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Andrew Hore – Quoted Micro 29 March 2021
AQUIS STOCK EXCHANGE
New Apex segment entry Samarkand (SMK) has got off to a strong start. At one point, shares were changing hands at 142p, against the placing price of 115p, but they ended the week at 123.5p (120p/127p). There was £15.4m raised after expenses. The company has developed e-commerce software technology known as Nomad. There are a number of modules and these can be used by clients to sell their products in China. There are 105 special cross-border e-commerce zones in China. This market is expected to reach £138bn in 2021. Samarkand also sells its own brands in China and some of the money raised will be used to buy other brands.
Incanthera (INC) has raised £1.14m at 12p a share. This will provide enough cash until the middle of 2022. There are discussions ongoing with two potential partners for the Sol skin cancer prevention product.
Imperial X (IMPP) has announced its intention to gain a standard listing and raise up to £1.5m. The company will change its name to Cloudbreak Discovery.
Rutherford Health (RUTH) has secured a £40m investment from Equitix Investment Management. In return the freehold of the South Wales centre will be transferred and there will be other security. There will be an initial investment of £25m with the rest paid in three equal instalments. The cash will be used for investing in infrastructure. The current debt of £18.6m will be repaid.
Arbuthnot Banking (ARBB) generated flat operating income of £72.5m, while there was a £1.1m loss. Management is optimistic about a strong rebound if the government continues with its current roadmap out of lockdown. There is a growing demand for lending.
Capital for Colleagues (CFCP) had NAV of 57.97p a share at the end of February 2021. That is before the sale of the investment in Anthesis for £1.15m. That leaves the company with £2.64m in cash.
In the first 18 days of March Bin 1301, a bar in Washington DC where Rogue Baron (SHNJ) has a stake, generated sales of $35,330, nearly double the same time the previous year. That is despite Covid restrictions.
SulNOx Group (SNOX) has appointed A and S International as a distributor of lubrication and bioremediation products.
EPE Special Opportunities (ESO) had an NAV of 437.63p a share at the end of January 2021, which was a 38% increase on the year before thanks to the strong performance of the Luceco (LUCE) share price. EPE is considering raising more cash through a loan note issue. That would provide further cash for investment.
Altona Rare Earths (ANR) has secured a memorandum of understanding for the acquisition of a rare earths mining project in Mozambique. The plaln is to buy 70% of the Monte Muambe rare earths project, via an earn-in.
First Sentinel has resigned as corporate adviser to Block Commodities (BLCC) after less than one month in the position. Block has entered into an option in partnership with Century Cobalt Corporation to acquire two million seeds, which can be used to produce medicinal grade cannabis. Block would have to issue more than 142.8 million shares at 0.07p each if the option is taken up.
Chris Akers has increased his stake in Quetzal Capital (WENP) from 15.2% to 17.2%.
Upper Thames Holdings has changed its name to Valereum Blockchain (VLRM).
S-Ventures (SVEN) has applied for an OTCQB quotation in the US.
AIM
Hormonal disease treatments developer Diurnal (DNL) says that Chronocourt, also known as Efmody could gain approval in the EU by the summer and that could enable a commercial launch in some European markets in the third quarter. Chronocourt/Efmody is a modified release hydrocortisone used to treat adult and adolescent patients with congenital adrenal hyperplasia, which is caused by a block in cortisol production. Potential sales are greater than for Alkindi, which is aimed at children.
A potential management buyout for Cambria Automobiles (LON: CAMB) at 80p a share would value the motor dealer at £80m. This is a premium of more than one-fifth to the previous market price.
Digital healthcare company Cambridge Cognition (COG) substantially reduced its loss in 2020 and is on course to move into profit this year. Revenues increased and expenses were reduced. There is a strong order book. There was £3m in the bank at the end of 2020. Voice-based service NeuroVocalix is set to be launched this year.
Cyber security firm ECSC (ECSC) grew recurring revenues by 22% to £2.4m last year. Even so, total revenues fell 4% to £5.7m due to a tough second quarter. The loss fell from £639,000 to £153,000. Net cash is £1.1m. There has been a good start to the new year with a clutch of contract wins.
STM Group (STM) has sold its trust and company services business for £2.45m plus net assets at completion of around £570,000. This has been non-core for some time. This will reduce short-term earnings – although there could be some cost savings – but the company can focus on pension administration and life assurance.
Judges Scientific (JDG) continued its record of increasing the ongoing dividend with a 10% increase to 55p a share. Pre-tax profit fell from £17m to £13.7m in 2020 and it could recover to £16m this year.
MJ Hudson (MJH) managed organic revenue growth of 3.6% in the first half, even though there was a lack of new fund launches. Cross-selling is paying off. The North American operations are more significant following recent acquisitions. Further acquisitions will help to increase the scale of the business.
Chariot Oil and Gas (CHAR) is acquiring AEMP, an African renewable energy developer, for up to $2m. There are discussions with mine operators that require 500MW of electricity.
MAIN MARKET
Foams manufacturer Zotefoams (ZTF) almost maintained its pre-tax profit last year thanks to strong sales to the footwear sector. Revenues were 2% ahead at £82.7m, but pre-tax profit was 5% lower at £8.3m. The final dividend is 4.27p a share. The new factory in Poland has started production and capital investment should be lower this year. Net debt was £35.6m at the end of 2020 and this figure should fall this year. This year pre-tax profit should improve to £9.3m.
LED lighting and wiring accessories supplier Luceco (LSE: LUCE) more than doubled 2020 pre-tax profit from £15.8m to £34m, even though revenues barely increased. Margins improved significantly, but there is still potential to improve LED operating margins. A strong second half offset the more difficult first half. The dividend is 6.2p a share. Net debt has fallen to £18.3m.
Oxilio has decided to exercise its option with drug developer Nuformix (NFX) to licence NXP001 for oncology indications. A licence agreement is being worked on. Once completed it will trigger a second upfront payment. Future royalties for any commercial treatments are capped at £2m a year.
