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Andrew Hore – Quoted Micro 12 November 2018
NEX EXCHANGE
Crossword Cybersecurity (CCS) plans to raise up to £2.25m prior to a move to AIM at the end of this year. The cash will be invested in sales and marketing, product development and working capital.
Primorus Investments (PRIM) says that investee company Stream TV Networks has secured a deal with Beijing Optical and Electrical, which will use Stream’s 3D display technology in large flat TV and monitor screens. Primorus has invested £1.4m in Engage Technology, which has 75 corporate clients for its construction software and a further 17 that are contracted but not yet live. Revenues are growing more slowly than hoped. Engage is talking with partners and potential corporate investors.
Angelfish Investments (ANGP) is increasing its shareholding in YBOO from 20% to 35% for an investment of £400,000. A working capital loan of up to £1.5m with an annual interest charge of 10%.
Inqo Investments Ltd (INQO) reported an increase in interim revenues from R7.65m to R8.37m and the loss declined from R4.52m and R4.12m. At the end of August 2018, net cash was around R11.5m. The South Africa-based social impact investor generated the majority of its revenues from Kuzuko Lodge with a contribution from Bee Sweet Honey.
KR1 (KR1) says that its investee company Volt Ltd has raised $2m. KR1 has converted loan notes and has a 7.94% in institutional digital asset custodian Volt valued at $1.4m. The initial investment of £200,000 acquired a 5% stake in September 2017.
MetalNRG (MNRG) has completed the acquisition of the Gold Ridge project in Arizona from Winston Gold for £530,000. The final payment is funded by shares at 1.75p each. The project area includes three former producing mines. There is potential for the discovery of further gold mineralisation.
Auxico Resources Canada Inc (AUAG) has raised $315,000 at 20 cents a share. This cash will fund geological work and the evaluation of opportunities in Colombia.
Healthperm Resourcing Ltd (HPR) is changing its name to SG Recruitment Ltd.
AIM
Gresham House (GHE) is acquiring investment manager Livingbridge for an initial £30m. Up to £10m more could be payable depending on performance. This deal will help to widen the customer base and provide product development opportunities. The combined group will have assets under management of more than £2bn. A placing raised £11.7m at 448p a share. The deal is immediately earnings enhancing even before cost savings. Gresham House Energy Storage Fund has raised £100m and will invest £57.2m in a portfolio of energy storage assets in development.
Castleton Technology (CTP) increased interim revenues by one-fifth to £12.9m and there was a 5% improvement in earnings per share. finnCap forecasts an improvement in full year earnings per share from 5.2p to 5.9p. The provider of software and managed services plans to pay a maiden dividend for this financial year.
Transportation software and services provider Tracsis (TRCS) has reported figures in line with recently upgraded forecasts. In the year to July 2018, revenues improved from £34.5m to £39.8m, mainly organic growth, while pre-tax profit rose from £7.6m to £8.5m, helped by a one-fifth increase in software sales. There is £22m in the bank to finance further acquisitions.
AdEPT Technology (ADT) has acquired unified communication services provider ETS Communications for £2.5m less net debt at the end of October 2018. This deal will be immediately earnings enhancing. Thebank facility has been increased to £35m in order to fund further acquisitions.
International benefits insurance provider GBGI Ltd (GBGI) is recommending a $1.515 a share cash offer from Elm Bidco. This values GBGI at $131.8m (£101.6m). There has been modest growth in earnings per share since GBGI floated at 150p a share in February 2018. Adividend of 1.4 cents a share was paid in June.
Myanmar-focused social media platform operator MySQUAR Ltd (MYSQ) is investigating into the use of proceeds of two recent fundraisings. Approximately £900,000 was paid out of company funds to former directors and third parties. Staff are being made redundant and additional cash is required. Trading in the shares is suspended. The nominated adviser SP Angel and joint broker Daniel Stewart have resigned. Piers Pottinger has stepped down as a director.
Floorcoverings manufacturer Victoria (VCP) has reassured investors about trading and the share price has started to recover. Victoria is not issuing a bond to refinance its debt because the potential pricing was unfavourable. Invesco has increased its stake to 22.1% and The Spruce House Partnership has built up a 13.6% stake.
Estate agency Purplebricks (PURP) has grown interim revenues in the UK by one-fifth. Trading in Australia is tough, and it is still early days in the US. Net cash was more than £100m at the end of October 2018.
First Derivatives (FDP) increased its underlying interim pre-tax profit by 15% to £10.6m. The interim dividend was 10% higher at 7.7p a share. The software and consultancy company with the fastest growth coming from licences for Kx software.
URA Holdings (URA) has gained EIS approval for the funding for its proposed reverse takeover of personalised digital entertainment content provider Entertainment AI. Complexities of the deal have been solved and documentation is progressing. URA has until 20 December to complete a reverse takeover.
Interim revenues and pre-tax profit at Best of the Best (BOTB) will be better than expected and this has led to a full year pre-tax profit upgrade from £1.4m to £1.6m, which is the same as the year before. The online competitions operator will be hit by the increase in remote gaming duty from 15% to 21% from October 2019. This will mean that 2019-20 forecasts will have to be reassessed.
Polarean Imaging (POLX) says that its phase III non-inferiority clinical trial of its Xenon polariser is up and running. Enrolment should be completed in the second quarter of 2019. A new order has been received to upgrade the polariser at SickKids Hospital in Toronto.
Remote tracking technology developer Starcom (STAR) has signed a deal with a distributor in North Africa covering Helios Advanced and BIO CAN fuel sensors. This year’s group revenues are expected to improve from $5.4m to $5.9m. Starcom has raised £400,000 at 2p a share.
Broadcast software provider Pebble Beach Systems (PEB) has won two new contracts that will underpin forecasts for 2018 and 2019. The two orders have a total value of £2m.
Zoo Digital (ZOO) reported interims in line with expectations. Revenues were 17% ahead at $14.9m and the main growth has come from dubbing services. The loss was slightly higher at $159,000. A major subtitling customer will increase its demand in the second half. The full year, underlying pre-tax profit is forecast to improve from $500,000 to $1.8m.
Recruitment company Kellan Group (KLN) plans to cancel its AIM quotation and the general meeting vote already has backing from the owners of 70% of the shares. The shares are tightly held and liquidity is limited.
Fastjet (FJET) says that it can continue operating in November, but it will require more cash.
Crawshaw (CRAW) has called in administrators to itself and four subsidiaries. Thirty five stores have closed and 19 are still trading. Administrators have also been appointed to Flowgroup (FLOW) because it could not find a suitable acquisition.
MAIN MARKET
Path Investments (PATH) says it is not proceeding with the farm-in for the Alfeld-Elze II licence having failed to raise the cash it required and reach agreement on the transaction structure. The deal would have led to a move to AIM. Trading in the shares remains suspended.
Beauty and personal care products supplier InnovaDerma (IDP) expects interim revenues to be similar to last year, while full year revenues are expected to increase from £10.7m to £14.4m. finnCap forecasts a rise in pre-tax profit from £700,000 to £1.7m.
Consumer goods supplier UP Global Sourcing (UPGS) reported revenues for the year to July 2018 fell by one-fifth to £87.6m and underlying pre-tax profit decreased from £10.7m to £5.6m. The main decline was due to discount retailers seeking tougher terms and delayed sales to a European retailer. Online sales increased and this helped to maintain margins. Brands include Salter kitchenware and Constellation luggage. The Kleeneze brand is being relaunched. Non-executive chairman Jim McCarthy has acquired 135,000 shares at 39.3p each. Equity Development forecasts a rise in earnings per share from 5.4p to 5.6p, while dividend per share should rise from 2.7p to 2.8p.
Trading in Blockchain Worldwide (BLOC) shares has been suspended ahead of a proposed acquisition of Chorum Group.
Shareholders have agreed to Titon Holdings (TON) moving to AIM on 10 December.
Andrew Hore
Andrew Hore Quoted Micro 1 October 2018
NEX EXCHANGE
Brewer Shepherd Neame (SHEP) managed to edge up its profit despite flat turnover of £156.6m in the year to June 2018. Underlying pre-tax profit was 5% ahead at £11.8m. The total dividend is 3% higher at 29.2p a share. Growth came from the managed pubs but there was a decline in the brewing operations because of the loss of the Asahi contract. Own brand volumes were 0.9% lower, but the division improved its profit contribution. Volumes will continue to fall as third party business is further reduced. The current year has started well.
