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Andrew Hore – Quoted Micro 29 January 2018
NEX EXCHANGE
Hydro Hotel, Eastbourne (HYDP) generated a 10% increase in turnover to £3.52m, but there was a decline in pre-tax profit from £224,000 to £156,000 in the year to October 2017. This is blamed on the increase in the minimum wage and the fact that more bookings are coming from online travel agents. The total dividend was unchanged at 21p a share. There is £1m in the bank. The public rooms’ refurbishment is complete and the hotel has gained 4* status. Exterior repair work and bedroom refurbishments continue.
Coinsilium Group Ltd (COIN) has launched a private fund for digital tokens. The Gibraltar-based fund will hold tokens issued to Coinsilium. The value of the digital tokens received in 2017 is $822,000. If digital tokens that will be received over the coming two years are included the total value is $5.34m. The advisory business has advised on four token issues and there are four more to be completed.
Capital for Colleagues (CFCP) says that its investee company Cotswold Valves has acquired Flow Capital Company Ltd. Capital for Colleagues has made a working capital loan of £300,000, on top of an existing £50,000 loan. Capital for Colleagues also owns 49% of Cotswold Valves.
Ganapati (GANP) says that its slot game Pikotaro’s Pineapple Pen has been selected as one of the ten finalists at the Global Gaming Awards. The result will be announced on 5 February.
Globe Capital (GCAP) has raised £100,000 from a 6% convertible loan note. The conversion price is 0.5p a share.
AIM
MayAir Group (MAYA) is recommending a 120p a share cash bid from Poly Glorious, which is ultimately owned by Jiang Li. That is below the 130p a share floatation price less than three years ago. The air purification equipment manufacturer is valued at £50.4m. The current chief executive and other management are taking shares in the acquisition vehicle, which is already involved in air conditioning industry in China. MayAir has been hit by increased competition.
Learning Technologies Group (LTG) reports that 2017 profit and cash was much better than forecast. Pre-tax profit is set to more than double to £13m and net cash was £1m. The e-learning business appears to have made good progress integrating NetDimensions and it is assessing other international acquisitions.
The decline in underlying profit at compliance and energy services provider Lakehouse (LAKE) was slightly lower than expected. There was still a fall from £7.5m to £5.5m and a cut in dividend from 1.5p a share to 0.5p a share. Net debt was £1.3m but there might be additional working capital requirements this year. Profit is on course to recover this year but dividend expectations have been downgraded. Property services and construction remain the weaker parts of the business but the core operations are growing.
MYCELX Technologies (MYX) says that orders from Saudi Arabian chemicals company SABIC boosted 2017 revenues. These revenues were generated late in the year. This has increased estimates by 20% to 30%. This means MYCELX will be cash flow positive. This year’s revenues should at least be maintained at 2017 levels.
Castleton Technology (CTP) has won two contracts, one of which is a renewal with Places for People, worth £1.2m and both incorporate a range of the modules provided by the housing association-focused business.
Composite materials supplier Velocity Composites (VEL) sparked a 2017-18 earnings per share downgrade from 8.5p to 5.5p following its 2016-17 figures. This is due to cost increases with the concomitant revenues not set to show through for another year at least.
Ideagen (IDEA) grew revenues by 43% to £17.2m in the six months to September 2017. The document control and compliance software supplier is on course to increase full year profit from £6.9m to £9.7m. Recurring revenues generated 63% of total interim revenues.
MAIN MARKET
Blockchain Worldwide (BLOC), the renamed Stapleton Capital, has changed its investing strategy to cover the blockchain technology industry. Management claims to have already seen a number of exciting blockchain opportunities.
Standard list cash shell Derriston Capital (DERR) still had £2.17m in cash at the end of 2017. Derriston has been seeking an acquisition for more than one year but it has not yet identified a suitable target.
Avocet Mining (AVM) has delayed completion of the sale of Resolute (West Africa) for a further five days to 30 January.
Andrew Hore
Quoted Micro 7 August 2017
NEX EXCHANGE
Valiant Investments (VALP) has raised a further £52,500 at 0.1p a share and its 84.7%-owned subsidiary Flamethrower has acquired FootballTipsFC.com for £40,000. Subscriptions generate £50,000 a year in revenues for the website which provides football betting tips.