Books publisher Quarto Group Inc (QRT) reported a dip in revenues from $135.8m to $126.9m, while adjusted pre-tax profit improved from $5.1m to $7.9m. Capitalised development costs were reduced from $23.8m to $20.3m, although the amortisation charge was higher at $28.6m. Strong cash flow combined with a share issue helped reduce net debt from $50.5m to $19.7m.
Dukemount Capital (DKE) is moving into the flexible power sector. A 50%-owned joint venture called HKSB will develop two 11KV gas peaking facilities that will produce 10MW for a total cost of £6.25m. The plan is to secure 15-year, CPI-linked contracts for each site.
Residential property developer One Heritage Group (OHG) had net assets of 9.25p a share at the end of 2020. There was an interim loss.
Andrew Hore
Andrew Hore – Quoted Micro 11 January 2021
AQUIS STOCK EXCHANGE
Standard list shell Baskerville Capital (BASK) plans to switch its quotation to the Access segment of the Aquis Stock Exchange. This move will happen at the time of the reverse takeover of Oberon Investments, the owner of fund manager MD Barnard. The transfer to the Access segment is expected to happen on 5 February, although this depends on completion of the deal.
Walls and Futures REIT (WAFR) increased its NAV to £3.96m at the end of September 2020. The Southfields property has been sold for £660,000, which was a small discount to the previous book value. The remaining residential property will be sold in the next few months. The company will then concentrate on specialist supported housing.
KR1 (KR1) has sold its remaining holding of FunFair tokens for an average price of 2.0207 cents each. That raised $1.28m, which is more than treble the cost.
Wishbone Gold (WSBN) expects the analysis of the aerial magnetic survey of the Red Setter project in Western Australia will be available before the end of the first quarter of 2021.
All Star Minerals (ASMO) continues to review opportunities in the mining sector in Africa. The deal is likely to be funded by a share issue, but more cash will be required.
Arbuthnot Banking (ARBB) non-executive director Nigel boardman has increased his shareholding from 5,020 shares to 11,348 shares. Shepherd Neame (SHEP) director JB Neame has sold 4,000 shares at 690p each and bought back 2,000 shares at 691.5p for an ISA.
Vulcan Industries (VULC) has raised £150,000 in share issues at 5p a share and 5.5p a share. TruSpine Technologies (TSP) is still waiting to receive £250,000 from Evrensel Capital Partners.
Peel Hunt has been approved as an AQSE corporate adviser.
AIM
Capital equipment manufacturer Mpac (MPAC) did better than expected last year although pre-tax profit is still likely to decline from £7.5m to £6.2m. net cash is £5m following the payment of £10m for Switchback last autumn. The order book is worth more than £55m, compared to 2020 revenues of £83m. The focus on healthcare and pharma has helped Mpac.
Judges Scientific (JDG) had a strong second half in 2020 and this has led WH Ireland to increase its 2020 pre-tax profit forecast from £12.1m to £13.5m. The 2021 figure has been maintained at £15.1m. Full year results will be announced on 23 March.
Fashion retailer Joules (JOUL) offset weak high street sales prior to Christmas with strong growth in online sales. Even so, continued uncertainty means that Peel Hunt has reduced its 2020-21 pre-tax profit forecast from £5.4m to £3.5m. Net cash is £13m.
Motor dealer Cambria Automobiles (CAMB) says trading the three months to November 2020 was ahead of the same period last year even though the market remains uncertain.
Wealth management firm Mattioli Woods (MTW) had more than £10bn of client assets by the end of November 2020. Gross discretionary assets under management are £2.9bn. Management is still seeking acquisition opportunities and there is £18m of cash in the bank.
Creo Medical (CREO) has received 510(k) clearance from the FDA for its MicroBlate soft tissue ablation devices. This broadens the range of products with approvals.
AssetCo (ASTO) has acquired a 2.9% stake in investment manager River and Mercantile at 186p a share. This cost £4.7m. There is still around £26m in cash available since the payment from Grant Thornton and after the tender offer to shareholders.
Avingtrans (AVG) is merging its two medical equipment businesses with Australia-based MRI technology developer Magnetica and it will own 59% of the enlarged business after also injecting A$600,000. A further £3.2m investment could increase the stake to 61.2%. The combined business is loss-making but the increased scale will help it to move towards profitability.
Telit Communications (TCM) has ended bid discussions with u-blox, although the potential bidder is still interested in making an offer. An all-share bid of 250p a share was indicated.
Tekmar (TGP) has secured a contract to design and manufacture subsea scour protection for a quay development project, which is worth more than £4m. That will be recognised in this financial year.
IntegraFin has decided not to bid for Nucleus Financial Group (NUC), which increased assets under administration by 8% to £17.4bn in the three months to December 2020. Inflows of funds increased, and outflows fell.
Eqtec (EQT) has signed a memorandum of understanding with Greece-based Nobilis Pro Energy, which will enable Eqtec to be involved in its partner’s pipeline of gasification projects opportunities in Thessalia and central Greece. A joint venture will be formalised.
MAIN MARKET
One Heritage Group (OHG) has acquired a site on Bank Street, Sheffield for £880,000. The final development cost is expected to be £2.9m and gross development value should be £3.6m. The residential developer says that its Burnley development will not be completed until later in the first quarter. Construction of the Waterloo Place development in Salford should commence in the second quarter.
Argo Blockchain (ARB) mined 96 Bitcoin during December. The increase in the bitcoin price means that these are valued at £1.63m. Argo holds 209 Bitcoin. The sharp rise in the share price has led to the exercising of warrants and options. This has raised £1.63m.
Tirupati Graphite (TGR) is on track to commission the Vatomina graphite project in the second quarter and build production to 6,000tpa. Tirupati raised £6m at 45p a share when it floated at the end of last year and the share price has risen to 83p.
Rainbow Rare Earths (RBW) has completed its drilling programme at the Phalaborwa rare earths project under budget and the results are expected before the end of the first quarter.
Pembridge Resources (PERE) has raised £570,000 at 4p each and this should be enough cash to take the company into next year.
Andrew Hore
Andrew Hore – Quoted Micro 26 October 2020
AQUIS STOCK EXCHANGE
Truspine Technologies (TSP) says that the latest tests of Cervi-Lok, which is a spinal stabilisation device, have been positive. The tests used a computer-generated model and it showed that Cervi-Lok had a reduction in range of motion that was better than existing screw-based fixation systems. FDA clearance is expected early next year.
