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Koovs Forced to Cut Marketing Spend for 2018
Koovs plc KOOV had a miserable time in the half year to the 30th September, with flat sales and a slight fall in group revenue, impacted by various woes, such as demonitisation, a new Goods & Services tax and high discounting. Operating costs did fall by 9% helping to reduce the loss for the half year by 15% to 7.8m. and there was a brief glimmer of hope in November with a 17% rise in sales and 43% in website traffic but it did not last and 2018 sales are going to be further affected by a forced reduction in marketing spend. The company seems to think that there is no real problem because brand awareness rose by 21%. What marketing people easily forget is that brand awareness is meaningless if it doesn’t get customers through the door and buying.
Nicholls plc NICL Group sales in the second half continued the strong trend seen in the first half year both in the UK and in the international business. UK sales of Vimto are 9% ahead of last year compared to average UK market growth of 2.3% and Africa has had an exceptional year with a 20% rise in revenue. The one cloud on the horizon is that the supply route to the Yemen has been blocked by hostilities which will mean that adjusted profit before tax for the year to the 31st December is now expected to be only in line.
Kromek KMK Revenue for the half year to the 31st October rose by 27% and the EBITDA loss was halved to 0.3m. Continued revenue growth has left the company well positioned to achieve EBITDA break even point over the full year, as expected.
Dotdigital Group plc DOTD The positive trading momentum seen in the second half of the previous financial year has continued into the new one, with strong international sales creating the confidence that the company can achieve its ambitious growth plans
Waterfront villas & houses for sale in Greece http://www.hiddengreece.net
Quoted Micro 3 July 2017
NEX EXCHANGE
A 40%-owned subsidiary of food and logistics company AfriAg Global (AFRI) has signed a deal with LGC Capital, which is quoted on TSX and acquired former NEX-quoted Leni Gas Cuba but it is no longer purely focused on Cuba, to create a 50/50 joint venture to grow and distribute medical and recreational cannabis products in southern Africa. David Lenigas is a director of both companies.
MetalNRG (MNRG) has obtained the right to acquire 100% of exploration licence applications, which are known as the Palomino cobalt project in Western Australia, in return for A$15,000 and one million MetalNRG shares at 1.5p each. Once the licences are granted a further two million MetalNRG shares will be issued. MetalNRG has formed a cobalt business. The cobalt price has moved from $24,000/t to $59,000/t in the past year.
Kryptonite1 (KR1) has invested £384,000 in 73,272,717 FunFair tokens. FunFair enables anyone to launch a blockchain casino. The company has also invested £83,416 in 46,860 Bancor tokens. Instead of an intermediary matching trades, Bancor tokens use automatically executed rules to do the matching.
Block Energy (BLOK) has successfully acquired up to 75% working interest in permit XIf, West Rustavi 12km from Tiblisi in Georgia, from Gerogia Oil and Gas. A $100,000 cash payment will be made for a 5% interest with a further 20% interest costing $500,000 in cash and $1m in shares and it is dependent on a move to AIM. Once the AIM flotation happens, a further $1m payable in three tranches will pay for a further 25% interest. The remaining 25% will be earned by a commitment to a side-track in two specified wells. Further bonus payments totalling $1.25m in cash or shares are payable depending on the achievement of milestones. Block is raising £90,000 at 0.85p a share and £210,000 via a convertible loan and this will finance a competent persons report on the Rustavi block.
Management believes that social media and consumer games apps developer Ganapati (GANP) could move into profit in two years. Ganapati improved revenues from £2.3m to £3.27m in the year to January 2017. The loss increased from £7.47m to £8.73m because of higher costs and interest charges. There was £2.38m in the bank at the end of January 2017.
Via Developments (VIA1) plans to issue up to $4m of 7% debenture stock 2020 with the first tranche expected to be £100,000.
NQ Minerals (NQMI) has appointed Bedford Row Capital Advisers to raise up to £25m through an asset-backed bond. The cash will be used to refinance existing borrowings and to refurbish plant and equipment to enable production at its mine in Australia.
AIM
Robotic software supplier Blue Prism (PRSM) continues to outstrip growth expectations. In the six months to April 2017, revenues increased by 133% to £9.3m but the loss jumped from £1.94m to £3.11m as Blue Prism invests in growing the business. The current run-rate of revenues is £1.72m/month. There was still £10.6m in the bank.
