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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 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 25 June 2018
NEX EXCHANGE
Shareholders have agreed to the proposed broadening of investing policy for Sativa Investments (SATI) and the first acquisition under the new policy is George Botanicals. Sativa paid £415,000 in cash and shares for the UK-based wholesaler and distributor of cannaboid medicinal products, including CBD oil. The company is being acquired from the interests of Sativa chief executive Geremy Thomas.
Gas and electricity supplier Good Energy (GOOD) says that this year’s results will be weighted towards the first half because of the cold weather earlier in 2018. There will also be increased investment in the sales team and a digital app in the second half. Good supplies more than 70,000 homes and less than 1% of the business market.
Wishbone Gold (WSBN) nearly doubled its revenues to $8.2m in 2017. There is $257,000 in the bank.
Pelican House Mining (PHM) has bought a 15% stake Mighty Oak Explorations, which has three licences to explore for cobalt and two to explore for lithium in Uganda.
NQ Minerals (NQMI) says the commissioning of plant for the Hellyer project is on course for August. The mine is a few months away from production.
Block Commodities (BLOC) has raised £165,000 at 0.035p a share. The cash will help to finance the launch of a pilot blockchain project in Uganda.
AIM
Alliance Pharma (APH) is acquiring the marketing rights to Nizoral, an anti-dandruff shampoo brand in Asia Pacific, for £60m. Alliance raised £34m at 91p a share. The rights being acquired, which cover 15 countries, generated net sales of £18.5m in 2017. They would have generated pro forma EBITDA of £7.1m.
Shoe retailer Footasylum (FOOT) has followed up the announcement of its exit from the FTSE AIM 100 index with a set of results that mean it is likely to be a long time before it gets back in the AIM 100. Peel Hunt has reduced its 2018-19 pre-tax profit forecast by one-quarter to £5.3m. Footasylum has been hit by discounting and the weak consumer market. Rental costs are higher than expected.
Social housing software and services provider Castleton Technology (CTP) continues to grow sales to new and existing customers. Two-fifths of customers take more than one product. Full year revenues were 15% ahead at £23.3m with organic growth of 13%. Net debt was 30% lower at £6.3m. There is a contracted backlog of £26.8m.
Frontier IP (FIPP) has taken a 24% stake in Cambridge Material Testing, which is developing software and hardware to measure material characteristics of metal components. The non-destructive tests are quick and require small samples.
Northbridge Industrial Services (NBI) has raised £2.5m at 125p a share. Northbridge will use £1.05m to pay the deferred consideration for the Tasman acquisition. This was originally due in January 2016 and has been incurring an annual interest charge of 8%. The rest of the cash will be invested in rental equipment as demand recovers. Gearing will fall below 20%
Rose Petroleum (ROSE) has published a maiden contingent resource for its interests in the Paradox Basin, Utah. The competent persons report shows a net 2C contingent resources of 12.3mmboe with gas accounting for nearly one-quarter of that resource. A post-tax NPV of $86.9m has been estimated. This assumes a 75% success rate for wells drilled and a recovery of up to 550,000 barrels per well. Each horizontal well is expected to cost $7m. These estimates are based on less than one-quarter of Rose’s acreage.
Myanmar-focused social media platform operator MySQUAR Ltd (MYSQ) is acquiring MyPay Myanmar for £1m in cash and 72.5 million shares issued at 1.38p each. An issue of unsecured convertible bonds has raised £2.22m. Bid talks have been terminated.
Touchstone Exploration Inc (TXP) has extended its credit facility for a further year. The $15m facility lasts until November 2022. The existing oil and gas assets in Trinidad are generating cash and this is also helping to fund the drilling of 12 wells this year. Next year, an exploration well will be drilled on the Ortoire block.
Michael Rowan is switching from chairman to chief executive at Active Energy Group (AEG) and the previous chief executive will focus on developing the forest management operations in North America and CoalSwitch in Poland.
Trading in the shares of URA Holdings (URA) has been suspended because it has not completed a reverse takeover. URA has signed heads of agreement to acquire Entertainment AI Ltd, which has developed tagging technology that enables viewers of video clips to purchase items in the video. It also owns the GTChannel, which runs automotive-related channels across YouTube generating revenues from advertising.
Project management services provider Progility (PGY) plans to cancel its AIM quotation. Praxis, which owns 64.75% of the company is backing the move. There is total support from shareholders owning more than 81% of the company so the cancellation is a foregone conclusion. Praxis is offering 55p a share for shares it does not own.
N4 Pharma (N4P) is making good progress with its therapeutic nanoparticle platform Nuvec. There should be results from studies in he fourth quarter. N4 is conducting studies to identify human cell types that are most responsive to Nuvec. The Sildenafil MR Viagra reformulation commenced a proof-of-concept trial in April and the results are expected in August.
