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Andrew Hore – Quoted Micro 15 March 2021
AQUIS STOCK EXCHANGE
Rogue Baron (SHNJ) joined the Aquis Stock Exchange on Friday. The company is a spirits brand developer, and its focus is the Shinju Japanese whisky brand and specialist tequila Copa Imperial Tequila. The idea is to build these and other niche brands to the point where larger drinks companies will want to acquire the brand. There was £755,000 raised at 7p a share. The share price ended the first day of trading at 8p (7p/9p).
Gunsynd (GUN) has already more than trebled the value of its investment In Rogue Baron, which was worth more than £1.8m, including accrued convertible interest, at the time of flotation. Gunsynd holds a 28.5% stake. Chris Akers has increased his stake in Gunsynd from 5.36% to 6.19%.
Sativa Wellness (SWEL) has taken more than £1.1m of bookings for its Covid-19 testing clinic business. This has been achieved by the Bath clinic and a further clinic has opened, plus 13 in-pharmacy and two mobile clinics. There could be 30 clinics by the end of April, ready for the easing of lockdown.
KR1 (KR1) has invested $200,000 into Automata Network’s seed funding round.
IamFire (FIRE) made a loss of £162,000 in the six months to October 2020. During the period, investments were made in WeShop and Bio2pure.
Upper Thames Holdings (UPPT) has net liabilities of £83,000 at the end of 2020 and since then £516,000 has been raised. The board will seek approval to change the company’s name to Valereum Blockchain.
Quetzal Capital (WENP) is raising £3m at 4p a share and issuing enough warrants exercisable at 8p to raise a further £3m. This will help to fund a reverse takeover or investment. NQ Minerals (NQMI) has raised a further £255,000 at 7p a share. Bluebell Investment and Consulting has invested £25,000 in Wheelsure Holdings (WHLP) at 13.5p a share, which represents a 4.9% stake. Altona Rare Earths (ANR) has raised a total of £800,000 at 6.5p a share from placings.
Western Selection (WESP) has increased its stake in Bilby (BILB) by 698,737 shares at an average share price of 35.11p each. This takes the stake to 12.2%.
All Star Minerals (ASMO) has appointed SP Angel as broker.
AIM
AMTE Power (AMTE) raised more than initially expected in the flotation and this should provide the cash required for investment in the battery cells development business. AMTE raised £11.3m at 175p a share. The share price jumped to 233.5p on the first day of dealings. The battery cells nearing commercialisation are aimed at the high-performance vehicles, oil and gas equipment and energy storage markets. There are currently 16 potential clients that products are being developed for.
Engineer Avingtrans (LON: AVG) is raising £35m from the sale of the Peter Brotherhood business that came with the £52.7m acquisition of Hayward Tyler in September 2017. Peter Brotherhood was estimated to be worth £9.3m of that cost. Borrowings will be paid off. Net cash is expected to be £22m at the end of May 2021.
Kape Technologies (KAPE) is acquiring Webselenese for $149.1m. This provides the group with a consumer platform for privacy and security content, which will generate information and data on consumer trends. In 2020, the acquired business generated revenues of $64.5m and EBITDA of $30.7m. In 2021, Kape is expected to increase earnings from 15.8p a share to 25.4p a share.
Billing and customer relationship management software provider Cerillion (CER) has won a Middle East contract worth £5m over five years. The implementation will take up to 18 months.
Getech (GTC) is raising up to £6.25m via a placing and open offer at 22p a share. The cash will be invested in developing hydrogen products and services.
Online merchandising technology provider Attraqt (ATQT) improved its full year revenues by 8% to £21m, helped by an initial contribution from AI firm Aleph. The loss was reduced from £4.4m to £2.6m. Annualised recurring revenues were £21.1m at the end of 2020. A £500,000 loss is forecast for 2021 before a move into profit in 2022.
Cloud-based PCI payment services provider PCI Pal (PCIP) is gaining momentum in the US. In the six months to December 2020, revenues rose by 56% to £3.2m. More of these revenues are coming via channel partners. Total annual contract revenues were 59% ahead at £8.3m. There should be enough cash in the bank to get the company to the point where it is generating cash.
