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Quoted Micro 10 June 2024
AQUIS STOCK EXCHANGE
Skincare treatments developer Incanthera (INC) says the first production order for its Skin + CELL products from Marionnaud has been doubled to 100,000 units. The launch will be in September. The previous figure was already higher than the initial order and the revenues from the order will be £4m. Future production orders could be even larger. This will help group revenues for the year to March 2025 to be more than £10m. This has enabled Incanthera to raise £4.1m from a share issue at 15p/share to cover additional working capital. Lupus treatment developer ImmuPharma (IMM) raised £1.5m from the sale of its 9.98% stake in Incanthera, which was valued at £600,000 at the end of 2023, although it retains warrants.
TruSpine Technologies (TSP) is talking to several potential commercial partners for its medical device technology, where the regulatory process is ongoing. The new board has improved relations with the inventor of the spinal stabilisation device IP. The investor relations website has been relaunched and a new medical advisory board will be put in place.
CBD products supplier Voyager Life (VOY) says another potential merger has fallen through. This follows the ending of the Northern Leaf deal. This has left Voyager Life short of cash. The business operations are being reviewed and there are talks about funding. The company has been winning new business and there are signs of an improvement in the retail stores.
RentGuarantor (RGG) increased full year revenues by 79% to £741,000. The rent guarantee services provider says arrears were 2.32% in 2023. The loss increased from £911,000 to £1.23m, after a £358,000 charge for the revaluation of the convertible loan note.
First Sentinel has resigned as corporate adviser of ChallengerX (CXS) and the shares have been suspended. ChallengerX is progressing with a potential acquisition, and it is required to appoint a new corporate adviser.
Helium Ventures (HEV) says that a shareholder in Trackimo is challenging the issue of a 19.4% stake to the Aquis company.
Invinity Energy Systems (IES) has leased an additional manufacturing facility in Motherwell. This should become operational in the third quarter and capacity should be more than 500MWh of energy storage per year. The Bathgate facility will also be upgraded.
KR1 (KR1) has invested $1m into the Avail Web3 infrastructure project in return for 12.5 million AVAIL tokens.
Video capture technology company Visum Technologies (VIS) has entered exclusive non-binding heads of terms for a licence agreement with Makeabl, which has developed cloud/app technology. This would be licensed in North American and European markets and help Visum Technologies to access new markets.
BWA Group (BWAP) has completed reconnaissance drilling at the Dehane 2 rutile sands project in Cameroon. The results were encouraging. Oberon Capital has been appointed as broker.
Arbuthnot Banking Group (ARBB) has completed the renewal of its subordinated loan, which is classified as Tier 2 capital. The loan was increased by £1m to £26m and lasts until June 2034.
Psych Capital has changed its name to Shortwave Life Sciences (PSY).
AIM
Destocking hit the interim figures of Gooch & Housego (GHH) and pre-tax profit slipped from £4.7m to £2.6m on a 1% decline in revenues to £63.6m. This excludes the loss making EM4 defence business sold earlier this year. The dividend was edged up by 0.1p/share to 4.9p/share. Net debt increased to £22.2m. The destocking was primarily in industrial and medical sectors. Industrial remains the largest generator of revenues despite a 13% decline. There was not a recovery in the semiconductor sector as expected. The subsea cable market was strong. There was a reduction in the aerospace and defence division loss on higher revenues, but it still needs to improve manufacturing efficiency.
GRC International (GRC) is recommending an 8p/share cash bid from Bloom Seed Bidco, which values the cybersecurity company at £8.6m. The bidder is a vehicle for technology investor Bloom, which can provide increased financial backing for the business. GRC joined AIM in 2018 at a time when there was investor interest in the cybersecurity sector. The flotation valuation was £40.2m at 70p/share. GRC has been loss making and never moved into profit.
Pawnbroker Ramsdens (RFX) reported interims showing the expected progress. Precious metals revenues were strong, although margins dipped. Pre-owned jewellery sales offset weaker watch sales. The contribution from each main division was higher. Interim revenues were 12% ahead at £43.8m, while pre-tax profit improved from £3.68m to £3.99m. The dividend was raised by 9% to 3.6p/share.
Strip Tinning (STG) has won a battery technologies contract from a German automotive motion technology manufacturer, that could have a lifetime value of £43m. This is for a cell contact system for battery pack modules for a US customer. This has already generated £1.7m in pre-production work. Production supply will start in the fourth quarter of 2025 with further pre-production revenues of £1m ahead of that time. There will be additional investment in engineering resources. Demand for glazing products has weakened and copper prices are rising. There will be a trading statement on 16 July.