Vulcan Industries (VULC) is acquiring the business and assets of Romar Process Engineering for £550,000 in cash and shares. Romar is a metal fabrication business and in the nine-months to July 2020 it made a pre-tax profit of £202,000 on revenues of £732,000. The group will be able to undertake larger contracts and some production will be transferred to the Romar facility. The exclusivity period for the proposed acquisition of E Lowe has been extended.
Early Equity (EEQP) has bought a 1% stake in Lotto Studios for £50,000. Lotto licences entertainment and sports brands for lottery and casino games. Early Equity believes that it can help with opportunities in Asia.
Gunsynd (GUN) has sold its 600,000 shares in Bunker Hill Mining raising £164,000. The investment company has reinvested £146,000 in Empress Royalty Corp.
Graham Lyon has stepped down as non-executive chairman and Majken Korsgaard has resigned as non-executive director of SulNOx Group (SNOX) and this means that trading in the shares has been suspended because there is no independent director. Nicholas Nelson has been reappointed as a director. Shipleys has resigned as auditor. Resolutions allowing the company to issue more shares were not passed at the AGM.
Tectonic Gold (TTAU) says that it is progressing towards drilling at the Specimen Hill prospect in Queensland. Samples have returned assays of more than 3.5g/t gold and more than 45g/t silver.
Chairman Robert Sutcliffe has been buying shares in DXS International (DXSP).
Rural Broadband Solutions (RBBS) has started trading following the reverse takeover of Secure Web Services by SAPO. Chris Akers has a 3.29% stake.
Shares in Coinsilium Group Ltd (COIN) have started trading on OTCQB Venture Market in the US.
AIM
Vianet (VNET) says that interim trading was ahead of Covid-19 revised expectations. There has been a month-on-month improvement in cash and profit during the period. New restrictions on hospitality outlets could hamper progress. The interims will be published on 8 December.
Full year figures from Tristel (TSTL) were slightly better than anticipated. The disinfection products supplier increased revenues by 21% to £31.7m and a 27% rise in underlying pre-tax profit to £7.1m. Profit growth will be held back this year by additional investment in the US, where there should be positive news about FDA approval of products.
C4X Discovery (C4XD) has raised £15m at 14p a share. This has nearly doubled the number of shares in issue. The cash will provide a strong financial position for C4X when it is negotiating with potential partners and strategic collaborators. It will also fund the development of potential drugs. that The cash should last for at least 12 months. Indivior has started a phase I clinical trial for C4X_3256 for the treatment of opioid dependence. The trial will last until the end of the year and there will be data in 2021.
Judges Scientific (JDG) is acquiring Korvus Technology, which supplies vapour deposition systems, for an initial £2.64m. This has sparked a small upgrade to the 2021 pre-tax profit forecast taking it to £15.2m.
Gold recovery services company Goldplat (GDP) has increased profit from activities in South Africa and Ghana. The sale of the Kilmapesa mine should be completed by December.
Rare books supplier Scholium (SCH) made a small interim loss. Shapero Rare Books increased its online activity. There will be annual savings of more than £100,000 from moving to new premises.
Orchard Funding (ORCH) has decided to withdraw its application for a banking licence.
Seeing Machines (SEE) has signed a memorandum of understanding with L3 Harris Technologies that could take the company’s computer vision technology into the flight simulator market.
Immunodiagnostic Systems Holdings (IDH) released its normal interim trading statement at 4.35pm on Friday. Covid-19-related sales are still small.
MAIN MARKET
Strong third quarter trading has helped LED lighting and wiring accessories supplier Luceco (LUCE) to increase its guidance for full year operating profit from £23m to between £28m and £30m.
Contango Holdings (CGO) has raised £1.8m at 5p a share and acquired the Garalo gold project in southern Mali for $1m, with $100,000 paid and the rest due in February. The rest of the cash will finance the development of the project so that gold production can start before the end of 2021. Capital costs of $1.2m are expected with further finance of $4m being sought to build up production. Target production is 30,000 ounces per year. The non-independent resource is 320,000 ounces of gold at an average grade of 1.5g/t. Costs should be less than $1,000/ounce.
Aircraft lessor Avation (AVAP) increased revenues by 14% to $135.3m and there was a full year pre-tax profit of $14.6m after a net impairment charge. Mitigating lender agreements have been made with clients.
Edale Capital has sent a requisition notice to InnovaDerma (IDP) in order to force an AGM re-election vote for two existing directors and to propose a new director.
Property investor Town Centre Securities (TOWN) says that it collected 75% of rents in the latest quarter with 10% deferred. Since June, £41.2m has been raised from retail property disposals.
Andrew Hore
Andrew Hore – Quoted Micro 27 July 2020
AQUIS STOCK EXCHANGE
Healthcare IT provider DXS International (DXSP) moved from loss to profit in the year to April 2020. Revenues were slightly lower at £3.28m, while a loss of £200,000 was turned into a pre-tax profit of £239,000. There was £1m in the bank at the end of April 2020, following the recent fundraising. There has only been a marginal drop in revenues due to COVID-19 and growth should return later in the year. Chairman Bob Sutcliffe has bought 46,153 shares at 6.5p each.
KR1 (KR1) has raised $493,000 from the sale of Nexus Mutual tokens. They cost $79,000. KR1 still owns three-quarters of the tokens it originally acquired in the blockchain-based mutual insurance company.
Gunsynd (GUN) has bought a stake in Eagle Mountain Mining at A$0.13 a share. The £110,000 investment in the ASX-listed company provides exposure to copper exploration. The cash will finance exploration at the Oracle Ridge copper mine project.
Clean Invest Africa (CIA) has raised £150,000 at 1p a share. The new shares come with warrants exercisable at 2.75p each.
The Tasmanian government has transferred the mining lease to the Beaconsfield gold mine to NQ Minerals (NQMI).
AfriAg Global (AFRI) had £76,000 in cash at the end of June 2020. There are also £1.16m of investments available for sale.