Chapel Down (CDGP) is opening a bar, restaurant and ginnery called the Chapel Down Gin Works in the Kings Cross area. The wines and beers maker reported a 15% rise in interim revenues to £5.72m. The majority of the growth in revenues came from the wine business and demand continues to exceed supply. The overall loss rose because of the much higher loss from the brewing business. Group profit is second half weighted.
V22 (V22) slipped into loss in the first half of 2018 as the NAV declined from 3.94p a share to 3.88p a share. If the art portfolio is revalued the NAV has increased from 7.47p a share to 8.29p a share.
Coinsilium Group Ltd (COIN) generated revenues of £1.33m in the six months to June 2018. There was a reported pre-tax profit of £554,000, after an impairment charge of £216,000. There was £65,000 of cash generated in the period. The blockchain consultancy and investment company obtained most of its revenues from token sales advisory business.
KR1 (KR1) made a loss of £7.36m in the six months to June 2018. That loss was due to unrealised losses on the carrying value of digital currencies and other investments because of the decline in prices during the period.
Property investor Ace Liberty and Stone (ALSP) increased its annul revenues by one-third to £3.52m, but pre-tax profit declined from £1.12m to £214,000. That was due to a lack of disposal gains and higher interest costs. Ace has acquired the Mecca Bingo Hall in Chesterfield for £3.999m and this generates an annual rent of £301,000.
A €5.34m gain on the acquisition of an investment property helped Black Sea Property (BSP) swing from a loss to a pre-tax profit of €5.11m. The NAV increased from 0.76 cents a share to 1.16 cents a share.
Health staff provider Healthperm Resources Ltd (HPR) nearly trebled its interim revenues to £297,000 as the number of candidates deployed jumped from 50 to 144. There are 158 people enrolled in the Middle East language training centre.
BWA (BWAP) continues to seek a reverse takeover candidate and its two investments are making progress. Prepaid cards provider Prepaid Global Services is making slower than expected progress but continues to plan to gain a quotation. BWA has applied for licences in Cameroon on behalf of investee company Mineralfields. BWA had £76,000 in the bank at the end of April 2018, while shareholder funds increased from £570,000 to £764,000.
Forbes Ventures (FOR) has appointed Igor Zjali as chief investment officer and Kirk Kashefi as a non-executive director. Nigel Quinton becomes permanent finance director. The £100,000 loan from Quanta Capital has been converted into 100 million shares. There was £56,000 in the bank at the end of June 2018. Investee company Civilised Bank has resubmitted its application for authorisation to the Prudential Regulation Authority.
Etaireia Investments (ETIP) engaged Bishop and Sewell to investigate transactions undertaken by former boss Baron Bloom. He failed to report that he received £6,230 of rent due to Etaireia from a tenant of the Ivy Leaf Club property. Bloom is owed outstanding salary and expenses, so no action is being taken by the company. Greg Collier has stepped down as a non-executive director.
Healthcare IT supplier DXS International (DXSP) swung from profit to loss in the year to April 2018, partly due to the interest charge. Revenues dipped from £3.43m to £3.41m. Investment in new products should help to build revenues.
Western Selection (WESP) increased its NAV from 95p to 96p. Improvements in the value of the stakes in Northbridge Industrial Services and Bilby, offset the reduction in the Swallowfield investment valuation. The total dividend has been increased from 2.2p a share to 2.25p a share. The shares are trading at a discount to NAV of around one-third.
Crossword Cybersecurity (CCS) increased its interim revenues by 37% to £544,000 and the loss was reduced from £1.24m to £824,000. There was £1.75m in the bank at the end of June 2018.
The NAV of EPE Special Opportunities (EL.P) fell by 19% to 190.2p a share over the six months to July 2018, due to a halving of the value of the investment in Luceco, where, in August, EPE invested a further £2m.
Wishbone Gold (WSBN) reported flat interim revenues of $3.91m, but the loss increased from $331,000 to $527,000. The revenues were generated from Thailand and Africa. The Honduras operation has been delayed but should be up and running by the end of the year.
Via Developments (VIA1) has raised a further £140,000 from a debenture stock issue.
Interim revenues declined from HK$7.22m to HK$5.27m at MiLOC Group Ltd (ML.P) and there was a significantly higher loss of HK$24.8m. The cash position was HK$7.65m at the end of June 2018. The traditional Chinese medicines supplier was hit by lower wholesale orders. Discussions continue with additional distributors.
AIM
Parasite control products developer TyraTech Inc (TYRU) has signed a conditional merger agreement with American Vanguard Corporation, which involves an offer to the other TyraTech shareholders of 3.15p a share. TyraTech needs cash to grow and 34.4% shareholder American Vanguard is in a stronger position to obtain the finance. TyraTech had cash of $3.7m at the end of June 2018.
Northbridge Industrial Services (NBI) is still losing money but the electrical and oil and gas tools markets are showing signs of improvement. A full year loss of £2m is still expected but the group could reach breakeven next year. Northbridge has the cash to invest in additional rental equipment.
Rose Petroleum (ROSE) reported a lower interim loss and it had net cash of $2m at the end of June 2018. Drilling of the first well on the company’s Paradox Basin acreage in Utah should start before the end of the year. A recent report suggested that there could be 13mmboe of 2C resource. There has been successful exploration in the area and it already has the appropriate infrastructure. If the appraisal well is a success that should provide a strong background for a further fundraising.
Keystone Law (KEYS) grew interim revenues by 30% to £19.9m thanks to strong recruitment of new lawyers. This progress means that Keystone is on target to improve full year pre-tax profit from £2.9m to £4.4m and a total dividend of 7.5p a share is expected.
NWF (NWF) says the warm summer has hit demand for heating oil and there has been increased competition in fuels. There has been increased demand for feed and the food distribution business is trading in line with expectations.
Health monitoring equipment supplier Deltex Medical (DEMG) is adapting its strategy in order to grow revenues and generate cash from existing customers. Costs are also being reduced. Probe revenues fell in the first half of 2018 due to delayed orders in the US and France. Overall, interim revenues fell from £2.88m to £2.33m, but the operating loss was only slightly higher at £1.14m. There is just over £1m in the bank.
Fishing Republic (FISH) has appointed Daniel Quinn as chief executive. He has previously worked at Go Outdoors and Tesco. That could point to a broadening of the range of products that will be sold by the fishing tackle retailer. Interim revenues fell from £4.1m to £3.4m, while the loss was £2.5m, which includes stock write downs and other one-off costs. Five outlets have been closed.
Trinity Exploration (TRIN) increased its oil and gas production in the first half and also achieved higher prices. The Trinidad-focused oil and gas producer increased interim revenues by 49% to $30.1m and generated $5m of cash from operating activities. There was net cash of $19m at the end of June 2018.
Gama Aviation (GMAA) increased interim revenues by 3% to $104.6m, with a lower contribution from the ground maintenance activities offset by higher revenues from the air services operations. A better second half should enable Gama to increase its full year pre-tax profit from $17.1m to $19.9m.
Oil and gas producer and explorer Cabot Energy (CAB) increased its interim revenues from $1.8m to $7.5m thanks to higher production in Canada, where Cabot took full control earlier this year. Even so, there was still a $4.2m first half loss, mainly due to exceptional costs, following the installing of a new management team. Management is in talks with potential farm-in partners for some of its Italian assets. That would enable Cabot to focus its investment in Canada. There was $6.2m in the bank at the end of June 2018, although some of that cash could be needed to complete the purchase of an Italian producing asset.
Immupharma (IMM) had £9m in the bank at the end of June 2018. The group is collaborating with Icanthera, which will in-licence the Nucant cancer programme, which has completed two phase 1 trials. Immupharma is also seeking to divest its subsidiary Ureka, while retaining an interest in the potential of the operations. Even though the results of the Lupuzor phase III trial were disappointing, a deal has been signed for Lupuzor to be provided via a Managed Access Programme. An open label extension study for Lupuzor will report by next summer.
Park Group (PKG) says that it has grown its cash balances and both the consumer and corporate businesses are trading well. Park is on course for a full year profit of £13.6m.
