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Quoted Micro 25 April 2022
AQUIS STOCK EXCHANGE
Gunsynd (GUN) had net assets of £5.99m at the end of January 2022. That includes £1.08m in cash. Investee company Low6 is still seeking a listing in Toronto via 1319735 BC Ltd. Mining investee company Charger Metals plans to start its maiden drilling programme at the Coates project in Western Australia. First Tin joined the Main Market after the period end.
Tectonic Gold (TTAU) has appointed Ian Bruce as exploration manager, and he will restart the drilling at Specimen Hill. A permit has been secured in the same area for Taree Fields, which was historically a high-grade copper mine. Deep Blue Minerals, where Tectonic owns 10%, raised $236,000 from diamond sales.
Lombard Capital (LCAP) has agreed in principle the sale of LCP Financial to SBS Group for £4.2m in shares and the repayment of a £370,000 intercompany loan. Lombard Capital will acquire Waste and Recycling Services before the sale is completed. Management will be seeking shareholder approval to leave Aquis.
ChallengerX (CXS) has signed a five-year agreement with The American Arena League for the use of the SaaS-based platform CXSports. This will help to promote the league and generate revenues.
Blockchain and open finance investor Coinsilium (COIN) has agreed to purchase $200,000 of YELLOW tokens for the Yellow Network, which is a cross chain overlay, financial information exchange and distributed infrastructure network.
Adam Pollock, who was previously head of corporate and institutional at WH Ireland, has become a director of Oberon Capital, the broking business of Oberon Investments Group (OBE).
Vulcan Industries (VULC) has raised £48,000 at 1.37p each.
All Star Minerals (ASMO) is changing its name to Marula Mining.
AIM
TV programmes producer Zinc Media (ZIN) lost on £2.61m on revenues of £17.5m in 2021. There is already £13m of booked revenues for 2022 and there is potential further business worth £35m that could be delivered this year. A greater proportion of the work being won is for series, rather than one-off programmes. Zinc Communicate, which produces non-broadcast content and podcasts, is becoming increasingly important. The timing of the orders is uncertain and not all the work will materialise, although £8m is at an advanced stage. This suggests that 2022 revenues should be much higher, and Zinc Media should become profitable and cash generative. Last year, the cash outflow from operations was £245,000. Net cash was £2.18m at the end of 2021.
Churchill China (CHH) is beating its rivals thanks to its capital expenditure and investment in marketing, and it has a better order book than normal for this time of year. In 2021, pre-tax profit bounced back from £800,000 to £6m as revenues recovered from £36.4m to £60.8m. The total dividend is £24p a share, while there is £19m in the bank. Churchill China has taken on more than 200 additional staff in the past year and they still require training. Last autumn, selling prices were raised by 12% and a 5% increase is planned for May. That will help to offset the cost rises. Pre-tax profit is expected to be between £8m and £8.8m this year.
Tungsten West (TUN) is reviewing development options for the Hemerden mine because of rising costs. This will lead to a two-month delay. This could lead to a focus on sodium tungstate production because it is higher value than ammonium paratungstate.
Solid State (SOLI) continues to best expectations. Revenues for the year to March 2022 will be around 6% ahead of previous expectations at £85m, while there is a 11% upgrade in pre-tax profit to £7.4m.
Seeing Machines (LSE: SEE) has secured a collaboration with Magna to develop and demonstration model driver monitoring system (DMS) combining, camera, electronics and interior mirror technology. This should help Seeing Machines win more market share.
Plant-based polymers developer Itaconix (ITX) says volumes continue to increase, particularly in the dishwashing detergent ingredients market.
Coral Products (CRU) is trading ahead of expectations in the year to April 2022 and there is a second interim dividend of 0.4p a share. There could also be a final dividend to add to this year’s total of 0.9p a share.
MAIN MARKET
Nuclear-related business has helped structural steel supplier Severfield (SFR) to enjoy record orders. Logistics, infrastructure and data centres are other areas of high demand. Longer-term, battery manufacturing plants could be another booming area. The current order book is worth £479m. The 2021-22 figures will be in line with expectations with pre-tax profit forecast to improve from £24.3m to £28.1m. This year’s revenues should be better than previously expected, but profit expectations have been maintained because of higher steel costs. The higher steel prices mean that higher working capital is required.
Full year profit of kitchenware retailer ProCook Group (PROC) will be slightly lower than expected at £9.5m. ProCook has grown revenues in a market that is slightly down
J Smart Contractors (SMJ) reported a decline in interim revenues from £5.75m to £5.16m, while pre-tax profit jumped from £890,000 to £6.35m, although that was due to a gain on the sale of investment properties of £6.06m. It is unlikely that full year profit will be higher this year. Net assets are £117.2m, including £76.2m of investment properties and net cash of £27.6m. The interim dividend is 0.96p a share and the ex-dividend date is 5 May.
Andrew Hore
Quoted Micro 4 April 2022
AQUIS STOCK EXCHANGE
In 2021, Good Energy (GOOD) revenues were 12% higher at £146m, while underlying pre-tax profit recovered from £500,000 to £2.6m. Since the year end the sale of the generating assets has boosted the balance sheet making it debt free. A final dividend of 1.8p a share takes the total for the year to 2.55p a share. Investment in billing platforms will help improve efficiency. The Zap-Map EV charging services business remains a focus of growth, along with an accelerating smart meter roll out. Even though trading conditions are tough, Good Energy could improve its profit this year.
Brewer Shepherd Neame (SHEP) is returned to profit at the interim stage, and it is paying an interim dividend of 3.5p a share. In the six months to December 2021, revenues increased by 55% to £78.7m, which is similar to the six months to December 2019. A loss of £7.2m was turned into a profit of £5.4m. Net debt is £82.4m after paying delayed VAT liabilities. Net assets are 1176p a share, excluding property revaluations. In the 13 weeks to 26 March 2022, like-for-like managed pub sales are 10% ahead, but it is a weak comparative. Costs are increasing and Peel Hunt has trimmed its full year pre-tax profit forecast from £8.6m to £7.2m.
ProBiotix Health (PBX) started trading on the Access segment having raised £2.5m at 21p a share. The share price ended the week at 21.5p, valuing the company at £26.2m. The company has been spun-off by OptiBiotix Health (OPTI), which retains a 44% stake after issuing ProBiotix shares to its own shareholders. They will not be able to deal in the shares for nine months. The core product developed by ProBiotix is LP-LDL ®. Studies have shown that the product can reduce cholesterol levels.
AIM-quoted European equities exchange operator Aquis Exchange (AQX) joined the Apex segment of the Aquis Stock Exchange on the same day as it reported full year figures. In 2021, revenues were 42% ahead at £16.2m, while pre-tax profit jumped from £470,000 to £3.22m. Net cash is £14.1m, after spending £1.1m on buying back shares. The company’s market share of pan-European trading improved from 4.7% to 5.2% and the purchase of the non-displayed matching pool of UBS could add a further 0.6% of market share. Liberum forecasts further growth in pre-tax profit to £4.2m this year.
Oberon Investments (OBE) is raising £3.4m at 6p a share in a significantly oversubscribed placing. The broker and investment manager wants to spend the cash on expanding its corporate finance and wealth management operations.
Pharma C Investments (PCIL) invested £100,000 in AIM-quoted Celadon Pharmaceuticals (CEL), formerly Summerway Capital, at 165p a share. Trading started on 28 March and the share price subsequently fell to 130p. Vertigrow, which was established in 2018, reversed into Celadon and it grows indoor hydroponic, high THC cannabis, which will be used for medicines to treat chronic pain. A Home Office licence to legally grow medicinal cannabis was received in July 2021 and it has been renewed until January 2023.
KR1 (KR1) has invested $1.5m in Subspace Labs Inc and it will receive a yet-to-be determined number of tokens. Subspace Network is an eco-friendly blockchain that enables scalable chain storage and computing.