Jangada Mines (JAN) has one of South America’s largest potential platinum group metals projects and it has floated on AIM. There is the prospect of a low cost open pit mine. Previous explorers have already invested more than $35m in developing the potential mine. An updated resource inventory is expected before the end of the year.
Phoenix Global Mining Ltd (PGM) has joined AIM and raised £4.6m at 1p a share, which doubles the shares in issue. British Virgin Islands-based Phoenix (www.pgmining.com) has an option to acquire 80% of the ExGen Resources Inc subsidiary Konnex, which holds the leases to the Empire mine project in Idaho. The plan is to mine 7,000 tonnes of copper a year from an opencast pit with a downstream plant extracting gold and silver. Pre-feasibility study work is already underway.
Bricks maker Michelmersh Brick (MBH) is acquiring Barnsley-based Carlton Main Brickworks for £31.2m. This will increase Michelmersh’s output by 40% to 100 million bricks a year. The acquisition will be significantly earnings enhancing this year. The Dunton brickworks is being sold for £2.68m.
TLA Worldwide (TLA) timewatch: TLA announced that trading its shares was suspended at 2pm on Thursday 29 June. TLA, which is best known for publishing a profit warning at 6.26pm on 23 December 2016, has not been able to complete the auditing and publishing of its accounts by the end of June.
Kromek Group (KMK) has already got the vast majority of its forecast revenues in its existing order book and it is set to reduce its loss this year. Revenues from medical, nuclear and security markets are forecast to grow from £9m to £12.5m and the loss should fall from £3.8m to £2.9m. There is plenty of cash in the bank to cover losses as Kromek moves towards profit.
Niche pharmaceuticals supplier Quantum Pharma (QP.) has sold its non-core biodose services for an initial £1.75m. More importantly this means that the low margin medical adherence division no longer exits and Quantum can focus on the core operations.
Strategic Minerals (SML) says that its Central Australian Rare Earths (CARE) subsidiary plans a three stage exploration programme with stage one including 40-50 drill holes totalling 2,000 metres. This will focus on cobalt and nickel laterites. The second phase will focus on deeper nickel sulphide deposits. Stage three is the sampling of soil for signs of rare earths. This is all fully funded from existing cash and cash to be generated from the tailings operation in the US.
Zoo Digital (ZOO) grew revenues from $11.6m to $16.5m in the year to March 2017. There was an unusually strong second half and Zoo almost broke even compared with a loss of $1.6m the previous year. Demand for localisation services from the likes of Netflix is expanding Zoo’s market and making it less dependent on its main customer. The recent fundraising and loan conversion has significantly reduced debt and net debt is forecast to be less than $1m at the end of March 2018. A small profit is expected this year.
Savannah Resources (SAV) says that metallurgical test work at its lithium project in Portugal demonstrates that a high-grade, low iron spodumene concentrate can be produced. This would be suitable for lithium batteries.
Fairpoint (FRP) says that it will not be able to publish its accounts before the end of June and trading in the shares has been suspended.
MAIN MARKET
Hipgnosis Songs Fund Ltd says that an institutional investor has agreed to subscribe for 20% of the fund which intends to invest in songs and music rights. The offer closes on 5 July. The fund has been set up by Merck Mercuriadis, who has decades of experience in the music industry, particularly managing parts of Sanctuary Group. Former AIM-quoted Sanctuary ran into problems with its accounts when it was quoted and was eventually taken over.
Nanoco Group (NANO) has received its first commercial order for the supply of CFQD resin to Wah Hong Industrial, which manufactures optical films and sheets for displays. The resin will be used to supply films to a manufacturer of TV and monitor products.
Aircraft leasing company Avation (AVAP) has declared an interim dividend of 6 cents a share, up from 3.25 cents a share. The ex-dividend date is 20 July. Revenues for the year to June 2017 are expected to be $94m.
Andrew Hore
Quoted Micro 1 May 2017
NEX EXCHANGE
Cyber security technology developer and consultancy Crossword Cybersecurity (CCS) continues to scale up its business and there is a product launch planned for this summer. In 2016, revenues jumped from £21,000 to £345,000 but the loss increased from £755,000 to £950,000 – even after £78,000 of R&D tax credits. There was £1.55m in the bank at the end of 2016. AIM-quoted Iomart is cooperating with Crossword on launching the Nixer machine learning DDoS platform on the market.
Brewer Adnams (ADB) says sales of beers and spirits continue to grow and its pubs are trading well, although the sale of smaller pubs will reduce the profitability of this part of the group. Currency movements, the sale of the UK distribution rights for Lagunitas beers and the renovation of the Swan Hotel will hamper overall progress in the first half. The £7m investment in the brewery is almost complete.