Asia Wealth Group Holdings (AWLP) reported a lower loss in the year to February 2017. Revenues improved from $1.2m to $1.53m, while the loss reduced from $150,000 to $110,000. The main business, Meyer Asset Management, made an improved contribution. The auditor has highlighted that no impairment assessment has been made on the investment in Ray Alliance. There is still $869,000 in the bank, following the acquisition of an investment property for $388,000. Management is assessing acquisitions in the fintech sector.
Block Energy (BLOK) has acquired a producing oil field in Georgia. The 90% working interest in the Satskhenisi production sharing agreement will be acquired for 70 million shares (14.35% of Block), which will be owned by Iksander . The field is near the Norio field where Block already has an interest. The permit runs until 2025 with a potential five year extension. Operating costs are up to $25/barrel and the current production from three wells is 10 barrels a day. The sale price is Brent minus $9/barrel. Block will retain 75% of revenues until more than $10m of capital costs are recovered. The purchase includes $500,000 worth of equipment, which can be used in other fields where Block has an interest.
Via Developments (VIA1) has raised a further £100,000 from a placing of 7% debenture stock 2020. Via has completed the Canal Street development in Manchester and the realised gross development value is £2.28m.
Hellenic Capital (HECP) has acquired an office premises in Leeds for £200,000. This was after the latest interims to June 2017. This is part of the new investing strategy. Net assets fell from £81,000 to £59,000 at the end of June 2017, including cash of £28,000.
Capital for Colleagues (CFCP) has invested an additional £150,000 in portfolio company Computer Application Services. Capital for Colleagues initially invested £150,000 in the Edinburgh-based software company at the beginning of 2016 and the latest investment will double the number of A shares it owns to 300,000.
Ecovista (EVTP) has raised £350,000 at 0.035p a share. This takes the stake owned by Hubwise to 12.45% and Elite CAM Balanced Discretionary Fund to 9.34%
AIM
Asset management performance software provider StatPro (SOG) reported a 23% rise in interim revenues to £21.6m, while underlying earnings per share improved from 1.1p to 1.8p. The interim dividend is unchanged at 0.85p a share. There was an initial two month contribution from the UBS Delta business and the annualised recurring revenues are running at £53.2m, which is before the latest three year contract in Australia. The acquired technology will be integrated with StatPro Revolution.
Telecoms infrastructure equipment supplier Filtronic (FTC) reported a jump in full year revenues from £13.6m to £35.4m thanks to a large order for antennas. There was a swing from a £7m loss to a £2.2m profit. The balance sheet is strong with net cash of £2.6m. Future investment in 5G telecoms infrastructure augurs well for Filtronic. Hargreave Hale has increased its stake from £6.16% to 11.3%.
Real Good Food (RGD) says that its forecast for the year to March 2017 was wrong because two anticipated claims have not materialised and it had incorrectly capitalised certain costs. This will knock £2m off expected profit. This revelation comes a few weeks after Downing invested £2.75m at 35p a share and the share price has subsequently slumped to 20.75p. Payments to Pieter Totte and Peter Salter over a three year period were not separately disclosed. Salter has left the Real Good Food board but Totte continues to survive as executive chairman.
Fairpoint Group (FRP) says it intends to appoint an administrator because of the cost of the lease on its head office costing £1m a year for four years. The IVA and related businesses are still being sold.
AdEPT Telecom (ADT) has acquired IT services provider Atomwide, which provides services to schools and local authorities, for an initial £12m. This adds 4% to this year’s earnings and 9% to next year’s. It was partly funded by £7.3m convertible loan from Business Growth Fund, which is convertible at 393p a share.
GetBusy (GETB) joined AIM last week and the share price rose to 34.5p. Cloud-based document management software provider GetBusy was spun out of ASX-listed software company Reckon and raised £3m from a rights issue. The two existing software products, SmartVault and Virtual Cabinet, generated revenues of £8m in 2016 – 82% of which is recurring – up from £6.8m the previous year. Accounting firms generate the majority of revenues and GetBusy is trying to expand in other sectors. Next generation software SCIM is being developed in order to make it easier for businesses to interact with customers and become more organised and productive.
