the mill at €42.9m and the deal should be earnings enhancing. The rest of the minority interest will eventually be acquired. Cantor Fitzgerald forecasts a 2016 profit of €4.9m, rising to €7.5m next year.
MAIN MARKET
CML Microsystems (CML) is showing signs of benefiting from a recovery in demand thanks to new contracts. In the year to March 2016, revenues improved from £21.8m to £22.8m, while underlying pre-tax profit moved ahead from £3.17m to £3.44m. The dividend was increased from 6.9p a share to 7p a share. The recently announced Chinese acquisition will not be completed for around three months.
A pre-feasibility study for the Batangas gold project, where Bluebird Merchant Ventures (BMV) has an option to increase its 25% stake to 50.1%, shows that it could generate $34m of free cash during its first seven years of production (assuming a gold price of $1,250/ounce). The upfront capital costs are $16m. Estimated operating costs are $735/ounce of recovered gold. Recovered gold production is forecast at 116,000 ounces and there are an additional 320,000 ounces of inferred gold resources. A definitive feasibility study should be completed by the end of the year.
Highlands Natural Resources (HNR) is reversing its recently acquired helium prospects in Montana into fellow standard list shell Opera Investments (OPRA), which previously had a reversal deal that fell through. The purchase price is £4m in Opera shares valued at 15p each. Opera plans to raise at least $750,000 to finance investment in the assets. Highlands will be the majority shareholder in the company.
ANDREW HORE