Sandal (SAND) has signed an agreement with Spanish smart home technology business Momit, which will redesign its smart thermostat so that it is compatible with the Energenie MiHome platform. This is part of Momit’s strategy to enter the UK market. The redesigned product should be launched in September and, along with related radiator valve sales, could add £500,000 to the annual revenues of Sandal.
Healthcare staff provider Healthperm Resourcing Ltd (HPR) has revised its strategy and candidates need to have passed the International English Language Testing System, which is required for a visa anyway. Healthperm has opened its own IELTS training facility in the UAE and this is focused on nurses. Healthperm has won two new mandates and there are three other potential mandates on the cards. Chief executive David Sumner has agreed to increase the maximum amount of loan notes he will subscribe for from £1m to £1.8m. The loan notes have a 10% interest charge.
Capital for Colleagues (CFCP) has raised £1.44m at 42p a share from its open offer and a further £980,000 in a placing at the same price. Coinsilium Group (COIN) has raised £118,000 at 2p a share and it will use £60,000 to finance the development of a blockchain-based management system. Goldcrest Resources (GCRP) is raising £380,000 at 0.5p a share. The cash will help to finance the competent persons report on the Norio block, which the company is in the process of acquiring.
NQ Minerals (NQMI) has entered into a A$6.5m loan facility to help finance the acquisition of the Hellyer gold mine in Tasmania. This means that NQ has A$15m of the A$20m in cash it requires to make the purchase.
Indigo Holdings (INGO) is investing £200,000 in Iranian Fast Moving Consumer Goods Ltd, an online retail delivery business associated with a convenience store chain.
Ashley House (ASH) has secured a £500,000 loan facility from its non-executive deputy chairman Stephen Minion. The secured facility lasts for 12 months.
Housebuilder St Mark Homes (SMAP) has appointed Alfred Henry Corporate Finance as its corporate broker. Merchant Place had performed this role for 18 years.
AIM
Mortice (MORT) has made a second UK acquisition. The facilities management services provider is paying up to £4.5m for Elite Cleaning and Environmental Services – £3.5m in cash and shares plus a 12-month earn-out of up to £1m in cash and shares. Elite provides cleaning services and clients include ITV and BMW. Elite made EBITDA of £1m on revenues of £12.3m. finnCap has increased its earnings forecast by 5% to 7.8 cents a share.
Internet domain registry company Minds + Machines (MMX) moved into profit in 2016. Revenues grew from $5.5m to $13.5m, while a loss was turned into an underlying pre-tax profit of $3.5m. This follows a restructuring of the business and the sale of non-core operations. Sales of the .vip domain in China were the major factor in the growth in revenues and .boston should be launched later this year. Cash conversion was poor due to restructuring costs and increased working capital.
Directa Plus (DCTA) had technological problems which held back the progress of the graphene producer last year. In 2016, revenues fell from €1.7m to €0.8m and the loss more than doubled to €4.1m. The reason behind the fall in revenues was the lack of sales of mobile decontamination units with sales of G+ graphene nearly doubling. The focus is textiles and environmental uses of the company’s graphene. Directa Plus has net cash of €6.8m and this will be enough to absorb the expected cash outflows for the next couple of years.
Diagnostic tests supplier Omega Diagnostics (ODX) says that its underlying pre-tax profit will fall from £1.3m to £1.1m in 2016-17. All divisions increased their revenues, helped by currency movements. Field trials are planned for the VISITECT CD4 test and the CE mark could be obtained by the end of the year.
TLA Worldwide (TLA) continues to embarrass itself with disastrous trading statements. Having issued a trading statement at 6.26pm on 23 December 2016, it has released its latest profit warning at 4pm – management probably thinks that is a big improvement because it was before the market closed. It turns out that four months after the end of the financial year TLA’s 2016 figures will be even worse than expected. Changes to revenue recognition and provisions for money that TLA thought it was owed but has not been paid are the reason. There is also money that TLA believed it was owed in financial periods prior to 2016 but has not been paid. That will lead to write-downs and the current estimate is between $1.5m and $2.5m. The 2016 figures may eventually be released in late May, according to the company.
Imaginatik (IMTK) says its revenues for the year to March 2017 will be flat at £3.9m but the loss should still be reduced. Bookings for the innovation software were lower at £3.5m but new clients were won in the second half. Imaginatik could be on course to breakeven in the current financial year.