Power Metal Resources (POW) has secured a £2m loan note investment from ACAM, which is also negotiating a uranium-focused joint venture, which would include all of Power Metal’s uranium licences. This would mean that the flotation of Uranium Energy Exploration will not happen – that has already cost £500,000 – and neither will previously proposed disposals. There would be a £10m investment in Power Metal Resources Canada so that ACAM would have a 70% stake. The loan notes bear interest of 10%/year and there will be 13.3 million warrants issued that are exercisable at 15p each.
Empire Metals (EEE) considers further positive exploration results as a major development for the Pitfield prospect. There is rutile at surface, and it should be easy to mine. Titanium dioxide mineralisation gets more prevalent at lower depths. This should improve project economics.
Pantheon Resources (PANR) has entered a gas sales precedent agreement with the state-owned Alaska Gasline Development Corporation, which is developing the Alaska LNG project. This is designed to supply Alaska and export up to 20 million tonnes of LNG each year. Pantheon Resources would supply up to 500 mmcf/day of gas at a maximum base price of $1/mmbtu. There are plans to increase the scale of the Ahpun development.
Jadestone Energy (JSE) says the Akatara gas processing facility, onshore Indonesia, is approaching final commissioning. The first gas should be processed in around a fortnight. Gas and LPG sales will start soon after that. The workover campaign on five Akatara wells has completed, and they will provide gas for the facility.
Seed Innovations (SEED) has completed its share buyback programme. This used up £510,000 on top of the £2m dividend. That followed the disposal of its Leaf Gaming stake for £2.4m. There has been a 11.6% share price decline so far this year, but that is not adjusted for the 1p/share special dividend.
Maritime systems developer SRT Marine Systems (SRT) admits that two coastguard contracts are unlikely to reach their project revenue milestones in the 15 months to June 2024. The largest contract is dependent on the completion of an inter-government loan. There should £45m of income recognised when this is finalised. Once the other contract is verified it should enable £9m to be recognised. Transceivers revenues have grown, and total revenues are expected to be £14m in the 15-month period. The six-month figure was £5.5m with no contribution from systems.
Hercules Site Services (HERC) reported a one-third increase in interim revenues to £48.8m as it continues to win additional contracts to supply construction staff. It moved back into profit in the period. The new training academy is up and running.
The Mission Group (TMG) has responded to the revised bid proposal of 13.9 Brave Bison (BBSN) shares for each share in the advertising and marketing services company. The board still believes that the bid does not reflect the underlying value of the business, but it is evaluating the bid.
Hostels operator Safestay (SSTY) has acquired a property in Brighton from the University of East Sussex for £2.275m. This will be converted into a 220 bed premium hostel. It is 600 metres from the sea front and will cost £1m to convert. Shore Capital has been appointed nominated adviser and broker. Safestay reported full year revenues 18% higher at £22.5m. EBITDA rose 15% to £6.8m. NAV was 50p/share.
Restaurants operator Tasty (TAST) gained court approval of its restructuring plan on Tuesday afternoon. Tasty has got out of the leases of 23 sites. This leaves 38 restaurants, which are predominantly the Wildwood brand. This should improve EBITDA by up to £2.1m between 2023 and 2025.
Clontarf Energy (CLON) has failed to move through to the next stage of the bids for the seven priority salt pans in southern Bolivia because of its offtake partner’s poor credit rating. Management hopes that it can argue the case that the credit rating is not relevant.
Mosman Oil & Gas (MSMN) is paying $500,000 for a 10% interest in a US helium project in Las Animas County, Colorado. This is an area with known helium deposits. There are five helium prospects and a well will be drilled for each of them. The sale of oil and gas asset will help finance the move into helium.
WIIT has decided not to make an offer for Redcentric (RCN).
MAIN MARKET
Credit provider S and U (SUS) says that its first quarter profit has fallen by one-third because of higher provisions due to lack of regulatory clarity.
Like-for-like sales at Hostmore (MORE) have fallen by 10%, but profitability has improved. Net debt is set to peak in the third quarter. The acquisition of TFI Fridays is progressing and the formal agreement should be signed shortly.
Motor dealer Caffyns (CFYN) has cut its dividend by one-third to 5p/share because it slumped into loss last year. There were property value write-downs.