Botswana Diamonds (BOD) has raised £543,000 at 1.25p a share and warrants have been exercised at 0.85p a share raising a further £265,000. The cash will finance exploration in Botswana and to assess an inferred resource for Frischgewaagt.
Ascent Resources (AST) has installed the infrastructure at the Petisovci project in Slovenia to enable the gas to be exported.
TechFinancials Inc (TECH) says that 51%-owned DragonFinancials is paying a dividend of $2m and TechFinancials will receive £1.02m. The payment date is 20 August.
Kestrel Partners has slashed its stake in home improvement products supplier entu (UK) (ENTU) from 21.1% to 7.33%. This investment appears a rare mistake for Kestrel which has a good record of building up stakes in technology businesses. Kestrel was still building up its entu stake in the first quarter of this year. The entu share price is around its all-time low so Kestrel will have made a significant loss on this investment. Meanwhile, entu is trying to secure a refinancing but this is likely to mean that the existing shareholders will be left with little in terms of value. The group continues to lose money.
Thor Mining (THR) is acquiring an interest in Kapunda copper deposit in South Australia. Thor is investing up to A$1.8m in convertible loan notes in a company earning a 75% stake in Kapunda. The initial investment is A$200,000. Conversion of the loan notes could give Thor up to 60% of this company. Due diligence on the US lithium assets has gone well and additional mineralisation has been identified. Director Paul Johnson acquired 500,000 Thor shares at 085p each.
A disposal deal for the interiors division of Stanley Gibbons (SGI) has fallen through because the buyer could not come up with the money. There is a termination fee payable and Stanley Gibbons believes that there are other buyers.
MayAir Group (MAYA) has won a $13.6m order to supply filtration and clean room equipment to a Chinese LCD panel manufacturer and most of the revenue will be recognised in 2017.
Empyrean Energy (EME) has raised £1m at 8.5p a share. Drilling has commenced on the Dempsey 1-15 onshore well in California.
Billington Holdings (BILN) says that its structural steel business has won two contracts worth £14m. One is for a London university and the other is for a distribution warehouse in south west England and some of the work will carry over into 2018.
MAIN MARKET
Diesel engines and parts supplier Associated British Engineering (ABSE) reported a higher loss in 2016-17 and there was also a sharp drop in NAV. The weak oil and gas market continues to hold back the group and revenues fell from £1.77m to £1.04m. The loss increased from £621,000 to £962,000, after a large increase in pension costs. The total cash outflow was just over £1mm similar to the previous year. Cash and financial assets total £968,000. There is a 2.3% stake in AIM-quoted SalvaRx. The initial stake was taken when the company was 3legs Resources. The NAV fell from 73p a share to 50p a share. This is despite a decrease in the pension deficit from £1.93m to £1.38m. There are £3.1m of trading losses and £8.5m of capital losses available but there is no deferred tax asset in the balance sheet.
Andrew Hore
Quoted Micro 17 April 2017
NEX EXCHANGE
Capital for Colleagues (CFCP) is raising £2.02m via a one-for-two open offer to existing shareholders at 42p a share and there are already commitments for 57% of this investment. The closing date is 27 April. The NAV was 43.5p a share at the end of February, which was hit by a write-off of a major investment. There are new investors will to take up shares worth £819,000 of they are not taken up in the open offer, or if there are not enough shares available additional shares will be issued.
Coinsilium Group Ltd (COIN) is joining forces with Oraclise to develop a smart contract system that can be used for the next generation of blockchain applications. The system will manage token issuance. There are already funds that trade in these tokens, which can be swapped for ownership rights in assets. Specific markets have been identified. The full details will be announced on Thursday.
Goldcrest Resources (GCRP) is acquiring a 100% interest in the Norio onshore production sharing agreement and has an option for a farm-in agreement to acquire 70% of Block VIII, which includes the East Khavtiskhevi onshore field. These assets are in Georgia and the current production at Norio is 25 barrels of oil per day. There are plans to increase production at Norio to 250 barrels of oil per day, which will enable Goldcrest to start generating cash during this year. Goldcrest has paid $380,000 and will issue $300,000 of shares at 0.5p each for 38% of Norio and then has the option to pay $620,000 plus $250,000 for the other 62%. Money will be raised by selling the existing gold exploration assets in Ghana.