AstraZeneca has returned the rights to AZD9412 to Synairgen (SNG) following a phase IIa study. The inhaled interferon beta did have a beneficial impact on lung function but the positives were not enough to continue with trials. The data will be returned to Synairgen for it to analyse. Synairgen has £4m in the bank.
Avacta (AVCT) has signed its first non-therapeutics licence for its affimers. The licensee is a major global diagnostics companies. The upfront payment is probably small but this is a significant deal.
Radiation detection technology company Kromek (KMK) is trading in line with expectations and it expects to continue to win new contracts.
Property management services provider HML Holdings (HML) has confirmed that its 2016-17 profit will be in line with expectations of £1.8m. There were six acquisitions during the year. A 2017-18 profit of £2.2m is forecast.
Instant communication mobile services provider Mobile Tornado (MBT) has raised £1.1m at 5p a share and the cash will be used for further development of its technology and support the launch of the Dispatch Console service. Last year, revenues fell 10% to £2.02m but recurring revenues increased to more than 90% of the total. The loss increased from £2.03m to £3.73m. Net debt was £9.06m at the end of 2016.
MAIN MARKET
Sealand Capital Galaxy Ltd (SCGL) has completed the acquisition of social media business SecureCom and Sealand hopes that a share split/bonus issue will improve liquidity. Existing shareholders will receive nine bonus shares for each one they own, leaving them with ten times the number of shares and the share price would be adjusted from 25p to 2.5p. The November 2015 flotation price was 10p and earlier this year a further £1.4m was raised at 20p a share. Pro forma cash was £3.26m at the time of the acquisition.
A number of standard list shells have reported their annual figures so that they beat the deadline of the end of April. Financial services-focused shell Vertu Capital Ltd (VCBC) is still discussing the potential acquisition of VCB Malaysia but there is still some way to go before a deal is secured. There was £553,000 in the bank at the end of 2016. Auctus Growth (AUCT) still had £1m in the bank at the end of 2016 and it continues to assess potential acquisitions.
Papillon Holdings (PPHP) is still proceeding with the long drawn out acquisition of Myclubbetting.com and it is near to lodging a readmission document with the UKLA. The publishing of the accounts of Papillon has been delayed because of difficulties concerning quantifying the costs of the acquisition.
Andrew Hore
Quoted Micro 30 January 2017
NEX / ISDX
There was a sharp improvement in operating profit from £120,006 to £213,657 at Hydro Hotel, Eastbourne (HYDP) in the year to October 2016. Revenues improved from £3.13m to £3.21m, while gross margin jumped from 9.9% to 13.6%. Pre-tax profit rose from £133,576 to £224,352. Improved marketing has helped to boost trade but the hotel will be hit by increases in the national living wage. Further refurbishment is panned at the hotel. Strong cash generation has increased the cash position from £651,000 to £1.39m. The second interim dividend is being raised from 12p a share to 14p a share, taking the total to 21p a share, up from 18p a share.
Rail track technology supplier Wheelsure Holdings (WHLP) reported an increased loss in the year to August 2016 because of higher admin expenses. Pre-tax loss moved from £228,000 to £262,000. Revenues increased by 21% to £290,000 even though London Underground orders have been delayed by budget restrictions. Orders have been received since the year end. Wheelsure has issued shares at 1p in lieu of £14,000 of commission owed to the company’s Italian agent, which has generated the first order for track equipment incorporating Tracksure.
Ashley House (ASH) remained profitable in the six months to October 2016 even though trading conditions were tough and there remains uncertainty about government funding for supported housing. It does appear likely though that there will be increasing demand for extra care housing schemes. Interim revenues were flat at £10.7m and the gross margin was much lower. The underlying pre-tax profit was halved to £200,000. Full year profit is still forecast to rise from £1.2m to £1.5m but this depends on three schemes reaching financial close by April.
Building projects manager and developer Formation Group (FRM) maintained its pre-tax profit at £2.2m in the year to August 2016, even though the recognised profit share from the development at Norwich House in Streatham fell from £2.42m to £1.42m. Group revenues were one-quarter higher at £29.4m helped by sales of apartments at Iverson Road, London N6. There was also a £1.02m post-tax write back relating to past properties. NAV increased from £7.6m to £10.4m. Since the year end, cash has been received from disposal proceeds, which will reduce net debt from £3m.