Eurocann International (BUD) has yet to identify a medicinal cannabis business that fits its acquisition criteria and price expectations, although it has made some short-term investments.
Trading in the shares of Lombard Capital (LCAP) has been suspended following a sharp rise in the share price.
AIM
Tungsten Corporation (TUNG) is benefiting from its focus on building up recurring revenues from its e-invoicing platform. Additional products and services are being added to help accelerate growth. As revenues grow they will cover overheads and profit could increase rapidly after this point has been reached.
Frontier IP (FIPP) has raised £2.33m at 55p a share. This will enable the IP investment company to provide bridge finance and invest directly in funding rounds. Frontier also wants to take on more people to help advise and develop investee companies.
In the year to March 2020, Mercia Asset Management (MERC) generated enough income to cover its overheads for the first time. That was with a part-year contribution from Northern Ventures. However, there were fair value write downs of assets of £15.8m. The NAV is 32.1p a share. Funds under management are £658m. Since the year end there was a gain on the disposal of the stake in Native Antigen.
Oil and gas producer Touchstone Exploration Inc (TXP) has confirmed the major potential of the Cascadura discovery in Trinidad. The estimate for 2P reserves is 45 mmboe of gas/condensate. Touchstone’s production could be multiplied by ten. finnCap has set a risked-NAV of 91p a share.
Scientific instruments manufacturer Judges Scientific (JDG) says that first half order intake was 17% lower. North American orders were one-third lower. Like-for-like interim sales were 12% lower. Cash was generated from operations.
Disinfection products supplier Tristel (TSTL) says that full year revenues were one-fifth ahead helped by an additional £1.5m due to COVID-19. Net cash was £6.2m at the end of June 2020.
Synairgen (SNG) says that its phase II trial of SNG001 in hospitalised COVID-19 patient shows a 79% reduction in the development of severe disease and death. Discussions have started with regulators.
Conroy Gold and Natural Resources (CGNR) has secured a joint venture with Anglo Asian Mining (AAZ) to develop a gold mine in Ireland. Anglo Asian is committing to spend €2m for an initial 17.5% stake with an option to spend the same amount to take the stake to 25%. The maximum stake that can be earned is 55%, which would take the Clontibret gold deposit to the point where the mine is ready for construction. Anglo Asian has been issued with 325,000 Conroy warrants exercisable at 16p a share. Sanderson Capital Partners has cut its stake to below 3%.
Bidstack (BIDS) generated revenues of £275,000 in the first half, but the second half is more important. The in-game advertising company is winning business around the world.
Mattress retailer eve Sleep (EVE) generated slightly lower revenues of £12.2m in the first half of 2020, but the loss will be much lower due to cost savings. Cash was generated in the first half and there is net cash of £9.1m. Some competitors are withdrawing from the European market.
MAIN MARKET
Retailer French Connection (FCCN) has reduced costs during a tough trading period. Websites sales were 24% higher in the past 15 weeks. Stores started to reopen on 15 June, but the recovery is gradual.
Standard list shell Auctus Growth (AUCT) had £780,000 in the bank at the end of June 2020.
Bermele (BERM) intends to acquire Singapore-based East Imperial, which sells premium mixers and New Zealand spring water. There is a nine month exclusivity agreement. Trading in Bermele shares is suspended.
Andrew Hore
Andrew Hore Quoted Micro 29 July 2019
NEX EXCHANGE
Inqo Investments Ltd (INQO) is investing in the South Lake Medical centre in Kenya. Other investors include Johnson and Johnson’s social impact fund. The total investment is $950,000, but Inqo’s contribution is not quantified. The medical centre was previously owned by a flower growing business and it caters for its workers.
Clean Invest Africa (CIA) has issued £130,000 worth of 8% convertible loan notes. They expire on 24 July 2020. The conversion price is 2.75p a share. Creditors have also agreed to accept payments of £54,000 in shares.
Sport Capital Group (SCG) had nearly £22,000 in the bank at the end of June 2019. There is also a 15% stake in Mighty Oak Exploration, which has exploration licences for cobalt and lithium in Uganda, and 2.4% in KKME, which has nickel and platinum prospecting licences in Botswana. A freehold property is in the books for £204,000.
Panther Metals (PALM) has raised £130,000 at 0.3p a share and the cash will help to finance the development of the company.
AIM
Parcel delivery business DX (DX.) says that figures for the year to June 2019 will be in line with expectations. That means that there will still be a small, but much reduced, loss. Revenues were 8% ahead at £322.5m. The loss of the passport delivery contract will hit this year but that will be offset by growth in the courier market. Net debt was £1.3m at the end of June 2019.
Cyber security services provider GRC International (GRC) has postponed its full year results because it is calculating deferred consideration payable for DQM Holdings. The expected deferred payment is £3.7m, which is higher than the original range. The deferred consideration should be 60% cash and 40% shares at 116.5p each. The share price has fallen to 49p. GRC wants to change the terms. GRC is loss-making and it wants to spread the cash payments. It may need to raise more cash.
Good news from Shield Therapeutics (STX) which has gained FDA approval for Feraccru in the US. The approval covers the treatment of iron deficiency, with or without anaemia, thanks to its high tolerability. This doubles the potential market for the treatment. Shield is in discussions with potential commercial partners. finnCap increased its target share price from 200p to 350p.
Safe credit card payments technology provider PCI Pal (PCIP) says that its full year loss will be in line with expectations of £4.6m. Total contract value in the US is £1.4m, which indicates that progress is being made in that important market. Net cash was £1.5m at the end of June 2019, although PCI Pal is awaiting a tax credit and some additional contract payments in the first quarter of this year. There could be scope to raise funds on the back of recurring revenues.
Document management software provider GetBusy (GETB) is growing its revenues internationally and its eponymous new software product GetBusy is reaching the point of a commercial launch. Net cash is £1.95m, which is plenty for the immediate requirements of the group.
Polarean Imaging (POLX) is raising £2.1m at 18p a share. Last December’s placing was at 14p a share. The medical imaging technology developer will use the cash to finance the phase III clinical trial for its technology, where patient enrolment should be complete in the third quarter of 2019, and preparations for a product launch. There will also be working capital to build polarisers for future orders.