Uvenco UK (UVEN) continues to hold discussions with its main creditor following the placing of its vending machine subsidiaries in administration. Those assets were sold for £1.8m and Uvenco is left with net debt of £1.6m.
Industrial equipment distributor Slingsby (HC) (SLNG) says that a stronger April and May means that sales are 1%lower in the first five months of the year. Compared to a 6% shortfall in the first quarter. Pre-tax profit is also slightly lower. Net debt was £1.4m at the end of May 2018.
Duke Royalty Ltd (DUKE) has increased its interim dividend by 17% to 0.7p a share. The dividend will be paid on 12 July.
RA International Group Ltd provides services to remote locations and it wants to raise £18.8m when it joins AIM. In 2017, RA generated revenues of $53.3m and profit of $13.7m, up from $5m the previous year.
MAIN MARKET
Oil and gas explorer Upland Resources Ltd (UPL) has completed a placing raising £3m at 2.5p a share. The cash will help to fund the drilling of a well at Wick in the UK and finance potential ventures in Sarawak and North Africa.
Beauty and personal care products supplier InnovaDerma (IDP) continues to find trading tough and it will report a full year pre-tax profit that is £650,000 lower than expected. Revenues will increase from £8.9m to £11m. finnCap had forecast a 2017-18 pre-tax profit of £2.4m on revenues of £13.8m following the 2016-17 full year figures. Last October, InnovaDerma raised £4.4m at 276p a share and that has helped to shore up the balance sheet.
Stewart and Wright (STE) is offering to buy 21.5% of its share capital at 590p a share as part of the cancellation of its listing. That is a 7% discount to NAV. There has been one trade in the shares so far this year. The property investor has been hit by the downturn in the high street.
Pembridge Resources (PERE) is trying to raise $40m and prior to that there will be a ten-for-one share consolidation. The cash will finance the acquisition of Minto Explorations from Capstone Mining, which will cost $37.5m in cash plus shares that would give Capstone 9.9% of Pembridge. Minto is a copper producer in the Yukon. The deal could be completed by the end of July.
Tom Charlton has increased his stake in North Midland Construction (NMD) from 8.4% to 9.4%.
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
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
Quoted Micro 9 October 2017
NEX EXCHANGE
National Milk Records (NMRP) has changed its year end to June and its latest figures are for the 15 months to June 2017. This is a period when the dairy information and data services provider sorted out its pension deficit problem and this removed significant, and volatile, liabilities from the balance sheet. The market has been tough for at least two years because of the weak milk price but it is starting to recover. In the 15 month period, revenues were £25.3m and operating profit before pension and one-off charges was £1.1m. The total loss before tax is £11.9m, which is after a pension related charge of £12.5m. Trading is improving.
WH Ireland believes that Ashley House (ASH) could report a pre-tax profit of £1.8m for the year to April 2018, although it is likely to be second half weighted. This follows a decline in underlying pre-tax profit to £53,000 last year because of uncertainty about government policy. The community care properties provider has a strong pipeline of potential developments. The acquisition of an off-site manufacturing business will help the group to win modular buildings business.
Energy efficiency products supplier Sandal (SAND) reported a 14% rise in full year revenues to £3.75m. The Energie MiHome range grew by 154%, albeit from a low base. The loss was halved to £135,000 but refunded tax reduced the cash outflow from operations. Development expenditure will broaden the product range in the smart home sector.
Ace Liberty & Stone (ALSP) reported a jump in pre-tax profit from £612,000 to £1.12m in the year to April 2017 and this is prior to the disposal of all the residential properties. The property investor made a £1.02m gain on disposals but this was offset by a £391,000 unrealised reduction in property values, compared with a £283,000 unrealised gain in the corresponding period. NAV was £18.1m at the end of April 2017.
Capital for Colleagues (CFCP) had a net asset value of 42.58p a share at the end of August 2017. Recent investment include £400,000 in timber frame buildings company Employee Owners Group and £150,000 follow-on investment in Computer Application Services.
London Nusantara Plantations (PALM) has £129,000 in the bank following the disposal of its initial land investment. There was a small gain on disposal but it was not enough to wipe out the interim loss. Management is assessing acquisition opportunities of plantations and mill capacity in Sumatra and Kalimantan, Indonesia. This will require additional funding.
Black Sea Property (BSP) has completed the €5.4m fundraising, at €0.01 a share, which it requires to progress the acquisition of the office building in Ivan Vazov Street in Sofia from UniCredit Bulbank. Debt funding of €7m still has to be secured from UniCredit Bulbank. Black Sea Property has paid a deposit of €1.04m out of the purchase price of €10.5m.
AIM
Bushveld Minerals Ltd (BMN) has published the circular for the demerger of its tin interests. Shareholders will receive one share in Afritin Mining Ltd, which will own the company’s Greenhills business, for each Bushveld share. Afritin will own the Mokopane tin project and Zaaiplaat tin tailings project in South Africa plus an interest in the Uis tin project in Namibia. Bushveld will still have coal assets but the main focus will be the vanadium assets and the potential value adding battery-related products.