Mechan Controls (MECP) has appointed administrators from Leonard Curtis to its subsidiary PJO Industrial, following a deterioration in its prospects. PJO supplies mining and pipe laying equipment. Mining demand has been weak. PJO was hit by a bad debt in 2015 and lost £206,000, while net liabilities were £514,000.
Forbes Ventures (FOR) has raised £530,000 from Gravity Investment Group at 0.3p a share. Gravity has a 60.8% shareholding in Forbes. The bulk of the cash will be invested in £500,000 worth of 12%, two-year convertible loan notes in residential care provider Primus Care, where Gravity director Chris Bateman is on the board. The conversion price will be 80% of the fair market value of an ordinary share.
There was further fundraising activity last week. NQ Minerals (NQMI) has raised £125,000 at 7p a share in order to finance working capital. Energy efficiency products supplier Sandal (SAND) has raised £52,000 at 28p a share. Milamber Ventures (MLVP) executive chairman Andy Hasoon has invested a further £16,300 in the technology investment company at 13.55p a share. Property investor Etaireia (ETIP) has generated £10,000 from the issue of shares at 0.09p each.
United Cacao (UCL) has raised further concerns about former chairman Dennis Melka. This involves a number of loans which were not previously disclosed. It also turns out that the small farmer programme has planted 70 hectares and not 194 hectares as said in the interim figures. The Peru-based cacao plantation operator has extended the exclusivity agreement with existing investors, in order to try to secure the long-term financial viability of the business, to 31 March. Cash is being raised from bond issues at large discounts. Just over $515,000 has been raised from the issue of $3.45m of nominal value bonds with a 7% coupon. One of the company’s directors will invest a further $40,000 at 18 cents per $1 bond.
AIM
Scientific instruments manufacturer Judges Scientific (JDG) had a strong end to 2016 and order intake grew organically by 3% during the year. This was too late to benefit the 2016 figures where slow orders and manufacturing problems had led to disappointment and pre-tax profit is expected to fall to £7.1m. Earnings per share will fall by nearly one-quarter to 82.8p a share. That is line with previously downgraded expectations. The year has started with an order book lasting 13.9 weeks and there are positive foreign exchange movements that will help in the recovery. A 2017 pre-tax profit of £8.6m and earnings per share of 102p are forecast, which is still below the level in 2015.
Imaging and radiation detection products developer Kromek Group (KMK) is raising up to £21m via a placing and one-for-30 open offer at 20p a share. Net cash was £2.3m at the end of October 2016 and the additional cash will provide a significant cushion for the company. Kromek is still a couple of years away from making a pre-tax profit but the cash outflow should decline.
Taptica Ltd (TAP) has issued a positive trading statement and this has led to a forecast upgrade for 2016. Earnings per share have been upgraded by 12% to 29.3 cents, which is 150% higher than the forecast was one year ago. Increasing mobile marketing spend by customers means that there should continue to be significant growth.
Beximco Pharmaceuticals (BXP) has formed a joint venture with BioCare Manufacturing in Malaysia. Beximco will own 30% of the joint venture and will provide technical support. The initial product is a metered dose inhaler. Beximco reported a 14% local currency increase in interim revenues but in sterling they rose from £58m to £79.7m, while the growth rate in pre-tax profit was slightly higher with the sterling equivalent rising from £8.2m to £11.6m. The first product is being sold in the US and approvals have been gained for two other products.
Walker Greenbank (WGB) has received a further £1m insurance payment relating to flooding at Standfast & Barracks at the end of 2015. This takes the total insurance payments for the Lancaster fabric printing factory to £14.3m and there could be more to come. The Milton Keynes warehouse has been restocked. Octopus has increased its stake to 13.1%.
Ultrasound training simulators developer MedaPhor (MED) says it still had cash of £1.4m, net of the litigation settlement, which has been formalised with SonoSim Inc. In 2016, revenues grew by 50% to £3.3m, partly thanks to an initial contribution of £850,000 from the acquisition of Inventive Medical. The loss has increased from £1.5m to £2.5m, after settlement costs.
ImmuPharma (IMM) has recruited the 200 patients it requires for its phase III trial for the Lupuzor potential treatment for Lupus. By the end of January, more than 80% of the patients will have been treated for three months. Patients have to be monitored for 12 months so the full trial will not be completed until the first quarter of 2018. So far, there have been no indications that the drug is not safe.
Headway Investment Partners has increased its offer for Ludgate Environmental (LEF) from 16p a share to 16.3p a share, which compares with the latest NAV of 21.7p a share. The bid, though, provides cash up front rather than having to wait for the portfolio to be sold off.