Judges Scientific (JDG) says that order intake was 4% higher in the first half of 2019. Delivery times have also been reduced so the order book has fallen from 14 weeks to 132 weeks.
Tristel (TSTL) has acquired 80% of its Italian distributor for an initial £600,000. This should be earnings neutral this year. The disinfection products supplier generated revenues of £26m in the year to June 2019, which were 17% higher than last year. Underlying pre-tax profit will be £5.5m. Management is waiting for a response from the FDA in the US for the usability and human factors pilot.
Tri-Star Resources’ (TSTR) 40%-owned SPMP has produced the first antimony metal from its plant in Oman. There is expected to be a slow ramp up of production until full production is reached in 2020. The gold recovery circuit has yet to produce commercial levels of gold. SPMP needs to raise additional debt in order to cover the upcoming months prior to antimony production reaching breakeven levels. There are negotiations concerning the conversion of mezzanine debt into interest-free shareholder loans or shares. Tri-Star is expected to lose £500,000 this year. Although SPMP is not being consolidated, there will be a share of profit. That could eventually be as much as £10m a year.
CCTV technology provider Synectics (SNX) says that results will be second half weighted this year. Interim profit fell from £1.5m to £1.2m, but Shore still forecasts a rise in full year pre-tax profit from £2.9m to £4m. Net cash was £5.3m at the end of May 2019. The interim dividend was increased by 8% to 1.3p a share.
Trading in United Oil and Gas (UOG) shares has been suspended ahead of the conditional acquisition of the Egyptian oil and gas business of Rockhopper Exploration (RKH) for $16m, with an initial cash payment of $11m. The main asset is a 22% working interest Abu Sennan and share of production was 813 barrels of oil equivalent per day in 2018. Net book value was $13.8m at the end of 2018. United needs to raise cash for the deal and it is not expected to complete until the end of this year.
MAIN MARKET
At the AGM of Trifast (TRI) the chairman said that the industrial fasteners supplier was growing strongly in the US, particularly in the electronics and automotive sectors. Debt facilities have been increased and management is seeking acquisitions. The uncertain economic environment in Europe has led to some delays in the production schedules of clients.
Pembridge Resources (PERE) says that its subsidiary Minto Explorations is getting a working capital facility from Sumitomo Corporation as part of an offtake agreement for 55,000 tonnes of copper concentrate. That lasts until the 55,000 tonnes is delivered or the end of 2020. There will be an advanced payment for 90% of the value of concentrate each month. There is an interest charge.
Zen Global has decided not to make a bid for World Trade Systems (WTS) because it could not come to an agreement with major shareholder Suzhou Weibao about buying its shares and convertibles in return for coins issued by ultimate holding company Zen Ltd. Zen wanted to use WTS to use as a shell in which to reverse its blockchain operations.
Spinnaker Opportunities (SOP) had cash of £880,000 at the end of June 2019. The company subsequently received a commitment to invest up to £1.4m from a single investor conditional on the deal to acquire medicinal cannabis company Kanabo Research. The deal documentation is being prepared.
Andrew Hore
Andrew Hore – Quoted Micro 25 March 2019
NEX EXCHANGE
Good Energy (GOOD) increased full year revenues from continuing operations from £104.5m to £116.9m, helped by last winter’s cold weather and a price increase, and pre-tax profit recovered from £700,000 to £1.7m. The renewable electricity supplier and generator has increased its dividend from 3.3p a share to 3.5p a share. Net debt was £40.1m at the end of 2018. Energy supply volumes increased by 3%, but domestic volumes were 1.2% lower in an increasingly competitive market. The growth came in the business side, which increased volumes by 23%. Good Energy generates energy from six solar sites and two wind farms. The company expects to continue to grow business volumes and invest in digital technology. Non-executive director Nemone Wynn-Evans has bought 9,500 shares at 105p each.
Trading in PCG Entertainment (PCGE) shares has been suspended because it is in talks to acquire VOX Markets and Align Research.
Karoo Energy (KEP) has been told by its potential nominated adviser does not believe its is suitable for an AIM quotation. This also means that the planned fundraising cannot go ahead. A refinancing is required. There are trade creditors of around £300,000. Trading in the shares has been suspended.
Primorus Investments (PRIM) has maintained its 3.4% stake in Fresho by participating in its latest fundraising, which was at a 76% premium to the price paid for the initial investment. The investment is worth A$673,000.
Dana Group International Investments Ltd (DANA) reported swing from loss of $129,000 to a profit of $95,000 in the six months to December 2018, due to other income of $276,000.
Tectonic Gold (TAU) says that roc chip samples from the Clermont project in Queensland show up to 8.01g/t gold, 140g/t silver and 6.32% copper.
Panther Metals (PALM) has completed the acquisition of Parthian Resources and its former shareholders own 16.1% of Panther.
Inqo Investments Ltd (INQO) has raised a further £225,000 at 90p a share.
Imperial X (IMPP) has changed its focus to medicinal cannabis. There was a small cash outflow in the six months to the end of December 2018. There was nearly £70,000 in the bank with net cash of £19,000. There are net liabilities and more cash will be required later this year.
Steve Howson is stepping down as chief executive of SG Recruitment Ltd (SGRL) and he will become a non-executive director. Majority shareholder David Sumner will be interim chief executive.
AIM
Footasylum (FOOT) has recommended a 82.5p a share bid from JD Sports Fashion (SPD) which values the footwear retailer at £90.1m. JD Sports was buying shares between 50p and 75p and built up a 18.7% stake. The bidder promises to maintain the separate commercial identity. Footasylum floated in November 2017 at 164p a share.
Diaceutics (DXRX) ended the week at 97.5p, having floated at 72p. The company provides data analysis and advisory services to pharma companies seeking to develop and commercialise diagnostic tests. There were £15.2m of placing proceeds net of expenses and £5.5m will be spent on the acquisition of data, while the rest will be used to pay off debt and develop AI analysis technology. There is limited liquidity in the shares because they are tightly held.