Active Energy (AEG) reported a higher interim loss. This was a period when $1.32m was spent on the development of the CoalSwitch plant. Along with its partner, Active has submitted an EU grant application for the SuperFuel coal slurry recovery technology and a decision should be made before the end of the year. There is also optimism about gaining a Crown Timber Licence for Newfoundland and Labrador.
Destiny Pharma (DEST) still has cash of £15.1m even though costs were increased in the first half. Investment in trials means that cash could fall to £10m by the end of the year. The phase I safety study for the use of XF-73 to prevent surgical infections should be completed by the end of this year and a phase IIb trial could commence early next year. A second formulation of XF-73 is being developed for dermal infections and diabetic foot ulcers in particular.
Midatech Pharma (MTPH) plans to sell its US subsidiary, which it acquired in 2015 when it gained its Nasdaq listing. Midatech will receive an initial $13m for the cancer care products supplier. The cash will be used for the research and development operations and paying off the loan from MidCap.
Bosch has invested £9m in fuel cell technology developer Ceres Power Holdings (CWR) in return for a 4.4% stake. Weichai Power will invest a further £1m to maintain its 10% stake.
There was a 17% fall in gold processed by Goldplat (GDP) in the year to June 2018, but sales only dipped from 40,285 ounces to 39,400 ounces. Revenues increased by 7% to £33.8m. The Kilimapesa gold mine continues to disappoint and lose money. A lower contribution from the Ghana processing operations and a bad debt were the main reasons behind the fall in pre-tax profit from £2.84m to £1.79m. Goldplat is seeking other mine investments, not necessarily in Africa. There was £1.54m in the bank.
Veltyco (VLTY) has managed to reduce its receivables but the were still €12.6m at the end of June 2018. Revenues for the previous six months were €8.9m. Net cash was €1m. Veltyco will launch its own financial trading brand in the fourth quarter.
Stride Gaming (STR) continues to be hit by the stagnation of the online bingo market but the decline in pre-tax profit is set to be in line with expectations. In the year to August 2019, pre-tax profit is expected to fall further from £14.2m to £13.8m. There will be a £4m provision for the recent fine from the UK gambling authorities.
Strategic Minerals (SML) reported a jump in interim pre-tax profit from $158,000 to $2.69m, but this did not come through in cash during the period. That is because £2.46m of the profit came from a gain based on the payment for the Leigh Creek copper mine below its asset value.
MAIN MARKET
Hemogenyx Pharma (HEMO) is moving towards the point where it can submit an IND application to the FDA for CDX antibodies. There is initial data that CDX antibodies can attack and eliminate Acute Myelogenous Leukemia in vitro. Hemogenyx already has an agreement with a global pharma company for this technology. Northland has been appointed as broker.
World Trade Systems (WTS) reported a drop in interim revenues from £10.1m to £6.3m and it has fallen into loss. Trading has been tough for the health food subsidiary. This is set to continue. Trading in the shares has been suspended for more than a decade and the board says that is working towards a resumption of trading on the premium segment of the Main Market.
WideCells Group (WDC) has gained financing of up to £2.7m from the European High Growth Opportunities Securitization Fund. The facility is convertible into shares and has warrants attached. The cash will be invested in the stem cell storage and insurance operations. The BabyCells stem cell storage service has been launched. Group revenues remain modest and WideCells made an interim loss of more than £2m. There was £1.73m in the bank at the end of June, offset by debt of £1.17m.
Investment company London Financial and Investment Group (LFI) has maintained its NAV at 65.4p a share, despite a decline in value of its stake in Finsbury Food (FIF), and the total dividend has been edged up to 1.15p a share. The share price is 42.5p.
Standard list shell Blockchain Worldwide (BLOC) still had £1.4m in the bank at the end of June 2018 following its decision to change its strategy from telecoms to blockchain acquisitions. Management is analysing potential acquisitions.
Andrew Hore
Andrew Hore – Quoted Micro 3 September 2018
NEX EXCHANGE
Healthperm Resourcing Ltd (HPR) has won a contract from Medway NHS Foundation Trust to supply up to 400 nurses. New research from Edison Investment Research forecasts a 2018 loss of £2.3m for the healthcare staffing company, falling to £600,000 in 2019. Initial revenues were generated last year and they could reach £2.8m in 2019. As revenues grow margins should improve. Net debt could be more than £5m by the end of 2018. The company’s loan notes, which are being subscribed for in monthly tranches by the majority shareholder, are repayable at the end of 2019.
Barkby Group (BARK) joined NEX in June after reversing into former AIM company Sovereign Mines of Africa. The gastropubs operator generated revenues of £950,000 and an underlying pre-tax profit, before flotation costs, of £133,000 in the three months to July 2018. The Turf to Table branded outlets continue to outperform expectations. The company is debt free and ready to acquire additional properties.
Crossword Cybersecurity (CCS) has appointed an unnamed nominated adviser ahead of a prospective flotation on AIM in the next few months. Hybridan is already the company broker. SaaS-based cyber software provider Rizikon Assurance is making progress and other products are in development.
Halal food-based certification services provider DagangHalal (DGHL) increased its revenues from MYR4.64m to MYR6.46m in 2017. There was a cash outflow from operating activities of MYR9.44m and net cash was MYR11.6m at the end of 2018. The company has subsequently settled the dispute with its former chief executive with a payment of MYR500,000.
Blockchain ventures investor and adviser Coinsilium Group Ltd (COIN) has entered into a strategic partnership with Universal Reward Protocol, which is developing a protocol so that retailers and shoppers can interact, for a €20m token sale. Coinsilium has also agreed an advisory partnership with Y Ventures subsidiary, Luminore 8.
Positive Healthcare (DOC) has asked for trading in the company’s 7% bonds 2021 to be suspended. Irregularities have been identified at the principal operating subsidiary and Positive is unable to publish its accounts or pay the next instalment of interest on the bonds.
Etaireia (ETIP) has completed the sale of a property in Girvan for a loss of £12,000. The company acquired the property for 25 million shares and £35.000 in cash and has received £47,000 in cash plus £1,000 contribution to legal costs. The £35,000 cash consideration is yet to be paid.
PCG Entertainment (PCGE) had $1.4m in the bank at the end of March 2018. Since then, the settlement of an equity share agreement cost $156,000. Litigation with a former chief executive, which scuppered acquisition plans, has been completed with a settlement of $286,000. PCG is in talks with a potential gaming company acquisition.
Panther Metals (PALM) has completed its review of technical information on three exploration tenements in north west Ontario, where it holds an option to acquire. Several high grade gold veins and base metal occurrences have been identified. A detailed exploration programme is being designed.
AIM
Sinclair Pharma (SPH) has agreed a 32p a share cash offer from Huadong Medicine Co, but it is still subject to pre-conditions relating to the Chinese authorities.
Watkin Jones (WJG) has exchanged contracts for a 599 bed student accommodation site from Kelaty Propco. This project should be completed by September 2021. It has also secured another deal with Kelaty for a 300 residential apartment scheme in the same area, which will boost the build-to-rent pipeline.
One Media IP Group (OMIP) is planning to raise £2.9m via a share placing at 6p a share and up to £6m from a loan note issue to the Business Growth Fund. Lord Grade and Ivan Dunleavy have each invested £37,500 in new shares. The intellectual property owner intends to use the cash to acquire music publishing rights, artists recordings and songwriters’ rights.
Westmount Energy Ltd (WTE) has made a £810,000 investment in JHI Associates Inc, which is focused on exploration in the Guyana-Suriname basin, where it has a 40% carried interest in the Canje offshore block. This investment represents 56% of Westmount’s gross assets.
Otus Capital Management and Andrew Gibbs have nearly doubled their stake in Van Elle (VANL) to 10.2%. Mark Cutler joined the piling company as chief executive last month.
Polarean Imaging (POLX) has commenced the recruitment of patients for the phase III clinical trial in the US to demonstrate the non-inferiority of the company’s drug / device combination. The medical resonance imaging technology using hyperpolarised 129-xenon gas only has to show that it is as good as the current treatment. Eighty patients will be recruited. Some will be candidates for lung resection and others for lung removal. A pilot programme has helped to design the study, which could be finished before the end of 2019. Polarean has enough cash to make progress with the trial but will need more finance to reach completion.