Shoe Zone (SHOE) says that it does not expect to pay a dividend until at least 2025. The footwear retailer expects to continue to lose money this year. The stores are closed at the moment.ch
Online women’s fashion retailer Sosandar (SOS) has agreed to sell a specialist collection of its products through Marks and Spencer (MKS). This follows deals with Next and John Lewis.
Coral Products (CRU) is repaying its £1.6m property mortgage out of the proceeds of its recent disposal. The £2.5m valuation of the Haydock site is expected to be increased in the next accounts. Coral has also repaid £500,000 of its CBIL loan with the other £433,333 likely to be paid before the year-end.
Business restructuring company Begbies Traynor (BEG) is acquiring of David Rubin & Partners for up to £25m. This takes the group’s market share to 12%. There is an initial £12m payable and the rest depends on performance over five years. Begbies raised £22m at 105.5p a share to help finance the deal, which should be immediately earnings enhancing.
Arden has upgraded its Dekel Agri-Vision (DKL) forecasts due to higher crude palm oil and palm kernel oil prices. This means that Arden expects Dekel to be profitable in 2021.
MAIN MARKET
Avation (AVAP) is raising £7.5m at 110p a share and this provides additional cash at a difficult time for the airline industry. NAV was previously 174p a share. Avation could continue to lose money for the next two years Net debt will still be more than $1bn.
Challenger Acquisitions (CHAL) is entering into a deal to acquire Cindrigo Energy, which owns Cindrigo Ltd, the company where a previous offer lapsed. The business is a developer of renewable energy projects using Swedish expertise in waste-to-energy and biomass. The shareholders of the target company will own 96.5% of the enlarged business.
Kanabo (KNB) has signed a production and supply agreement with PharmaCann Polska for cartridges containing Kanabo’s medicinal cannabis formulations. The initial production capacity is up to 36,000 cartridges. FastForward Innovations (FFWD) has sold its stake in Kanabo for a profit of £140,000. FastForward has also sold its Cellular Goods (CBX) for a £54,000 gain.
Argo Blockchain (ARB) has raised £26.8m at 200p a share and this cash will fund the purchase of a further stake in Pluto Digital Assets. The £7.3m investment in Pluto will maintain the Argo stake at 25%. AIM-quoted Pires Investments (PIRI) owns 6.4% of Pluto.
The Financial Reporting Council has started an investigation into the audit of motor dealer Lookers (LOOK) by Deloitte for 2017 and 2018.
Wheaton Precious Metals (WPM) is increasing its first quarterly dividend by 30% to 13 cents a share. The strategy is to pay 30% of average cash generated by operating activities in the previous four quarters.
Pharmaceuticals developer Nuformix (NFX) is raising £1.565m at 2p a share. This cash will finance preclinical studies for the NXP002 inhaled formulation for lung disease and further research and development of formulations. Nuformix is waiting to see whether Oxilio will option the NXP001 cancer treatment. This option expires on 24 March.
Andrew Hore
Alan Green discusses Marks & Spencer #MKS, Severn Trent #SVT, Avacta #AVCT & CVS Group #CVSG on the UK Investor Magazine podcast
Alan Green discusses Marks & Spencer #MKS, Severn Trent #SVT, Avacta #AVCT & CVS Group #CVSG with Jonathan Roy on the UK Investor Magazine podcast
Ian Pollard – M&S #MKS Admits Defeat
Marks & Spencer M&S Bad news for Waitrose, as the the bonds between the two behemoths grow ever closer. with M&S and Ocado announcing a new 50/50 joint venture which is intended to transform online grocery shopping for UK consumers.Significantly the new venture will trade as Ocado.com which must be a clear indication as to who will be holding the reins, although lip service is paid to the M&S brand and its leading food quality and innovation.Of course a major announcement like this can not come without the necessary jargon and the unintended admission. Thus the joint venture is seen as a strategically compelling route to unlock growth for M&S Food – an admission that growth in M&S Food has become blocked with the implication that it has lost its way as any Saturday afternoon shopper can tell. Steve Rowe and Ocado see it as combining the magic of two iconic and much-loved retail brands. We shall see
Taylor Wimpey TW claims 2018 as another strong year which produced record revenues, a very strong start to 2019 and continued strong demand for Wimpey homes. Profit before tax for the year to 31st December rose by 18.9% and basic earnings per share by 18.2%. A total dividend of c.£600 million will be paid in 2019, subject to shareholder approval and confirm the intention to make further material cash returns in 2020 and beyond.
