Home » Posts tagged 'hrn'
Tag Archives: hrn
Quoted Micro 26 February 2024
AQUIS STOCK EXCHANGE
Music manager and promoter All Things Considered (ATC) has raised £2.3m at 105p/share. The company raised £4.15m at 153p/share when it joined Aquis in December 2021. The latest proceeds will be used to develop the artist representation and direct to consumer divisions, plus fund acquisitions. A potential artist management company acquisition has been identified. A new festival is being developed.
Trading was in line with expectations at Arbuthnot Banking Group (ARBB). Shore Capital believes the recovery in profitability due to higher interest charges has broadly already happened. Even so, the broker believes that the current valuation is undemanding.
Visum Technologies (VIS) is planning to acquire Socrates Imaging for Euro2m in cash and shares. Visum has exclusivity until the end of March 2024. Socrates Imaging has developed photo and video capture souvenirs. A final agreement needs to be made and shareholders have to agree to the purchase.
US focused lender Investment Evolution Credit (IEC) generated revenues of £441,000 and pre-tax profit of £268,000 in the six months to November 2023. Cash was £659,000. Consumer lending operations could start in the UK in 2025.
Hydro Hotel Eastbourne (HYDP) reported flat annual revenues of £4.4m, while pre-tax profit fell from £445,000 to £310,000 due to higher cost of sales. Cash is £1.63m. a lower dividend of 12p/share has been announced. Management is trying to secure more direct bookings.
Inteliqo (IQO) has launched the full Langaroo app on Google Play and the App store. Langaroo enables users to understand, speak, message and share information in 130 languages.
Coinsilium (COIN) will be providing global trade exchange platform LC Lite, which has been acquired by Incomlend. Coinsilium will advise on project token economics ahead of a launch later this year. Fees are paid in cryptocurrencies.
Valereum (VLRM) is getting near to completing a blockchain-based digital financial markets infrastructure and this should happen this year. After phase 1 is launched there will be further phases developing on-chain Centralised Securities Depositary. Investment company VLRM Capital will invest in principal trading of equities and cryptocurrencies, as well as staking digital assets. The first fund should be launched by the summer. Valereum chairman James Formoli will provide seed capital of £500,000 to the investment vehicle. Valereum itself wants to raise up to £4m and firm commitments have been received for £2.5m at 6p/share.
Phoenix Digital (PNIX) director Nicholas Lyth bought 1.26 million shares at 3.1p each.
TruSpine Technologies (TSP) has submitted additional documentation to the FDA for the 510(k) application for its Cervi-LOK medical device product. A shareholder requisition notice has been deemed to be invalid.
Hydrogen Future Industries (HFI) has raised £552,000 at 5p/share. The cash will further develop technology and fund a feasibility study for use in the mining sector. Rogue Baron (SHNJ) has issued 7.2 million shares to a service provider for services over a 12-month period.
PanGenomic Health (NARA) intends to withdraw from the Aquis Stock Exchange.
AIM
Safety and compliance services provider Marlowe (MRL) is selling part of its governance, risk and compliance software and service business to Inflexion for an enterprise value of £430m. That will pay off debt and enable £150m plus to be paid to shareholders. That could leave £60m of cash in the business. This could fund acquisitions in the remaining business areas of testing, inspection and certification, and occupational health. Marlowe chief executive Alex Dacre is leaving with the disposal.
Horizonte Minerals (HZM) estimates that it will cost $454m to complete construction and deliver first metal at the Araguaia nickel project. This means that the estimate of overall cost is currently 87% higher than before at $1bn. The company is in talks with shareholders and lenders to secure full funding in the second quarter of 2024. The increased investment requirement means that existing debt facilities will have to be restructured. Short-term funding will be required will the discussions continue. Heikon Investments slashed its shareholding from 7.99% to 0.33%.
Shield Therapeutics (STX) is making progress with Accrufer iron deficiency treatment sales, but a third party overstated the number of prescriptions in 2023. There would have been 90,500 on the previous methodology, which was lower than expected, but the revised figure is 77,000. Year-end cash was $13.9m. Costs are being controlled, but there is no guarantee that there is enough cash to reach breakeven. Shield Therapeutics expects to be cash flow positive in the second half of 2025 instead of later this year.
Electric drivetrain developer Saietta Group (SED) it needs more cash by the end of March, or it will have to find a bidder and that made it the top faller on AIM for the second week in a row. Cash payments have been delayed.
Retail and promotional business Spaceandpeople (SAL) did slightly better than expected in 2023 with revenue of £5.8m, up from £4.7m. The company has changed its revenue recognition policy in the UK and revenues will be recognised on a net rather than gross basis. Without the change the 2023 revenues would have been more than £6.5m. The German business is recovering, and its revenues will still be recognised on a gross basis. There is no change to pre-tax profit – £90,000 is forecast.
Fertiliser producer Harvest Minerals (LON: HMI) says 2023 orders totalled 34,880 tonnes and 28,707 tonnes were invoiced and cash received for 27,024 tonnes. The 2024 orders have reached 7,067 tonnes. Management believe that orders could reach 70,000 tonnes this year, even though the market remains difficult. There was $630,000 in the bank at the end of 2023.
Frasers Group has acquired a 8.9% stake in models and collectibles supplier Hornby (HRN).
Empire Metals (EEE) is focusing on the Pitfield titanium project and is not extending the Gindalbie tribute agreement.
Chamberlin (CMH) has sold its profitable Petrel business for £3m and an exceptional gain of £2m. The cash will be invested in its foundry and machining business. There is £250,00 deferred until repairs are undertaken for the facility that is being sub-let to the purchaser by Chamberlin.
RBG Holdings (RBGP) has raised £2.8m at 9p/share, compared with a market price of 9.25p. This will provide a more solid base from which to grow the remaining legal services and M&A business. New legal partners have been recruited to grow the core operations. There is a £24m HSBC facility, but there will be increased headroom after the cash call. There is enough cash for at least 12 months. It is possible that M&A adviser Convex Capital will be sold to its management.
MAIN MARKET
Aquila Services Group (AQSG) intends to leave the standard list. The housing consultancy business reversed into shell company General Industries in August 2015. The share price is well below the level it was at the time of that deal. Management says that it has missed out on chances to acquire businesses because of a lack of liquidity in the shares. Leaving will save £100,000/year.
Newtyn Management has reduced its stake in Pinewood Technologies (PINE) from 10% to 8.56%. Chief executive William Berman sold 1.46 million shares at 34.85p each.
Andrew Hore
Andrew Hore – Quoted Micro 24 February 2020
NEX EXCHANGE
The costs of a cyber-attack meant that National Milk Records (NMRP) interim pre-tax profit fell by two-thirds to £375,000. Revenues also declined from £11.7m to £10.7m, although that was mainly due to one-off revenues in the corresponding period. Disease testing services was the only part of the group where revenues improved. Underlying trading is within expectations. Net debt increased from £2.1m to £2.4m. Lower milk prices may reduce milk volumes from their high levels last year.
GP software supplier DXS International (DXSP) has raised just over £1m at 8p a share. The shares equate to more than one-quarter of the enlarged share capital. The cash will provide working capital required to market the company’s new products. The latest framework agreement has included a modest price rise. NHS accreditation of the company’s new software should be complete in April.