Ascent Resources (AST) has started a well test at Pg-10 at the Petisovci project in Slovenia and an announcement about the results of the test should be published later this week. Henderson took advantage of a share price rise to sell one-fifth of their stake taking it to just below 10% but then almost doubled the number of shares it owns by converting £1m of convertible loan notes into 100 million shares. There are still £8.14m of convertibles in issue.
Ramblers Metals & Mining (RMM) expects to achieve the milling of 1,250 metric tonnes a day by the middle of 2017. Saleable copper of between 5,100 and 5,800 tonnes is forecast to be produced in 2017, along with 4,400 to 5,100 ounces of gold. In 2016, there was 4,174 tonnes of copper and 6,132 ounces of gold produced.
Keras Resources (KRS) has raised £600,000 at 0.35p a share in order to finance exploration at the Klondyke gold project in Australia. Some of the cash will be used to repay a £265,000 loan.
A concept study for the development of the CS natural pozzolan project in Nevada should be completed by the end of the first quarter of 2017. Sunrise Resources (SRES) should have information about the potential timeline for commercial production for the pozzolan, which is more environmentally friendly alternative to Portland cement.
MAIN MARKET
East Africa-focused Rainbow Rare Earths has raised $8m at 10p a share ahead of its standard listing. Demand for the shares was strong. This cash will be invested in the Gakara rare earths project in Burundi. Rainbow requires $2.23m to enable it to commence production in nine months. The main rare earths will be neodymium and praseodymium, which are used in generators, electric vehicles and wind turbines. Rainbow has secured a ten year offtake agreement with thyssenkrupp Raw Materials, which covers the sale of 5,000 tpa of concentrate. Petra Diamonds founder Adonis Pouroulis is chairman of Rainbow, which could move into profit in the year to June 2018.
Andrew Hore
Quoted Micro 7 November 2016
ISDX
Mechanical and engineering services provider Fluid Systems Designs Holdings (FSD) has successfully diversified into the Energy from Waste (EfW) sector and has won work on major projects. In the year to May 2016, revenues were flat at £14.5m, while pre-tax profit increased £277,000 to £372,000. The AMP6 water investment programme has commenced so demand should start to build up but there was a small reduction in revenues from this sector. New framework agreements are being pursued.
Hellenic Capital (HECP) is changing its investment policy and name. The general meeting to gain shareholder approval will be held on 16 November. The company, whose new name will be City and Commercial Investments, will have a two pronged investment policy: UK property and African natural resources. The idea is to generate steady income from property in order to cover overheads. The company can then focus its remaining capital on seeking out resources projects.
Blockchain technology investor Coinsilium Group Ltd (COIN) has divested its 27.3% stake in TRAC Technology because it no longer meets the company’s criteria. Coinsilium will receive $100,000 – 50% in cash and 50% in 2.6 million shares at 1.6p each in AIM-quoted Kolar Gold Ltd (KGLD), which have to be held for three months. Former Coinsilium director Cameron Parry is chief executive of Kolar Gold, which has also secured a 50/50 joint venture with TRAC to launch an online gold and silver trading and storage platform for the Indian market. Kolar will invest £50,000 in the joint venture. TRAC already stores 120kg of gold and 4.3 tonnes of silver for clients in vaults in London, Geneva, Singapore and Hong Kong.
Valiant Investments (VALP) has raised another £24,000 at 0.1p a share, having recently raised £51,500 at the same share price. Valiant owns 84.7% of Flamethrower, which has acquired Compass Heading, a compass app, for $12,500. Revenues are generated from advertising and in-app sales.
Capital for Colleagues (CFCP) has invested a further £100,000 in existing investee company Anthesis Consulting Group. The investment is part of a larger share placing by Anthesis in order to finance organic and acquisitive growth.
Trading in the shares of Dana Group International Investments Ltd (DANA) has been suspended because it has not released its results for the period from January 2015 to May 2016. There have been problems preparing the accounts for 21.7%-owned investee company Bonyan International Investment. Dana intends to extend the accounting period to June 2016 to align its calendar to Bonyan. Earlier this year, Dana sold its 34.12% stake in Makkah and Madinnah Commercial Investment Company. Khaled Al-Husseini has stepped down from the Dana board, while Firas Baba, the chief operating officer of Bonyan, has become a director of Dana.