Positive initial results from an oncology drug study have given the Midatech Pharma (MTPH) share price a boost. This is the first in-human study for MTD201 Q-Octreotide, a sustained-release treatment for carcinoid cancer and acromegaly. The study shows a safe, well-tolerated and effective sustained release of the drug.
Filtronic (FTC) has won a second order, worth $1.1m, for its MassiveMIMO technology, which helps mobile networks use their spectrum efficiently. It is still early days for the technology, but this is a positive sign and will offset the decline in older product ranges.
CCTV and security technology supplier Synectics (SNX) has secured a large contract with Serco, covering six custodial sites. This will help to underpin the current forecasts.
Altona Energy (AHR) has signed an exclusive licence for pyrolysis technology in Australia and China with GCAT. This will enable Altona to construct plants in the two countries and Altona will receive 95% of the net revenues generated by the technology when used in the treatment of waste.
Thor Mining (THR) says that metallurgical test work shows 78% copper recovery at the Kapunda copper project when using glycine as a leaching agent. Thor is earning up to 60% of Kapunda.
FIH Group (FIH) has traded well in the first five months of its financial year, thanks to a strong performance by arts logistics business Momart, which has opened a new facility. The Gosport ferry and Falkland Islands activities are trading in line with expectations. A small reduction on last year’s pre-tax profit of £3.2m is still anticipated.
Starcom (STAR) reported a 61% increase in interim revenues to $3.1m. There has also been a change in mix from lower margin to higher margin products. The security and tracking products developer is still losing money and is on course for a small, but much reduced, full year loss. The business is second half weighted so the outcome is heavily dependent on trading in the last few months of the year.
MAIN MARKET
BATM (BVC) is set for a good second half. The biomedical and networking divisions have both been winning contracts and a significant amount of the benefits of these wins will come through in the second half. The most high profile contract win is the joint development deal with ARM. The first deal under this agreement is with FatPipe Networks, which develops technology for the optimisation and security of wide area networks. Longer-term, BATM’s SDN/NFV technology could be important in the development of driverless vehicles and other new technologies. BATM has net cash of nearly $17m.
Interim revenues at Ross Group (RGP) declined by 28% to £68,000 but it still managed to make a pre-tax profit of £10,000. The search continues for a suitable acquisition. Large shareholders have lent £6.07m to Ross.
Telecoms services provider Toople (TOOP) has won a contract with a reseller worth at least £3.5m over a three year period. Group gross margins are running at around 15%. That suggests a gross profit of £525,000 over the period of the contract, although the gross margin on this business could be higher. To put that in perspective, chief executive Andrew Hollingworth is entitled to a salary of £120,000, so this contract could cover his salary and some of the other directors’ salaries. Toople needs further wins to reach breakeven. The share price has more than trebled since the contract news, just in time for another share issue to raise cash to keep the business going.
Andrew Hore
Andrew Hore – Quoted Micro 20 August 2018
NEX EXCHANGE
Health and community care properties developer Ashley House (ASH) reported a much-improved profit for the year to April 2018. There was a strong second half performance because of the completion of four schemes. Full year revenues were flat at £18.5m, while pre-tax profit jumped from less than £100,000 to £1.8m, although that includes a £500,000 write back of a previous impairment charge. Net debt was reduced from £2.5m to £1.5m. The housing and health property pipeline is valued at £206m, covering 22 schemes. The F1 Modular business lost money last year but trading appears likely to improve.
Ananda Developments (ANA) has acquired $200,000 of convertible loan notes in iCAN Israel-Cannabis Ltd, which focuses on medicinal cannabis. This is the first investment for Ananda and the convertibles have an annual interest rate of 6%. The interests of Ananda director Charles Morgan have assigned $100,000 of the convertibles to the company. iCan has subsidiaries involved in organising cannabis symposiums and cannabis-based research services, plus a 5% stake in CannRx Technology Inc, which has developed liquid soluble cannabinoids for use in treatments, and a 20% stake in CMTREX, which is developing a trading platform for cannabis.
Nigel Wray has reduced his stake in High Growth Capital (HASH) from 5.99% to 4.72%. Healthperm Resourcing Ltd (HPR) non-executive chairman David Sumner has bought 29,230 shares at 190p each, taking his stake to 84.7%.
Early Equity (EEQP) says trading in the company shares will resume on 28 August. Trading had been suspended on 16 May. The resumption follows an agreement with NEX Exchange that will change how shares are distributed to related parties. Early Infinity Holdings (EI) is the exclusive distributor for Yicom Global, where Early Equity is a 47. 1% shareholder. EI’s agents sell the products in Malaysia and elsewhere in south east Asia. EI incentivises its agents by gifting them shares in Early Equity. These were deemed to be a gift rather than a trade, so they were not reported. A new nominee company with two trustees that are not shareholders in Early Equity has been set up. This will hold shares for the benefit of agents of EI. Agents will receive a warrant certificate. These agents own 46.7% of Early Equity and shares equivalent to 6.29% of the company will be transferred to the nominee company. Early Equity previously announced that it wants to move to a standard listing. The company’s NAV was £1.54m, including £429,000, at the end of 2017.
Coinsilium Group Ltd (COIN) is investing $125,000 in Bundle Network Ltd, which is developing an online platform that enables the trading of cryptocurrencies. Coinsilium will also receive Bundle Network crypto tokens.
MetalNRG (MNRG) has paid a $50,000 option fee, which could lead to the company gaining a 51% stake in a new company that holds the rights to the Kamyshanovskoye uranium project in the Kyrgyz Republic. The project has an inferred uranium resource that could be worth $144m at $26/lb, plus exploration upside. International Mining Company owns 100% of the project and it would be put into a new vehicle, where MetalNRG would inject cash to gain its majority stake. MetalNRG has 90 days to undertake due diligence and review data. If the option is not taken up the option fee would be converted into a 2.5% stake in the new vehicle.
VI Mining (VIM) is starting its drilling campaigns at minas Pampa and Rosario de Belen, while the vendors are in discussions about changes in the terms of the deals. The timing of the due payment has been extended while the talks continue.
Panther Metals (PALM) has appointed Ariana Resources (AAU) boss Dr Kerim Sener as a non-executive director.
Ecovista (EVTP) is asking for shareholder approval for a resolution that will enable it to issue up to 3.486 billion shares so that management can continue with its strategy.
AIM
Gatemore Investments has increased its stake in TLA Worldwide (TLA), the company famous for issuing a profit warning after the market closed prior to Christmas 2016, from 7.4% to 12.2%. Bart Campbell has stepped down as executive chairman of TLA, but he will continue to receive his monthly salary until the end of the year.
Last year, revenues fell by nearly one-third to £24m at microwave electronic products supplier Filtronic (FTC) but it had already been flagged. The ending of a low margin contract meant that pre-tax profit fell from £2.16m to £1.23m, although that includes exceptional finance charges of £486,000 due to exchange rate movements. The broadband and wireless divisions are being merged because they have similar customer bases. There is net cash of £3.6m plus available bank facilities. Investment in new products continues and there is long-term demand from investment in 5G networks and security-related areas.
Marshall Motor (MMH) reported a decent set of figures given the tough new car market, which is exacerbated by the decline in diesel car sales. There was a small dip in continuing revenues but underlying pre-tax profit edged up to £16.4m. Used vehicle profit improved. The dividend is maintained at 2.15p a share. Trading will be even tougher in the second half, partly due to testing regulation changes, and full year profit is expected to decline from £29.1m to £24.2m. There is a strong balance sheet with a NAV of £201m.
Zamano (ZMNO) has ended discussions with its potential reverse takeover target. This means that cash is likely to be returned to shareholders.
Condor Gold (CNR) has been granted an environmental permit for developing a processing plant for the La India project by the Nicaragua authorities. Gold production could be 80,000 ounces a year from a single open pit. Accounts for the six months to June 2018, show cash of £1.57m.
Abzena (ABZA) is recommending a 16p a share cash bid from Astro Bidco, which values it at £34.4m. The life sciences company joined AIM four years ago when it raised £20m at 80p a share. It needs additional finance pumped into the business.