Cancer treatments developer Incanthera is planning to join NEX this week. Manchester-based Incanthera is developing Sol, a topical product for the treatment of solar keratosis and prevention of skin cancer, which could be licenced to a partner within 18 months. There is a pipeline of cancer therapeutics which have come through the Institute of Cancer Therapeutics at Bradford University, which owns 12.3% of the company. AIM-quoted Immupharma (IMM) will hold a 11.9% stake and has 7.27 million warrants, where the exercise price is being rebased to the issue price. Cairn is the corporate adviser and Stanford Capital Partners is the broker. The expected admission date is 28 February.
NQ Minerals (NQMI) is paying A$2m for 100% of the Beaconsfield gold mine and processing plant in Tasmania. This was a major gold mine up until 2012 and it could go back into production. The gold price has risen by 50% since production stopped. The initial payment is A$100,000.
NAV fell from 64p a share to 59p a share at Western Selection (WESP) in the six months to December 2019. The lack of a dividend from AIM-quoted Bilby (BILB) meant that dividend income nearly halved, although it was the one core investment that increased in value. There will be no interim dividend. Share disposals mean that net cash was £2.45m at the end of 2019.
Gunsynd (GUN) has decided not to take up its option to acquire a further 22.33% stake in the Kolosori nickel prospect in the Solomon Islands. Previously £45,000 was paid for a 7.76% stake. Gunsynd has received £20,000 of the £260,000 it is due to be paid for its stake in Oyster Oil and Gas.
Primorus Investments (PRIM) says that investee company SOA Energy UK hopes to join AIM by the fourth quarter of 2020. Drilling is due to commence at the Ofek well in Israel during May and it could last 40 days with a further 40 days of testing. The results will be known before the flotation. Primorus owns 14,977 SOA shares.
Belvedere Leisure Resorts (BELV) is still waiting for cash to cover the full subscription promised just after flotation and it does not appear likely that the investor can come up with the cash. Other investors may come up with the funds in the next six weeks.
Investment company First Sentinel (FSEN) has raised £196,000 from an issue of Green Finance preference shares at 100p each. There is a fixed interest rate of 5.05% a year and then a variable rate of up to 10.15% depending on whether certain conditions are met. The preference are convertible into ordinary shares. The focus is investments in the ethical, sustainable and renewable energy sectors.
Sativa Group (SATI) says subsidiary Goodbody Botanicals will have its products stocked in 100 of WH Smith Travel’s UK stores.
Angelfish Investments (ANGP) has appointed Novum Securities as its corporate adviser.
AIM
Rail optimisation software and equipment supplier Tracsis (TRCS) had a strong first half. Interim revenues increased from £18.8m to £26m. There were two acquisitions in January 2019, so they contributed for a full period this time. There is cash of £26m and it should reach £31.6m by the end of July.
Medical technology supplier Inspiration Healthcare (IHC) says it did better than expected in the year to January 2020. Revenues should be 15% ahead at £17.8m, which is equivalent to like-for-like growth of 12%. EBITDA should be one-fifth higher at above £2m.
4D Pharma (DDDD) is raising £22m at 50p a share, which is half the level that 4D floated at in June 2014. This cash will provide the additional funds required to support ongoing studies for IBS and oncology. The clinical study data is important when it comes the next step for the group.
Urban Logistics REIT (SHED) plans to raise up to £106.7m at 137.5p a share and this will be used to acquire logistics properties. The cash will be raised via a placing, offer for subscription and open offer. The share price equates to adjusted NAV and is a discount to the market price. A special dividend of 3.85p a share will be paid.
Stanley Gibbons (SGI) is acquiring trading inventory from 58.1% shareholder Phoenix SG Ltd for £1.07m. This will be paid as the inventory is sold, net of sales commission.
AdEPT Technology (ADT) raised £4.25m at 320p a share, which was more than it was initially seeking. This will reduce debt and provide funding for acquisitions.
Chris Pullen has resigned as chief executive of Staffware (STAF) and a search for a replacement is about to commence. The recruitment and training company continues to talk with its lenders. Net debt is estimated at £60m at the end of 2019.
Toys supplier Hornby (HRN) is raising up to £15m via a placing and one-for-3.006268641288 open offer at 36p a share. The cash will be invested in the company’s brands, digital marketing and corporate systems.
MAIN MARKET
Nanoco (NANO) has filed a patent infringement lawsuit against Samsung relating to Nanoco’s synthesis and resin technology for quantum dots. There was a collaboration with Samsung, but it ended without a licence agreement.
Stevia supplier PureCircle (PURE) has secured a waiver and amendment to its bank facility. This covers all previous defaults and provides an additional $8.6m of funds.
Career development platforms developer Dev Clever (DEV) has delayed the roll-out of its platform and that hit interim revenues. Management hopes to secure a partnership with a worldwide technology manufacturer that will enable an international roll-out. Chris Akers has increased his stake from 6% to 7.15%.
World Trade Systems (WTS) intends to cancel its listing on 27 March in order to save costs.
Andrew Hore
Ian Pollard – Hornby #HRN & self-inflicted wounds
Hornby plc HRN Years of mismanagement continue to take their toll at Hornby, where sadly, things seem to go from bad to worse with every year that passes. Revenue for the year to the 31st March slumped badly from £47.4 to £35.7m whilst the annul loss before tax edged slightly higher to £10.1m. Group sales for the 10 weeks to the 8th June are lower than expected, a self inflicted wound if ever there was one, caused it seems by the impact of insufficient investment in tooling in past years. The new CEO puts a brave face on things, claiming that they are currently laying down the foundations for their future success.
Ferguson plc FERG third quarter revenue rose by 10.2% and trading profit was up by 17.1% despite a miserable performance in the UK. The US continued to grow strongly and the fourth quarter has started well. Yet again the UK let the side down badly with growth of 0.7% which included price inflation of 3%. In the UK organic revenue declined by 10.9%, whilst trading profit slumped by 29.3% at constant exchange rates.
Ashtead Group AHT Announces another very successful year crowned with a strong fourth quarter which saw revenue and profit before tax each rise by 20% and earnings per share by 26%.Revenue for the year to 30th April rose by 20% and it is proposed to increase the final dividend to 27.5p per share making a total rise for the year of 20%.
Telecom Plus TEP performed as expected in the year to 31st March, with further growth in all areas of the business. Revenue rose by 7.1% and on a statutory like for like basis profit before tax just managed to edge ahead by 0.3%, earnings per share rose by 2.1% and the full year dividend is to be increased by 4.2% to 50p per share. The most notable achievement of the year appears to have been winning the Which “Best Utilities Provider” 2018 award.
Luxury villas & houses for sale in the Greek Islands; http://www.hiddengreece.net
Andrew Hore – Quoted Micro 9 April 2018
NEX EXCHANGE
Good Energy (GOOD) has renewed its offshore wind power deal with Orsted for a further two years. This secures 12% of the output of a North Sea wind farm and this can power more than 26,000 homes. Generation has been ahead of expectations.