Toilet tissue supplier Accrol Group Holdings (ACRL) has asked for trading in its shares to be suspended because of uncertainty about its financial position. It has been difficult to pass on extra raw materials costs and operational problems have also increased costs. There is also going to be a large fine relating to a health and safety incident.
Earthport (EPO) has raised £25m at 20p a share. This cash will be used to expand the corss-border payment services company’s market and global presence, develop further products and invest in the operating platform.
The requisitioner of the general meeting at Conroy Gold and Natural Resources (CGNR) failed to get any of its resolutions passed so there are no more changes to the board. Conroy raised €240,000 at €0.30 a share. The exercising of warrants raised €167,000. The cash will be used to develop the Clontibret deposit and pay for additional exploration at the Slieve Glah gold prospect.
Reabold Resources (RBD) is raising £1.76m at 0.5p a share. This follows a £3.96m subscription at the same share price. Reabold intends to change its focus to European oil and gas projects. Two former M&G analysts have joined the board.
City of London Group (CIN) has completed the reverse takeover of Milton Homes, which provides equity release products for residential property owners.
Stanley Gibbons (SGI) has found a new buyer for its interiors division. Gurr Johns is paying £1.25m with up to £400,000 deferred consideration. Stanley Gibbons is retaining £300,000 of inventory and the Mallett premises in New York. It has also retained the Mallett and Made by Meta brands. Millicent had agreed to pay £2.4m for the assets and brands and it has to pay a termination fee. Stanley Gibbons reported a £30.2m loss for the year to March 2017. Even taking out exceptionals the underlying loss was £11.1m. The NAV is £18m.
Kin Group (KIN) has raised £1m at 0.001p a share and every four shares come with a warrant to subscribe for a new share at 0.004p each. A CVA is proposed where unsecured creditors will swap their money owed of £2.27m for shares at 0.01p each. A capital reorganisation is required to reduce the nominal value of a share to below the placing price. John Taylor, who has been involved in the aerospace and military sectors, and Lindsay Mair, a corporate financier at SP Angel, are joining the board.
Redcentric (RCN) has appointed Chris Jagusz as chief executive. Net debt is falling but it is still £33.3m. Working capital management has improved. Profit should start to recover this year.
Orosur Mining Inc (OMI) has announced a drilling programme for the Anza gold project in Colombia. There will be 15,000 metres of diamond core drilling and the first results should be available by next February. The plan is to define a maiden resource and the potential for further mineralisation.
Avacta (AVCT) has announced a research collaboration with FIT Biotech in order to assess the effectiveness of is Affimer technology with FIT’s vector technology for delivering a gene.
The Environmental Protection Agency in the US has asked Tristel (TSTL) to resubmit its application for its Duo surface cleaner. This means that approval could be five months later than planned.
Northland has initiated coverage of Venture Life (VLG) and it expects the consumer healthcare firm to move into profit in 2018. Northland believes that Venture Life will benefit from growth in demand for self-care products because of the ageing global population. Venture Life already sells its products in more than 40 countries.
Angling Direct (ANG) is acquiring Fosters Fishing for £3m in cash. Fosters have a 17,000 square feet store in Birmingham and made an operating profit of £460,000 last year. When a new store in Slough opens Angling Direct will have 18 outlets.
SkinBioTherapeutics (SBTX) says that its technology has passed third party cytotoxicity tests. Phototoxicity and in vitro ocular toxicity tests are underway.
AdEPT Telecom (ADT) has declared a 13% increase in interim dividend to 4.25p a share. Recent acquisitions are performing well and are helping to focus the group on managed services.
Redhall Group (RHL) says delays on nuclear and infrastructure will hit its figures for the year to September 2017. The Hinckley Point C contract is expected to start in October 2017. The Chieftain facility is being closed. The 2016-17 profit forecast has been halved to £500,000. The 2017-18 profit forecast has been trimmed by £200,000 to £3.4m.
Adams (ADA) has taken its cash pile to £660,000 following the sale of £584,000 worth of shares in GVC.
Former AIM company Clinical Computing has sold its trading subsidiaries to TSX-listed Constellation Software.
MAIN MARKET
InnovaDerma (IDP) is raising £4.4m at 276p a share. The Skinny Tan brand owner needs the cash for working capital. Despite declaring a profit of more than £1m in the year to June 2017 there was a £607,000 cash outflow from operations as inventory levels soared.
Curzon Energy (CZN) raised £2.33m at 10p a share but the share price has declined to 9.25p. Curzon has acquired coalbed methane licences in Oregon. Curzon believes that gas could be produced before the end of the year.
Haynes Publishing (HYNS) has completed the acquisition of E3 Technical from Solera UK for £4.72m. This will expand the data-related operations of Haynes, as well as providing cross-selling opportunities. E3 provides repair and maintenance information and vehicle registration look-up services.