Oil and gas producer Empyrean Energy (EME) has received a $906,000 tax refund from the IRS from the 2016-17 tax year.
SalvaRx Group (SALV) is selling its business to a Toronto-quoted company in return for shares, most of which will be distributed to shareholders. The 94.2% stake in cancer drugs developer SalvaRx Ltd is being swapped for 757.9million shares in Portage Biotech Inc, which are deemed to have a value of $67.5m. SalvaRx shareholders will receive 18 Portage shares for each SalvaRx share they own if they approve the disposal. SalvaRx will retain around 100 million Portage shares and become a shell.
ClearStar (CLSU) has been named as preferred contract labour screening provider for Gulfstream Aerospace. This should contribute to a reduction in loss this year.
Premier African Minerals (PREM) has raised £750,000 at 0.18p a share. Premier plans a drilling programme of up to 2,750 metres to expand the resource base at the RHA Tungsten mine. The cash should last until the end of 2018.
MAIN MARKET
Tex Holdings (TXH) reported a slump in interim pre-tax profit from £423,000 to £96,000 even though there was a small reduction in admin expenses. There was a much better contribution from the plastics division but that was more than offset by the slump in profit by the engineering division due to delays in orders. Metal fabrication and powder coating business Argento UK has recently been bought. The interim dividend is unchanged at 2.5p a share.
Nanoco (NANO) expects the first displays using its cadmium-free quantum dots to be launched before Christmas. Volume production is expected at the new Runcorn plant before the end of 2019. The 2017-18 revenues were lower than expected because it could not recognise a payment from a large customer. Net cash is estimated at £7.9m at the end of July 2018.
Dukemount Capital (DKE) reported an increase in full year loss from £177,000 to £286,000. The NAV was £379,000 at the end of April 2018. There is £148,000 in the bank. Dukemount is on the brink of moving forward with its first two supported living developments.
PV Crystalox Solar (PVCS) has settled its claim with a customer. The customer will pay a total of €28.8m, of which the outstanding payment of €14.3m will be paid at the end of November. The customer has also waived the delivery of the solar wafers that were supposed to be supplied.
Andrew Hore
Andrew Hore – Quoted Micro 13 August 2018
NEX EXCHANGE
Brewer Adnams (ADB) grew its turnover by 7% to £35.5m in the first half of 2018 but there was an underlying operating loss and lower gains from asset disposals. The reported pre-tax loss increased from £284,000 to £840,000. The second half is always more profitable. Depreciation is higher due to investment in the brewery and the refurbishment of the Swan Hotel. Adnams own beer volumes increased by 4.8%, compared with the market growth of 1.3%. Carbon dioxide shortages have affected the second half. The interim dividend is unchanged at 78p/B share and 19.5p/A share.
KSE is offering £29,419.64 a share in cash for Arsenal Holdings (AFC) and that values the football club at £1.8bn. KSE already owns or has acceptances totalling more than 97% of the shares in the company.
Healthperm Resourcing Ltd (HPR) increased revenues by 184% to £293,000 in the first half of 2018 and 144 healthcare staff candidates were deployed in the period, which was nearly three times as many as in the first half of 2017. More students are being trained in the English language. Healthcare recruitment contracts have been signed in the UK and they cover nine hospitals. Contracts have also been signed outside the UK.
Angelfish Investments (ANGP) is subscribing for 0% secured convertible loan notes in Wallet Ads Ltd. The first drawdown is £50,000 and this will be followed by five monthly instalments of £20,000. On payment of the final instalment, or under certain other circumstances, the loan notes can be converted into 20% of the enlarged share capital of Wallet Ads, which has developed a mobile engagement platform combining mobile wallet passes, web and social media and this enables digital vouchers to be sent to smartphones. Angelfish non-exec Richard Walker will join the Wallet Ads board.
Pelican House Mining (PHM) is investing in battery minerals explorer Kalahari Key Mineral Exploration (KKME), which is exploring for nickel and platinum group metals in Botswana, near the South Africa border. AIM-quoted Two Shields Investments (TSI) is a co-investor in KKME and it increased its stake to 22.2%. Two Shields Investments also increased its stake in cobalt explorer Cobalt Blue Holdings to 49% before swapping it for a 11.26% stake in African Battery Materials (ABM), thereby gaining a wider exposure to technology metals licences.
Clean Invest Africa (CIA) raised an additional £50,000 at 1p a share when it floated last year. Geremy Thomas holds a 3.1% stake.
Shareholders in Welney (WENP) have voted against the appointment of Mark Jackson and Mark Chapman as directors.
AIM-quoted TechFinancials Inc (TECH) joined NEX on 8 August. Monreal has changed its name to Eight Capital Partners (ECP).
AIM
Fryer management and commercial kitchen services provider Filta (FLTA) says that interim figures are in line with expectations. There will be a full contribution from GMG, which was acquired last year, while the sale of the refrigeration division has helped to improve margins. Revenues are growing from newer franchisees and the UK-based seals business also grew its revenues. The interims will be published on 4 September.
Former boss Philip Swinstead has sold his 9.82% stake in Parity Group (PTY) and Helium Rising Stars has taken a 10.9% shareholding. Parity is on track to achieve double digit profit growth this year. The IT recruitment and consultancy services provider is modestly rated on a prospective multiple of less than nine, even though the share price has risen following the share dealing.
Pebble Beach Systems (PEB) expects revenues to fall from £4.6m to £3.9m but the broadcast software supplier believes that the second half should be better. A backlog of £4.7m should help full year revenues to be nearer to last year’s level.
Frontier IP (FIPP) has announced its first Portugal-based spin-out. It is taking a 31.8% stake in NTPE, which is developing Paper-E technology that can be used to print electronic circuits, sensors and semiconductors. This opportunity came through the relationship with Universidade Nova de Lisboa Faculty of Science and Technology. Another investee company, 27.5%-owned Fieldwork Robotics, has secured a deal with soft fruit grower Hall Hunter to prototype and test a raspberry harvesting robot system.
Phoenix Global Mining (PGM) has reported that the first drilling results from the Empire mine in Idaho have been encouraging. There was 68 metres at 0.57% copper from the surface. The current JORC resource is 0.52% copper so it would be good news if the current drilling provides higher levels of copper.
Mereo BioPharma (MPH) had net cash of £36.9m at the end of June 2018, but a R and D tax credit of £8.2m was received in August. An adult Phase 2b study for Osteogenesis Imperfecta (OI) is due to complete enrolment by the end of September. There will be initial six month data from the open-label high dose part of the study by the middle of next year. A flotation on Nasdaq is still a possibility.
MAIN MARKET
Engineering and construction company North Midland Construction (NMD) increased its interim revenues from £135.1m to £160.9m and more than doubled pre-tax profit from £1.23m to £2.51m. The interim dividend has been doubled to 6p a share. Cash in the bank was 138% higher than 12 months before are £18.9m, although there are also finance leases of £4.5m. The order book is worth £320m. The telecoms-related part of the business is still losing money. There were much better profit contributions from the water and construction divisions.
Argo Blockchain (ARB) is developing a global datacentre management business facilitating cryptocurrency Mining-as-a-Service and has signed a deal that will provide 9.5MW of clean energy for two datacentres in Quebec (Argo already has one datacentre in Quebec). That provides the capacity for more than 150,000 subscribers and the centres will be operational in September and October. Argo joined the standard list on 3 August after raising £25m at 16p a share, which valued the company at £47m. However, the share price has fallen back to 11.13p.
Beauty and personal care products supplier InnovaDerma (IDP) has appointed Kieran Callan, who was a non-executive director, as chief executive with Haris Chaudhry moving to executive chairman. Callan used to work at PZ Cussons. This appointment follows poor trading and disappointing pre-tax profit in the year to Last October, InnovaDerma raised £4.4m at 276p a share and, having fallen by two-thirds at one point since then, the share price has recovered to 148.5p. Haircare brand Roots will be sold in Tesco.
Telecoms services provider Toople (TOOP) is holding a general meeting on 30 August in order to get shareholder approval to enable it to issue more shares to raise cash to keep the business going.