Gunsynd (GUN) has received £3,000 in cash and 300,000 shares in Integumen in final consideration for the original skin treatment assets that Gunsynd, then known as Evocutis, sold in 2015.
Valiant Investments (VALP) has raised £47,750 at 0.1p a share.
AIM
Carpets manufacturer Victoria (VCP) says trading is ahead of expectations for the year to 1 April 2017. The performance has been helped by the integration of acquisitions in the UK and Australia. The new chief executive arrived too late in the financial year to have an impact.
MayAir Group (MAYA) improved full year revenues by 3% to $65.6m but pre-tax profit slumped from $7.5m to $5.9m because of a delayed contract. This contract has been completed and there should be a partial recovery in profit this year. The air filtration equipment supplier is on course to open its new facility.
D4T4 Solutions (D4T4) says that its earnings will be slightly ahead of expectations as higher margin software sales more than made up for lower project revenues. The 2016-17 pre-tax profit forecast has been edged up to £4.1m. There was £5.1m in the bank at the end of March 2017. There is still uncertainty about potential demand from a Japanese customer.
Arian Silver Corp (AGQ) has signed an option to acquire three lithium exploration projects in Mexico for up to $200,000 payable over 12 months.
Strategic Minerals (SML) has secured a deal to supply 400,000 tons of magnetite a year at a market based price over several years – depending on Strategic continuing to have access to the Cobre magnetite stockpile. This should double annual sales with a maintained margin.
More good news from software provider Cerillion (CER). Interim revenues have grown from £6.9m to £7.5m and EBITDA moved ahead from £1.1m to £1.5m. The interim figures will be announced in the middle of June.
Full year contributions from all its hostels meant that 2016 revenues generated by Safestay (SSTY) rose from £4m to £7.4m but it remained loss-making. NAV is 58p a share and the company is trading at a small discount to this figure. There has been a subsequent £12.6m sale and leaseback of the Elephant & Castle and Edinburgh hostels and a new £18.4m, five year secured debt facility provided by HSBC. This will reduce the cost of borrowings.
First Property Group (FPO) had funds under management of £475m at the end of March 2017, up from £353m a year earlier. Profit is expected to be in line with expectations before the recently announced sale of a property in Romania. The full year figures will be published on 8 June.
EMIS Group (EMIS) has appointed Andy Thorburn as its new chief executive. In the past four years, Thorburn has been chief operating officer of Caribbean-focused communications group Digicel. Prior to this has worked for a number of software companies and BT.
Dolphin Fund has decided not to proceed with a bid for FIH Group (FIH) because of the uncertainty caused by the attitude of the Falkland Islands government. Dolphin cannot make a bid for six months unless there is a rival bid announced.
Hague and London Oil (HNL) plans to acquire the Netherlands-based assets of Tullow Oil for an initial €9.75m with the potential to pay a further €20m. There are capital spending requirements for these assets which are generating revenues. Operating spending is estimated to be $21/barrel in 2017. The finance for the deal is being negotiated.
Gas and electrical services provider Bilby (BILB) is beginning to win work from the framework contracts it has been appointed to and this will boost the 2017-18 financial year. Northland has been appointed nominated adviser and broker.
Franchised property services provider Hunters Property (HUNT) grew its pre-tax profit from £1.42m to £1.85m in 2016. The dividend was increased from 1.5p a share to 1.9p a share. The subsequent acquisition of Besley Hill takes the group into south west England and the number of outlets has risen past 200. House broker Dowgate Capital forecasts a 2017 underlying pre-tax profit of £1.91m earnings per share may be slightly lower.
A reduction in admin expenses helped APC Technology (APC) to return to profit in the first half. Revenues declined from £9.5m to £8.3m but this was due to a large Morrison contract in the corresponding period. The core electronic components distribution business grew revenues by one-fifth. The underlying pre-tax profit was £200,000.
The second largest shareholder in Hornby (HRN) is requisitioning a general meeting to remove Roger Canham as chairman and from the board and replace him with Ian Anton.
MAIN MARKET
WideCells (WDC) has raised an additional £649,000 at 12p a share in order to accelerate the growth of its three divisions and develop a client relationship management system. Last July’s placing raised £2m at 11p a share. The CellPlan stem cell insurance product is selling better than expected. The stem cell storage facility will be operational in the second quarter and the company has applied for a research licence. The additional funds will help to finance additional appointments for its WideAcademy education and training business.