Andrew Hore
Quoted Micro 8 May 2017
NEX EXCHANGE
Mechan Controls (MECP) is selling its main subsidiary to its technical director and intends to sell its other business and return cash to shareholders. The core business is being sold for up to £2m, with a minimum of £1.64m, including £1.24m initially, payable. The final £360,000 is dependent on the buyers selling the 142,300 shares they own in Mechan Controls. This leaves the group with Nirvana Engineering, which made a pre-tax profit of £352,000 last year. The company is changing its name to Mandicon.
Wine maker Chapel Down Group (CDGP) is putting a brave face on the frosts at the end of April. These were the worst frosts in April for two decades. There was a patchy impact with some vineyards impacted and some not. The company says that it mitigates risk by sourcing fruit from a wider area. The potential crop will become clearer in June. A further 129 acres of vineyard will be planted in the rest of this year.
Bulgaria property investment company Black Sea Property (BSP) is still negotiating a loan from UniCredit Bulbank to finance the acquisition of the UniCredit Building. Black Sea Property is paying €10.52m for the building – a deposit of €1.04m has been paid – and €7.6m of this will come from a loan. Once this loan is secured then a share issue can be undertaken. It appears that the deal may not be completed in May as originally envisaged. Unicredit can remain in the building for six months after completion and does not have to pay rent. The deposit will be forfeited if the deal does not go ahead. Black Sea Property has extended the repayment date of £100,000 of the unsecured loan facility from Phoenix Capital to the end of July. Discussions continue about the assignment to Phoenix of the investment advisory agreement from AG Asset Management. Anthony Gardner-Hillman is stepping down from the board and a replacement should be appointed in the near future.
Ace Liberty and Stone (ALSP) has acquired the Grosvenor Casino site in George Street, Manchester for £4m. The annual rental is £300,000. Ace has also bought the company that owns Willow House in Aldershot for £1.05m.
Angelfish Investments (ANGP) says that the loan of £497,500 has been repaid with interest by 4 Navitas. The talks about a joint venture have ended and Angelfish is trying to recover professional fees and expenses. This means that Angelfish has £1.1m in the bank and a loan to One Media Enterprises of $425,500 and it is seeking pre-IPO investments. It should be remembered that Angelfish has £2.3m of preference shares in issue.
Early stage investor Primorus Investments (PRIM) says that cloud-based food service business Fresho has announced that annualised revenues through its platform is nearly A$100m. The platform connects wholesalers and suppliers to restaurants, hotels, independent supermarkets, hospitals, pubs and other retailers. Additional automation will help to boost margins. Primorus, which is also quoted on AIM, invested £175,000 in Fresho in September 2016. Another round of funding is expected early next year. That will provide an opportunity to revalue the existing investment.
Etaireia Investments (ETIP) is buying two office buildings at Whitehouse Office Park in Peterlee, County Durham, with 113 out of the 125 year lease left unexpired. The purchase price of £1.125m will be paid through a combination of 600 million shares at 0.1p a share, giving Taxspecialefx (Peterlee) LLP a 24.3% stake, and cash payment of £525,000 deferred for 12 months. Completion is expected within three months. The annual rental income is £99,500. The seller is entitled to 75% of rental income until the deferred payment is made.
Adnams (ADB) non-executive director Guy Heald has sold 310 B shares at £114 each, raising £35,340. He retains 15.9% of the B shares.
All Star Minerals (ASMO) has raised £40,500 at 0.075p a share. Equatorial Mining & Exploration (EM.P) has raised £14,000 via the exercising of warrants at 0.01p each and it has also issued 110 million irredeemable 0.01p convertible loan notes.
AIM
The new management team has spent 2016 restructuring Quantum Pharma (QP.). One part of the business has been closed and another may be divested. The focus is niche pharmaceuticals and specials. In the year to January 2017, pre-tax profit dropped from £10.1m £6.2m. There will be a recovery in profit this year but it will take another year for profit to get back to £10m.
Podcasts supplier Audioboom (BOOM) has increased its revenues from £192,000 to £1.31m although it continues to lose money. There is already more than £3m of recognised or pre-booked advertising for 2017. Audioboom has built up its user base and it has started to generate revenues on the back of that. The acquisition of advertising technology firm SONR should help to further target advertising. Audioboom will make a further loss this year and, even after raising around £5m, the net cash is expected to be less than £1m at the end of 2017.
Management spent a significant amount of time last year sorting out the operations that Inspiration Healthcare (IHC) inherited when it reversed into the AIM-quoted business. This meant that underlying profit was flat at £1.1m. Demand for pre-natal care equipment and services is rising. There is scope for further organic growth and for acquisitions.
Pennant International Group (PEN) says that Lockheed Martin has increased the size of a contract from £200,000 to £2.2m, with potential for me. The total order book is worth more than £35m.