Andrew Hore
Andrew Hore – Quoted Micro 12 March 2018
NEX EXCHANGE
Shepherd Neame (SHEP) improved its interim revenues and underlying pre-tax profit. Revenues were 6% ahead at £84.1m and underlying profit edged up from £5.7m to £5.8m. The interim dividend has been raised from 5.62p a share to 5.75p a share. Net debt was £79.5m. The main growth in revenues was in the managed pubs and hotels division. There was an underlying improvement in the profitability of the brewing business, where own beer volumes were 4.2% higher.
Ashley House (ASH) has reached financial close on the Scarborough extra care housing development. There are 63 apartments plus communal areas and the gross development value is £10m. completion is expected in spring 2019. A housing development and health scheme are likely to follow. This development is not part of the Morgan Sindall joint venture. Non-executive director Christopher Lyons has bought 31,000 shares at 10.09p a share.
EPE Special Opportunities (ESO) had a fully diluted NAV of 239p a share on 5 March 2018 but that was prior to the Luceco profit warning. The NAV included Luceco (LUCE) shares at 77.8p each but the price has subsequently fallen to 57.2p a share. EPE is the largest shareholder in LED lighting products supplier and this was the second profit warning in three months. The original 2017 profit expectation was £16.7m and this has been cut to £11m.
Western Selection (WESP) has raised £668,000 from the disposal of shares in Swallowfield (SWL) and it has a remaining stake of 7.71%. Western sold 120,000 Swallowfield shares at 330p each and 80,000 at 340p each. Last month, personal care products supplier Swallowfield bought men’s grooming brand, Fish for an initial £2.7m.
Ace Liberty and Stone (ALSP) has issued £4.76m of convertible loan notes as part of the £4.85m open offer. A holder of an existing £500,000 loan note is converting into the latest convertible loan notes and like the other subscribers is receiving one warrant for each £1 of loan notes.
MetalNRG (MNRG) says a licence has been granted relating to the Palomino cobalt project, where the company has the right to acquire a 100% stake in return for two million shares at 1.5p each. MetalNRG is also issuing 500,000 shares for work that has already been carried out.
Crossword Cybersecurity (CCS) has raised £2.16m at 270p a share. The cash will be invested in sales and marketing and developing new cyber security products.
Good Energy (GOOD) says that holders of £3.6m of its first energy bonds have agreed to retain them, while the other £4.3m worth will be repaid on 29 March.
Co-chairman David Sumner has increased the amount of Healthperm Resourcing Ltd (HPR) loan notes he will subscribe for to £5m. The outstanding balance is currently £2.7m and additional tranches of up to £200,000 can be subscribed for each month.
London Capital Group Holdings (LCG) is selling a 91.5% stake in its Tradex and 100% of other subsidiary companies to its main shareholder in return for £4.64m of loan notes with a coupon of 8%. The costs of the NEX quotation will also be covered by the buyer. The remaining 8.5% of Tradex can be acquired for £431,000 in loan notes. The disposal requires FCA approval. London Capital will seek a fintech business to acquire within the required six month period.
PCG Entertainment (PCGE) and Wishbone Gold (WSBN) have joined NEX. They are both retaining their AIM quotations and are chaired by Richard Poulden.
AIM
VR Education has raised more cash than it originally asked for. It has raised £6m at 10p a share and this values the company at £19.3m. The company has developed the ENGAGE education platform and is also developing corporate training and educational content to go on the platform. The business is generating revenues but it still has to take full advantage of the technology it has developed.
Energy supplier Yu Group (YU.) increased its revenues from £16.3m to £47m last year and annualised bookings continue to grow. Underlying pre-tax profit jumped from £195,000 to £3.08m. Yu has gained a licence to supply water. The dividend has been increased from 2.25p to 3p a share.
Share (SHRE) has continued to add to its market share. In 2017, the broker revenues grew from £14.6m to £18.7m and it moved back to underlying pre-tax profit. Digital investment continues and the benefits of this will increasingly show through over the next couple of years. This year the recent partnerships will make a 12 month contribution. Higher interest rates will also help to increase interest income on the cash held.
Smart audio sales started to take off last year and Frontier Smart Technologies (FST) continues to invest in this area. The original digital radio technology business is profitable but the development costs for smart audio more than wipe that profit out. Net cash was £3m at the end of 2017 and this should be enough for Frontier’s requirements. There is scope to grow the digital radio business but smart audio will provide the main growth. From a tiny percentage in 2016, smart audio could contribute nearly two-fifths of revenues in 2019.
Begbies Traynor (BEG) has bought Springboard Corporate Finance for an initial £2.75m in cash and shares. Springboard generated a pre-tax profit of £750,000 on revenues of £2.3m in 2016-17. Up to £500,000 more will be payable depending on performance over the next five years. Begbies says that third quarter trading is in line with expectations. Corporate insolvencies are increasing, albeit from low levels.
Polemos (PLMO) has terminated the proposal to acquire SecurLinx Corporation, which still hopes to come to the London market. Trading in the shares has been restored. Polemos is raising £270,000 at 0.01p a share, plus a further £140,000 conditional on shareholder approval. These placings are before the planned share consolidation of one new share to every 100 existing shares. When additional approvals are given by shareholders a share offering will be made via PrimaryBid.
Netcall (NET) more than doubled its interim SaaS revenues thanks to the purchase of MatsSoft. Interim revenues grew by one-third to £10.7m, which includes organic growth of 5%. Underlying pre-tax profit was 8% ahead at £1.8m. Net debt is £2.5m.
Audio products supplier Focusrite (TUNE) reported sales growth of more than 25% in the first half. Edison upgraded its full year profit forecast by 4% to £10.4m.
Applied Graphene Materials (AGM) has secured the use of its graphene-enhanced epoxy prepreg in the tailgate of the W Motors Fenyr sports car. This is a limited market but it is a good showcase for the technology.
Second half trading was stronger than expected at FIH Group (FIH) as both trading in the Falkland Islands and Momart improved their performance. This has led to an upgrade in the 2017-18 profit forecast from £2.5m to £2.8m.
GRC International (GRC) raised £5.04m at 70p a share when it joined AIM on 5 March. The share price ended the week at 115p. GRC provides services relating to IT governance and compliance.
Zamano (ZMNO) had €5.05m in the bank at the end of January 2018. It remains in talks for potential acquisitions that would enable the company to remain quoted. Part of any deal would be the offer of a cash return to existing shareholders. Trading in the shares has been suspended.
Microsaic Systems (MSYS) had £3.2m in the bank at the end of 2017. Microsaic is focusing on the biopharma market but it could take until 2019 for its partners to start to generate revenues from its technology. There should be enough cash for more than one year but more will be required. Costs have been reduced.
SysGroup (SYS) has signed a three-year managed hosting deal with TJ Morris Ltd, trading as discount retailer Home Bargains, worth more than £950,000.
Contract research organisation Fusion Antibodies (FAB) says that its 2017-18 revenues are expected to grow by at least two-fifths to £1.9m. Last year’s flotation took up management time so revenues are lower than hoped.
Attraqt (ATQT) reported a full year loss of £4.05m, including exceptional costs of £2.38m. The e-commerce software provider intends to focus on operational efficiency this year. There was £2m in the bank at the end of February.
BOS Global Holdings (BOS) has been placed in administration.
Instem (INS) has switched a long-standing client to the SaaS model and this will increase recurring revenues by two-fifths. There are potentially £10m of fees that could be converted to the recurring revenues model.
WANdisco (WAND) has announced more deals including a partnership with Alibaba, which will embed WANdisco Fusion in some of the cloud services that it offers. Total bookings increased by 45% to $22.5m in 2017 and this has sparked a 2018 revenues upgrade by WH Ireland from $25.5m to $30.8m, although a slightly higher loss of $6.5m is expected. WANdisco could move near to breakeven in 2019.
Mirada (MIRA) has secured a £3m loan facility, which adds to the existing facilities. An initial £1.5m will be drawn down within two months. This provides working capital to finance additional contract wins. The annual interest rate is 15%. The provider of the facility is a 27% shareholder.
Strategic Minerals (SML) has paid A$1.5m in cash and A$1.45m in shares for the Leigh Creek copper mine. Strategic has acquired 24,900 tonnes of JORC compliant resource copper. Production should build up to 200 tonnes of copper each month and there is an offtake agreement for 100% of copper production. Strategic has extended its rolling agreement with the owner of the Cobre magnetite stockpile until March 2019. This deal generated revenues of $5.64m in 2017.