Gunsynd (GUN) owns 1.25 million shares in Media Tech SPAC, which is acquiring Scandinavia-based Drylab A/S, which has developed a subscription-based film and TV production platform. The technology allows reviewing and sharing of filmed takes in real-time, uploads those filmed takes to a cloud-based platform and saves time and costs. The service is designed to work without internet access.
Vulcan Industries (VULC) has sold M and G Olympic Products, which manufactures architectural metalwork, for £1. This is part of refocusing on fabrication businesses.
Cadence minerals (KDNC) has agreed to sell its 31.5% stake in Lithium Technologies and Lithium Supplies in return for £3.72m.
The attempt to remove the chairman and the other resolution put forward at a requisitioned general meeting of Love Hemp (LIFE) were heavily defeated.
Pioneer Holdings Inc (PNER) has acquired Crowdform, which creates apps and websites for brands and start-ups.
Trading in Hot Rocks Investments (HRIP) shares was restored after it reported 2020-21 results and interims to September 2021. There was cash of £93,000 and net assets were £788,000 at the end of September 2021.
Tectonic Gold (TTAU) had £396,000 in the bank at the end of 2021 and management says that it is well funded even though there have been delays to exploration.
Lombard Capital (LCAP) had net liabilities of £2.29m at the end of 2021. The directors are trying to refinance the company.
Hydrogen Future Industries (HFI) has incorporated a subsidiary to develop wind and water-based hydrogen production systems.
Evrima (EVA) has replaced corporate adviser Keith Bayley Rogers with Novum Securities.
Kasei Holdings (KASH) says that its chair Jane Thomason Abigail subscribed £150,000 for new shares at 20p each.
AIM
Digital payments business Boku (BOKU) improved its underlying pre-tax profit from $8.8m to $11.8m in 2021. Longer-term, eWallet activity will help to accelerate growth. Monthly average cash balances are running at $50.8m. Boku will be hit by the loss of Russian revenues that were likely to be around $1.5m.
NWF (NWF) says that its fuels business is making a profit of 2p a litre, compared with 1p a litre under normal circumstances. This will boost cash flow, but it is not likely to be repeatable. Full year profit will be much better than expected.
Artisanal Spirits (ART) achieved strong growth in the UK, China and the US last year. Member lifetime value increased from £932 to £1,445, helped by retention rates improving to 77%. The investment in casks of whisky is paying off with the value of the stocks increasing by 26%. Current year revenues are growing by 30%.
EKF Diagnostics (EKF) increased 2021 revenues by 25% to £81.8m. Even stripping out one-off Covid business, the growth was 14%. Pre-tax profit improved from £15.4m to £21.4m. Net cash was £19.6m at the end of 2021, although that was prior to an additional investment in Verici Dx (VRCI). Some of the cash pile is being invested in expanding the fermentation capacity in Indiana. There are plans to buy back up to nine million shares.
Employee benefits services and insurance provider Personal Group (LSE: PGH) beat expectations with 2021 even though pre-tax profit declined from £8.8m to £4.7m as the effects of the original lockdown showed through in the figures. There will also be a delay in the recovery coming through in better profit. The total dividend was reduced from 18.4p a share to 10.6p a share. Net cash is £20.3m.
Brand Architekts (BAR) is making a recommended bid for fully listed InnovaDerma (IDP), which has regularly disappointed investors. The offer is 7p in cash and 0.3818 of a Brand Architekts share for each InnovaDerma share, which values the skincare company at £13.6m. Brand Architekts has a strong balance sheet and will be able to improve the marketing for the combined group’s products.
Windward (WNWD), which supplies AI-based software for real-time marine and shipping information, doubled its customer base last year. There is an increased need for information to stop breaches of sanctions following the Russian invasion of Ukraine, as well as the ongoing requirement to track sea cargos. Windward is loss-making, but revenues should build up significantly as marine compliance requirements become more stringent. Net cash is $39m and this will provide the funds for Windward to achieve its growth forecasts.
SIPPs admin services provider Curtis Banks (CBP) improved pre-tax profit from £13.4m to £14m in 2021. The growth was held back by delays in technology projects. The dividend is maintained at 9p a share. This was achieved despite a decline in interest income. The higher interest rates will not make a significant difference until 2023. Investment in systems will improve efficiency.
Construction and building software supplier Eleco (ELCO) grew revenues from £25.2m to £27.3m, while pre-tax profit improved from £4.9m to £5.3m. Eleco is transitioning to a SaaS-based model and that will hold back short-term revenues growth. Eleco increased its full year dividend from 0.4p a share to 0.6p a share.
Great Western Mining (GWMO) has completed the road to its Mineral Jackpot properties in Nevada and that will help it to exploit spoil heaps. There are also plans to drill five shallow exploration holes in the area.
MAIN MARKET
Repair and maintenance services provider Mears (MER) reported a 2021 pre-tax profit of £25.6m on revenues of £878m as local authority repair and maintenance activity returned to normal levels. Mears made a loss in 2020. The order book is worth £2.4bn.
Beacon Rise Holdings (BRS) joined the standard list with nine shareholders owning most of the shares. Prior to flotation £1.07m was raised at 100p a share. The current bid/offer spread is 100p/400p. Beacon Rise Holdings is seeking acquisitions involved in primary and secondary related education technology. This could be software or hardware that facilitates active learning. Pro forma net assets equals the cash of £744,000.
Rockpool Acquisitions (ROC) has terminated its proposed acquisition of Greenview Gas. Another party will acquire the business. Rockpool has received £1.2m from Greenview, which is a small premium on the loan provided plus interest.
Telecoms services provider Toople (TOOP) says first quarter revenues are 9% ahead of the previous fourth quarter, while gross profit is 17% higher.
Andrew Hore
Quoted Micro 14 February 2022
AQUIS STOCK EXCHANGE
Good Energy (GOOD) has repelled the latest attempt by major shareholder Ecotricity to influence decisions. It wanted to remove the chairman and stop the sale of generation assets without shareholder approval. Both resolutions were defeated.
Dominique Einhorn has resigned as chief executive of ChallengerX (CXS) following his arrest in France for tax and other offences. ChallengerX joined Aquis in December after it acquired SportsX, which provides marketing services to rugby and football clubs. Sarlat Rugby, which is 100%-owned by Dominique Einhorn, is one of the first clients. The share price was unchanged at 2.4p (2.2p/2.6p).
Hydro Hotel Eastbourne (HYDP) increased revenues from £2.23m to £2.79m in the year to October 2021 and that enabled it to move from a loss of £174,000 to £457,000. This was helped by government assistance. Trading is still not back to pre-pandemic levels. There is £1.33m in the bank.
EPE Special Opportunities (ESO) had net assets of 455.66p a share at the end of January 2022. There was £27.6m of available funds at the end of January. Directors and managing partners bought shares, but more were sold by others.
Cadence Minerals (KDNC) has completed the purchase of a 20% stake in the Amapa iron ore project.
Gowin New Energy (GWIN) is considering trading in agarwood products, including incense and oils in Taiwan. A trial is being launched ahead of the Quingming festival.
Quantum Exponential (QBIT) investee company Arqit Quantum has signed a research and development agreement with the United States Air Force. This could lead to a quantum encryption service for the Department of Defense.
SulNOx (SNOX) plans to gain an OTC quotation in the US so that Americans can invest.
SuperSeed Capital Ltd (WWW) managing director Mads Jensen has bought 3,000 shares at an average price of 83.9p. SuperSeed raised £2m at 100p a share at the end of January. The share price ended the first week at 70p (65p/75p) and it remained at that quoted price last week with limited trading volumes.
Samarkand (SMK) non-exec Phil Smiley acquired 28,777 shares at 139p a share. Daniel Thwaites (THW) director RAJ Bailey bought 15,000 shares at 102.25p a share. Chris Akers has increased his stake in Quetzal Capital (QTZ) from 17.2% to 18.3%.