A concept study for the CS pozzolan-perlite project has persuaded Sunrise Resources (SRES) to focus on the project. It is thought that the 100%-owned project should have low caped and operating expenses thanks to surface mining and simple production processes. The pozzolan mined can be used as a greener alternative to Portland cement. There are no defined resources yet.
Onshore oil and gas explorer Egdon Resources (EDR) has submitted a new planning application for the Wressle field development. This follows the rejection of the previous planning application by North Lincolnshire Council. Egdon is also appealing the original decision.
Verona Pharma (VRP) raised $80m at the time of its flotation on Nasdaq. The shares were issued at 132p each and the ADSs issued in the US at $13.50 each – one ADS represents eight shares. The ADSs are trading on the Nasdaq Global Market. Last month, respiratory disease treatment developer has received authorisation from the FDA to proceed with a clinical trial for RPL554.
Manufacturer of professional audio equipment Focusrite (TUNE) produced good interim figures thanks to strong sales in North America. Interim revenues were 24% higher at £32m with pre-tax profit 89% ahead at £4.6m. Net cash is £9.4m and the interim dividend was raised by 15% to 0.75p a share. . Edison has upgraded its 2016-17 pre-tax profit forecast from £8m to £8.5m.
The Article 6 Marital Trust has become the largest shareholder in FIH Group (FIH), with 28.9%, following the sale of shares by Blackfish Capital Alpha Fund and former bidder Staunton Holdings at 300p each. Edmund Rowland has stepped down as chairman.
PowerHouse Energy (PHE) has moved its ultra high temperature gasification waste to energy G3-UHt unit to the Thornton Science Park, operated by the University of Cheshire. This will enable further development and opportunities for demonstrating the technology.
LED lighting products developer Photonstar LED (PSL) has taken advantage of a sharp share price recovery to raise £465,000 at 1.25p. The cash will be used to roll-out new product ranges.
Sanderson Group (SND) says that interim figures are in line with expectations. The retail and manufacturing software provider increased interim revenues from £9.86m to £10.9m – just under 50% is recurring revenues. Digital retail revenues were one-fifth higher. Net cash was £4.51m at the end of March 2017. Full year pre-tax profit is expected to rise from £3.44m to £3.72m. The interims will be published on 24 May.
Strategic Minerals (SML) is acquiring its joint venture partner’s stake in Central Australia Rare Earths for £522,500. Larger amounts of funding will be required to explore the resource than originally thought. Cash generated from Cobre in New Mexico will be used to finance this investment.
Digital audio technology developer Frontier Smart Technologies (FST) says that its first half revenues is significantly ahead of last year and full year EBITDA is set to be well ahead of expectations with margins higher than anticipated. Analogue radio has been switched off in Norway and there is strong demand for digital radio across Europe. Smart audio contracts have been won and there will be a better indication of progress in the second half.
Gas producer Ascent Resources (AST) has re-entered the second well at the Petisovci gas field in Slovenia. The well is being prepared for production, which should take four weeks. There has been a further objection to the Integrated Pollution Prevention and Control permit, which it requires to build a gas processing plant so more gas can be produced.
DP Poland (DPP) says that system sales grew by 21% in the first quarter of 2017. There have been eight stores added this year and a new commissary is under construction.
Accident prone Redcentric (RCN) appears to be sorting itself out but it is not out of the woods yet. Net debt is estimated at £39.5m at the end of March 2017 and the bank appears to support the company. Waivers have been received for covenant breaches and there were large exceptional charges. The underlying pre-tax profit is forecast to rise from £6.3m to £9.1m.
MAIN MARKET
Personal care products supplier InnovaDerma (IDP) has acquired the owner of the IP for Prolong, the only FDA-approved medical device for the treatment of premature ejaculation, a market valued at more than $1bn a year. This is part of a strategy to build up a life sciences division. Prolong is a non-prescription, vibrating medical device that is used in training in order to increase time between arousal and ejaculation. The device could cost between £250 and £300. InnovaDerma is paying £1m in shares, issued at a 25% discount to the market price minus the settlement of current liabilities at the current share price – estimated at £323,600. On top of this, a royalty of £11 per unit sold will be paid until the patent runs out in 2031 and if Prolong generates an operating margin of 20% in any year a bonus of £150,000 is payable. Prolong will be launched in North America in the second half of 2017 and Europe and Australia next year. InnovaDerma also announced that its self-tanning Skinny Tan products will be available on the ASOS website.
Opera Investments (OPRA) is going ahead with its acquisition of Kibo Gold from AIM-quoted Kibo Mining (KIBO) for £3.66m in shares at 6p each and moving from the standard list to AIM. The acquisition has the Imweru and Lubando gold projects in Tanzania. Opera is also raising £1.5m at 6p a share – it already had £486,000 in the bank. The Imweru project could be producing 50,000 ounces of gold a year within two years. Opera is changing its name to Katoro Gold.