Ted Baker plc TED updates that pre-tax profit for the Year to 26th January has been adversely affected by three non-cash impacts: Foreign exchange movements in the final week of the financial year, is the first. Systems upgrades have allowed the identification of additional costs which arose during the second half but will now provide robust controls to prevent a recurrence; Thirdly a more prudent view has been taken on aged stock, resulting in an unanticipated write-down in value of approximately £5m. Profit before tax is now expected to be in the region of £63m.
Avingtrans AVG Revenue from continuing operations increased from £26.9m. to £47.7m in the half year to the 30th November, whilst adjusted EBITDA from continuing operations more than tripled to £3.6m from £1.1m. Adjusted Profit Before Tax shot up to £1.6m following 2018’s half years loss of £0.1m and the interim dividend is increased by 7.7% to 1.4p per share.
Redde plc REDD Another set of good results showing further growth in earnings for the half year to the 31st December, claims the CEO, as earnings rise by 14.9% and profit before tax by 7.6%. It is anticipated that the second half will be a tougher comparison against the benefits which last years extreme weather, kindly generated for the company. The interim dividend is maintained at 5.5p per share
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Ian Pollard – Can Marks #MKS remain independent?
Marks & Spencer MKS looks like it has definately claimed top position as 2018’s big time Christmas loser. In the 13 weeks to the 29th December International sales collapsed by a frightening 15% which is not surprising when you look firstly at the poor service offered by some of its overseas stores and more importantly the fact that it started a major sales effort weeks before the advent of Christmas, having been forced into an offer of 20% off everything you see. Overall, group sales were down by what must have been a very disappointing 3.9%. Steve Rowe blames well publicised market conditions and then a full menu of management failures plus the combination of reducing consumer confidence, mild weather, Black Friday, and widespread discounting by competitors, all of which he claims made November a very challenging trading period. A list of major failures like that makes Marks future as an independent company, look decidedly dodgy.
Tesco TSCO Enjoyed a strong Xmas in the UK & and Republic of Ireland with Christmas like for like sales sales up by 2.6% and outperforming the UK market in both volume and value terms. This applied in all key categories: food, clothing and general merchandise. In the third quarter the rise was 1.9%. Booker was particularly strong with third quarter sales rising by 11% and Christmas up by 6.7%. In Central Europe claims that the quality of the business is continuing to improve are hardly born out by by the figures which show increasing falls in each quarter as the year progressed. The first quarter showed a fall of 1%, the second 2% and the third 3%.
Asia looked a bit like a disaster area with third quarter sales down by 8% nearly equalling the first quarters 9% but Christmas fighting back strongly with a a decline of only 2.8%. Strangely enough, online like-for-like sales did not enjoy the surge in sales of some of its competitors, with the increase over the Christmas period being a comparatively modest 2.6% over the Christmas period. It looks like Tesco still still knows how to get its shoppers out of their armchairs and into its stores.
Halfords Group HFD The 14-week period to 4 January 2019 was one of overall decline. Every part of the business saw sales fall on a like for like basis except for Autocentres and Travel Solutions. Car maintenance led the way with a drop of 4.6%. Again management sees no fault in itself and drags out the usual suspects, as being responsible for the disappointing performance – mild weather and weak consumer confidence. In fact these two factors have become so important as face savers for Halfords management that the Chief Executive, thinks one mention is not enough and it is worth bringing them in for a second just in case the board and the shareholders did not get the message the first time round.
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Ian Pollard: ABF – A Headline A Day
Associated British Foods ABF Yesterdays headline trumpeted that Primark blamed three periods of unseasonable weather for sales sliding by 2.1% over the year to the 15th September. But today a new day has dawned and brought with it new headlines as the media stands on its head and proclaims that today’s truth is that Primark has in fact delivered a strong performance with sales rising by 1%. Like for like sales in the UK rose by 1.2% where its share of the clothing market grew significantly. Despite suffering in Europe where sales were weak and fell by 4.7%, total sales including those from fifteen new stores in nine countries, grew by 5%
Perhaps George Weston the CEO got it right when he calmly headlined that it had been another year of progress, with strong profits, not only from Primark but from each of its other world beating divisions, grocery, agriculture and ingredients, with only sugar letting the side down. Adjusted profit before tax rose by 5% and earnings per share by 6% whilst the final dividend is increased by a healthy 10% in line with the promises of a strong profit performance made in Septembers update.
