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Quoted Micro 12 September 2016
ISDX
Mechan Controls (MECP) reported a rise in pre-tax profit from £180,000 to £271,000 on flat revenues of £1.9m in the six months to June 2016. There was £1.08m in the bank. Mechan has declared an interim dividend of 1.1725pa share and the ex-dividend date is 15 September. Trading conditions are better than one year ago and the improvement in the first half is expected to continue in the second half.
Capital for Colleagues (CFCP) has invested £50,000 in return for A shares in IT services provider 2C Services. The A shares have preferential rights to capital in the event of certain exits. Capital for Colleagues has also subscribed for ordinary shares equivalent to 20% of the share capital in return for a nominal sum. The existing investment in The Homebuilding Centre has been converted from £250,000 in loan notes into 250,000 A shares, while further loans of £97,000 have been combined into a three year loan.
Crossword Cybersecurity (CCS) has linked up with AIM-quoted Iomart to work on a machine learning-based way of stopping Distributed Denial of Service (DDoS) attacks. The hosting and managed services business wants to offer the service to its clients so it could be lucrative for Crossword.
Oil and gas explorer Doriemus (DOR), which is also quoted on AIM, has launched a three-for-15 open offer at 0.035p a share to raise up to £865,000. The open offer price is at a 22% discount to the previous closing mid price. The open offer closes on 18 October. The cash will pay for cost overruns of the Brockham drilling and testing programme – Doriemus has a 10% interest – and for further funding of other interests. The directors will be taking up their entitlement.
AIM
SQS Software Quality Systems AG (SQS) is reaping the benefits of its strategy to increase higher margin managed services business. In the six months to June 2016, revenues were 11% higher at €166.6m but underlying pre-tax profit was one-third higher at €11.9m. Net debt was €32.9m, following the acquisition of the remaining 25% of the company’s Indian business, but the second half is always highly cash generative. New sectors are starting to increase their use of software testing services, particularly in the digital area, including mobile payments and smart grids businesses. The US is becoming an increasingly important market and it is expected to overtake Germany as the biggest market.
Belvoir Lettings (BLV) reported a three-fifths increase in revenues to £4.3m in the first half of 2016 tanks to contributions from acquisitions made in the past year. The Northwood acquisition was made at the end of the period so it will not make a significant contribution until the second half. Like-for-like revenues were 10% higher. Pre-tax profit was 69% higher at £1.3m. The unchanged interim dividend of 3.4p a share is nearly covered by underlying earnings per share.
Motif Bio (MTFB) says that patient enrolment for the phase III clinical trial for the use of antibiotic iclaprim for acute bacterial skin and skin structure infections is ahead of schedule. This means that data should be available in the second quarter of 2017. The results of the second iclaprim trial should be available in the second half of 2017. The convertible promissory notes held by Amphion Innovations have been renegotiated. Instead of converting the accrued interest of $441,000 on the $3.55m of loan notes (maturing at the end of 2016) into shares at 24.47 cents a share, Motif will issue 409,000 shares and pay cash of $314,000. Amphion will also provide $15,500 a month of corporate services if Motif floats on Nasdaq.
Sutton Harbour (SUH) says that it expects the government report on the viability of the reopening of the Plymouth City Airport site to be published in the next few months. This will be followed by an independent government inspector making a decision on whether “safeguarding of the former airport site from redevelopment is sound planning policy following the Examination in Public, currently timetabled for March 2017“. The company’s strategic review is continuing.
Minoan (MIN) is one of the first companies to admit that the vote to leave the EU has hit its business. Along with the political problems in Turkey, the EU vote has knocked £100,000 a month from gross profit. Management does believe that this could be a temporary phenomenon. The latest court action over Minoan’s proposed Greek development is due to happen on 16 September. The judges will determine the arguments against the development after the hearing.
MedaPhor (MED) says that the American Board of Obstetrics and Gynecology has given notice that it will terminate its ultrasound skills training contract because of ongoing litigation over some of MedaPhor’s patents. If the litigation is sorted out then the relationship can be resurrected.
Fishing Republic (FISH) has acquired the Fantackletastic store in Lincolnshire for £150,000 in cash. The 4,000 square feet store is the group’s first in the east Midlands and takes the number of stores owned to 11. In the year to March 2016, the store made an operating profit of £40,000 on revenues of £425,000.
Starcom (STAR) has launched the new version of its Watchlock product but this was too late to benefit the first half figures. Interim revenues slipped from £2.64m to £2.51m, while cost savings meant that the loss was reduced. Starcom has recruited an installation and services company for its Tetis cargo security product.
IPPlus (IPP) is selling its original contact centre business for £6.7m in order to concentrate on its secure payments business. The company’s name will change to PCI-PAL. The sale and leaseback of a property will raise a further £800,000 leaving net cash of £4.8m. A £1m special dividend will be proposed.