Alfred Henry has resigned as corporate adviser to Lombard Capital (LCAP).
AIM
Building products supplier Alumasc (ALU) reported that interim pre-tax profit fell 12% to £5.1m on revenues 2% ahead at £46.3m. The profit fell because shading business Levolux fell back into a loss of £1m. Roofing did well but the Levolux business held that division back. The water management division sales were nearly one-fifth higher, and profit improved. Housebuilding product sales increased but margins fell. However, the second half should be stronger.
Self-storage sites operator Lok’nStore (LOK) says that first half trading was strong. Interim revenues are one-third higher, helped by higher occupancy and prices.
Orchard Funding Group (ORCH) has launched a bond offer and it is guaranteeing 10% of face value of outstanding bonds. The Orchard Bond Finance bond offers an annual interest rate of 6.25% payable twice a year. The repayment date is 2027. The cash from the bonds will help to finance growth. The offer is open until 23 February. The offer is available through PriamryBid and intermediaries, such as Interactive Investor and AJ Bell. The minimum subscription is £2,000. The bonds will be issued on 2 March and trade on the Official List.
Sustainable investments company i(x) Net Zero (IX.) raised £10.7m at 76p a share. The share price ended the week at 77p, which is a premium to pro forma net assets.
ASX-listed Artemis Resources (ARV) joined AIM and raised £5m at 3.75p a share on 7 February. It owns 100% of the Greater Carlow gold copper cobalt project and the Paterson Central gold copper exploration project in Western Australia. Exploration commenced at Paterson Central in November 2021, and it is expected to resume in March. The Paterson Central project is adjacent to the Havieron project that is being developed by Newcrest Mining and Greatland Gold (GGP). Greater Carlow has a JORC complied mineral resources estimate for its Carlow Castle deposit of 14.3Mt @ 0.7g/t gold, 0.4% copper and 0.05% cobalt. An update is expected by the summer. The share price ended the week at 3.875p.
Filtronic (FTC) grew ongoing interim revenues by 12% to £8m and the telecoms components manufacturer moved back into profit. The full year pre-tax profit forecast is being maintained at £1m even though revenues have been edged up to £18m because the improvement is from lower margin products. Defence spending is boosting demand.
Omega Diagnostics (ODX) is raising £5m and could raise a further £2m from an open offer. It is also selling its manufacturing facility in Alva for £1m after it failed to win a Covid diagnostics contract. Even so, Omega is expected to continue to lose money. The CD4 diagnostics operations will be transferred to the Ely site and sales are building up, Health and nutrition business continues to grow.
Kitwave (KITW) has acquired West Country-based MJ Baker, which distributes ambient, chilled and frozen food. This is the first acquisition since flotation and Kitwave is paying £24.5m in cash. This deal includes own branded Bakers Best Buy products and should be earnings enhancing.
Recent new admission Facilities by ADF (ADF) has already sparked a forecast upgrade from a trading statement. The film and TV hire services provider is expected to make earnings of 4.5p a share for 2021.
Dekel Agri-Vision (DKL) continues to generate increasing revenues from crude palm oil, but it is taking longer than expected for cashew revenues to grow. January was a record month for production and extraction rates improved, while prices rising. The cashew plant is using 15% of capacity and waiting for additional components.
Mergers and tax adviser K3 Capital (K3C) increased interim revenues from £17.6m to £31.2m providing a significant boost to profitability. The interim dividend is 4p a share. K3 is on course for a full year pre-tax profit of £17.7m, up from £13.6m, providing the ability to potentially pay a total dividend of 12.1p a share.
MAIN MARKET
S and U (SUS) is paying a second interim dividend of 36p a share. Group debt is £114m out of possible facilities of £180m. There was a reduced level of bad debts in the year to January 2022 and pre-tax profit will be more than double last year’s £17.2m. Advantage has started to finance electric vehicles. Net loan advances are £140m. Property bridging has a loan book of £64m.
Anglesey Mining (AYM) plans to move to AIM. A general meeting will be held on 8 March to gain shareholder approval.
Sure Ventures (SURE) has net assets of 118.34p a share.
Andrew Hore
Quoted Micro 10 January 2022
AQUIS STOCK EXCHANGE
Hydrogen Utopia International (HUI) has agreed an exclusive, non-transferrable licence for the distributed modular gasification technology developed by Powerhouse Energy, and this covers Poland, Greece and Hungary. There is also an initial agreement in Bulgaria. The technology turns waste plastic into syngas. Hydrogen Utopia has raised £3m at 7.5p a share, which values the company at £28.8m. The share price has risen to 13.75p. There has already been work done on developing a facility in Poland. The initial cost could be €10m and the facility in Poland could be on stream in 2023. Hydrogen Utopia is targeting places where EU funding or private sector cash is available to finance investment. Even so, the company will need to raise more cash, but not for 18 months.
Vulcan Industries (VULC) increased interim revenues from £2.19m to £2.72m and the loss was reduced from £1.56m to £951,000. Third quarter activity is improving and the acquisition of Aftech should be completed during January, although the effective date is 1 December, and this will help the second half, as well as enhancing earnings. Vulcan has raised £224,000 at 1.6p a share.
British Honey Company (BHC) says that 2021 sales will be at least £8.4m and there is a strong order book for the first quarter of 2022. Production and dispatch will be consolidated at the Market Harborough distillery and the Buckinghamshire office and distillery will be closed.
Ace Liberty and Stone (ALSP) has exchanged contracts on the acquisition of a property in Stafford that is let to Iceland Foods. The purchase price is £1.26m and the annual rent is £95,000. Ace Liberty has raised £11.85m from disposals. There were £200,000 of convertible loans converted into shares and there is £375,000 of convertible loans outstanding.
Apollon Formularies (APOL) has renewed three medical cannabis licences approved by the Jamaican government.
EPE Special Opportunities (ESO) is stopping buying back its shares. It has bought 628,844 shares in the past month.
Trading in the bonds of Belvedere Leisure has been suspended because the annual report has not been published. The audit should be completed by the end of the month. Trading in Lombard Capital (LCAP) shares has also been suspended. Although the results for the year to June 2021 have been published Aquis has queried the audit report relating to the recoverability of loans. Lombard Capital has net liabilities of £1.57m.
AIM
Facilities by ADF (ADF) is the first AIM new admission of 2022. The company provides vehicles and services to the film and TV industry, predominantly in the UK but also in Europe. The £13m net raised at 50p a share that Facilities by ADF has raised will be invested in much needed additional capacity. The company is already nearly fully booked for this year. The company has a fleet of more than 500 vehicles and trailers. This includes artiste trailers, make-up units, generator units and transport vehicles. This could increase to 700 by the end of 2023. Unsurprisingly, revenues fell from £15.9m to £8m in 2020 because lockdowns affected TV and film production. There has been a sharp recovery in the first half of 2021 with revenues reaching £11.5m, which is nearly as much as in 2018.
Conroy Gold and Natural Resources (CGNR) has signed the joint venture agreement with Turkey-based Demir Export. This covers licences held along the 65km district scale gold trend in the Longford-Down Massif in Ireland. The plan is to develop an initial gold project and start mining. Phase 1 will involve Demir Export investing €5.5m to earn 25%, then another €4.5m to earn a further 15%. The final phase will involve the investment of additional funds by Demir Export so that the project will reach construction ready status. That will take the stake to 57.5%. Regulatory consent is still required.
Restaurants operator Tasty (TAST) says that second half trading was extremely encouraging, but December, normally the best month of the year, was disappointing because of Covid uncertainty. There are 50 restaurants trading with the other four due to reopen later this year. There are two or three restaurants that might be sold.
Nicholas Slater has increased his stake in upmarket kitchens supplier John Lewis of Hungerford (JLH) from 4.78% to 6.07%. John Llewellyn Lewis has reduced his stake from 22.15% to 19.57%, while non-exec Alan Charlton has bought 2.5 million shares at 1.2p a share, taking his stake to 8.73%.