AIM
Drug developer Sareum (SAR) has enough cash to finance itself for a couple of years following the licence agreement for its Chk1 inhibitor drug candidate CCT245737 with ProNAi Therapeutics. This deal shows that the strategy to licence drug candidates when they reach the point of clinical trials can work and provide cash to finance other drug candidates. Sareum has a 27.5% interest in Chk1 with co-investment partner CRT Pioneer Fund owning the rest. This deal means that Sareum effectively has cash of £1.55m – including unspent funds in the partnership of around £300,000 – plus the $1.9m (£1.5m) share of the initial payment for the licensing deal. Sareum has already received £900,000 of the initial payment with the rest due to come through in the near future and it could receive up to $550,000 more in the next 12 months if the initial milestone is achieved. There was a £674,000 cash outflow in Sareum’s most recent financial year so this cash pile could last for some time. Sareum continues to develop its TYK2 autoimmune and cancer candidates and it could purchase interests in other potential drug candidates if it can find suitable acquisitions.
Berkeley Energia (BKY) has raised £24.1m ($30m) at 45p a share in order to finance the development of the Salamanca uranium mine, which will cost a total of $100m. The amount raised was at the upper end of the range sought by the company.
X-ray and gamma ray imaging and radiation detection technology developer Kromek Group (KMK) has won a number of new contracts in recent weeks and these underpin the expectations for a reduction in loss over the next two financial years. The latest contract is in the bone mineral densitometry market and it is worth $1.2m over two years – $300,000 in the current financial year. Prior to this there was a $1.6m contract with the US Defense Threat Reduction Agency, which is another two year contract. A loss of £3.7m is forecast for the year to April 2017and that should fall to £2.1m in 2017-18.
Franchise Brands (FRAN) has announced its first acquisition since it floated in August. It is paying £900,000 in cash and shares for Barking Mad, which provides dog sitting services, and it should be earnings enhancing in the first full year. The business was established in 2000 and it has 71 franchisees covering 75 territories. The deal has led to an upgrade of the 2017 earnings forecast from 2.03p a share to 2.27p a share.
Goldplat (GDP) produced 9,129 ounces of gold in the three months to September 2016. The loss was reduced at the Kilmapesa mine and the new plant should be installed in time to move the mine into profitability in this financial year.
Caledonia Mining Corporation (CMCL) says that this year’s profit is likely to be lower than expected, partly due to a lower grade at the Blanket gold mine in Zimbabwe. WH Ireland has reduced its 2016 earnings forecast from 25.2 cents a share to 17.8 cents a share, which is still nearly double the 2015 level. The profit has also been impacted by the movement the strength of the rand against the dollar and cost of assessing investment opportunities. Gold production is still expected to be 50,400 ounces this year, rising to 60,300 ounces in 2017 when earnings of 41.9 cents a share are forecast.
MAIN MARKET
InnovaDerma (IDP) has entered the US market with its self-tanning brand Skinny Tan. Superdrug started selling Skinny Tan in the UK last February and it has become its best selling tanning brand. Production is being moved from Australia to the UK, which should reduce transport costs by early 2017. In the year to June 2016, revenues jumped from A$1.05m to A$8.4m from seven countries even before sales in the US have started. This enabled the company, which switched from the Marche Libre to the standard list in September, to move from a loss to a pre-tax profit of A$473,000 – or A$411,000 after development costs. Net debt was A$871,000 at the end of June 2016.
OTHER MARKETS
Former AIM investment company Gate Ventures has raised £2.25m at 6p a share, which is double the share price of the last trade on Britdaq. Gate recently invested £380,000 in a fundraising by AIM-quoted Reach4Entertainment. Gate is valued at more than £100m at 3p a share despite its modest asset value.
Andrew Hore
Quoted Micro 25 July 2016
ISDX
Guild Acquisitions (GAQO) is raising £100,000 at 0.03p a share in order to finance a technology-based investment strategy. The money was not received for a previous £40,000 placing. The focus is likely to be on blockchain-related investments and the new board believes that there will be plenty of opportunities. George Mcdonaugh, Jeremy Woodgate and Rupert Williams are joining the board, while Charles Goodfellow is leaving and enabling Peterhouse to become corporate adviser. Mcdonaugh has experience in the technology sector and will be an executive director. He bought 20 million shares in the placing. Williams and Woodgate,who acquired 10 million shares in the placing, are also directors of broker Smaller Company Capital Ltd (www.ec-capital.co.uk) and used to run another broker, Ocean Equities.