Zoo Digital (ZOO) says full year revenues will be at least $28m, up from $16.5m last year, while EBITDA will be ahead of expectations and be at least $2.3m. Localisation services remain the main growth area. Herald has reduced its stake from 15.7% to 14.6%.
Volvere (VLE) says that its 2017 pre-tax profit improved from £1.94m to £3.22m. Impetus Automotive contributed the growth in profit with CCTV software company Sira and Shire Foods reporting lower profits. NAV is 656p a share, with £18.4m in cash and marketable securities.
AFC Energy (AFC) reduced its loss to £5.5m in 2017. The fuel cell technology developer should have enough cash for this year, but it is likely to run out in 2019. AFC could move into profit in 2020.
Pallet developer RM2 International (RM2) has received $2m from the disposal of a building in Switzerland. That means it will have enough cash until mid-April.
Drilling is set to recommence at the Stonepark zinc project in Limerick and Connemara Mining (CON) has set aside £250,000 to cover its share of the spending over the next 12 months. Connemara has a 23.4% stake in the joint venture that owns the project.
Drilling results from the Kodal Minerals (KOD) lithium project at Bougouni in Southern Mali continue to be positive. The latest 19 drill holes have shown high grade intersections of consistent pegmatite mineralisation of up to 1.68% Li2O.
Clear Leisure (CLP) is ready to set up its Bitcoin mining joint venture in Serbia. Management says that the joint venture could produce more Bitcoins at a lower cost than expected. That would increase the return on the €200,000 investment. Assuming a Bitcoin price of $10,000 and an 8% discount rate, the investment could eventually be worth €389,000.
MAIN MARKET
Bioquell (BQE) reported a rise in pre-exceptional profit from £1.6m to £2.9m in 2017. This was despite a decline in defence revenues. There is £14.6m in the bank. The focus is the biodecontamination business and management believes that this will show through in improved performance this year.
InnovaDerma (IDP) has warned that its full year figures will be below expectations. The personal care products supplier always expected the year to be second half-weighted and full year revenues will be higher. However pre-tax profit will be similar to the £1.03m reported for last year. Last October, £4.4m was raised at 276p a share. The share price has fallen to 121.5p.
Toople (TOOP) has raised £250,000 at 1.022p a share. This will keep the telecoms business going as it tries to increase its revenues in order to reduce its loss. Last June, Toople raised £1.41m at 3.25p a share. Toople joined the standard list in May 2016 when it raised £2m at 8p a share.
Path Investments (PATH) is delaying its exit from the standard list until 29 March. The plan is to move to AIM when an oil and gas asset acquisition is made.
Andrew Hore
Andrew Hore – Quoted Micro 26 February 2018
NEX EXCHANGE
Blockchain technology investor Coinsilium Group Ltd (COIN) is advising Tutellus Technologies on its upcoming token generation event. Tutellus matches students with teachers in the Spanish-speaking world. The Tutellus token will be used as a medium of exchange for the new blockchain-based platform. Richard Lloyd has been appointed as adviser to Coinsilium’s Gibraltar-based subsidiary TerraStream, which is developing a token offering platform. TerraStream intends to raise cash via a token offer but it is waiting for a more specific set of regulations from the Gibraltar Financial Services Commission that should be published in the second quarter.
IMC Exploration Group (IMCP) has decided to focus on the flagship project in gold project at Avoca, Wicklow and the Kilbricken zinc deposit in County Clare. IMC plans to relinquish five licences.
Natural resources investing company MetalNRG (MNRG) has appointed Rolf Gerritsen as chief executive and he is subscribing for 2.5 million shares at 2p each, combined with 2.5 million warrants exercisable at 3p each. The former chief executive Paul Johnson is acquiring the same number of shares on the same terms. MetalNRG is progressing the potential standard listings of a number of resources businesses and it will retain stakes. MetalNRG is also seeking to move to the standard list.
Health staff recruiter Healthperm Resourcing Ltd (HPR) generated revenues of £250,000 in 2017. There were 130 candidates deployed. The company intends to double its number of employees by the end of June 2018. New contracts have been won in the Middle East and with Walsall Healthcare NHS Trust and these candidates will be found this year. The 2017 figures should be published in May.
AIM
Gooch and Housego (GHH) says that it is experiencing exceptional demand for critical components for microelectronic manufacturing and this has offset any slowing in demand for high reliability fibre couplers. Trading is in line with expectations and there will be a second half weighting to the year’s figures. US tax changes will reduce the deferred tax in the balance sheet by £500,000 and cut the effective rate of tax to around 23%.
Lighthouse Group (LGT) is doing particularly well at the moment. The IFA significantly increased its business from affinity groups and average revenues per adviser rose by nearly one-quarter to £122,000. Assets under management are starting to build up and the fees from these will begin to become more important. In 2017, pre-tax profit improved from £1.9m to £2.5m and net cash was £8.7m. The dividend was raised from 0.27p a share to 0.42p a share.
Scotland-based Springfield Properties (SPR) reported maiden interim results. Revenues were 10% higher at £54.8m and pre-tax profit was £3.1m, up from £2.6m. The fastest growth came from the affordable homes division. The private housing side is waiting for planning permissions for planned villages in Scotland but existing permissions mean that the second half has significant contracted revenues. Even though Springfield was quoted for a few weeks of the period it is paying a 1p a share interim dividend.
Saffron Energy (SRON) has asked for trading in its shares to be suspended because there have been changes to the proposed acquisition of south east Asian oil and gas assets. A supplementary admission document is likely to be required.
Gas and electricity supplier Flowgroup (FLOW) has secured £5m of additional funding from Palm Ventures and Lombard Odier Asset Management to provide seasonal working capital. Cost savings are on track but the market remains competitive.
Ultimate Sports Group (USG) has decided to stop marketing spending on the UltimatePlayer.me children’s sport platform due to disappointing take-up. There will be a £521,000 write-off relating to this platform. There was £130,000 in the bank at the end of 2017 and Ultimate has raised £537,500 at 5p a share, although this will require a capital reduction. Richard Bernstein is acquiring nine million shares and David Kyte the other 1.75 million shares. Eurovestech-boss Bernstein has been engaged to find a suitable business to acquire and a successful transaction would net him a fee of 1% of the value of the acquisition.
Fintech business TruFin (TRU) joined AIM on 21 February, when it raised £70m at 190p a share. The share price ended the week at 214p.
Stanley Gibbons (SGI) has secured a £19.4m investment from Phoenix UK Fund to shore up its poor balance sheet. This will leave Phoenix with a majority stake, but it will take out the RBS debt.
CCTV technology business Synectics (SNX) improved its pre-tax profit from £2.6m to £3m last year, despite strong comparatives in the key gaming sector in the previous year. Oil and gas improved its contribution but trading in transport was hit by the lack of new buses being bought by companies. Synectics expects flat pre-tax profit of £3m for the year to November 2018, due to additional development spending, but a sharp jump to £4m is forecast for next year.
Tristel (TSTL) has been hit by tough trading conditions in surface cleaners in the NHS and investment in gaining approvals have also held back profit. The international business goes from strength to strength and this helped interim pre-tax profit to grow to £2m. US EPA approvals for surface cleaners could be gained by May but then state by state approvals are required so revenues will not flow through until 2019. Approvals for endoscope cleaning products require FDA approval and will take longer.
Drilling results from the APTA deposit at the Anza project in Colombia that is 100%-owned by Orosur Mining Inc (OMI) have been positive. High grade gold mineralised intercepts currently cover a strike extent of 1.5km and a depth of 275 metres. Results are awaited on five more holes and six holes will be drilled on Charrascala deposit.
Kin Group (KIN) says it will not make an acquisition by 28 February so trading in the shares will be suspended. There are talks with potential acquisitions and £800,000 remains in the bank.
MAIN MARKET
London and Associated Properties (LAS) is selling the Brixton markets to Market Village for £37.25m in cash. This compares to book value of £24.5m. The net income is £1.2m a year. London and Associate Properties had net assets of £38m, which is equivalent to 44.5p a share, at the end of June 2017. The share price is at a one-third discount to the June 2017 even without any profit on the disposal and gearing should fall to below 100%.