Wynnstay Group (WYN) warns that trading in the second quarter is weak because of the warmer winter weather. There has also been a weakening in farmgate prices. Interim figures will be well below the first half of last year and the full year will be below forecast. Peel Hunt argues that it has already factored these elements into its forecast for rival feed supplier NWF (NWF) and it is not changing its forecasts.
Pelatro (PTRO) has launched a data monetisation platform with a revenue share contract with an existing client, which is worth $500,000 in the first year. This is a product that can be sold to other customers.
Financial trading platform Aquis Exchange (AQX) reported 2018 revenues ahead of expectations and it doubled its market share during the year. The subscription-based model means that higher trading levels by a trader lead to subscription income levels going up. Aquis will continue to be loss-making this year, but the relatively fixed cost base means that once this is covered the profit should grow significantly as revenues grow.
Scientific instruments supplier Judges Scientific (JDG) increased is cash generation from operations from £10.9m to £15.7m in 2018. There was 5.5% organic growth in revenues and underlying operating profit rose by just over one-third to £14.7m. The cash balance has increased to £15.7m, which provides firepower for acquisitions. Shore Capital has edged up its earnings per share forecast from 188.8p to 190p.
Volvere (VLE) says full year revenues from continuing operations will rise from £16.2m to £18.6m. There was a £23.1m gain on the sale of Impetus Automotive. There was an underlying loss on continuing activities, but the frozen pie maker Shire Foods improved its profit contribution. There is £34.1m of cash in the Volvere balance sheet.
Frontier IP (FIPP) says that the outcome for the year to June 2019 is likely to be ahead of management expectations. A deal by investee company Exscientia, which is involved in AI-based drug discovery, with Celgene Corporation should result in a substantial uplift in its valuation.
Science in Sport (SIS) had a 25-day contribution from the profitable PhD Nutrition business in 2018. The group’s underlying loss increased last year, but PhD will help to reduce the loss and the cash outflow from operations, which was £6.42m last year. There is £8m in the bank and even with capital investment requirements that should be enough to cover requirements this year.
Ceramic products supplier Portmeirion Group (PMP) increased its 2018 pre-tax profit by 10% to £9.7m and a further rise to £10.3m is forecast for this year. Online sales are growing rapidly from a relatively low base. The home fragrance business is doing well, and capacity is being added. The total dividend is 8% higher at 35.7p a share.
Share (SHRE) improved its significantly improved its profitability in the second half of 2018, although trading levels weakened towards the end of the year. That weakness has continued into the early months of this year. Evan so, Cenkos forecasts a rise in pre-tax profit from £700,000 to £1.3m, upgraded from £1.1m, in 2019.
Clear Leisure (CLP) has placed its 50%-owned data mining operation in Serbia on a care and maintenance basis. This is due to the fall in the price of cryptocurrency. Legal actions and negotiations continue concerning a number of past investments. Clear has paid £76,000 for a 10% stake in PBV, which provides data services for the Italian legal sector. At the end of 2018, there were €2.1m of bonds converted into shares.
Andrew Perloff has increased his stake in 600 Group (SIXH) from 6.19% to 8.85%.
Midatech Pharma (MTPH) has changed the ratio of its ADRs from two shares for each ADR to 20 shares for each ADR. This is a way of getting the trading price of the ADRs on NASDAQ back above $1.
EQTEC (EQT) could be a beneficiary of the deal done by its largest shareholder EBIOSS with Urbaser for the collection, treatment and possible conversion of waste to energy. Urbaser is conducting due diligence on EQTEC’s gasification technology and this could be used for any waste to energy plant if all three parties come to an agreement on a specific opportunity. Projects could be in Bulgaria, Greece, Macedonia and Romania.
A local authority report has placed a five year reserve status on the Plymouth Airport site where Sutton Harbour (SUH) has a 135 year lease. The local authorities are keen that the site should be used for general aviation, but a viable business plan needs to be put together. Sutton Harbour would like to develop the site.
Tau Capital (TAU) has sent a circular to shareholders concerning a capital return of $1.19m or 2.42 cents a share, raise $150,000 via a placing at 0.1 cents a share and change its name to UK Onshore. Reverse takeover candidates are being assessed. Gerwyn Williams and Nigel Burton will join the board.
Synectics (SNX) has won a £1m order from the oil and gas sector. This is the largest order for its surveillance systems from this sector for a number of years. Synectics reported a rise in full year revenues from £70.1m to £71.2m and pre-tax profit slipped from £3.02m to £2.86m. The full year dividend is increased from 4p a share to 4.7p a share.
MAIN MARKET
Athelney Trust (ATY) has responded to the letter from former director Dr Pohl, who wants to regain his place on the board along with Simon Moore and remove David Lawman. Dr Pohl has acquired more than 100,000 shares in the past month, and this means that five shareholders own more than 50% of the investment company putting its investment trust status at risk. As long as there is more than 35% of the company held by the public this is not a problem, but it would be if Dr Pohl joined the board. There have been £90,000 of extra costs because of disputes between the two major shareholders. The plan remains to bring Gresham House on board as fund manager
WideCells Group (WDC) is changing its name to Iconic Labs and moving into digital marketing and technology. The management of this business previously built up social publisher Unilad. In the first 12 months, an agency consulting division will be launched to assists clients to develop brands. There are plans to build up a distribution and publishing division through acquisitions and launch content licensing and e-commerce divisions. There is little indication of what will happen to the stem cell operations, although management appears to believe that the insurance business could be worth pursuing. Historic liabilities are being resolved. The convertible loan note holder continues to convert a proportion of the loan note that is below 30% and then sell the shares. There are 785.6 million shares in issue with more to come.
Bluebird Merchant Ventures (BMV) has raised £436,500 at 2.25p a share. The cash will be used for the pre-construction phase of the South Korean gold projects. An agreement has been made with a local landowner for the use of land outside the main entrance of the Kochang mine.
Highlands Natural Resources (HNR) has raised £1.56m at 8.5p a share via an offer through PrimaryBid.com. This cash will fund a move by the natural resources company into the organic cannabidiol market. It has established Zoetic Organics in the US and it believes that hydrogen produced by Highland in Kansas can be used as a fertiliser with potential to increase the size of the plant. First revenues could be achieved in the summer.