MAIN MARKET
Slovenia-based Graft Polymer (GPL) is a developer of polymer modification and drug delivery systems. More than 50 products have been launched. In 2020, GraftBio was started to develop IP for biopharma applications. Revenues remain small but there are opportunities for them to grow significantly. The business should have strong operational gearing. A placing raised £5m at 21.5p a share. Graft Polymer intends to invest in capital equipment and further product development. A new production line will cost £2m and some of the other cash will go on lab upgrades and other investment. Management also wants to expand the distribution network and secure deals with more partners.
AdvancedAdvT (ADVT) has acquired 12 million shares in advertising agency M&C Saatchi (SAA) at 200p a share and the standard list shell approached the advertising agency with a bid proposition based on a share swap. AdvancedAdvT had £129.2m in the bank at the end of June 2021, so this investment is less than one-fifth of that cash. Vin Murria is a director of both companies, and she has a 13.2% stake in M&C Saatchi. The independent directors of M&C Saatchi say that they do not believe in the logic of a merger and also do not think the valuation put on the business is high enough.
Online retailer Made.com (MADE) says that the UK and Europe each achieved 38% growth over 2021. Average order values were 8% higher and active customers increased by 26%. The supply chain is a worry, but management says that lead times are three to four weeks. This follows the deferral of around £40m of sales to the first quarter of £40m. Made.com is still expected to lose money in 2021 before moving into profit in 2022.
Motor dealer Lookers (LOOK) has sparked another upgrade with its trading statement. Peel Hunt has increased its 2021 pre-tax profit forecast from £82.6m to £86.7m. Strong margins continued in the fourth quarter. However, those margins may not continue.
Macfarlane (MACF) has sold its labels business for £6.4m. This business generated a profit of £300,000 in 2020.
Andrew Hore
Andrew Hore – Quoted Micro 27 December 2021
AQUIS STOCK EXCHANGE
All Things Considered Group (ATC) is a music artist management and services provider that branched out into live streaming events due to Covid-19. There was £4.13m raised at 153p a share, and the share price rose to 155p, valuing the company at £15m. In the six months to June 2021, revenues jumped from a sharply reduced figure of £1.39m to £5.04m, including £3.31m from live streamed events. ATC is loss making. The cash and valuation of the stake in livestreaming company Driift appear to provide an underpinning for the valuation, but there is a significant amount of accruals relating to unpaid performing rights fees on live streaming.
ChallengerX (CXS) was used as a holding company to acquire SportsX prior to joining the Access segment of Aquis. The core business is providing marketing services to rugby and football clubs. Smaller clubs need ways of generating additional income, so the services should be attractive to them. ChallengerX will earn income through revenue sharing agreements and by retaining a 10% to 30% reserve position in any club’s social tokens, that it will help the clubs to issue. ChallengerX raised £752,000 at 2p a share. The bid/offer spread at the end of the first day was 2p/3p and the mid-price was still 2.5p on Christmas Eve.
Fellow Aquis company Dispersion Holdings (DEFI) had invested £216,000 in SportsX in May, which was its first investment after flotation, and then swapped this stake for shares in ChallengerX that were worth £1.25m at the subscription price.
Good Energy (GOOD) says that November trading was in line with expectations. Domestic price tariffs were raised at the beginning of November, and this offset the lack of win generation during the month. Power prices continue to rise, though, and wind generation remains low, which means that 2021 profit will be £3m lower than expectations. Good Energy requires more cash for working capital because of the higher prices.
Rutherford Health (RUTH) intends to leave Aquis. A general meeting will be held on 11 January and if the shareholders are in agreement, then the company will cancel the quotation on 25 January. Rutherford Health has found it difficult to raise additional cash and does not want the distraction of being quoted.
CBD products supplier Voyager Life (VOY) has acquired Cannafull, a manufacturer of CBD skincare products, including under its own Ascend Skincare brand. Voyager Life paid the liquidator of the company £9,000 for the brands and assets.
Hydro Hotel Eastbourne (HYDP) is paying a 20p a share dividend to shareholders on the register on 31 December.
Tectonic Gold (TTAU) had £542,000 in the bank at the end of June 2021, although there are also borrowings of £322,000. The operating cash outflow was £210,000 with a further £401,000 spent on exploration during the year. The subsequent sale of Kazera Global shares raised more cash. A $275,000 tax refund relating to the Specimen Hill gold project is due to be received.
IamFire (FIRE) is subscribing £2m for WeShop Holdings Ltd convertibles and has the option to invest a further £2.5m. The conversion price is 75p a share and the shares trade on JP Jenkins. The social media retail platform will be fully launched in the first quarter of 2022.
Lombard Capital (LCAP) has sold its property in Preston for £2.075m. The total cost of the property was nearer £3m.
Love Hemp Group (LIFE) has allotted 65 million shares at 1.5p each in final deferred consideration for Love Hemp Ltd. Chief executive Tony Calamita has an 8.87% stake. A Love Hemp virtual store has been set up with Deliveroo.
Trading in Igraine (KING) shares recommence after its full year and interim figures were published. This period pre-dates the move into medical technology investment.
AIM
CT Automotive (CTA) is a supplier of interior components to the automotive sector and it already has a strong relationship with Nissan. The top three customers account for two-thirds of revenues. CT Automotive raised £33.6m at 147p a share and this will go towards reducing debt. The shares ended the week at 160p. Electronic component shortages have hit the second half of 2021, after a strong first half’s trading. Trading will be disrupted well into 2022.
Libertine Holdings (LIB) raised £9m at 20p a share to finance the opportunity to become an important part of the move towards vehicles being able to use cleaner fuels via its own powertrain technology can extend the range of battery-powered electric trucks. Large commercial vehicles are the main market, but there are other uses for the technology. The cash will be used to take on more commercial and development people, as fund further development of technology and facilities. The share price jumped to 37.5p by the end of the week.
York-based Aptamer Group provides contract research services with longer-term potential for royalties and licence revenues when the client uses the reagents in commercial applications. Three-quarters of the top 20 global pharma companies are clients. Raising £10.8m at 117p enables it to scale up its operations. In the 15 months to June 2021, Aptamer Group revenues were £1.6m and the loss was £2.91m. The share price ended the week at 136p.
Surveying and Corridor.ai analysis platform operator Cordel (CRDL) has won a 6.5 year contract with Network Rail that starts at the beginning of 2022. This is worth £500,000 a year and covers storing and processing of gauge and clearance information for the whole network.
Delivered ready meals company Parsley Box (LSE: MEAL) says that trading improved at the end of the year and supply problems are easing. Net cash is £2.2m, but significant cash outflows mean more money is required, possibly as much as £6m. A large discount to the market price may be required to raise that much.
Deepmatter Group (DMTR) managed to secure £2.55m of funding ahead of the Christmas break. It was at a heavily discounted 0.1p a share. Existing shareholders are being given the chance to invest at the same price via a one-for-3.7 open offer that could raise up to £250,000. The digital chemistry data company is still in discussions with South Korea-based drug discovery company Standigm Inc, but the deal will not be done this year, so 2021 revenues will be lower than the company’s previous expectations.
Anglo Asian Mining (AAZ) has taken a 19.9% stake in TSX Venture Exchange Libero Copper and Gold Corporation for $4.9m. This is the first step in the diversification outside of Azerbaijan. Libero has the option to acquire copper exploration properties in Colombia, Argentina and Canada.
Redx Pharma (REDX) will receive a $9m milestone payment following the start of a phase 1 trial of AZD5055, a porcupine inhibitor targeting fibrotic diseases. There are up to $360m of additional payments depending on successful development.
Primorus Investments (PRIM) says that investee company Alteration Earth will not be joining the standard list until 2022. The prospectus has been submitted for a second reading by the UKLA. Primorus invested £350,000 for five million shares in the shell. Primorus is electing to take Bushveld Minerals (BMN) shares in return for its Mustang Energy loan notes, because of ongoing litigation.