KR1 (KR1) has announced its latest investments. An investment of £184,000 has been made in Nexus Mutual Project (NXM) tokens. The number of tokens will be confirmed after the public token sale. KR1 will receive the tokens at a 17.5% discount to the lowest price offered in the public sale. Nexus Mutual will use blockchain technology to recreate insurance mutual. The company has also invested £150,000 in Argent Labs Ltd, which is creating a decentralised banking protocol on the Ethereum blockchain. KR1 has invested €201,000 in the private pre-sale for the Herdius project.
Gibraltar-based TDH Ltd has taken on Coinsilium Group Ltd (COIN) as its adviser for a token generation event. The TrustedHealth platform will create a decentralised global network of doctors and healthcare specialists offering virtual consultations. They will pay with TDH tokens and the token sale started on 27 March and lasts until 27 April. Faruk Saylam has sold 1.5 million shares, which leaves him with a 4.4% stake.
NQ Minerals (NQMI) has been granted a mining lease for the Sunbeam silver mine in northern Queensland. This will enable the processing of 48,000 tonnes of mineral stockpiles, which include gold, silver, copper, lead, zinc and antimony.
MetalNRG (MNRG) says the prospective buyer of the company’s stake in US Cobalt has completed due diligence. MetalNRG will receive 21.7 million shares in ASX-listed Tyranna Resources Ltd for its 15.38% stake in US Cobalt.
Angelfish Investments (ANGP) says that One Media Enterprises has been acquired by OTC-quoted OneLife Technologies Corp but the payment it is due will have to wait until the buyer is allowed to raise cash. That should be later in April. Angelfish will have its original investment repaid along with management fees plus an uplift in the amounts due. The timing of the first instalment is still uncertain.
First Sentinel (FSBN) has raised a further £62,000 from a bond issue. The company plans to issue up to £4m of bonds.
Gowin New Energy Group Ltd (GWIN) says that Mr Chen Chih Lung has converted his loan note into 40 million shares at 1p each. This takes his stake in Gowin to 21.6%.
AIM
SimplyBiz Group (SBIZ) joined AIM on 4 April. It was valued at £130m at the placing price of 170p but the share price ended the week at 160.5p. The company provides compliance and business services to financial advisers.
Higher managed services revenues helped AdEPT Telecom (ADT) to make further progress last year. Pre-tax profit is expected to be £7.4m and the dividend will be raised 13% to 8.75p a share. Debt is lower than expected.
Broadcast industry software provider Pebble Beach Systems (PEB) is hopeful that it can secure terms to extend its bank facility until November 2019. Pebble is adding industry experience with the appointment of Graham Pitman as a non-executive director.
Gooch and Housego (GHH) says trading is in line with expectations and the order book is at a record level of £84.7m. Demand for high reliability fibre couplers has been weak but is expected to recover in the second half. The manufacturing sites have been organised into three technical groupings and performance is improving. The interims will be published on 5 June.
Floorcoverings supplier James Halstead (JHD) says it is considering a bid for Airea (AIEA) but it has yet to approach for the Burmatex-branded floorcoverings business. Airea is closing its Ryalux residential carpet business. There is £3.7m in the bank and the pension deficit has been reduced. Eight shareholders own around 48% of Airea.
appScatter (APPS) is adding to its service that enables organisations to publish their apps on multiple stores and platforms by paying £13.5m in cash and shares for data analysis business Priori Data. This should provide a full service for clients. There are plans to raise £15m at 70p a share.
Denial of service online attacks prevention technology developer Corero Network Security (CNS) is still loss-making and it is raising £4m at 5.75p a share, as well as trying to secure a £3m debt facility. One year ago, Corero raised £5.6m at 5p a share.
FairFX (FFX) can issue Mastercard branded cards and is launching a commercial finance offer to business customers.
Mytrah Energy (MYT) has recommended a bid from majority shareholder Raksha Energy Holdings Ltd. Raksha is offering 45p a share in cash to mop up the 42.1% of the wind power producer it does not own. That is higher than the share price has been for 16 months but not much more than 50% of the level it was nearly three years ago. This bid values Mytrah at £78.9m.
Hornby (HRN) says sales improved towards the end of the financial year as European product was delivered. There was net cash of £4m at the end of March 2018 but management says that a larger debt facility is required for seasonal working capital requirements. Barclays will waive a covenant on the existing facility.
1Spatial (1SPA) has won a £1.6m deal with Land and Property Services in Northern Ireland. Most of this will be generated over the next five years. The geospatial data provider is expected to get near to breakeven in the year to January 2019.
Watkin Jones (WJG) says that first half trading is in line with expectations. Student accommodation developments continue to make the largest contribution with a pipeline of 9,800 beds. The build to rent development business has secured planning consents on three sites, covering 700 units. The management business has contracts to manage more than 14,000 beds, even though the sale by a client of student properties covering more than 5,000 beds meant that the new owner took on their management.
MAIN MARKET
Ingredients supplier Treatt (TET) says that interim revenues are 11% higher this year, helped by new business wins. Current full year forecasts predict an increase in revenues from £109.6m to £117.3m so Treatt is well on its way to achieving that. A full year profit of £14.4m is forecast. There will be a small negative foreign exchange charge in the first half but the US tax charge will be lower than previously expected.
Bluebird Merchant Ventures (BMV) has completed the $500,000 farm-in spending on the Gubong mine and following the publication of a feasibility study the expenses will be shared 50/50 with Southern Gold.
Andrew Hore
Ian Pollard – Hornby #HRN – plagued again by late deliveries
Hornby plc HRN claims for the umpteenth time that it is at last getting its act together over the delivery problems which have been plaguing it for years. It introduced a new strategy to increase sales which failed to do so because it involved putting an end to discounting. which, not surprisingly led directly to a fall in sales. Although there was some improvement towards the end of the year both sales and profits fell as expected.
It did not however end there because the sales problem was made worse, as it continued to be affected by late deliveries. Hornby must have more experience of long standing delivery problems than any other UK company and it still could not find a solution to what is after all a basic management problem
But good news is in the offing and it intends to refine the strategy which has been a failure so far. The refinement is one which will need more finance, so the begging bowl has come out again and new lenders have been approached for a new finance facility which appears to have been approved and is expected to be in place by mid June. Barclays is doing its bit by agreeing to a waiver for an expected breach of covenant.
The interim Chairman claims that the dust is now settling and trust amongst retailers and customers is returning. One can only hope that this time it will not just be a case of more broken promises.
Luxury villas & houses for sale in Greece; http://www.hiddengreece.net
Andrew Hore – Quoted Micro 20 November 2017
NEX EXCHANGE
Clean Invest Africa (CIA) raised £530,000 at 0.4p a share and joined the NEX Exchange Growth Market on 14 November. The founders subscribed for shares at 0.25p each during September and October. The expected admission price was 1p and the share price ended the week at 1.45p (1.3p/1.6p). That values the company at £2.26m. There is £512,000 in the bank after expenses of £63,800. Clean Invest Africa is focused on renewable and clean energy projects and technologies that will aid the development of Africa. Executive coach Rene Carayol has a 6.28% stake.