Standard list shell Stranger Holdings (STHP) claims that Alchemy Utilities Ltd has sabotaged the proposed reverse takeover by refusing to provide audited accounts. Stranger is trying to get back the £300,000 it lent to Alchemy as well as its reverse takeover costs of £450,000. Stranger believes that the Alchemy management team may have misrepresented its financial status. An alternative acquisition is being lined up, but Stranger had negative net assets at the end of September 2018 and there are additional costs since then.
Standard list shell Hertsford Capital (HERT) still had £2.88m in cash at the end of 2018.
Telecoms services provider Toople (TOOP) is growing its gross profit but EBITDA is similar to the same period last year, which was around £650,000.
PV Crystalox Solar (PVCS) has ended its wafer production activities in Germany and it intends to apply its wire sawing expertise to cutting non-silicon materials. There are plans to return £38.5m to shareholders, which is equivalent to 24p a share and that is not far short of the current market price. That could still leave more than €10m of cash. Management is considering whether to maintain a listing.
Sure Ventures (SURE) says 23%-owned Suir Valley Ventures has maintained its 10% stake in WarDucks, which is developing an AR game, by participating in a €3.3m fundraising.
Andrew Hore
Andrew Hore – Quoted Micro 30 July 2018
NEX EXCHANGE
Milamber Ventures (MLVP) has signed heads of terms for the acquisition of health and social care training provider Orchard Rock. Milamber will pay up to £1.9m in cash and shares. If the deal goes ahead then there will be an initial cash payment of £800,000. A further £200,000 is payable when the management handover is completed and up to £900,000 is payable in shares depending on EBITDA. In the year to April 2018, Orchard Rock achieved revenues of £980,000 and EBITDA of £374,000. The deal includes a 15% stake in digital learning business YourHippo in return for £100,000 in shares. At the AGM, shareholders voted through the authorities required for equity and debt funding for the Orchard Rock deal. Two new private investors have acquired 166,668 shares at 9p each.
Smart home products supplier Sandal (SAND) says that its smart home products revenues exceeded £1m in the year to May 2018. This growth did not quite offset the fall in the PowerConnections division due to destocking. Two product ranges have been discontinued at a stock write-off cost of £72,000. According to Equity Development, MiHome revenues could almost double this year and they would represent most of the growth in group revenues and help Sandal to move into profit. In 2019-20, MiHome should be generating the majority of group revenues.
Peru-based VI Mining (VIM) is acquiring the Cushuro gold project for $27.5m in (5.75 million) shares from Karmin Exploration. Karmin has restrictions on selling shares until 2 March 2020. Cushuro is in the same region as the existing two silver and gold projects.
MetalNRG (MNRG) is acquiring the Gold Ridge project in Arizona, which includes three mines that were previously producing gold. MetalNRG will pay $700,000 in cash and shares to Winston Gold Corporation.
South Africa-based social impact investor Inqo Investments Ltd (INQO) had R2.9m in cash at the end of February 2018. There are also loans of R784,000 to offset against that. Full year revenues increased from R17m to R23m, but the lack of other income meant that Inqo has fallen back into loss. The Kazuko game reserve is achieving better room rates and higher occupancy, helped by the weak Rand. Honey producer Bee Sweet Honey generated revenues from the May 2017 harvest but not from the November one because of bad weather. There was also an interest contribution from Four One Financial Services.
Crispin Freeman, non-executive director of Hydro Hotel, Eastbourne (HYDP), has bought 600 shares at 740p each, thereby taking his stake to 6,600 shares.
AIM
Pennant International Group (PEN) has achieved three-fifths of its 2018 profit forecast in the first half. The defence training services provider expects to report a more than doubled interim profit of £2.1m on the back of a 30% increase in revenues. The order book is worth £30m. A full year profit of £3.5m is forecast. This is without a contribution from the potential Middle East contract.
Geospatial data technology developer 1Spatial (SPA) is raising £8m at 3.75p and this cash will be deployed to repay the overdraft, develop additional technology and win new customers.
APC Technology Group (APC) has raised £2.54m at 6.75p a share in order to help finance the £2.2m acquisition of Aspen Electronics, although £500,000 is being paid in shares. This has sparked a one-third upgrade in the Stockdale 2018-19 earnings per share forecast to 0.75p. Aspen distributes RF and microwave components.
Tern (TERN) is raising £2.9m at 26p a share. This cash will help to develop its investee companies, particularly cyber security business Device Authority. Tern has a 50% stake in Internet of Things business InVMA, which has acquired the IP of AMIHO Technology, which has developed technology for the connectivity for the smart energy sector.
Judges Scientific (JDG) continues to benefit from currency movements and operating profit will show progress at the interim stage. The interims will be published on 18 September. There should be less of second half bias this year. At the end of June 2018, the order book stood at more than 14 weeks.
Holders Technology (HDT) moved back into profit in the six months to May 2018 and both PCB and LED businesses increased their revenues. An interim loss of £53,000 was turned into a profit of £65,000. The interim dividend is unchanged at 0.25p a share. NAV is 96p a share, which is double the current share price.
Online gaming marketing services provider Veltyco (VLTY) has made consistent progress since reversing into an AIM shell but this has come to a halt. Marketing revenues continue to grow but the progress of 51%-owned Bet90 has been slower than expected, sparking the decision to spend more on marketing. This means that group EBITDA will be lower than expected. Altair Entertainment owes Veltyco €3.4m and it has agreed to pay €300,000 a month. Veltyco had €1m in the bank at the end of June 2018.
Financial services provider STM Group (STM) says first half trading was in line with expectations. The Harbour acquisition should be fully integrated with STM Malta by the end of August. STM is recruiting additional directors and management.
Wynnstay Properties (WSP) is acquiring units 10-15 in Petersfield Business Park for £3.83m. The current annual rent is just over £203,000.
Beximco Pharmaceuticals (BXP) is exporting its fourth product to the US. The latest product is an anti-diabetic drug, which is the generic equivalent of Bristol-Myers Squibb’s Glucophage.