Andrew Hore
Quoted Micro 12 December 2016
ISDX
IMC Exploration (IMCP) and its partner Koza Ltd have started work on a mapping and rock sampling programme at the Goldmines River licence in County Wicklow and a licence in County Wexford. This work will help to prepare for the next phase of drilling.
African Potash (AFPO), which has lost its AIM quotation because of the resignation of its nominated adviser, has moved to ISDX, where Peterhouse is its corporate adviser. Dealings on ISDX commenced on 7 December. African Potash is attempting to build up a vertically integrated fertiliser mining, production and distribution business in the Republic of Congo.
Ashley House (ASH), which develops health and community care properties, is refinancing its loan from Rockpool through a £1.5m facility provided by Invescare Ltd, where Ashley non-executive deputy chairman Stephen Minion is one of the shareholders. The facility lasts until June 2018 and is secured against individual assets of the company.
Geologist Gareth Northam has been appointed to the board of Goldcrest Resources (GCRP). Goldcrest has raised £70,000 by issuing convertible loan notes to natural resources investor Pelamis Investments. The loan note is convertible into 28 million shares at 0.25p each – a price relating to after a planned 50:1 capital reorganisation.
Valiant Investments (VALP) has raised £40,000 at 0.1p a share in order to provide finance for 84.7%-owned apps developer Flamethrower. Kryptonite 1 (KR1) has raised £155,000 at 0.05p a share, while Imperial Minerals (IMPP) raised £35,000 at 2p a share.
AIM (Latest AIM Journal available)
Fairpoint (FRP) made a profit warning just prior to the close on Friday but there was still time for the share price to halve. Dividend payments have been suspended. The legal services business has not been trading as well as hoped in November and December. The closure of the debt services business is on course to be completed in early 2017 but overheads are still higher than the management planned that they would be.
MP Evans (MPE) has sold its Malaysian joint venture and intends to pay a special dividend of 10p a share. The disposal will raise $100m and the deal valued the plantations at $13,000/hectare. That is more than the remaining assets are being valued at by the current bid. Kuala Lumpur Kepong has received 12.9% acceptances for its 740p a share bid. The disposal means that one-third of the cost of this bid will be covered by cash.
Expect more shares to come on to the market following the announcement that a further £1.15m of loan notes in CloudTag Inc (CTAG) have been converted into shares by L1 Capital. The conversion price is 6p but the market price has risen to more than twice that level. There are £50,000 of loan notes left.
AB Dynamics (ABDP) is raising additional cash to give it a larger buffer as it invests in its new facility. The automotive testing equipment manufacturer already had cash in the bank but it has raised £5.4m at 475p a share and it is offering shareholders the chance to subscribe up to £1m at the same share price.
Northacre (NTA) has been on AIM for 19 years but it has decided to end its association with the junior market. This is not a surprise because the main shareholder owns 94.3% of the company. That shareholder is offering to buy any shares at 100p each – a 35% premium to the previous market price.
Formation Group (FRM) has also decided to leave AIM but it is switching to ISDX. A general meeting will be held on 4 January and the property developer could join ISDX as early as 12 January of shareholders agree to the AIM cancellation.
Clean room equipment manufacturer MayAir (MAYA) says that it generated revenues of $52.4m in the ten months to October 2016 and there is an order book worth $20.4m most which should be recognised this year. This provides some comfort that MayAir can achieve full year expectations. Management still hopes to be moving into a new factory before the end of 2017.
Vianet (VNET) reported lower interim revenues but stripping out discontinued fuel-related activities revenues grew slightly thanks to the vending division. The core operations grew their profit contribution but higher losses from the technology business held back overall profit growth. In the six months to September 2016, pre-tax profit improved by 9% to £1.13m. The US loss in the leisure division was halved and the number of sites continues to grow, unlike the UK where the number of sites continue to decline. The vending division offers good potential for profit growth now that it is covering its costs and more of the additional revenues drop through to profit. The uses of the technology for the Internet of Things should help to boost growth. Net cash is £1.98m and the interim dividend is unchanged at 1.7p a share. A full year profit of £2.4m is forecast.