Brewer Daniel Thwaites (THW) reported an improvement in interim revenues from £44m to £48m but pre-tax profit was flat at £5.4m, excluding movements on interest rate swaps. The interim dividend is unchanged at 1.1p a share. Net debt rose to £60.9m due to hotel acquisitions and capital investment. Most of the growth in revenues has come from the hotels and inns businesses. Management says that it is aware of some weakening in its consumer markets.
Metal NRG (MNRG) lost £59,000 in the six months to August 2017 but there was still £273,000 in the bank. The focus is cobalt and investments have been made in Western Australia and Nevada. There are further potential investments in Australia and North America. Management plans to announce how it will increase its profile and the liquidity of its shares.
African Potash Ltd (AFPO) is raising £400,000 at 0.025p a share and the cash will finance the development of the African fertiliser trading business and an eVoucher payment system using blockchain.
AIM
Science in Sport (SIS) has secured £14m via a placing at 70p a share in order to expand geographically and in terms of sports. A further £1m could be raised through a one-for-32 open offer at the same share price. The cash will be used to expand the company’s online presence in the US and new product development. The US expansion will be predominantly via Amazon initially and this will require additional stock levels. The SIS.com ecommerce platform will also grow. A move into football will increase the addressable market. Losses are expected to continue for at least two more years.
Zoo Digital (ZOO) is already getting the initial benefits from its film and video dubbing service ZOOdubs. This has widened the scope of the business and helped interim revenues to grow by 63% to $12.7m. A full second half from ZOOdubs will help achieve full year revenues of $26m and that should move Zoo digital into profit in the year to March 2018 even though costs are being increased ahead of expansion in revenues. Localisation services are generating more than two-thirds of revenues with subtitling service ZOOsubs also growing its revenues. ZOOscripts is being developed to provide scripts and metadata that can be used by the other services.
Floorcoverings manufacturer Victoria (VCP) has agreed to acquire floor and wall ceramic tiles manufacturer Keraben Grupo for £246.5m. A placing is raising £180m at 783p a share.
Meat and dairy products supplier Zambeef (ZAM) achieved its downgraded forecast for last year but there has been a further downgrade for 2017-18. Revenues were 17% higher at $255.8m but profit slumped to £200,000. Sales are expected to be flat this year but a recovery in pre-tax profit to $4.2m is anticipated. Non-executive director Tim Pollock, who is investment director for food and agriculture at CDC Group, will take over as joint chief executive from Carl Irwin at the end of March.
President Energy (PPC) is beginning the workover programme of four wells on Puesto Flores, which will cost $2.2m. The payback should be less than 12 months, assuming an oil price of $55/barrel. This is one of the reasons behind the expected increase in forecasts sales from $20.6m in 2017 to $69.5m in 2018, which will enable a 2018 pre-tax profit of $10m.
SRT Marine Systems (SRT) expects a strong second half following a 10% rose interim revenues to £2.9m but a higher loss of £1.6m. That excludes a £1.5m impairment charge for a large Asian contract that has been delayed until 2018-19. finnCap expects the maritime awareness technology developer to report flat full year pre-profit of £1.5m but that requires £12m of revenues in the second half. That requires project milestones to be achieved.
AB Dynamics (ABDP) continued to grow its business at the same time as starting to move into new premises. In the year to August 2017, the automotive testing systems and measurement products supplier increased revenues by one-fifth to £24.6m. Underlying pre-tax profit improved from £4.72m to £5.94m. The total dividend has been raised by 10% to 3.331p a share. Net cash was £9.6m.
Versarien (VRS) wanted to raise £1.2m via institutions and PrimaryBid.com at 18p a share and it ended up accepting £2.9m. Back in March, £1.5m was raised at 15p a share in the same way. The advanced materials company has announced a collaboration with a global consumer goods company on the development of the Nanene graphene nano-platelets in polymer structures. The first purchase order has been made.
GCM Resources (GCM) has completed the appointment of Northland as nominated adviser and joint broker. GCM wants to raise £2m via an offer at 34.4p a share through PrimaryBid. The cash will be used to provide further funding for the development of a mine mouth power plant proposal and for working capital.
Serabi Gold (SRB) has announced the conditional acquisition of Chapleau Resources Ltd for an initial $5m, with a further $5m payable in three months and the final $12m when first gold is produced from the Coringa project in Brazil or 24 months from the initial payment. Coringa is relatively near to Serabi’s existing producing gold mine at Palito. Running the two together should reduce the costs of production. The initial payment can come out of existing facilities. Serabi generated revenues of $36.2m and a cash inflow from operations of nearly $7m.
InterQuest Group (ITQ) appears to have set in motion the first stage of plans to leave AIM. That is because it wants shareholder approval to allow it to issue additional shares equivalent to 75% of the issued share capital. The management behind the recent bid for the company own a majority of the shares but need the backing of 75% of the shares voted in order to cancel the quotation. By issuing additional shares InterQuest can dilute the stake of the shareholders that oppose the cancellation of the AIM quotation and management can get what it wants.
AdEPT Telecom (ADT) reported a 36% increase in interim revenues to £22.6m with managed services contributing more than two-thirds of the total. Pre-tax profit increased by 29% to £3.9m. The interim dividend was raised by 13% to 4.25p a share. Full year profit is expected to rise from £6.9m to £8.3m.
Boku Inc develops technology which enables people to pay for services via their mobile. The company is loss-making but it is highly operationally geared so after it covers its costs the profit should grow rapidly. At 59p a share, Boku will be valued at £125.9m. Existing shareholders will raise £30m and the company will raise £15m.
Belluscura has announced details of its plans to join its parent company Tekcapital (TEK) on AIM in early December. Tekcapital’s 47.5% stake in Belluscura will be diluted by a fundraising to generate between £7.5m and £10m. Belluscura has acquired non-core product lines from large medical device companies as well as new IP and technologies.
Keystone Law Group is the latest legal firm to come to AIM. A placing at 160p a share will raise £10m and value the company at £50m. The flotation is due to be completed on 27 November.
Beeks Financial Cloud Group is raising £7m at 50p a share, which values the company at £24.5m. The flotation date is 27 November. Beeks is a cloud-based provider of automated foreign exchange and futures trading.
Ten Lifestyle Group is a lifestyle and travel platform providing concierge services. Corporate clients provide Ten’s services to individual customers. It also expects to join AIM on 27 November.
Mirriad Advertising has developed native in-video advertising technology, which can insert branded advertising into existing content. Revenues are modest and Miriad is still heavily loss-making. IP Group currently owns 38.2%. The flotation is expected on 29 November.
Concepta (CPT) has confirmed a £600,000 order from China for its MyLotus product which provides measurements to help improve the chances of conception. On the back of this, Concepta raised £2m at 7p a share.
Amryt Pharma (AMYT) has signed an exclusive distribution agreement with El Seif in Saudi Arabia for its products.
Africa Oil Corp is subscribing for £8.46m worth of shares in Eco (Atlantic) Oil and Gas (ECO) and this will give it a 19.8% stake. The subscription price of 22.25p a share was at a 28% premium to the closing price on the previous day’s trading. The cash will be used to identify and acquire new oil and gas exploration assets.
MTI Wireless Edge (MWE) has won a $1m contract for military antennas. Along with previous contracts, the revenues will be recognised over the period until the end of 2019. There is potential for larger orders to come.