Andrew Hore
Quoted Micro 23 January 2017
NEX / ISDX
Clinical decision support systems supplier DXS International (DXSP) increased its interim revenues by 17% to £1.78m and it has moved into profit. DXS has moved from a loss of £39,000 to a pre-tax profit of £64,000. DXS has won the tender for London Partnership Procurement, which has 100 members and is expected to spend £1.5bn over the four year contract period, and a new version of its software has been launched. There was £361,000 in the bank at the end of October 2016.
Based on the latest fundraising price, the value of the Coinsilium Group Ltd (COIN) stake in nano payments company SatoshiPay Ltd has grown in value from €200,000, mostly invested one year ago, to €725,220. Fellow NEX-quoted company Kryptonite 1 (KR1) has invested just over €59,000 as part of the €1m fundraising giving it 1% of SatoshiPay. AIM-quoted Blue Star Capital (BLU) is investing a further €640,000 at €340 a share and it is raising £700,000 from a share placing at 0.15p a share in order to finance the investment. AIM-quoted FastForward Innovations Ltd (FFWD) is another investor in SatoshiPay and the value of its investment has, since the original investment in September 2015, increased by 212.5% to €500,140.
Early Equity (EEQP) has increased its NAV from £209,000 to £706,000 at the end of August 2016 mainly thanks to the £607,500 raised at 0.45p a share last year. The full year loss was slightly lower at £110,000. Early Equity invested £450,000 in a 32.1% stake in Yicom Global, a healthcare products supplier primarily focused on China. This business started trading in February 2015 and is already profitable with revenues building up each month. Early Equity has received a dividend of nearly £26,000.
AIM
Eco (Atlantic) Oil & Gas plans to raise up to £3m ahead of its admission to AIM. Eco is already quoted on TSX-Venture market but it believes that the London market will take more account of the prospects for its exploration interests. Eco has offshore exploration interests in Guyana and Namibia. The Orinduik block in Guyana, where Eco has a working interest of 37.1%, is near to the Liza discovery by ExxonMobil and Eco’s partner is Tullow Oil. Part of the cash raised will go towards funding seismic exploration of the block. This will help to identify where the exploration well should be drilled next year. There are applications for other blocks in Guyana. Eco has stakes in four blocks in Namibia but the initial focus is Cooper (32.5% working interest) where an economic impact assessment needs to be carried out before any drilling.
Strategic Minerals (SML) moved into profit in 2016 thanks to strong sales of magnetite from the Cobre mine in New Mexico and it has enough cash to push ahead with the development of its other interests. Strategic Minerals has the rights to sell the magnetite which is a by-product of the mining. The rights to sell the stockpile of magnetite are coming up for renewal. They could be renewed for a further 12 months or even possibly for a number of years, which would provide more certainty about future revenues. Last year, there was a 24% increase in sales, taking revenues to $1.55m. The company has also received a $400,000 compensation settlement from the rail provider to the mine. This cash will go towards exercising the option to take a 50% stake in the Redmoor tin/tungsten project in Cornwall. The cash will fund the 2017 drilling programme for the joint venture. Strategic Minerals is also interested in the CARE nickel project in Australia.
Vislink (VLK) is still selling its hardware division to xG Technology Inc (XGTI) but surprise, surprise Vislink is not getting the full disposal proceeds of $16m upfront. This means that Vislink shareholders have to shoulder the costs of another general meeting to agree to the revised disposal already having agreed to the original terms at a previous general meeting on 9 January. Vislink is still likely to receive $16m for the business but only $6.5m of this is payable initially. On completion, secured loan notes of $9.5m will be issued and should be redeemed within 45 days. Vislink also retains the right to cash received from an outstanding debt up to a maximum of $2m. It is not clear if there is any chance of the debt being paid. The xG share price has bounced back since Christmas and a ten-for-one consolidation means that the share price complies with regulatory requirements for the Nasdaq Capital Market. The loss-making company raised $10m gross at the end of 2016.
Global Energy Development Ltd (GED) proposes to acquire subsea surface vessel businesses and change its name to Nautilus Marine Services. The deal covers 11 offshore subsea service vessels and one barge vessel, which provide services in the Gulf of Mexico. A convertible loan note issue is planned to raise $10.5m – the coupon is 8% and the conversion price 50p a share. The current share price is 16.25p. The loan note cash, plus the issue of two other loan notes valued at $6.1m and $15m and convertible at 160p a share and 225p a share respectively, will finance one transaction and the other transaction will be financed by forgiving $8m out of $12m of existing loan notes. Issued by the seller
Premier Technical Services Group (PTSG) has bought lightning protection and earthing systems installer Nimbus for £1m. This business made a pre-tax profit of £300,000 in 2015. Premier says that last year’s trading was in line with expectations.