MiLOC Group Ltd (ML.P) is raising $650,000 (£482,000) from a convertible bond issued to Murray Investment Fund Company. The maturity date is 19 January 2018 and there is no interest charge in the first 12 months, followed by an annualised interest rate of 6%. The conversion price will be four-fifths of the share price at which MiLOC or a new holding company floats on the standard list. There is a 3% redemption premium if the loan is not converted into shares.
Food and logistics supplier AfriAg (AFRI) plans to change its name to AfriAg Global in order to reflect a more international focus. Nearly 1.5 million kg of perishable goods was air freighted globally in the first half of 2016., a 60% increase on the first half of 2015.
AIM
Lettings firm Belvoir Lettings (BLV) says that four of its existing franchisees have acquired businesses that will add £850,000 a year to network revenues and this should lead to additional annual management services fees for Belvoir of £102,000. Belvoir has provided funding of £353,000 to help finance the acquisitions and this will add £32,000 to interest income. The deals include the acquisition of a business in Bournemouth which formed the basis of a new franchise. These purchases follow the acquisition of Northwood, the largest remaining independent lettings franchise, as part of the company’s multi-brand strategy. Belvoir is paying up to £22m for Northwood, which has 86 franchised outlets, taking the group total to more than 300 outlets and 54,000 managed properties. Northwood is different from the other group franchises because it offers a guaranteed rent scheme for landlords.
Safestay (SSTY) says that the strong trading performance of its Elephant & Castle hostel has led to an increase in its valuation from £12.2m to £16m.
Renewable energy supplier Good Energy (GOOD) has increased its customer meter points by more than one-third in the first half of 2016 and brand awareness is at new highs. The figure is dominated by FiT customers where growth is likely to slow. Customer meter points were 36% higher at 239,750, with the fastest growth coming in gas where customers were 54% higher. A 5MW solar farm in Dorset increased generating capacity to 52MW with 5MW due to be added in the second half. A new billing system should be installed by the end of this year. A generating site sale will add at least £430,000 to first half profit. The interims will be published on 13 September.
Radiation detection and x-ray technology developer Kromek (KMK) has an impressive order book having taken in $30m of orders in the year to April 2016. These orders are for more than one year but it covers most of the expected 2016-17 revenues of £8.9m. Kromek is expected to continue to lose money for the next two years but the loss will decline. Met cash was £3.86m at the end of April 2016 and this cash is expected to last for at least two years.
Interactive TV content technology developer Mirada (MIRA) is set to have a much improved performance in the year to March 2017. Mirada lost £829,000 in 2015-16 but management expects the company to start generating cash later in the current financial year. The integration of Mirada’s technology for the Televisa cable networks in Latin America means that revenues will be generated every time that a viewer signs up to the service. Mirada continues to invest in R&D. House broker Allenby believes Mirada could make a profit of £1m in 2017-18.
Somero Enterprises Inc (SOM) says that its full year figures will be better than expected and this has led finnCap to upgrade its 2016 earnings forecast by 7.5%, which leaves the shares trading on a single figure prospective multiple.
IS Solutions has changed its name to D4T4 Solutions (D4T4). This reflects the company’s focus on data and data analysis. In the year to March 2016, revenues of £18.6m were boosted by licence sales and projects. There was net cash of £3.4m at the end of March 2016 and the dividend was increased from 0.56p a share to 2p a share. This year, pre-tax profit is expected to rise from £3.5m to £4m, although some of the earnings growth will be held back by a higher tax charge.
Judges Capital (JDG) has warned that its 2016 figures will be lower than expected. The scientific instruments manufacturer had already warned at its AGM that the year had started sluggishly. Order intake was 3.4% lower in the first half of 2016 and the order book is shorter. Orders have started to pick up and the foreign exchange moves could be beneficial for Judges. House broker Shore has cut its 2016 earnings forecast from 122.3p a share to 100p a share. The business is highly cash generative and the dividend is still expected to grow by 10% to 27.5p a share.
MAIN MARKET
DRS Data & Research Services (DRS) says that it has received a bid approach from AQA Education, an independent education charity. The offer is likely to be in cash. DRS provides data capture technology and services for elections and education. DRS, which has been listed for more than two decades, had been considering a switch to AIM following a requisitioned resolution from founder Malcolm Brighton.
Natural flavourings supplier Treatt (TET) says that the disputed earn-out for the acquisition of Earthoil has been set at £971,000. That is less than was asked for but Treatt is still disappointed. This leaves an addition £414,000 to be paid by Treatt. There are outstanding claims totalling £694,000 where judgement is expected next year.
ANDREW HORE