Lekoil Ltd (LEK) has formally rejected the 1.9p a share bid from Lekoil Nigeria. It points out that the offer does not take account of the potential cancelation of $350m of intercompany debt.
MAIN MARKET
Great Southern Copper (GSCU) has options over potential copper gold projects in northern Chile and news of a new left wing president in Chile hit the early trading in the shares on the standard list. Great Southern Copper raised £3.52m at 5p a share and ended the first day at 4.55p before recovering to 4.9p at the end of the week. The assets under option are the San Lorenzo copper gold project northeast of coastal town La Serena in northern Chile and the Especularita copper gold project, which is south of the other project. Initial exploration should help the company to understand the prospects in the two areas before spending a more significant amount of money.
House broker finncap still expects personal care products supplier Innovaderma (IDP) to make a small profit on the back of a recovery in revenues in the year to June 2022. Cash should be maintained at £2.3m.
Cash shell Hawkwing (HNG) wanted share trading to recommence after the proposed acquisition of ecommerce aggregator Internet Fusion Group. The FCA says that the £13.7m loan to Internet Fusion Group is a transaction under the definition of a reverse takeover so trading cannot recommence. Hawkwing is trying to unwind the loan.
Andrew Hore
Quoted Micro 13 December 2021
AQUIS STOCK EXCHANGE
Gibraltar-based RentGuarantor (RGG) provides a rent guarantee service to tenants in the private rental sector. It has joined the Access segment having raised £125,000 at 200p a share. Chief executive Paul Foy has agreed to lend the company £200,000. The business is currently loss-making and has to grow much bigger to get to the point where it is breaking even. The share price ended the week at 210p, although there were no reported trades.
Incathera (INC) continues discussions with two global cosmetics companies about the commercialisation of the Sol skin cancer treatment and started talks with two more. There was £627,000 in the bank at the end of £627,000 and this should last well into next year.
Capital For Colleagues (CFCP) has raised £1.95m at 64p a share and all the directors are participating in the placing. This will provide additional cash for investment. The company had £1.91m in the bank at the end of August 2021. NAV was 69.71p a share at the end of August 2021. A final dividend of 1.5p a share is payable on 3 March.
Lombard Capital (LCAP) lost £228,000 in the quarter to September 2021. The company requires cash, and the Gaskell House waste and recycling property is up for sales. Those proceeds will not be enough to pay off the bonds when payment is due at the end of January 2022. The plan is to try to extend the redemption date.
TECC Capital (TEC) had £1.1m in the bank at the end of September 2021, which is the same as the NAV. Acquisitions are being evaluated.
Clean Invest Africa (CIA) more than halved its interim loss to £553,000. Net liabilities have increased to £3.22m. More cash is required to get the most from the CoalTech technology.
Coinsilium Group Ltd (COIN) says investee company Greengage is withdrawing the application for a Gibraltar banking licence. The plan is to pursue an e-money licence and then apply for a UK bank licence.
KR1 (KR1) has paid the performance fee of £4.15m to Reflexivity Research, which is owned by the executives of KR1. There will be £830,000 paid in cash and the rest in shares. KR1 contributed 350,000 Poldadot in the Astar, formerly Plasm, crowdloan.
Sativa Wellness Inc (SWEL) generated record revenues in one week and that takes revenues for the eleven months to November 2021 to £13.8m. The growth is coming from the testing clinics.
Kevin Soltani has stepped down as chieve executive of Semper Fortis Esports (SEMP) and Keith Harris will be interim executive chairman.
Chris Akers has raised his stake in Quetzal Capital (QTZ) to 17.2%. Burns Singh Tennent-Bhohi increased his stake in Gledhow Investments (GDH) to 8.26%. Scwiar Capital has raised its shareholding in Helium Ventures (HEV) to 10.9%.
EPE Special Opportunities (ESO) had net assets of 511.93p a share at the end of November 2021. Share buybacks are planned and 150,000 shares were acquired at 350p each.
Pioneer Media Inc (PNER) has raised a further C$400,000 at C$1 a unit (one share and one warrant). This takes the total raised to C$1.5m. Vulcan Industries (VULC) has raised £383,000 via placings at 1.6p a share and 1.5p a share.
NFT Investments (NFT) is applying to list on the NEO Exchange in Canada.
AIM
Cloud video editing platform developer Blackbird (BIRD) is raising £8m at 28p a share with chief executive Ian McDonough investing £380,000. This will finance further technology development and add to the technical staff. There will also be cash for market testing advancements and new products. The potential market is enormous, and Blackbird has only just started to exploit new areas.
Windward Ltd (WNWD) has developed AI-based software that enables real-time information about seafaring vessels to be transmitted to their owners. Israel-based Windward raised £26.3m at 155p a share and it ended the week at 204p. The market capitalisation of £166.5m is high considering the progress made. In the six months to June 2021, revenues improved from $7.11m to $8.09m, while the loss jumped from $1.53m to $4.04m. Annual contract value is $19.7m with 99% of revenues from subscriptions.
Ondine Biomedical Inc (OBI) has returned to AIM and raised £22.3m at 53.41p a share. The share price ended the week at 58.5p. Canada-based Ondine develops photodisinfection-based therapies for drug resistant infections. The light-based technology can reduce inflammation and eliminate pathogens. It originally floated on AIM on 9 August 2004, then focused on dental treatments, and left in 2011. In the six months to June 2021, revenues increased from C$213,000 to C$1.98m, while the loss fell from C$7.48m to C$4.58m.
Redx Pharma (REDX) has received another $10m milestone payment from Jazz Pharmaceuticals as the research collaboration reaches the two year mark.
Antimicrobial technology developer Byotrol (LSE: BYOT) fell back into loss following the Covid-19 boosted revenues in the corresponding interim period. Revenues more than halved from £6.7m to £3.2m. There was £1.9m of cash at the end of September 2021.
4GLOBAL (4GBL) provides sports consultancy services to governments and other organisations, as well as subscription data products. It raised £4m at 91p when it joined AIM.
Nexus Infrastructure (NEXS) returned to profit last year as revenues improved from £125.7m to £137m. Civil engineering services provider Tamdown continued to lose money but the eSmart Networks EV charging installation division moved into profit. Management is considering floating eSmart Networks on AIM or bringing in a strategic investor. The money that Nexus would raise can then be used to acquire a business to broaden the range of services offered by the TriConnex utilities connection division.
MAIN MARKET
Sivota (SIV) has found a potential reverse takeover candidate in the form of Israel-based Apester, which has an interactive digital platform. The plan is to pay $12m for a 53.9% stake in Apester. Sivota wants to raise £11m.
Urban Logistics REIT (SHED) has moved from AIM to the Main Market following a £250m fundraising.
MENA Land (MENA) has lost its listing, trading having been suspended since 2 November 2020.
Argo Blockchain (ARB) has resolved its litigation with Celsius by terminating the lease agreement and paying $6.32m to Celsius, which is handing over title to equipment and paying bitcoin to Argo. November revenues were £8.29m with Argo mining 185 bitcoin.
Andrew Hore
Andrew Hore – Quoted Micro 1 March 2021
AQUIS STOCK EXCHANGE
Incanthera (INC) says that it is prioritising discussions with two global cosmetic companies as potential partners for Sol, a sun cream that prevents skin cancer. Incanthera is also assessing the potential for using the technology to develop other products.
Sativa Wellness (SWEL) plans to raise C$4m through a placing of units at C$0.07875 each. Each unit consists of one share one-half of a warrant exercisable at C$0.105 each. The cash will provide working capital and investment for a new health screening service. Sativa has opened ten Covid-19 testing facilities. A dispute with Dragonfly Biosciences has been settled.
World High Life (LIFE) is submitting a novel food dossier to the Food Standards Agency. This is part of the move to regulation of the CBD market in the UK. The dossier includes pre-clinical results.