Chill Brands (CHLL) shares have been suspended because of allegations relating to the use of insider information and concerns about commercial arrangements. This means that the board cannot provide accurate information about its financial position.
Oxford Cannabinoid Technologies (OCTP) has left the standard list.
Andrew Hore
Quoted Micro 6 May 2024
AQUIS STOCK EXCHANGE
Good Life Plus (GDLF) has traded strongly since joining Aquis and raising cash for marketing. The luxury prize draw company increased the number of subscribers from 21,000 at the end of 2023 to 30,000. Churn has been reduced.
Invinity Energy Systems (IES) raised £56m at 23p/share with £25m committed by the UK Infrastructure Bank and £3m from Korean Investment Partners. There is also an open offer to raise up to £6.6m. The share price slipped 6.12% to 23p. IES will use £30m to increase capacity ahead of the launch of the latest version of the Mistral flow battery.
KR1 (KR1) gained shareholder approval for the market acquisition of up to 14.99% of its shares. NAV was 132.05p/share at the end of March 2024, down from 134.6p/share one month earlier. There was £1.96m in income from digital assets during the month.
Apollon Formularies (APOL) has sent a general meeting notice for 28 May to gain approval of the cancelation of the Aquis quotation. The company is selling its IP to a Canadian company.
Rogue Baron (SHNJ) has acquired Eight Vodka for £70,000 in shares at 0.5p each. Eight Vodka is distilled eight times in Ecuador.
Trading in Silverwood Brands (SLWD) was restored following the completion of a capital reduction. Phoenix Asset Management increased its stake from 0.94% to 29.9%. In the first quarter a rebranding of Balmonds has disrupted sales. The costs of acquiring Cosme Science hit profitability of Sonotas.
One Health Group (OHGR) says it did better than expected last year with annual revenues improving from £20.5m to £23m. Net cash was £4.7m at the end of March 2024. There was a 13% increase in NHS patient referrals for treatments. New five-year contracts have been secured with the two largest customers.
RentGuarantor Holdings (RGG) says first quarter revenues were 62% ahead and the number of tenant contracts was 38% higher.
Investment company MaxRets Ventures (MAX) reported net assets of £19,000 at the end of October 2023, down from £497,000. There was no new investment during the year. A transformative acquisition is being sought.
Hydrogen Future Industries (HFI) more than halved the interim cash outflow from operating activities to £234,000. Ther was £263,000 in the bank at the end of January 2024, but £612,000 has been raised since then. Testing of the prototype wind turbine and the electrolyser has gone well.
Substrate AI (SAI) generated revenues of $8.6m in 2023. There was $4.42m in the bank.
Hacienda Management has taken a 7.48% stake in Supernova Digital Assets (SOL). Pete Mills increased his stake in Oscillate (MUSH) from 3.02% to 4.03%. DXS International (DXSP) chairman Robert Sutcliffe bought 100,000 shares at 1.46p/share.
AIM
Trinity Exploration & Production (TRIN) has agreed a bid from fellow AIM-quoted Trinidad oil and gas company Touchstone Exploration (TXP), which is offering 1.5 shares for every Trinity share. The Trinity shareholders will own one-fifth of the enlarged company. The combined group will be in a stronger position to make investments in new production. The Touchstone Exploration share price is 4.85% lower at 39.25p, valuing each Trinity share at 58.875p – the share price is 50% higher at 54p.
Alpha Financial Markets Consulting (AFM) has confirmed that BridgePoint Advisers has made a bid approach and Cinven is considering making a bid. Revolution Bars Group (RBG) has received interest from Nightcap (NGHT), which is assessing the situation and options include a bid or acquisition of some sites or subsidiaries.
Electric Guitar (ELEG) moved from the standard list to AIM following the reverse takeover of 3radical on 3 May. It is the first in a planned series of acquisitions in the digital marketing sector, where regulatory and market changes, such as the blocking of third-party cookies, provide significant growth opportunities. 3radical was acquired for 61.2 million shares valued at £1.28m. A fundraising generated £1.32m at 2.1p/share and that valued the company at £4.7m. 3radical was set up by the founders of campaign management software provider Alterian at the end of 2011 The shares had been suspended at 2.1p and they fell to 1.8p when trading recommenced on AIM.
Multi-channel retailer TheWorks.co.uk (WRKS) moved from a premium listing to AIM. The board felt the company was too small for the cost and regulatory burden of the Main Market. One of the attractions of AIM is that the company will no longer be classified as a Public Interest Entity and it will be able to choose an auditor from a wider range of firms. Singer forecasts a slump in pre-tax profit from £10.1m to £1m in the year to April 2024.