MAIN MARKET
Bioquell (BQE) increased its revenues by 9% to £15.7m in the first half of 2018. The bio decontamination services provider generated like-for-like revenues growth of 15% at constant currency rates. Pre-tax profit is two-fifths higher at £1.96m, although that includes a £76,000 gain on disposal. There is £15m in the bank.
Telecoms services provider Toople (TOOP) had a slightly more successful third quarter. Gross profit was 57% higher than the third quarter of the previous year. That follows flat gross profit at the interim stage. However, gross profit needs to be much higher to cover overheads.
Laurence Orbach has stepped down as a director of book publisher Quarto Group (QRT).
Andrew Hore
Ian Pollard – Significantly Distressed London Companies Surge 17%
Begbies Traynor BEG has published its Red Flag Alert for the second quarter of 2018, showing that 472,183 businesses were experiencing ‘Significant’ financial distress: at the end of June 2018, up 9% compared to last year. However the rate of increase is declining and has fallen 1% compared to the first quarter. The south of England was the worst affected area, with London being the worst performing region with a rise of 17% compared to last year. Begbies believes that after a poor first quarter we may now be seeing tentative signs of stability returning to the UK economy.
United Carpets Group UCG is pleased with its performance for the year to the 31st March, with like for like sales increasing by 3.2% and revenue up by 2.5% It is proposing to increase the final dividend from 0.275p. per share to 0.285p after profit before tax remained almost flat at £1.52m compared to £1.53m. It should be noted that since the year end, like for like sales have fallen by 1.6%.
FDM Group FDM produced what it decribes as a solid performance in the first half of 2018. Despite revenue for the six months to the 30th June growing by only 1% the interim dividend is being increased by 21% after rises of 12% and 17% respectively in profit before tax and basic earnings per share. It is anticipated that results for the full year will be in line with expectations.
Ascential plc ASCL The half year to the 30th June produced good organic growth with like for like revenue rising by 14% or 7% on a constant currency basis. Reported like for like operating profit fell from £32.2m. to £28.7m. but the interim dividend is being increased by 6% from 1.8p per share to 1.9p. Current trading is in line with expectations for the full year.
Judges Scientific plc JDG expects the interim results for the half year to 30th June will show strong progress in revenues, EBIT and earnings per share. The solid order book from the beginning of 2018 has enabled momentum from 2017 to be maintained, with currency movements having a positive impact.
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William Hill On A Winning Streak
William Hill plc WMH Adjusted operating profit for the year to 26th December is expected to show a rise of 11%, ahead of expectations. In the nine weeks since the last trading statement on the 11th November the UK and the US have shown good momentum, gross win margins have been ahead of expectations and significantly ahead of the previous year.Net revenue has been very strong.
Judges Scientific plc JDG The positive demand for the company’s products which started in the second half of 2016 has continued throughout 2017Organic order intake for the year to 31st December increased by 16% and it is anticipated that earnings per share will be above current market expectations.
Watkin Jones WJG delivered what it describes as another set of impressive results with profit before tax for the year the year to 30th September soaring from £13.3m to £43m., a rise of 326.3%, on revenue up by 13.1%. Both revenue and gross profit showed strong growth, driven by student accommodation developments. EBITDA was up by 8.6% and the final dividend is to be increased by 10% to 6p per share.
SpaceandPeople SAL enjoyed strong trading during the final quarter of 2017 and became debt free by the end of the year on the 31st December, all bank debt having been repaid during the course of the year. Profit before tax will be £100,000 higher than anticipated at about £1.2m. Dividend payments are to be re-commenced and a final dividend of 1.5p per share will be proposed.
Sinclair Pharma plc SPH Revenue over the past two years has grown by in excess of 80%, returning the company to EBITDA profitability in 2017, a year which saw a strong performance across all key brands and revenue growth of 20% or 14% on a constant currency basis. The fourth quarter was particularly strong in Germany and Brazil and 2018 is expected to produce further strong growth overall.
Steppe Cement STCM Revenue for the year to 31st December rose by 20% over the previous year, after a 4% volume increase and a 15% price rise. Exports doubled to 146,000 tonnes
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Pure Circle recovering from US Customs Debacle
Pure Circle PURE Final results for the year to the 30th June were severely affected by it being denied access to the US market where it had been producing a third of its revenue, after it was made subject to a Withold Release Order by US Customs & Border Protection. Extensive investigations resulted in it being removed from that list but not until the 30th January and although sales to the US have now resumed, it will take time for it to rebuild the previous momentum which it had acquired in the US market. Operating profit fell by nearly half to US$17.6m. and earnings per share were also halved from 8.49 to 4.16 cents per share. The company claims it has a unique market position with 72 patents granted and a further 200 pending.
OCADO Group OCDO Revenue in the 13 weeks to 27th August continued to grow strongly with an increase of 13.1%, significantly ahead of the industry average. Orders per week increased by 16% but the average order size fell by 1.2%.
Judges Scientific JDG has made a robust recovery from a year ago with interim results to the 30th June showing new records being set for revenue, profit before tax, earnings per share and dividends. Revenue rose by 20%, (14% on a like for like basis), adjusted pre tax profit by 48%. and basic earnings per share by 65.1%. The interim dividend is being increased by 11% to 10p per share.
Swallowfield plc SWL reports another very strong performance and excellent progress in the year to the 24th June with the final dividend being increased by over 50% to 3.5p per share making a total increase for the year of 68%. Helped by the weakness of sterling and acquisitions revenue grew by 36% or 8% excluding acquisitions. On a constant currency basis the figures were 31% and 2% respectively.
Augean AUG Despite a 14.4% rise in revenue for the six months to the 30th June, adjusted profit before tax fell by 7.2% and adjusted earnings per share by 7.4%, following losses in its Industry and Infrastructure businesses which it describes as legacy issues from Colt. To add to its mixed fortunes waste disposed of by its Energy and Construction business declined by 23.7%.
Keyword Studios KWS delivered another strong set of results for the half year to the 30th June and the interim dividend is being raised by 10%. Like for like revenue rose by 17% and adjusted profit before tax and earnings per share by 60% and 55% respectively.
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