AfriAg Global (AFRI) intends to acquire the shares in medicinal cannabis pharma company Apollon Formularies that it does not own, and this will be classed as a reverse takeover. Shares will be issued to the Apollon shareholders. AfriAg is also raising £2.5m at 5p a share.
Arbuthnot Banking (ARBB) is selling its Tay mortgage portfolio to a subsidiary of OneSavings Bank for £53.8m, which is equivalent to 97.9% of the outstanding loans. Arbuthnot has already announced that it intends to pay a 21p a share special dividend, which replaces the 2019 dividend declared in March 2020. Arbuthnot will make a loss in 2020 so there will be no dividend.
Gunsynd (GUN) has invested £65,000 in a convertible loan issue by B2B pool betting platform Low6. Gunsynd had already invested £200,000 last December. AIM-quoted Pires Investments (PIRI) has also increased its investment in Low6. It invested a further £35,000, having also invested £200,000 at the same time as Gunsynd. Low6 is expected to float during the second quarter of 2021 and Canaccord Genuity is its broker.
Tectonic Gold (TTAU) says that the latest exploration at Specimen Hill reaffirms the drill targets and informs plans for higher density drilling, so that a resource can be calculated. Tectonic says that the Deep Blue Minerals diamonds joint venture with AIM-quoted Kazera Global Investments produced 220 carats in January. Higher grade materials will be mined during the rest of the year.
SulNOx Group (SNOX) says that Bureau Veritas has certified that SulnoxEco Fuel Conditioner complies with European standards. This means that SulNox’s products can be used for 70% of the hydrocarbon market. Management is confident that production can be scaled up.
NQ Minerals (NQMI) has signed an agreement with ASX-listed Evolution Mining for the evaluation and potential processing of lead and silver rich stockpiles at the Sunbeam project in North Queensland. Evolution has a processing plant 80km away from Sunbeam, which has stockpiles from past mining. The processing would be done on a cost and revenue share basis with NQ. This could finance further exploration. NQ says that it should qualify for the Green Economy Mark when it moves to the standard list.
Lombard Capital (LCAP) has received shareholder approval for refocusing its strategy on property investment and development.
Almon I Holding has cut its stake in Coinsilium (COIN) to below 3%. It increased its stake to 3.68% in January 2020.
Altona Energy has changed its name to Altona Rare Earths (ANR).
AIM
Trading platform operator Aquis Exchange (AQX) moved into profit last year thanks to high levels of trading on its platform. Aquis had been expected to lose money in 2020 but it is now expected to make a £200,000 profit on revenues of £11m. EU trades have been moved to the Paris operation and London has restarted trading in Swiss shares.
VR Education (VRE) continues to grow the revenues of its ENGAGE VR platform. Group revenues increased by 38%, while ENGAGE revenues rose by 550% thanks to strong demand for virtual events. The US provides significant potential. VR is still hiring additional people, although the focus is more on marketing. VR is still losing money, but the cash burn has been reduced this year. Management is targeting 100,000 monthly users by 2025.
Hormonal disease treatments developer Diurnal (DNL) says Alkindi sales in the UK and Germany grew by 29% in the first half but the timing of purchases in other markets meant that overall revenues barely increased. Chronocourt could gain European approval in March and the US regulatory pathway for DITEST, an oral testosterone formulation, has been set out. Net cash was £20.3m at the end of December 2020.
K3 Business Technology (KBT) has sold its managed services business for £14.7m. The business made a pre-tax profit of £1.2m last year, but the disposal proceeds will wipe out net debt and enable the repayment of the £3m shareholder loan due in June. There should still be more than £35m of recurring revenues.
Interim trading at transport software and services provider Tracsis (TRCS) was active and it was not far below the levels in the six months to January 2020 prior to Covid-19 becoming a factor. Revenues declined from £26.4m to £22m and management believes Covid-19 reduced the figure by £6m. New rail contracts are being won, but the lack of events hit the data and events division. Cash has improved from £17.9m to £21m.
Revenues fell by one-third at President Energy (PPC) in 2020 due to lower oil prices. President did generate $10m of free cash flow and that helped to reduce net debt. President plans to drill seven wells this year and that could increase production by one-third. Anew subsidiary, Atome, will develop hydrogen and ammonia production.
Shield Therapeutics (STX) has raised £25m at 30p a share and could raise a further £4.2m via an open offer. The cash will finance the new strategy of directly launching iron deficiency treatment Accrufer in the US.
Yew Grove REIT (YEW) has agreed a new lease for Gateway Three building, East Wall Road, Dublin with the Electricity Supply Board. The new lease lasts five years. Along with three rent reviews, this takes the increase in annual rents to €470,000 this year.
Best of the Best (BOTB) has concluded its strategic review and it has reemphasised its online strategy. finnCap has upgraded its pre-tax profit forecast to £14m.
Benchmark Holdings (BMK) increased first quarter revenues by 18% to £29m and it is on course to reduce its loss this year, prior to moving into profit in 2021-22. The advanced nutrition business contributed significant growth in the first quarter.
MAIN MARKET
Online auctions provider Auction Technology Group (ATG) raised £247.4m at 600p a share, while existing shareholders pocketed £51.5m after the over-allotment option was exercised. The company was valued at £600m. There was a 30% gain to 780p a share at the end of the first week of trading. The company is involved with three main auction markets: arts and antiques, industrial and commercial and consumer surplus and returns. It has six main auction marketplace brands and trade magazine Antiques Trade Gazette. Low double-digit organic revenue growth is anticipated for the next few years.
Town Centre Securities (TOWN) announced a 1.75p a share interim dividend, even though this is not covered by earnings. Lower car park income meant that there was a sharp decline in interim profit. The NAV was 286p a share at the end of December 2020 and it is not expected to decline by more than 2% by the year-end in June. This is more than double the current share price.
CML Microsystems (CML) is paying 50p a share to investors following the sale of its storage division. This will cost £8.28m. the cash should be received before the end of March.
Strong demand for diagnostic products more than offset weakness in the networking division of BATM Advanced Communication (BVC) and enabled 2020 revenues to grow by 49% to $184m. Pre-tax profit jumped from $5.2m to $13.6m. Revenues are expected to decline this year, but pre-tax profit is forecast to improve from $13.6m to $17.3m. This may depend on the timing of the sale of the NGSoft business and it also assumes no additional sales of ventilators this year. Longer-term, revenues will build up from virtual networking technology NFVTime. There is also potential for dividends.
Construction services provider NMCN (NMCN) says that two contracts in the water division could lead to an additional loss of £5m in 2020. These costs relate to delays. The total loss for 2020 could be up to £22m. The additional cash costs will be spread over 28 months. Shareholders are being asked to agree to an extension of the company’s borrowing limit.
Aircraft lessor Avation (AVAP) took a $46.7m impairment charge on its aircraft and a $12.9m credit loss in the six months to December 2020. The NAV was 174p a share at the end of 2020. A full year loss of $30m is expected before the exceptional write-offs.
Cannabis-based products developer Cellular Goods (CBX) raised £13m in its offer at 5p a share. The share price jumped to 19p on the first day of dealings.
Potash project developer Emmerson (EML) raised £5.5m at 5.75p a share. Emmerson has a mining licence for the Khemisset potash project in Morocco. The cash will be used for the detailed design of the mine and the phased development of the project.
Shell company Stranger Holdings (STHP) is pushing ahead with the proposed reverse takeover of the Recyclus Group. A prospectus is being drafted.
Packaging supplier Macfarlane Group (MACF) increased its 2020 profit by 10% to £13m on a 2% increase in revenues to £230m. The full year dividend has been increased from 0.69p a share to 2.55p a share.