Cornish Metals (CUSN) has published a preliminary economic assessment of the South Crofty tin project in Cornwall. There is an after-tax NPV8 of $201m at a tin price of $31,000 /tonne. Pre-production capital requirement is $177m, which is higher than previous estimates, and there should be 14-year mine life. Life of mine all in sustaining cost is estimated at $13,661/tonne. Planned first production is in 2027.
Horizonte Minerals (HZM) has enough cash until 17 May and senior lenders have agreed to extend waivers on loans, including deferring interest payments, until 15 May. These lenders have security over the company’s assets. Horizonte Minerals has guaranteed the debt of the subsidiary that owns the Araguaia project. Discussions with creditors and investors continue in an attempt to achieve some recovery value for creditors. That may include the disposal of the Araguaia project. None of the proposals are likely to recover value for shareholders.
Arrow Exploration (AXL) grew average production from 1.3mboe/day in 2022 to 2.2mboe/day in 2023 and revenues increased from $28.1m to $50.6m, which was slightly lower than forecast. There was cash of $13m at the end of 2023 and this fell to $12m at the end of March 2024. Production has reached 2.9mboe/day in March, while drilling activity will lead to further increases in the medium-term. Canaccord Genuity has cut its 2024 revenues forecast from $103.9m to $98.6m and net cash is expected to be $17m at the end of 2024.
Trading at property services provider Kinovo (KINO) is ahead of expectations with organic growth of 23% in the year to March 2024. Underlying pre-tax profit should be more than £6m, excluding costs related to the DCB contracts, which were guaranteed by Kinovo when it was sold, still to be completed.
Mark Halpin has stepped down as chief executive of managed IT services provider CloudCoCo (CLCO) and MXC Guernsey, which holds a 10.6% stake, has extended its loan notes to 31 August 2026 in return for a £550,000 fee. The amount outstanding on the loan notes is £5.85m. MXC can also appoint an executive director and Ian Smith becomes interim chief executive. The shares returned from suspension following the release of figures for the year to September 2023 showing revenues 7% ahead at £26m. The loss was flat at £2.6m. There was a cash inflow from operating activities. Net debt was £6.3m at the end of September 2023.
Brake discs developer Surface Transforms (SCE) raised £6.5m fundraising at 1p/share. There will be a one-for 1.76036319 open offer at the same price. That could raise £2m. The cash will finance the scale up of manufacturing. Factory capacity will be increased to £75m. This year’s revenues are forecast to be £17.5m.
Gift wrap and stationery supplier IG Design (IGR) did better than expected in the year to March 2024 with margins recovering and pre-tax profit improving from $9.2m to $25.9m, compared with a forecast of $20.5m, even though revenues fell. Net cash nearly doubled to $95m. It appears the recovery is gathering pace. Management believes that margins could return to previous levels this year and an operating margin of more than 6% in 2026-27, suggesting a pre-tax profit of around $50m.
IT distributor Northamber (NAR) is acquiring Tempura Technology and Tempura Communications, which distribute unified communications products, for £6.02m in cash and 181,818 shares. There is £2.64m of the cash consideration contingent on EBITDA in the years ending June 2025, 2026 and 2027. This is a profitable business that has been growing organically.
Heavy mineral sands project developer Kazera Global (KZG) says recent changes at the National Nuclear Regulator in South Africa mean that it will have to provide additional information on how it will meet financial obligations. This should be funded by cash flow. A response is expected shortly and that will allow heavy mineral sands production to start in Alexander Bay, South Africa.
Oil and gas producer Jadestone Energy (JSE) reported a $91.3m loss for 2023 due to asset impairments, lower oil prices and higher interest costs. Capital investment has increased net debt to $110.5m by the end of March 2024. Average production in the first quarter of 2024 was 17,200 boe/day, which was hit by the Australian cyclone season. Production guidance for 2024 is 20,000-22,000 boe/day.
MAIN MARKET
Castings (CGS) did better than expected in the year to March 2024 and Canaccord Genuity upgraded its pre-tax profit forecast from £27.1m to £28.2m. Margins improved in the second half. Net cash is £32m.
Cybersecurity firm Narf Industries (NARF) is accelerating work on capabilities uniquely effective in battling a new generation threat. Developed was funded through a $2.3m contract from DARPA.
Andrew Hore