TLA Worldwide (TLA) reported its 2016 results at 7am on 15 November and the 2017 interims at 7.01am on the same day. That is much better than releasing the profit warning concerning the 2016 figures at 6.26pm on the last day of trading prior to Christmas 2016. Trading in the shares resumed at 2pm on 16 November after the 2016 accounts were posted. The 2017 loss was $9.26m. The interim loss was $3.86m and net debt was $25m with further contingent consideration of $12.2m. The share price slumped to 12p and then recovered to 14p.
Former chairman Michael Ellis has requisitioned a general meeting at Van Elle Holdings (VANL) so that he and his son-in-law Thomas Lindup can be returned to the board. Both men had left the board of the ground engineering services provider prior to its profit warning in March, which was five months after floating. Ellis also wants to remove chief executive Jon Fenton and senior independent director Robin Williams.
Utilitywise (UTW) has delayed publication of its results because of the requirements for further auditing.
Integumen (SKIN) has acquired the Stoer skincare range for men and its ecommerce platform. This brand complements the Visible Youth brand aimed at women. Integumen is issuing 12.6% of its enlarged share capital in payment for Stoer, which values it at £510,000 at a share price of 2.45p.
Interim revenues fell from £21.9m to £17m at Hornby (HRN) and the loss increased to £5.7m. Net debt was £4.7m at the end of September 2017. A £12m placing and open offer at 29.5p a share will provide cash for investment and to buy a 49% stake in the holding company of Oxford Diecast Ltd, which is controlled by Hornby chief executive Lyndon Davies.
Blue Prism Group (PRSM) has sparked another upgrade with its latest trading statement. The robotic process automation supplier has added more customers and has a 100% renewal rate so full year figures will be comfortably ahead of expectations but the loss will be in line with forecasts. The annual figures will be published on 25 January.
Fishing Republic (FISH) has been hit by increased competition in the fishing market, which has knocked profit margins. There was a decline in like-for-like store sales in October. That means that there will be a loss this year. This has led to the departure of the chief executive and other board members. Chris Griffin becomes acting chief executive and he will conduct a strategic review. His experience should be helpful with online sales, which continue to grow.
Angling Direct (ANG) has acquired North West Angling Centre and Tacklesaver for £450,000 in cash plus stock. They have annual revenues of £1.8m. That takes the number of stores to 20. Angling Direct has reassured the market that trading is in line with expectations.
Oracle Power (ORCP) and its partners have submitted plans to the Pakistan authorities for a 660MW power plant which would eventually become a 1,320MW plant. The coal for the power plant will come from Thar Block VI. If the regulator issues a letter of intent then the partners will have to submit an electricity tariff application and apply for a generation licence.
Film finance provider FFI Holdings (FFI) has acquired digital, post-editing machine rental business EPS-Cineworks for $9.54m. This business fits well with the Pivotal Post post-production business acquired earlier this year prior to flotation.
BOS Global Holdings (BOS) says that Innovation Corporation has asked for security to be provided against its convertible note. Innovation has converted £217,000 of convertibles at 16p a share. That left £1.06m available from the note. Former managing director Michael Travia, who has requisitioned a general meeting to change the BOS board, is associated with Innovation and they have a total stake of 18.9%. BOS admits that its cash position is tight.
MAIN MARKET
Packaging supplier Macfarlane Group (MACF) says it expects full year expectations to be met as the momentum of the first half has continued into the second half. The distribution division increased revenues by 11% in the four months to October 2017 which more than offset a small dip in manufacturing sales. Manufacturing profit will be flat this year but distribution profit will be much higher.
Standard list shell Spinnaker Opportunities (SOP) has viewed potential acquisitions but has yet to find one that fits with its criteria. It is seeking an energy or industrial acquisition valued at between £5m and £30m. There was still £1.1m in cash at the end of October 2017 and the NAV was 4.23p a share.
Telecoms business Toople (TOOP) has more than 1,300 small business customers and it says that “monthly revenues have consistently exceeded £100,000” between June and October 2017. Toople has decided to end its relationship with a third party sales agency and bring sales in-house. The current customer acquisition cost is said to be “within the range previously announced of £40 to £91 per customer” and that is the same as 12 months ago. In the first half, admin expenses were £662,000. There was a £82,000 gross profit on sales of £655,000. Management has tried to keep costs down but revenues do not appear to be significantly higher in the second half based on the above statement. The first half cash outflow from operating activities was £552,000. This may have been reduced in the second half but the outflow is still likely to be significant. There was net debt of just over £300,000 at the end of March 2017 but since then £1.26m net from a fundraising in June. The share price is 1.18p, compared with the 2p fundraising price.
Simian Global (SMG) says that the exclusivity period for the acquisition of media and advertising company GVC Holdings has been extended to the end of March 2018. A further £50,000, on top of £200,000 already lent, will be provided to GVC at an interest rate of 15%.
Andrew Hore
Quoted Micro 23 October 2017
NEX EXCHANGE
Supported housing developer Walls and Futures REIT (WAFR) has improved its net asset value by 4.4% to 94p a share in the six months to September 2017. Interim figures should be published within a fortnight.
African Potash Ltd (AFPO) has decided not to acquire investment company Onshore Energy Ltd and concentrate on its fertiliser business instead. Progress has been delayed but fertiliser trading has started in Zambia and a 21% stake was acquired in Advanced Agricultural Holdings, which is focused on South Africa. There were no revenues in the year to June 2017, although there was trading income of $9,000, and the loss was $2.27m. There was £11,000 in the bank at the end of June 2017. African Agronomix is earning a stake in the company’s potash interests. Trading will recommence in the shares on 23 October.
Black Sea Property (BSP) has €7m of debt, in the form of a mortgage, from UniCredit Bulbank. This will be used to complete the planned acquisition of the office building in Sofia. The loan lasts for three years from completion of the documentation.
Via Developments (VIA1) has completed the purchase of the development site in Latimer Road, Luton.
AIM
Belvoir Lettings (BLV) has approached The Property Franchising Group (TPFG) about a merger between the letting agents but the reaction has been negative. Belvoir believes that the market is consolidating and it makes sense for two of the major players to come together. The indicative offer is 0.715 of a Belvoir share and 52.2p a share in cash for each TPFG, although the amount of cash could be varied. This values each TPFG share at 130.5p.
eServGlobal Ltd (ESG) is raising £24m at 9p a share with existing retail investors given the chance to clawback £3.4m of the shares. Cash is required to be injected into the HomeSend joint venture so that the 35% stake can be maintained. There will also be costs to rationalising the core business in order to help move it into profit.
Overseas growth dominated the Tristel (TSTL) where full year revenues were one-fifth higher, or 7% excluding the acquisition of the Australian distributor. Tristel has already warned that regulatory approval has been delayed in the US but it can still continue to grow its infection control sales. Animal health and contamination control revenues fell but margins improved. House broker finnCap forecasts an improvement in profit from £4m to £4.4m this year.
Secure payments and contact centre technology provider Eckoh (ECK) continues to add contracts in the US while UK revenues are steady. Seven US contracts worth $5.1m have been won. Eckoh has moved into a net cash position of £1.7m. Interim figures will be reported on 22 November.