Andrew Hore
Andrew Hore – Quoted Micro 16 November 2020
AQUIS STOCK EXCHANGE
Robert Labrum is executive chairman of Primorus Investments (PRIM) following the resignation of Jeremy Taylor Firth and fellow director Alastair Clayton. Primorus is undertaking a strategic review of the business, following the sale of its stake in Greatland Gold (GGP). Other investments include TruSpine Technologies (TSP). Primorus does not have any debt and it has decided not to go ahead with a share buy back.
EPE Special Opportunities (ESO) had a net asset value of 345.7p a share at the end of August 2020. Since then, the investment company has made a $2.5m investment in a segregated account of Prelude Structured Alternative Masters Fund, which invests in distressed credit opportunities.
Youth training services provider Harrogate Group joined the Aquis Stock Exchange on 9 November. The current share price is 3p (2p/4p).
Gunsynd (GUN) is raising £1.13m at 1p a share. This cash will be used to make further investments.
Evrima (EVA) has exercised its option agreement to increase its stake in KKME from 2.4% to 19.6%. This cost £138,000 and this was paid in the form of 2.3 million shares plus the award of 2.3 million warrants at an exercise price of 12 pa share, lasting three years. KKME’s main project is Molopo Farms Complex, which could be a nickel sulphide project. There is an earn-in agreement with AIM-quoted Power Metals (POW) and four holes have been drilled.
KR1 (KR1) has earned 40,270.1 tokens in Kusama, which is described as an incentivised canary network for the Polkadot blockchain project. This stake did not cost anything.
Lombard Capital (LCAP) says progress with the development of a recycling business has been held back by the suspension of trading in the shares. The main asset is a freehold waste recycling site. There was £3,630 in cash in the bank on 30 June 2020. There are net liabilities of £100,000.
Sumner Group Mining has left the Aquis Stock Exchange.
AIM
Digital brand protection services provider Brandshield is reversing into Two Shield Investments (TSI) in an all share deal that values the 80% not already owned by Two Shields at £13.2m. A placing will raise £3.2m at 20p a share, following a 200-for-one share consolidation. Brandshield has developed technology that can be used to protect the brands of clients and get illegal sites and information taken down. Revenues of $1.51m in the first half of 2020 were nearly as much as for the whole of 2019. Two Shields has mining investments that could provide further funds for the core business in the future.
Insolvency litigation finance provider Manolete Partners (MANO) generated cash before new investments in the six months to September 2020. One major case has extended payment term s so there was a working capital outflow during the period. After the announcement of the interims another case was completed, and this will realise £2.8m in cash out of the total settlement of £7.5m. That will be paid over a two year period. Net debt was £5.4m and there are additional facilities that can be sued to finance additional cases.
Zoo Digital (ZOO) generated additional revenues from localisation services on past films and TV programmes in the first half, while production of new programming was delayed by the problems relating to Covid-19. Back catalogue work and higher dubbing revenues more than offset the reduction subtitling revenues. Interim revenues were 15% ahead at $16.4m. Forecasts have been upgraded and a $1.4m pre-tax profit is expected for the full year.
Three directors in Anexo (ANX) are selling a combined 29% of the credit hire and legal services firm to institutional investor DBAY at 150p a share, which is a premium to the market price. DBAY has the finance to provide backing to Anexo in order to expand its business.
Healthcare services provider Totally (TLY) moved into profit in the first half even though revenues were hit by the lack of elective surgeries in the period. Revenues increased by 9% to £54.1m, helped by a full contribution from urgent care business Greenbrook. Net cash is £12.3m and there is an unchanged interim dividend of 0.25p a share. Activity levels have been improving although there is still uncertainty due to lockdowns and restrictions around the UK and Ireland.
One Media IP (OMIP) increased revenues by 14% to £4m on the back of the strong music streaming market in the recent financial year. A 2019-20 pre-tax profit of £600,000 is forecast. That is slightly better than forecast. There is £6.7m in cash and there should be news of acquisitions and partnerships with artists over the coming months. The TCAT anti-piracy software service will be managed as a separate business. Dr Ed Vernon will head up the new Belfast-based venture and take a 8% stake.
MAIN MARKET
OTAQ (OTAQ) is acquiring the assets of ROS Technology for up to £300,000. ROS is a developer of electronic and mechanical products in sectors including aquaculture and offshore. The former owner Dr Peter Robinson was the designer of OTAQ’s SealFence product. He is an important addition to the development team. ROS made a pre-tax profit on full year revenues of £312,000.
Auctus Growth (AUCT) has agreed the acquisition of HeiQ Materials AG, which is a materials innovation company focusing on the apparel, medical and home textile markets, for £119.6m via a share issue at 112p a share post one-for-three share consolidation. A placing and subscription will raise £20m at the same price, while the vendors of the business will sell £40m of the shares they are issued. The company’s name will be changed to HeiQ.
Matomy Media (MTMY) has agreed to merge with Global Auto Max in an all share deal. Global Auto Max imports vehicles made by Toyota, Jeep, Chrysler, Fiat, Mercedes-Benz, Hyundai, VW, Volvo and Ford. Turnover was ILS355m.
Conduit Holdings plans to join the standard list in December. An offer could raise up to $1.1bn in order to finance the newly established reinsurance underwriting business. The focus is property, casualty and speciality insurance. There are no legacy losses to hamper the business.
Andrew Hore
Andrew Hore – Quoted Micro 21 September 2020
AQUIS STOCK EXCHANGE
Renewable energy supplier Good Energy (GOOD) improved interim revenues by 6% to £67.5m. Gross margins declined as Good Energy focused on business customers. There was a slump from profit to loss, partly down to expected credit losses. There is no interim dividend, but payments should resume next year.
Newbury Racecourse (NYR) reported a two-thirds slump in interim revenues to £2.43m. This meant that the loss jumped from £363,000 to £1.69m. There were six race days in the period. Catering, events and the hotel all fell into loss, although the Rocking Horse nursery made a reduced profit. Nine race days are planned for the second half. There will be a substantial loss for 2020.
S-Ventures (SVEN) raised £650,400 at 2.67p a share prior to flotation on 16 September. There have been no trades and the share price ended the week at 3p/5p.
Trading has resumed in Lombard Capital (LCAP) following the completion of disciplinary proceedings. A fine of £23,800 has been imposed on Lombard for the failure to provide timely information and a resulting sharp movement in the share price. Lombard also failed to notify changes in significant shareholdings.
Western Selection (WESP) says that its NAV has fallen by 29.7% to 45p a share over the 12 months to June 2020. The decline in the share prices of AIM-quoted investments is behind the decline. The lack of a dividend from Bilby (BILB) meant that income more than halved.
NQ Minerals (NQMI) has raised £275,000 at 7p a share. TruSpine Technologies (TSP) says that Evrensel Capital Partners is being given an extension for its subscription of £250,000 at 36p a share. Evrensel has until 11 November to complete the subscription and it has been taken on as an adviser by TruSpine.
Panmure Gordon has been approved as a corporate adviser for the Aquis Stock Exchange.
AIM
ThinkSmart (LON: TSL) has revalued its remaining 10% stake in buy now, pay later finance provider Clearpay. The Clearpay stake was valued at £53.7m at the end of June 2020. That is based on the Afterpay share price, which has risen since. Following the settlement of litigation with Dixons Carphone, which led to a payment of £1.45m after June, ThinkSmart has around £10m in the bank and generating cash.
Hanover Bidco has launched a 40p a share recommended bid for ClearStar (CLSU) and this values the employee checks company at £14.7m. ClearStar floated at 57p a share back in July 2014.
Parcel and freight delivery company DX (DX.) increased full year revenues by 2% to £329m and there was a move from loss to a pre-tax profit of £1.8m. The freight division loss was reduced. Net cash was £12.3m, although it is helped by delayed tax payments. The parcels market is growing, and DX continues to invest in new depots.
Keystone Law (KEYS) has resumed dividends following the interims. Revenues grew but the rate of growth slowed. Lawyer recruitment continues and Panmure Gordon has upgraded its 2020-21 earnings from 7.1p a share to 11.9p a share.