First Property Group (FPO) has won a new investment mandate from three colleges in Oxford and Cambridge totalling £14.5m. A new fund has been set up called Fprop UK Special Opportunities LP and First Property is investing £725,000. Including debt, the fund can invest £30m. Fees will be dependent on the value of the properties under management. At the end of 2016, First Property had invested 95% of the funds it manages for the Shipbuilding Industries Pension Scheme.
Gold miner Orosur Mining Inc (OMI) reported a first half profit of $3.7m and generated cash of $7m from operations. The commencement of underground production from San Gregorio west in November will boosted the second half. Cash operating costs were $914/ounce but this figure should fall below $900/ounce for the full year. There was $5.4m in the bank at the end of November despite the heavy capital expenditure in the period. There will be more drilling at the Anza gold project in Colombia in order to define the potential mineralisation and provide a maiden resource figure.
Independent Oil & Gas (IOG) plans to acquire a gas pipeline in the southern North Sea. This unused pipeline, which has a capacity of 300,000mmcfd, could be used to transport gas from the Blythe hub and Vulcan satellite fields. There will be a lot of technical work required to get the pipeline up and running. Drilling at the Skipper field indicates that the oil is heavy making it difficult to produce.
SQS Software Quality Systems (SQS) continues to increase its higher margin managed services business and 2016 profit was in line with expectations despite the negative effect of currency movements (SQS reports in €). Net debt was €12m at the end of 2016. Significant new business continues to be won.
Arria NLG (NLG) has left AIM although it has not finalised its admission to ASX and the New Zealand Stock Exchange. Arria hopes to complete a $25m fundraise in the first quarter of 2017.
MAIN MARKET
Standard list cash shell Stranger Holdings (STHP) has raised a further £110,000 at 1p a share. Trading in the shares commenced on 13 January, following a £848,000 (£675,000 after costs) placing at 1p a share. The initial 50 million shares were issued at 0.1p each. The current share price is 1.25p (1p/1.5p). There is no guidance concerning a specific sector focus for any acquisition. The two directors are also directors of Plutus PowerGen and standard list shell Papillion Holdings. They were also directors of former AIM company BioProgress.
Hair and skin care products supplier InnovaDerma (IDP) says that its first half revenues are more than 80% ahead at £3m. The revenues have been boosted by UK sales of skin tan brand Skinny Tan, which tans and reduces the visibility of cellulite.
Andrew Hore
Cluff Sees Improvement for Gas & Triples Combined Resources
Cluff Natural Resources CLNR Believes that the outlook both for the sector and the company showed marked improvement in 2016 with major progress being made in the southern North Sea. Geological and technical work throughout the year resulted in a tripling of total combined P50 resources from 845 BCG of gas to 2.37 TCF. funding for the coming year was also secured.
Frontier Dev plc. FDEV The growth in revenue for the 6 months to 30th November exceeded the boards expectations with a rise of 66% to £18.1m. interim results are expected early in February.
Innova Derma IDP revenue is expected to have risen by just over 80% to about £3 for the 6 months to 31st December. Growth has been led by the success of Skinny Tan which was launched in February through Superdrug. Revenue and earnings are expected to be enhanced in the second half following the entry to the American market in October.
Goals Soccer Centres GOAL claims that it has at long last turned the corner with robust trading and a significant improvement in business during the second half year to 31st December. Modernisation and updating of facilities are said to be responsible for the volume rise of 3.1% which compares with 1% for the year as a whole.
WANdisco WAND maintained its momentum during its second half to the 31st December with a rise in bookings of 109%. The fourth quarter and the year as a whole, both saw rises of 97%. A number of new contracts were obtained and the year ended with a strong order book and sales pipeline. In the 4th quarter the company operated at nearly cash flow break even point and 2017 is expected to show more progress made towards achieving profitability.
Villas & houses for sale in Greece – visit; http://www.hiddengreece.net
Quoted Micro 19 December 2016
ISDX/NEX
Hydro Hotel, Eastbourne (HYDP) has indicated an improvement in pre-tax profit for the year to October 2016 by raising its dividend payments. The first payment in January will be 7p a share and the second in May will be 14p a share. The total dividend has been increased from 18p a share to 21p a share. Hydro Hotel still has a significant cash pile. Company secretary Sally Gausden has been appointed as a non-executive director.
Netalogue Technologies (NTLP) has replaced its managing director. Richard Condon will become a non-executive director and he will be replaced in the role by development director Andrew Robathan. This follows a review of the company’s strategy and Netalogue will further develop its B2B functionality, which will help it compete against rivals and gain global strategic partners.
Trading commenced in property developer Formation Group (FRM) shares on ISDX on 15 December, although the AIM quotation will continue for the time being.