Macfarlane Group (MACF) increased pre-tax profit by 19% to £9.3m on the back of a 9% increase in revenues. The profit growth came from the packaging distribution division with the manufacturing division making a lower contribution. The full year dividend was raised from 1.95p a share to 2.1p a share. The pension deficit has been cut from £14.5m to £11.8m.
BATM Advanced Communications (BVC) had a strong second half and 2017 revenues were much better than expected. EBITDA is expected to jump from $2.8m to $7m. The growth is coming from both the networking and biomedical divisions.
Precious stones explorer Shefa Yamim (SEFA) says that Macquarie University has confirmed the existence of moissanite coupled with titanium-rich corundum in its licence area volcanic rocks and this augurs well for the potential of the Kishon Mid-Reach project.
Andrew Hore
Quoted Micro 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 1 May 2017
NEX EXCHANGE
Cyber security technology developer and consultancy Crossword Cybersecurity (CCS) continues to scale up its business and there is a product launch planned for this summer. In 2016, revenues jumped from £21,000 to £345,000 but the loss increased from £755,000 to £950,000 – even after £78,000 of R&D tax credits. There was £1.55m in the bank at the end of 2016. AIM-quoted Iomart is cooperating with Crossword on launching the Nixer machine learning DDoS platform on the market.
Brewer Adnams (ADB) says sales of beers and spirits continue to grow and its pubs are trading well, although the sale of smaller pubs will reduce the profitability of this part of the group. Currency movements, the sale of the UK distribution rights for Lagunitas beers and the renovation of the Swan Hotel will hamper overall progress in the first half. The £7m investment in the brewery is almost complete.
Sandal (SAND) has signed an agreement with Spanish smart home technology business Momit, which will redesign its smart thermostat so that it is compatible with the Energenie MiHome platform. This is part of Momit’s strategy to enter the UK market. The redesigned product should be launched in September and, along with related radiator valve sales, could add £500,000 to the annual revenues of Sandal.
Healthcare staff provider Healthperm Resourcing Ltd (HPR) has revised its strategy and candidates need to have passed the International English Language Testing System, which is required for a visa anyway. Healthperm has opened its own IELTS training facility in the UAE and this is focused on nurses. Healthperm has won two new mandates and there are three other potential mandates on the cards. Chief executive David Sumner has agreed to increase the maximum amount of loan notes he will subscribe for from £1m to £1.8m. The loan notes have a 10% interest charge.
Capital for Colleagues (CFCP) has raised £1.44m at 42p a share from its open offer and a further £980,000 in a placing at the same price. Coinsilium Group (COIN) has raised £118,000 at 2p a share and it will use £60,000 to finance the development of a blockchain-based management system. Goldcrest Resources (GCRP) is raising £380,000 at 0.5p a share. The cash will help to finance the competent persons report on the Norio block, which the company is in the process of acquiring.
NQ Minerals (NQMI) has entered into a A$6.5m loan facility to help finance the acquisition of the Hellyer gold mine in Tasmania. This means that NQ has A$15m of the A$20m in cash it requires to make the purchase.
Indigo Holdings (INGO) is investing £200,000 in Iranian Fast Moving Consumer Goods Ltd, an online retail delivery business associated with a convenience store chain.
Ashley House (ASH) has secured a £500,000 loan facility from its non-executive deputy chairman Stephen Minion. The secured facility lasts for 12 months.
Housebuilder St Mark Homes (SMAP) has appointed Alfred Henry Corporate Finance as its corporate broker. Merchant Place had performed this role for 18 years.
AIM
Mortice (MORT) has made a second UK acquisition. The facilities management services provider is paying up to £4.5m for Elite Cleaning and Environmental Services – £3.5m in cash and shares plus a 12-month earn-out of up to £1m in cash and shares. Elite provides cleaning services and clients include ITV and BMW. Elite made EBITDA of £1m on revenues of £12.3m. finnCap has increased its earnings forecast by 5% to 7.8 cents a share.
Internet domain registry company Minds + Machines (MMX) moved into profit in 2016. Revenues grew from $5.5m to $13.5m, while a loss was turned into an underlying pre-tax profit of $3.5m. This follows a restructuring of the business and the sale of non-core operations. Sales of the .vip domain in China were the major factor in the growth in revenues and .boston should be launched later this year. Cash conversion was poor due to restructuring costs and increased working capital.
Directa Plus (DCTA) had technological problems which held back the progress of the graphene producer last year. In 2016, revenues fell from €1.7m to €0.8m and the loss more than doubled to €4.1m. The reason behind the fall in revenues was the lack of sales of mobile decontamination units with sales of G+ graphene nearly doubling. The focus is textiles and environmental uses of the company’s graphene. Directa Plus has net cash of €6.8m and this will be enough to absorb the expected cash outflows for the next couple of years.
Diagnostic tests supplier Omega Diagnostics (ODX) says that its underlying pre-tax profit will fall from £1.3m to £1.1m in 2016-17. All divisions increased their revenues, helped by currency movements. Field trials are planned for the VISITECT CD4 test and the CE mark could be obtained by the end of the year.
TLA Worldwide (TLA) continues to embarrass itself with disastrous trading statements. Having issued a trading statement at 6.26pm on 23 December 2016, it has released its latest profit warning at 4pm – management probably thinks that is a big improvement because it was before the market closed. It turns out that four months after the end of the financial year TLA’s 2016 figures will be even worse than expected. Changes to revenue recognition and provisions for money that TLA thought it was owed but has not been paid are the reason. There is also money that TLA believed it was owed in financial periods prior to 2016 but has not been paid. That will lead to write-downs and the current estimate is between $1.5m and $2.5m. The 2016 figures may eventually be released in late May, according to the company.
Imaginatik (IMTK) says its revenues for the year to March 2017 will be flat at £3.9m but the loss should still be reduced. Bookings for the innovation software were lower at £3.5m but new clients were won in the second half. Imaginatik could be on course to breakeven in the current financial year.
AstraZeneca has returned the rights to AZD9412 to Synairgen (SNG) following a phase IIa study. The inhaled interferon beta did have a beneficial impact on lung function but the positives were not enough to continue with trials. The data will be returned to Synairgen for it to analyse. Synairgen has £4m in the bank.
Avacta (AVCT) has signed its first non-therapeutics licence for its affimers. The licensee is a major global diagnostics companies. The upfront payment is probably small but this is a significant deal.
Radiation detection technology company Kromek (KMK) is trading in line with expectations and it expects to continue to win new contracts.
Property management services provider HML Holdings (HML) has confirmed that its 2016-17 profit will be in line with expectations of £1.8m. There were six acquisitions during the year. A 2017-18 profit of £2.2m is forecast.
Instant communication mobile services provider Mobile Tornado (MBT) has raised £1.1m at 5p a share and the cash will be used for further development of its technology and support the launch of the Dispatch Console service. Last year, revenues fell 10% to £2.02m but recurring revenues increased to more than 90% of the total. The loss increased from £2.03m to £3.73m. Net debt was £9.06m at the end of 2016.
MAIN MARKET
Sealand Capital Galaxy Ltd (SCGL) has completed the acquisition of social media business SecureCom and Sealand hopes that a share split/bonus issue will improve liquidity. Existing shareholders will receive nine bonus shares for each one they own, leaving them with ten times the number of shares and the share price would be adjusted from 25p to 2.5p. The November 2015 flotation price was 10p and earlier this year a further £1.4m was raised at 20p a share. Pro forma cash was £3.26m at the time of the acquisition.
A number of standard list shells have reported their annual figures so that they beat the deadline of the end of April. Financial services-focused shell Vertu Capital Ltd (VCBC) is still discussing the potential acquisition of VCB Malaysia but there is still some way to go before a deal is secured. There was £553,000 in the bank at the end of 2016. Auctus Growth (AUCT) still had £1m in the bank at the end of 2016 and it continues to assess potential acquisitions.
Papillon Holdings (PPHP) is still proceeding with the long drawn out acquisition of Myclubbetting.com and it is near to lodging a readmission document with the UKLA. The publishing of the accounts of Papillon has been delayed because of difficulties concerning quantifying the costs of the acquisition.
Andrew Hore