Gas and electrical services provider Bilby (BILB) is restating last year’s results. This will reduce reported pre-tax profit from £1.37m to £718,000. This is due to additional costs and disputed revenues. The share price is less than one-third of the level it peaked at less than 12 months ago. The interim figures will be published later this month.
Share (SHRE) has sold 20,000 shares in London Stock Exchange for £540,000. Share retains 100,000 shares in London Stock Exchange.
TV technology developer Mirada (MIRA) says the roll-out of its technology by izzi Telecom will be slower than expected and demand in Mexico is uncertain. This means revenues, particularly higher margin licence sales, will be delayed. This year the expected underlying loss is likely to be around £1.4m higher at £1.8m. Capitalised development spending is rising so there will be a significant cash outflow even when amortisation is taken into account. A pre-tax profit is not expected until 2018-19.
Armadale Capital (ACP) has announced a JORC compliant resource of 40.9 million tonnes @9.41% graphite content for the Mahenge Liandu project in Tanzania. This is a particularly high grade and it should be easy to extract – and that could be confirmed early next year. There will be additional drilling and a further upgrade could happen in the first half of 2017.
Evgen Pharma (EVG) reported interim figures in line with expectations and there is £5.5m left in the bank. This is enough to push ahead with two phase II clinical trials for SFX-01 and to investigate other potential uses. The results of the trials should be available in the first half of 2018. The US Food and Drug Administration has given orphan drug status to the treatment for subarachnoid haemorrhage.
Premier African Minerals (PREM) has decided not to increase its stake in Casa Mining from 4.5% to 30%.
MAIN MARKET
Project engineering consultancy Waterman Group (WTM) says that its performance has been in line with expectations in the first four months of this financial year. Exchange rates have helped to ensure a small increase in revenues in the period. This suggests that dividend growth will continue. Waterman has won work for the MoD, Brent Cross shopping centre and UK roads. The interim figures will be published in February. Michael Strong has been appointed as a non-executive director.
Andrew Hore
Quoted Micro 8 August 2016
ISDX
Chapel Down Group (CDGP) has exchanged contracts on the 1.6 acre site in Ashford that will be used for the proposed new Curious brewery. The deal will be completed when planning permission is obtained.
Valiant Investors (VALP) has raised £71,000 at 0.1p a share in order for it to finance the development of 83.3%-owned apps developer and marketer Flamethrower.
Milamber Ventures (MLVP) says that its grant application partner Private Shares has invested £25,000 at 16p a share and it will invest a further £25,000 at the same share price once Milamber holds a concept development workshop. Any grant writing services provided before 18 February next year will be paid for in shares at 18p each. Milamber non-executive director Barney Battles has invested £12,500 in shares at 16p each and also converted £12,500 of fees into shares at 18p each.
AIM
A positive trading statement from software robots company Blue Prism (PRSM) lead to a share price rise of more than two-fifths. The share price was already nearly double the flotation price of 78p and it reached 211p at the end of the week. A new contract has been won with a major bank and another large bank has renewed its contract for three years. This means that the full year figures will be better than expected.
Branded interior furnishings supplier Walker Greenbank (WGB) has received a second interim insurance payment of £3.2m relating to the flooding at the Standfast & Barracks printing factory in Lancaster at the end of 2015. A payment of £8m had already been paid. An £800,000 payment is expected soon and there could be more to follow. The factory is almost back to full production following the installation of new digital printers and the backlog of orders is being fulfilled. Overall group trading is in line with expectations. UK sales have fallen but overseas sales have grown. There could be a modest boost from the weakness of sterling.
Domain names wholesaler and services provider CentralNic (CNIC) has been awarded the contract to distribute the .FM domain by its owner BRS Media. CentralNIc plans to promote the top level domain to online streaming businesses. The deal also includes the launch of other domains including .AM.
Asset management software provider StatPro (SOG) continues to transfer customers to its StatPro Revolution SaaS-based service. In the six months to June 2016, revenues improved from £15.4m to £17.6m, while underlying pre-tax profit was slightly lower at £827,000. The real benefits of the transfer to monthly revenues for Revolution will show through next year. Edison forecasts a small increase in profit from £2.6m to £2.8m this year and then a 2017 profit of £3.7m.