Telecoms software supplier Artilium (ARTA) has formed an alliance with NYSE-listed Pareteum Corporation, which involves the sharing of distribution, products and technology. The focus will be Latin America and Asia. A share exchange will mean that Pareteum will own 8.8% of Artilium, which will own 19.9% of Pareteum. Artilium is opening a new office in Germany.
Cloud-based communications software provider Cloudcall Group (CALL) is raising £5.7m at 143.5p a share and the cash will help to finance further growth. Cloudcall wants to take advantage of its partnerships with Microsoft Dynamics and Bullhorn and attract new partners.
Proteome Sciences (PRM) says that its deal pipeline is improving but the adoption of its proteomic services has been slower than hoped. This year the loss will be reduced but it will be higher than previously expected. Proteome has gained Good Clinical Laboratory Practice accreditation which will enable it to take on larger clinical projects.
Sula Iron and Gold (SULA) is evaluating the best way to develop the Ferensola gold asset as well as seeking to bring other assets into the group. There could be a joint venture or farm out at Ferensola and Sula intends to solicit interests from potential partners.
Hornby (HRN) is ending the discounting of its stock but it will still hit the figures for this financial year. New chief executive Lyndon Davies continues to review the business strategy and more will be revealed with the interim figures. The interim chairman is leaving the board.
BP Marsh (BPM) has increased its NAV from 273p a share to 304p a share in the six months to July 2017. Disposals brought in significant amounts of cash and this is being reinvested. One of the main focuses of the investment is the North American market.
Infinity Energy S.A. (INFT) is in talks to acquire Transgas Ltd from its own chief executive and its family. Transgas owns petroleum exploration licences in south west England. Infinity will issue shares for the purchase if it is agreed and it intends to change domicile from Luxembourg to Guernsey.
Molecular diagnostics firm Genedrive (GDR) has signed a distribution agreement with Sysmex Europe for the supply of the Genedrive hepatitis C (HCV) ID kit, which is designed to be used in a decentralised environment and produce results within 90 minutes. This is the first commercial partner and Sysmex will be responsible for marketing and distribution in the EMEA region. The initial focus will be African companies.
RNA therapeutics technology developer Silence Therapeutics (SLN) is claiming money in the High Court for income it believes it is owed on products sold by Alnylam. The High Court has to determine whether Silence is entitled to supplementary protection certificates, which can give up to five years of exclusivity after a patent expires
Seeing Machines (SEE) believes that it could treble its revenues this year to between A$38m to $A43m and revenues could double again next year. However, cash is in short supply so investment has been curtailed. New investment is being sought. Interest is building in the automotive sector for the FOVIO driver monitoring technology.
Jim Meredith has become executive chairman of Augean (AUG), following the resignation of Stewart Davies as chief executive, and Christopher Mills and Roger McDowell, who stepped down in June 2015, have joined the board as non-executives. Augean continues to have problems with the HMRC regarding its landfill tax assessment and profit will be lower this year and in 2018. A further £1.7m is being cut from annual overheads.
Futura Medical (FUM) has received positive market research from fellow AIM company Cello (CLL) for its MED2002 gel for erectile dysfunction. More than three-fifths of physicians canvassed in the US thought that MED2002 was better than existing treatments. The equivalent figures in Germany and France were 60% and 54% respectively.
Concepta (CPT) has signed up two distributors in China for its MyLotus fertility product. This takes the number of distributors to three and more will be signed up in the coming months. The product is being evaluated for use after a woman has got pregnant.
Sunrise Resources (SRES) has discovered a new deposit at the CS Pozzolan-Perlite project in Nevada. There have also been positive drilling results in the existing deposit areas.
Omega Diagnostics Group (ODX) has signed a three year agreement to supply food intolerance product FoodPrint to a US laboratory testing services provider.
Thor Mining (THR) is moving to a phase of progressing the commercialisation of its exploration interests. There has been a resource upgraded at Pilot Mountain and there will soon be a resource estimate at Kapunda. The options for progressing with the development of the Pilot Mountain and Molyhil projects are being considered. A placing will raise £565,000 at 0.8p a share. There is a warrant with each share which enables the holder to subscribe for a new share at 1.2p.
Strategic Minerals (SML) has entered into a binding term sheet to acquire the owner of the Leigh Creek copper mine project, which is the northern Flinders Ranges in South Australia. It will cost A$1.8m to restart production at the mine. Strategic has to inject A$1m into the holding company, pay A$250,000 in cash and A$750,000 in shares to the current owner and agree a royalty agreement with them which will be capped at A$3.65m. The Cobre magnetite ore operation in New Mexico had a record quarter to September 2017. Revenues were $2.04m, which was more than the first six months of 2017 and for 2016 as a whole. Annual sales should exceed $5m and this provides cash flow for other projects. Strategic had $1.63m in the bank at the end of September 2017. Shareholders have agreed to a new option programme for management.
MAIN MARKET
Sportech (SPO) has put itself up for sale, although the strategic review continues. There have already been four preliminary proposals but no detailed discussions have commenced.
InnovaDerma (IDP) has been criticised by the Advertising Standards Authority for some of its online advertising for Skinny Tan. Trading is in line with expectations.
Andrew Hore
Corporate news review Tuesday 17th October 2017
ASOS ASC says FY retail sales grew strongly at +34% on a reported basis and +27% on a constant currency basis. Customer engagement remains strong with active customers6 +24%, average basket value +2% and average order frequency +5%. CEO Nick Beighton said the new financial year “shows continuing momentum in the business” and the potential for the company “remains huge.”
Bellway BWY reports another record year with completions rising by 10.6% to a record 9,644 homes. Operating profit rose by 16.2% to £571.6m, with EPS up 12.7% to 370.6p and a 13% rise in the proposed total dividend per share to 122.0p.
Hornby HRN updates on trading and says to maximise the value of its brands over the long term, it will no longer offer for sale large quantities of stock at a discount. Hornby warns that current year revenues will be lower and, consequently, there will be a material impact on profitability in the current financial year. Interim Chairman David Adams has indicated his intention to step down to take up another appointment.
Merlin Entertainments MERL updates on trading and reports 12.4% revenue growth driven by continued strong New Business Development, including the successful opening of LEGOLAND Japan, five new Midway attractions, and 381 new accommodation rooms. Trading in recent weeks has remained mixed and Group like for like revenue growth for 2017 is therefore expected to be approximately flat on 2016. EBITDA is expected to be in the range of £470 – £480m.
Moneysupermarket.com MONY updates on trading and says it is on track for another record year.
Virgin Money Holdings VM. updates on trading and confirms profitability, earnings and underlying RoTE are in line with expectations.
Pearson PSON updates on trading and reports a good competitive performance year to date, while plans to complete the digital transformation and simplify the company are on track. Nine-month revenues are in line with expectations.
Quoted Micro 26 June 2017
NEX EXCHANGE
Good Energy (GOOD) received applications for £16.7m of the corporate bonds on offer. The maximum application level was £20m. The energy supplier will issue the bonds on 30 June. At the company’s AGM, Martin Edwards was not re-elected as a non-executive director and four special resolutions, three relating to pre-emption rights and one about calling a general meeting at 14 days notice, were not passed. Edwards has been a director of Good Energy since its formation and has expertise in renewable energy generation. It is unclear whether the length of his time on the board was held against him by institutions or whether there was another reason for him being removed from the board. He was chairman of the remuneration committee.