MAIN MARKET
New standard-listed shell Vale International Group Ltd (VIG) commenced trading on 5 September. The strategy is to acquire a financial services-focused technology business in Europe or Asia. A placing raised £550,000 at 3.5p a share and the shares have traded at 5p (4.5p/5.5p).
Standard-listed Anglo African Agricultural (AAAP) is raising £475,000 at 0.67p a share in order to pay creditors and finance the growth of food manufacturer Dynamic Intertrade. Cape Town-based Dynamic supplies herbs, spices and seasonings to food manufacturers and the cash will be used to build stock levels and increase production. David Lenigas has been appointed as non-executive chairman and he has subscribed for 22.39 million shares giving him a 12.4% stake. No bids were made during the recent offer period and the strategic review has come to an end.
Andrew Hore
Quoted Micro 29 August 2016
ISDX
Yujin International (YUJ/HPR) intends to switch from AIM to ISDX following the proposed acquisition of Healthperm Resourcing and also change its name to Healthperm Resourcing Ltd. Yujin joined AIM in February 2009 when it operated a maritime business that has subsequently been sold. Healthperm supplies nurses from the Philippines, where there are estimated to be 200,000 unemployed nurses, to healthcare providers in the UK and UAE. Potential customers want to employ around 1,000 nurses, while the current pipeline of 180 candidates for the NHS could generate £970,000 for the company. There will be a 91-for-two share consolidation and £275,000 will be raised after consolidation at 150p a share. Healthperm will cost an initial £11.2m in shares at the subscription price and if pre-tax profit is at least £2.9m in 2017 a further £4m will be paid in shares at the same price. There were no revenues up until the end of 2015.
Former AIM company Black Sea Property plans to join ISDX on 31 August. Black Sea Property originally joined AIM on 14 March 2005 but the property portfolio was completely disposed of by July 2014 and cash returned to shareholders. Trading on AIM was cancelled in January but the shareholders voted to continue as a property company and domicile was moved from Jersey to the Isle of Man. The strategy is to build up a portfolio of Bulgarian property assets. This could be residential, commercial or hotel properties, or it could be investments in distressed companies that need to be restructured. AG Asset Management will be investment adviser and its holding company owns 28.7% of Black Sea Property and has provided a loan facility of £350,000.
Secured Property Developments (SPD) still has £760,000 in the bank following the sale of its property asset. There was a £17,000 loss in the first half of 2016. The board is seeking investments, which include the possible funding of property developments.
Early Equity (EEQP) says that 32.1%-owned Malaysian business Yicom Global made a profit in its most recent financial year and Early Equity will receive a dividend totalling £26,000. The Chinese healthcare products supplier reported a net profit of RM 850,000 (£161,000) on revenues of RM4.06m (£768,000). Yicom started trading in February 2015.
Australia-based explorer NQ Minerals (NQMI) has raised £113,000 at 8.4p a share. Geologist Roger Jackson has joined the board. He has options over 4 million shares at 6p each.
AIM
Tracsis (TRCS) says that full year underlying profit will be in line with expectations thanks to strong second half revenues helping full year revenues to grow by one-quarter to £32m. The stated profit will be reduced by acquisition and disposal costs. There was more than £11m in the bank at the end of July 2016. Tracsis has made a joint investment in Nutshell Software with the former majority shareholder in Ontrac, which was acquired last year. Nutshell develops apps for transport, utility and energy businesses. Tracsis is investing £500,000 for a stake in Nutshell of up to 37.8%.
Call centre services and technology supplier IPPlus (IPP) says that it will make a modest pre-tax profit in the year to June 2016. The Ansaback call centre services provider won a substantial call centre contract. The secure payments business also won new contracts and transaction volumes rose by 46%. There were lower revenues from software. There was £900,000 in the bank at the year-end.
Capital equipment manufacturer Molins (MLIN) made a small underlying profit in the first half of 2016 but it is still paying a dividend even though it has been halved to 1.25p a share. There are continued delays in receiving orders and that could hamper the normally strong second half. Tony Steels became chief executive in June.
Mass spectrometry instruments developer Microsaic Systems (MSYS) has raised £5.4m at 5p a share in order to progress the commercialisation of instruments and make manufacturing more efficient. There was £1.95m in the bank at the end of June 2016 but there was a cash outflow of more than £1.6m in the previous six month period.
MAIN MARKET
Cash shell Flying Brands Ltd (FBDU) continues to work on the reverse takeover of medical technology business Stone Checker Software. There was a £125,000 cash outflow, including a £62,000 loss from fraudulent activity, in the six months to June 2016. Directors’ fees have been accrued since 1 April 2016. There is still £196,000 in the bank. Tweeter Leon Hogan has built up a 5.1% stake.
Andrew Hore