Billing and customer relationship management software provider Cerillion (CER) has gained its largest ever contract. This £11.2m contract underpins next year’s figures.
There was a small decline in interim revenues at freight management services provider Xpediator (XPD) and there are further cost saving benefits in the second half. Freight forwarding made a higher profit, although overall operating profit was flat. A 0.45p a share dividend was declared. NAV is 19.9p a share.
Filta Group Holdings (FLTA) has been hit by closures and weak trading in the catering sector. The commercial kitchen services franchise group says trading is recovering, but it is still down on previous levels. Revenues should be more than two-thirds of normal levels by the end of 2020.
Online security software provider Kape Technologies (KAPE) doubled revenues in the first half of 2020. Organic growth was 12% as more people working from home led to demand for Kape’s software products. There are still cost savings to come from the Private internet Access acquisition. Full year earnings per share are expected to increase from 6.5p to 13.3p.
Cloud-based payment services provider PCI Pal (PCIP) reported slightly higher than expected full year revenues of £4.4m, up from £2.8m the previous year. Total annual contract value is running at £6.7m and this underpins the current forecast for this year. PCI Pal will continue to lose money but the cash outflow will reduce.
Union Jack Oil (UJO) is raising £7m at 0.16p a share to cover the oil and gas company’s share of investment in the Wressle field and fund other work programmes and drilling.
Trading in Phimedix (PHM) shares has been suspended because the shell has not found a suitable acquisition. Prior to suspension, Steven Myers sold his 7.7% stake and Ali Mortazavi further reduced his stake from 8.15% to 7.7%.
MAIN MARKET
Tex Holdings (TXH) has decided to delist from the Main Market by 13 October. Trading has been suspended since 29 April 2019. Funding is required and the board believes it will be difficult to secure the cash as a listed company because of the requirement for a prospectus for a major share issue. Costs will also be reduced.
IMC Exploration (IMC) intends to accelerate its exploration programme at the North Wexford gold project. The drilling will be JORC compliant.
Papillon (PPHP) says due diligence on its potential mining acquisitions has been completed. Kilmapesa has recommenced gold production.
Castillo Copper Ltd (CCZ) says that it has verified high-grade copper and identified gold mineralisation at the Big One deposit, on the Mt Oxide project. There are plans to commence drilling.
Andrew Hore
Andrew Hore – Quoted Micro 14 September 2020
AQUIS STOCK EXCHANGE
Investment company S-Ventures is set to join the market on 16 September. The strategy is to make investments in consumer health and organic food businesses in the UK and Europe. The S-Ventures management will use their expertise to help smaller brands grow faster and achieve greater scale. Up to three acquisitions are planned each year and they are likely to have values of between £150,000 and £2m.
Evrima (EVA) has secured an option to acquire a 17.2% stake in Kalahari Key Mineral Exploration (KKME), which would increase its investment in the Botswana-focused nickel, copper and platinum explorer to 19.6%. The former Sport Capital Group has 60 days to acquire the stake for $183,000 in the form of 2.3 million shares at 6p each. The same number of warrants will be issued, and they are exercisable at 12p each. AIM-quoted Power Metals has a
Block Commodities (BLCC) has been fined £7,000 by the Aquis Stock Exchange. Block failed to make sure that it provided accurate and fully up to date information to investors about fundraisings. It also failed to consult with its corporate adviser. Trading in the shares remains suspended.
All Star Minerals (ASMO) is assessing potential gemstones opportunities in Africa.
Lombard Capital (LCAP) has sold a 29.5% stake in LCP Financial for £275,000 in order to provide funds to develop the waste and recycling operations.
Early Equity (EEQP) has appointed Novum Securities as its corporate adviser and trading has recommenced in the shares.
Gold explorer Tectonic Gold (TTAU) has raised £403,000 at 0.275p a share. Each new share has a warrant attached that is exercisable at 0.7p each after the results of the exploration drilling are released. The cash will finance drilling.
AIM
Michelmersh Brick (MBH) has restarted production following lockdown despatches have recovered more quickly than the sector. Interim revenues fell by 17% and underlying pre-tax profit was halved, but full year expectations have been upgraded. The bricks manufacturer is operating at normal levels and June 2020 revenues were better than those in June 2019. Canaccord Genuity has upgraded its full year profit forecast from £5.3m to £6.5m, down from £9.7m in 2019. Limited UK brick production capacity means that Michelmersh is in a strong position and it has demonstrated its resilience this year.
Internet domain name registry and services provider CentralNic (CNIC) is paying $36m for the Codewise businesses, which provide monetisation services and online marketing tools. This fits with Team Internet and will be significantly earnings enhancing from day one. A placing raised £30m at 75p a share.
Synairgen (SNG) has published interim data for its SNG001 treatment that suggests that it could be effective for COVID-19 patients, particularly those suffering with more severe symptoms.
Belvoir Group (BLV) weathered the COVID-19 lockdown well. Financial services increased their contribution in the first half and lettings income held up. Underlying pre-tax profit improved by 7% to £3.16m, helped by the Lovelle acquisition. Earnings per share were 16% higher at 7.3p. The interim dividend is 3.4p and a further 2p is payable in lieu of the final dividend that was not paid. The former boss sold shares at 150p each.
The Property Franchise Group (TPFG) reported an unchanged interim pre-tax profit of £2m and an interim dividend of 2.1p a share is being paid. Cash has risen to £6.1m. Lettings income held up and trading was strong in June. The core business and online operation EweMove both performed strongly in July.
Arden has initiated research on Dekel Agri-Vision (DKL) and it believes that the palm oil and cashew nut processer is worth 7.6p a share. The broker believes that Dekel could make an operating profit next year. Profit should build up over the next few years as cashew nuts processing activities grow.
Concrete levelling equipment supplier Somero Enterprises (SOM) is resuming dividends and paying a deferred final dividend of 20.7 cents a share as well as an interim of 4 cents a share. That will cost $14m. North American interim sales held up best with European sales falling by one-quarter. Pre-tax profit is still expected to fall from $28m to $17.6m, but net cash should be $20m at the end of 2020.
Digital invoicing services provider Tungsten Corporation (TUNG) is on course to move into profit in the current financial year. The loss per share was reduced from 3.5p to 1.4p in the year to April 2020 and there was cash generated from operations.
Irrigation products supplier Amiad Water Systems (AFS) reported a decline in revenues but profit increased as margins improved. Amiad was already reducing its cost base when COVID-19 started to hamper the business. This led Stifel to increase its full year pre-tax profit forecast to $4.5m. Further growth could come from new products and potential acquisitions.
Building and construction products supplier Alumasc (ALU) has realigned its cost base but pre-tax profit was still one-third down at £3.7m as full year revenues declined by 16% to £76m. A 2p a share dividend was declared. Trading has been recovering since the June year end. Further cost saving benefits will help profit to recover this year. finnCap forecasts £6.4m pre-tax profit for 2020-21.
New SIPP business has been slow for STM (STM) but the recurring revenue base means that interim revenues were maintained at £11.8m. Additional personnel costs reduced pre-tax profit by nearly one-third to £1.1m. There is £17.6m in the bank and that enables STM to pay an interim dividend of 0.55p a share, which should be one-third of the total for the year. A full year pre-tax profit of £2.5m is forecast, with a rebound to £4.5m in 2021.
Recruitment firm Hydrogen (HYDG) plans to cancel the AIM quotation. A tender offer of 40p a share provides investors with a way to sell their shares prior to the cancelation.
MAIN MARKET
LED lighting and wiring accessories supplier Luceco (LUCE) has realigned costs so that they are more in line with revenues. In the first half of 2020, revenues fell by 13% to £71.6m, but operating profit was one-quarter higher at £9m. Gross margins continue to increase, and overheads have been kept down. Operating profit margin of 12.3% was higher than ever before.
Andrew Hore