South Africa-based social impact investment company Inqo Investments Ltd (INQO) says that occupancy rates of its core investment Kazuko Lodge are improving and it moved into profit last year. The weakness of the Rand has helped to boost tourist demand and room rates. In the year to February 2017, Inqo revenues increased from R10.7m to R17m and a loss of R4.72m was turned into a pre-tax profit of R10.3m, thanks to a rise in other income from R867,000 to R14m. Net cash was R2.3m at the end of February 2017. This year, the first revenues from Bee Sweet Honey and retirement savings scheme provider Four One Financial Services are anticipated.
Housebuilder St Mark Homes (SMAP) is paying an interim dividend of 5.5p a share. The shares go ex-dividend on 6 July.
AIM
Phoenix UK has bought out a rival shareholder in Hornby (HRN) and this has triggered a mandatory bid at the purchase price of 32.375p a share. This purchase took Phoenix’s stake in Hornby to 55.2%. The bid values Hornby at £27.4m. Neither Hornby’s management nor Phoenix wants to lose the AIM quotation. The bid closes on 14 July.
Wynnstay (WYN) reported flat interim pre-tax profit of £4.07m prior to the goodwill write-down on the Just for Pets retail business. Pet retailing is a competitive market and it is consolidation. Just for Pets is relatively small and it loss has masked an improvement in the core agricultural division and the Wynnstay Sores retail business. A recovery in the milk price means that farmers are back in profit and are spending more money on feed. Net debt was £8.28m at the end of April 2017, which is higher than last time because of the rise in commodity prices. The interim dividend was increased by 5% to 4.2p a share. The full year profit is forecast to decline from £7.4m to £7.1m.
NWF (NWF) also benefited from a recovery in feed demand in the second half of the year to May 2017, although there was a decline in the year as a whole. The food and fuel distribution businesses both made improved contribution. The full year figures will be published on 1 August.
South America-focused gold miner Orosur Mining Inc (OMI) says that operating costs were between $800 and $900/ounce last year. In the year to May 2017, Orosur produced 35,371 ounces of gold, which is at the lower end of the expected range. There was net cash of $2.9m at the end of May 2017 even though a new underground mine has been developed. Orosur plans to commence a drilling programme in Colombia, while the deadline for a decision by Asset Chile on whether to back phase II of the Anillo project has been extended to the end of 2017, although Orosur can talk to other potential backers.
Timber importer James Latham (LTHM) reported better than expected full year figures. In the year to March 2017, revenues were 7% ahead at £199m and gross margins improved. Earnings per share were 4% higher at 55.8p and the total dividend is 15.35p a share, up from 14.3p a share. Net cash was more than £16m. Revenues were 3% higher in the first two months of the current financial year.
InterQuest Group (ITQ) continues to advise against acceptance of the bid from Chisbridge, which is a management backed takeover vehicle. Acceptances of the 42p a share cash bid have been received from shareholders owning 2.85% of InterQuest, which is added to the 40.5% of the share capital that already backed the bid. The offer has been extended to 13 July.
European Wealth Group (EWG) is raising £6.14m at 12.8p a share and could raise up to £3.07m more via an open offer to existing shareholders. The cash will be used to pay off debt and deferred consideration.
Tracking and security equipment developer Starcom (STAR) has raised £650,000 at 1.5p a share, with each share coming with one-fifth of a warrant exercisable at 2.5p a share for up to 12 months. Some of the cash will be used to pay $246,000 to YA II, which will reduce the drawn down convertible loan facility from $330,000 to $110,000. YA II has agreed to a conversion price for the rest of the facility of 2.5p a share up until the end of 2017.
Redx Pharma (REDX) has a chance of securing the funds it requires in order to come out of administration. Discussions are still at an early stage. It is unclear whether this will involve changes to management, given that the current management believed that it could string along Liverpool City Council and put off repayment of its loan. Redx has gained UK Medicines and Healthcare Products Regulatory Agency approval for oral cancer treatment RXC004. This provides permission for a phase Ib/IIa study for gastric, biliary and pancreatic cancer patients.
Clontarf Energy (CLON) is in talks to secure further projects and additional finance. Clontarf was recently awarded block 18, offshore Equatorial Guinea.
Myanmar International Ltd (MIL) raised a total of $7.3m via PrimaryBid.com and institutions, having initially wanted to raise between $3m and $5m. The Myanmar-focused investment company offered shares at $1.18 each – a 9.2% discount to the market price. Myanmar has achieved a broadening of its shareholder base. The enhanced proceeds are still expected to be invested within six months.
Digital media content business Brave Bison Group (BBSN) has appointed Claire Hungate, a former chief operating officer of ex-AIM TV production company Shed Media, as chief executive but she does not join the company until September. Brave Bison says that it does not believe a merger with fellow AIM company Zinc Media is in its interests.
Water treatment company HaloSource (HAL) has finally completed a £1.8m fundraising at 1.5p a share. The cash will provide working capital to help expand the drinking water business and develop the lead removal technology. The cash will fund the group into 2018. The new shares are more than one-third of the enlarged share capital. The completion of the conditional fundraising was announced on 21 April. There is no mention in the latest announcement of the investor that had tried to gain Chinese government approval to invest.
Gold producer and explorer Shanta Gold (SHG) raised £11m at 6p a share as part of a refinancing that also includes a new $50m debt facility to replace the existing $40m facility. Shanta is acquiring TSX Venture Exchange-quoted Helio Gold, which has gold exploration assets near to Shanta’s own licences, for $5.6m in shares. Shanta will be able to finance the commercial underground production phase at its New Luika gold mine.
Thor Mining (THR) has raised£460,000 at 0.9p a share and there is one warrant with each new share which is exercisable at 1.8p a share. Thor has agreed to acquire 25% of US Lithium, which has interests in Arizona and New Mexico, from Pembridge Resources for £59,000 and £30,000 will be provided to cover operating costs. There is an option to acquire the other 75% for 52.8 million shares at a deemed price of 0.9p each. Thor has completed a 50 hole drilling programme on the Dundas gold project in Western Australia. The results should come through in a few weeks.
First, the good news from TLA Worldwide (TLA). Management is obviously trying to suggest that it does not have contempt for investors by releasing a profit warning at 7am – its advisers must be doing something right. This is certainly a big improvement on publishing a profit warning at 6.26pm on 23 December 2016. TLA still thinks that it will be able to report its 2016 figures and post its accounts on 30 June. However, the trade receivables write-off is going to be higher than the previous guesstimate of $1.5m-$2.5m. The write-off is expected to be $3.2m and on top of that the negative effect of the accounting corrections on EBITDA is likely to be $3.6m, up from $2m previously. That will leave 2016 EBITDA at $4.8m. The interest charge will take up the majority of that figure. It is not just that, though. The original 2015 profit will be reduced by $1.9m. Net debt was $21.8m at the end of 2016 but a large chunk of the receivables that should have helped to reduce that figure are not going to come in. There is no dividend – unsurprisingly. The finance director has left, although he will be providing assistance for three months.