Gledhow Investments (GDH) made a number of new investments last year but disposals meant that there was still cash of £258,000 at the end of September 2016. The existing investments include a €40,000 convertible loan to Netherlands-based electric scooter developer AppScooter and investments in placings in virtual reality content developer EVR Holdings and Management Resource Solutions, which has run into financial difficulties. The NAV is £452,000, which is slightly higher than the market capitalisation based on the mid price of 0.75p (0.5p/1p) a share.
Black Sea Property (BSP) has signed a non-binding letter of interest to acquire Varna Project Investment, which owns six, almost complete, apartments and development land on the Black Sea coast. The acquisition will cost €130,000 and the assumption of debt of €1.02m – at an interest charge of 5% a year. The apartments will be marketed next May and the land should be sold within 18 months. The loan is repayable on 1 July 2020. The deal could be completed by the end of March.
Karoo Energy (KEP) has generated positive results from exploration on its production licences in the Gemsbok Basin in Botswana. Further exploration, including additional wells and extending the gravity survey data, will be undertaken in 2017.
AIM
It was a mixed first half for defence equipment and services supplier Cohort (CHRT) but the second half is expected to be better. Cohort reported a loss but there was a small improvement in underlying pre-tax profit from £3.51m to £3.86m on flat revenues. The mix of revenues has changed with acquisition contributions offset by lower contributions from SCS, which is being absorbed into two other divisions. The order book is worth £129.6m. Full year profit is expected to improve from £12m to £14.3m but this is down to acquisitions and earnings per share will dip slightly. Dividends should still be increased with a total of 7p a share forecast.
Shell company SigmaRoc (SRC) has secured the acquisition of Ronez Ltd from LafargeHolcim Group for £45m. SigmaRoc chief executive Max Vermorken should know the business because he was a consultant to LafargeHolcim until recently. Ronez owns two quarries and other construction materials operations in Jersey and Guernsey. In 2015, these operations made an operating profit of £4.32m on revenues of £26.3m. Ronez was acquired, as part of Aggregate Industries, by Holcim back in 2005. The markets are limited and market share is already high. Further acquisitions are planned as part of the buy and build strategy. There will be a 104-for-one share consolidation and £40m will be raised at 40p a share, while a further £10m will come from a convertible loan. When the company’s original assets were sold SigmaRoc raised £500,000 at the equivalent of 25p (0.24p pre-consolidation) a share. A listing on the Channel Islands Stock Exchange is planned following the reverse takeover.
Property management services provider HML Holdings (HMLH) is raising £2m at 37p a share and this will help to finance three potential acquisitions. These acquisitions could cost a total of £4.4m but there will be some deferred consideration. Four acquisitions have already been made this year and there are 62,000 homes under management. Interim pre-tax profit improved from £810,00 to £920,000. Net debt was £1.4m at the end of September 2016. The shares ae being issued at ten times prospective earnings.
Ultrasound training equipment developer Medaphor (MED) appears to have settled its patent dispute in the US. The agreement has yet to be put in writing but after this happens the lawsuit will be dismissed. Medaphor says that it will pay cash in settlement but it has enough in the bank to cover this. There was £3.5m in the ban at the end of June 2016 but this is likely to be less than £3m now.
A lack of insolvencies continues to hamper the profitability of Begbies Traynor (BEG). Interim revenues dipped from £25.5m to £24.5m but underlying pre-tax profit was flat at £2.5m because of a higher contribution from the property services side of the business – partly due to additional contributions from acquisitions. The interim dividend is unchanged at 0.6p a share. Bank facilities have been extended until 2021 and this will reduce the interest charge. Further add-on acquisitions are planned.
The news does not get any better at Redcentric (RCN). There has been an overstatement of net assets of £20.8m, which relates to overstated profit. Net debt was £34.4m at the end of September 2016, although that is lower than average monthly levels. Banking covenants are being waived but, unsurprisingly, there will be no dividend. Redcentric is attempting to improve the running of its finances and interim results are promised before the end of the year slimming tablets.
Veltyco (VLTY) says that it will beat the profit expectation of €1.38m for 2016. This helps to make the 2017 profit forecast of €3.17m appear to be more attainable. Veltyco’s business is generating players for online gaming and option trading websites.
First half trading has been tough for property adviser Fletcher King (FLK) but it is maintaining its interim dividend at 1p a share. Property prices have fallen by 5%-10% and transaction volumes are lower. There was some turmoil in the property market after the EU referendum, with some transactions falling through, but demand recovered after a few weeks. In the six months to October 2016, revenues fell from £2.96m to £1.68m, while pre-tax profit, excluding investment gains, fell from £597,000 to £163,000. There will be no one-off gains this year but there could be next year. Net cash was £2.64m. The decline in the pound has attracted foreign buyers, although uncertainty remains.
MAIN MARKET
Hair care and tanning products supplier InnovaDerma (IDP) has raised £800,000 at 110p a share to help fund higher stock levels. This follows a placing earlier in the month which raised £540,000 at 70p a share. Andrew Hore