Ultrasound simulation equipment developer and supplier Medaphor Group (MED) is acquiring Inventive Medical Ltd, which sells cardio ultrasound simulation products under the HeartWorks brand. Medaphor already has a relationship with Inventive Medical and the companies’ products are complementary. Medaphor is paying £3m in shares – at 43p each – for the company. Loss-making Medaphor has £3.5m in the bank and this should last until the end of 2017.
TechFinancials Inc (TECH) enjoyed a strong first half, which has reassured investors following the disappointment of its failed joint venture in Asia. Revenues grew by 30% to $9.6m, while EBITDA nearly doubled to $1m.Full year forecasts have not been changed but there could be scope for upgrades later in the year.
Cloud-based communications software and services provider CloudCall Group (CALL) is raising up to £3.77m at 57.5p a share – a 3.6% premium to the previous closing price. The cash will be used to expand sales activities, particularly in the US. This investment will be coordinated with its partner Bullhorn, which is starting to sell outside of its core recruitment customer base. CloudCall’s product is used by 12% of Bullhorn’s UK customers and 2% of its US customers.
MayAir Group (MAYA) has announced the commencement of a share buyback of up to 10% of its share capital. A maximum of £5.76m can be used for this buyback. This follows $17.7m of industrial and commercial clean air equipment contract wins in recent weeks.
MAIN MARKET
Engineering and environmental consultancy Waterman Group (WTM) expects to report a full year pre-tax profit in excess of its target of £3.3m. Waterman had set itself the target of tripling its profit in the three years to June 2016. Net cash has increased from £3.8m to £5.4m. Trading continues to be strong. The results will be published on 10 October.
Andrew Hore
Quoted Micro 6 June 2016
ISDX
Capital for Colleagues (CFCP) has invested £770,000 in employee owned businesses in the six months to February 2016. Interim revenues grew from £257,000 to £364,000 but admin costs increased significantly so, excluding unrealised gains, the pre-tax profit dipped from £41,000 to £34,000. Unrealised gains slumped from £47,000 to £6,000. At 62.5p (60p/65p) a share, Capital for Colleagues is valued at £6m. The net asset value was £4.2m at the end of February 2016 and £1.15m has been raised since then. There are still plenty of opportunities for new investments as well as additional investment in existing investee companies.
Blockchain technology investor Coinsilium Group Ltd (COIN) reported a loss of £2.42m in the first 15 months of its existence to December 2015. That includes an investment impairment of £1.31m for an investment in Hive Labs. The investments are all early-stage so it will take time for them to bear fruit. More recently the company has branched out into providing training. The NAV was £2.33m at the end of 2015. At 4.1p (3.6p/4.6p) a share, Coinsilium is valued at £2.9m. There were seven trades in Coinsilium shares last week at prices between 3.2p and 4.25p. Five of these trades were the day before the results were announced. The most recent trade was 100,000 shares at 3.2p each. Coinsillium is one of the more frequently traded ISDX companies and there were seven trades in the previous week.
Contemporary art collector and trader V22 (V22O) says an independent valuation of its collection at the end of 2015 said that it was worth £1.67m, which is triple the amount invested in the collection. V22 also has a property portfolio and in May it paid £250,000 for a 125 year licence on a Grade II listed building in Forest Hill, which will provide exhibition and event space. In 2015, revenues grew from £568,000 to £822,000 and the loss declined from £78,000 to £34,000. Since then, V22 has raised £225,000 from selling half of its option interest in a company that owns the freehold to a building in South Bermondsey. V2 has already received £150,000 with £75,000 payable by the end of June. V22 retains an option over 15% of the holding company that owns the building. At 0.9p (0.85p/0.95p) a share, V22 is valued at £300,000. The NAV including the valuation of the art portfolio is 4.49p a share.
Cairn has resigned as the corporate adviser to Nordic Energy (NORP), whose shares are already suspended because it is unable to bring out its interim figures within the required time. At the end of 2015, Nordic relinquished its Danish oil and gas exploration licence because it was unable to fund the required work programme. Nordic had £42,551 in the bank at the end of May 2015. Former director Rudolf Kleiber has been awarded £14,210 for unfair dismissal and disability discrimination.