Superyacht painting and maintenance services provider GYG (GYG) is raising £6.9m at 100p a share prior to joining AIM on 5 July. GYG is valued at £46.6m at the placing price and the plan is to pay an annual dividend equivalent to 6.4% of the placing price, although it will be 3.2% for 2017. Last year, GYG generated revenues of €54.6m and made EBITDA of €6.7m.
MAIN MARKET
China-focused healthcare investor Cathay International Holdings (CTI) says that it will receive just over $4m in dividends from 50.56%-owned subsidiary Lansens Pharmaceutical. The dividend will be paid on 4 August. Lansens’ subsidiaries have received insurance payments totalling $2.58m. Two directors were not re-elected at Cathay’s AGM because, although they received the majority of votes, they did not receive the majority of independent votes. Further re-election resolutions will be proposed in the next four months and they will only need a majority to be passed.
Falcon Media House (FAL) has signed a memorandum of understanding with Tata Communications to collaborate on an over the top service for brands and content rights holders, using Falcon’s Q-Flow technology.
SMALL CAP AWARDS 2017 WINNERS
Company of the Year
Gear4Music (G4M)
Musical instruments retailer Gear4Music has gone from strength to strength since joining AIM in June 2015. The share price has risen by 600% in the past year. In May, £4.2m was raised at 690p a share.
The musical instruments market remains fragmented but Gear4Music is becoming one of the main players in Europe and it is opening distribution facilities in Europe as well as expanding its UK base. The investment required is holding back short-term profit growth and, in fact, pre-tax profit is expected to dip this year from £2.7m to £2.4m before rising to £3.3m in 2018-19.
IPO of the Year
Accrol Group Holdings (ACRL)
Tissue manufacturer Accrol had just celebrated its first anniversary on AIM when it was given this award. Accrol floated at 100p a share on 10 June 2016 and the share price has risen to 159.5p. Full year figures will be announced on 10 July.
Accrol is a leading supplier of tissue products to the discount sector and it has opened a new factory in Leyland, Lancashire. This investment takes annual production capacity to 143,000 tonnes. A ten-year lease has been secured on a 368,000 square foot warehouse in west Lancashire and this will become the central distribution facility. The warehouse management and logistics have been outsourced.
NEX Exchange Company of the Year
Chapel Down Group (CDGP)
English wines producer Chapel Down has been quoted on NEX and it forerunners for more than 14 years. Revenues have grown from £1.47m in the year to September 2002 to £10.2m in 2016. The Tenterden-based business made a small loss when it floated. Continuing operations moved from an underlying pre-tax profit of £156,000 in 2015 to £340,000 in 2016. Frosts have hit production this year but the outcome for wine production is still uncertain.
The company has developed brewing business Curious Drinks, which has separately raised money to build a new brewery but Chapel Down still effectively controls the business. The new Ashford brewery will be open in mid-2018 and this will free up space for further wine making at Tenterden.
Impact Company of the Year
Obtala (OBT)
African agricultural and forestry business Obtala is set to start to commercialise its operations this year. Up until now revenues have been modest but they are set to jump to £11.9m in 2017, trebling to £36.9m in 2018, which should be high enough to allow Obtala to make a profit in 2018. Hardman estimates that the Mozambique forestry assets could generate EBITDA of more than £25m in 2021. There are also plans to build up the orchard and horticultural business in Tanzania.
In May, Obtala acquired profitable sawn timber trader WoodBois International for $14.8m (£11.4m). The Copenhagen-based business sources timber from across Africa and sells it around the world. WoodBois has been short of capital to finance growth and it fits well with Obtala’s existing timber and forestry operations.
Executive Director of the Year
Nick Jarmany, Quixant (QTX)
Telematics technology provider Quartix is highly cash generative enabling it to finance growth in the UK, France and the US and pay increasing dividends. Chief executive Nick Jarmany founded Quixant in 2005 having spent more than two decades at Densitron Technologies. He guided the business to an AIM quotation in 2013.
The UK remains the dominant region for revenues but France and the US are growing strongly from low bases. Last year, US revenues more than doubled, from £256,000 to £677,000, but the loss was even higher than that because of the investment in sales and marketing and support services to enable growth over the next five years.
Transaction of the Year
Keywords Studios (KWS)
Outsourced video games services provider Keywords Studios has made numerous earnings enhancing acquisitions since it joined AIM but this award is for the purchase of Synthesis for up to €18m, which is one of eight purchases in 2016. This deal meant that Keywords became the global leader in localisation and voice-over recording for video games and added additional studios in Germany, France and Taiwan.
Keywords is expected to maintain a net cash position at the end of 2017 but this will depend on the level of acquisitions activity. There is a €35m bank facility that is not fully utilised and that could be used for further acquisitions.
Analyst of the Year
Andrew Blain, Cenkos Securities
Journalist of the Year
Jamie Nimmo, Evening Standard
Adviser of the Year
Cenkos Securities
Fund Manager of the Year
Paul Mumford, Cavendish Asset Management
Lifetime Achievement
Malcolm Diamond (Trifast/Flowtech Fluidpower)
Andrew Hore
Fast start to the year for Whitbread
by Ian Pollard
Whitbread WTB – Management reports a good start to the year, with first quarter sales growth of 7.6%, in line with expectations. Premier Inn continued to win overall market share with strong sales growth of 9.2%, benefitting from a resilient hotel market and the contribution from the c.9,000 rooms opened over the last two years. Costa sales grew 8.7% with UK equity like for like growth of 1.1% and a good performance in the expanding travel and drive thru channels. Whitbread has a clear plan to deliver growth and remain on track to open c.4,200 hotel rooms, 230-250 Costa coffee shops and install c.1,250 Costa Express machines this year.
Hornby HRN – A dismal performance from a management team that needs to turn this company around, although CEO Steve Cooke claims “solid evidence of our delivery in phase one of our Turnaround Plan.” FY revenue of £47.4m (2016: £55.8m), loss before tax of £9.5m (2016: £13.5m loss). At least net cash at 31 March 2017: stood at £1.5m (2016: £7.2m net debt). Hornby claims the current financial year has started positively and it is are well placed to achieve the Board’s expectations for the year.
Wynnstay Group WYN – Interim results benefited from greater demand for agricultural inputs over the winter period but were affected by continued subdued trading at pet products business, Just for Pets. Revenue of £205.32m (2016: £193.24m) and adjusted profit before tax, before goodwill & investment impairment charges of £4.07m (2016: £4.08m). The interim dividend of 4.20p is an increase of 5%.
Lekoil Limited LEK – Reports continuous commercial production and cash flow generation at Otakikpo. The company says the 15m Shell offtake facility secured on Otakikpo production provides liquidity to complete Phase 1 development and ramp up production to 10,000 bopd by year end. The Honourable Minister of State, Petroleum Resources of Nigeria, granted consent to complete the transfer of the original 17.14% participating interest that LEKOIL acquired in OPL 310 in February 2013.
Berkeley Group Holdings BKG – FY profit before tax shot up an impressive 53% to £812.4m, with net asset value per share up 18.4% to £15.56. Management claimed it had delivered another strong performance in a fast-changing environment.