Carbon credits adviser China CDM Exchange Centre Ltd (CCEP) reported flat revenues of £1m in 2015 but profit dipped from £29,000 to £6,000. There was a cash inflow of £575,000, taking cash in the bank to £1.59m. The NAV is £46.1m, which is mainly based on carbon-related investments. At 0.25p (0.2p/0.3p) a share, China CDM is valued at £300,000, which is a large discount to the cash pile. There was a small trade of 936 shares at 0.2p each the day after the results were announced.
China-based LED products supplier Gowin New Energy Group Ltd (GWIN) reported a large loss for 2015 because of write-offs relating to the termination of contracts with its former manufacturing partner. The plan is to keep design and sales in-house but outsource production. There may also be opportunities for joint production development with other companies. This will reduce the company’s working capital requirements. There was cash of RMB1.3m in the bank at the end of 2015 but there are also shareholder loans of RMB12.6m.
Diversified Gas & Oil (DOIL) has raised a further £420,000, which is part of the additional £3.5m it wants to raise from the issue of 8.5% unsecured bonds. In 2015, revenues fell from $7.36m to $6.3m due to the lower oil price and there was a cash outflow from operations of $3.93m. The company continues to acquire oil and gas assets.
AIM
Constellation Software Inc has made a bid approach to Bond International Software (BDI) following the ending of a standstill agreement late last year. The potential offer price is 105p a share and Bond is still considering its options. Last month, Bond sold Strictly Education for £11.3m – £7m paid immediately and £4.3m to be paid within six months. The cash will be used to pay off borrowings, which were £5.9m. Bond had cash in the bank so this will have gone up following the transaction and there were plans to distribute some of the cash to shareholders. It was after this disposal was announced that Constellation converted non-voting shares and this gave it 29.9% of Bond. Constellation appears to have made the bid approach at this time so that it can retain the cash.
Air filtration and clean air equipment supplier MayAir (MAYA) has secured new contracts worth a total of $22.8m. The majority of this work will come from the installation of clean room equipment for two customers. There is also a contract to supply air filtration equipment for office buildings. The majority of these revenues will be generated this year. This is good news because a large contract was coming to an end. In 2015, MayAir’s revenues were $63.6m. Former broker Mirabaud forecast 2016 revenues of $75.5m. Cantor Fitzgerald has been appointed broker to the company.
Life sciences software provider Instem (INS) has acquired regulatory information management systems supplier Samarind for up to £2.5m and this has led to a profit upgrade. House broker N+1 Singer has increased its 2016 earnings per share forecast by 5% to 10.4p and the 2017 figure by 14% to 13p. Samarind adds post-marketing services to Instem’s existing regulatory reporting software. Two-thirds of Samarind’s revenues of £1.2m are recurring and most of the customer base is new to Instem.
Daily Internet (DAIP) moved into profit in the year to March 2016. Revenues grew by 22% to £4.76m and a loss of £140,000 was turned into a profit of £250,000. The managed hosting and internet services provider has been reducing its cost base and the benefits are yet to show through. There was £650,000 generated from operating activities and net cash was £206,000, although there is still potential contingent consideration of £435,000.
Building services provider Northern Bear (NTBR) says its net debt fell in the year to March 2016 and it intends to increase its dividend. Last year, net debt was £4.5m and the dividend was 1.5p a share, which was well covered by earnings of 8.5p a share. Earnings are set to be flat this year despite problematic weather conditions but the increased dividend should still be well covered. Reduced finance costs offset the effect of lower revenues.
Kefi Minerals (KEFI) says that it has reduced the funding requirements for the Tulu Kapi gold project from $145m to $130m following further refinements to the project and reductions in interest costs. At a gold price of $1,250/ounce, Kefi expects to generate $173m of cash in the first three years of production. All-in sustaining costs are $746/ounce. This is based on contract open pit mining and total production of 980,000 ounces of gold over ten years.
MAIN MARKET
Specialist electronics supplier Acal (ACL) reported underlying revenue growth of 3% in the year to March 2016. Including acquisitions, revenues rose from £271.1m to £297.2m – it would have been higher at constant exchange rates – and improved margins meant that pre-tax profit jumped from £11.8m to £14.4m. Trading conditions are not easy and this is likely to continue to be true for the rest of the first half although an improvement is expected later in the year.
ANDREW HORE