Marks & Spencer Group MKS waved its magicians wand and produced a 7.1% increase in profit before tax after revenue which fell by 3.1% in the half year to the 29th September. The company is now going through the first phase of it transformation programme which includes the closure of over 100 stores and the introduction of a” new, very determined and energetic management team” which indicates that the previous management team must have been regarded as somewhat lacking in these qualities. The store closures had their effect on revenue with Clothing & Home down 2.7%, Food down by 0.2% or 2.9% on a like-for-like basis, reflecting tough trading. Looking at the level of their food prices perhaps there is little wonder that trading was tough.
Persimmon PSN “All gone” is the word from Persimmon which admits that at the end of its third quarter on the 6th November it is fully sold up for the current year and forward sales beyond 2018 are 9% up on a year ago. Sales prices remain firm and consumer confidence is described as being resilient.
Dairy Crest Group DCG claims delivery of a good performance in the half year to the 30th September, driven by its two largest brands, Cathedral City and Clover. Profit before tax fell by 88% and basic earnings per share by 89%. Revenue rose by 2% and the interim dividend is to be increased by the same amountBeachfront Houses & Apartments For Sale in Greece http://www.hiddengreece.net
Ian Pollard: Marks & Spencer Group #MKS Writes Its Own Obituary
Marks & Spencer Group MKS – Results for the year to the end of March read like an obituary for what was once a great British retail institution. It matters not where you look, Clothing & Home, Food, International, Marks is in retreat on all fronts, exiting international markets, reducing selling space, and expecting further closures during the current financial year. Even the successes ring hollow, when you examine them. International profits more than doubled but only because they got rid of the loss making bits. They are even reduced to blaming unseasonable weather for impacting trading in the second half. And of course you can not forget that old chestnut, the challenging UK consumer market. Any management which has to blame the consumers, has got serious problems, when it should be blaming itself for failing to live up to the challenges.
Group revenue fell by 0.7% leading to a slump of 62.1% in profit before tax and 77.8% in basic earnings per share. Of course these can be adjusted to make them look better and Marks does not hesitate in so doing. Like for like sales fell in each quarter One can almost hear the sigh of relief as it announces that it will manage to maintain its dividend. Blame is laid on the costs incurred as Marks pursues its transformation plan, “restoring the basics”, which still has a long way to go. It even lists its problems so that shareholders can see what damage management has done and the problems which it has to overcome if it is to survive.
Marks admits it has lost appeal and has to recover it, it needs to refresh its food offer, stop losing market share in younger customers and larger households, its online offer is not competitive and its website is too slow. If a website is slow, that does not happen overnight, it is an indication of a sclerotic management living in the past. This seems to be the year when the past has well and truly caught up with Marks. Will predators soon be circling it ?
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Ian Pollard – Vodafone Reaps The Rewards
Vodafone Group plc VOD has in its third quarter to the 31st December, reaped the rewards for having become what appears to be a sclerotic company whose management has had to seek refuge in jargon and obscurantism, always a sign of problems. India. for example has declined by 32.1% because it could not beat the competition. Later on one learns that Vodafone India merged with Idea Cellular and Vodafones revenue is now excluded from the results. Mud has a clearer consistency, there is a “more for more ” proposition and scale is being gained in “fixed”.
In what appears a desperate attempt to avoid being tied down it has even created a new geographical area which nobody has ever heard of before. No it is not Fantasy land but “other Europe”. Where is that one may ask. My first thought was that it must be the UK after Brexit but it isn’t. Anyway, wherever it is it fell by 24% which perhaps explains why they want to keep its location a secret. The “real” Europe fell by 2.8% , despite rises in the UK of 5.8% and 2.9% in Germany.
Group revenue fell by 3.6% overall, the decline being led by the “growth” regions of Africa Middle East and Asia Pacific. This is described somewhat optimistically as good commercial momentum.
Marks & Spencer plc MKS yesterday announced the closing of up to fourteen stores accompanied by the loss of hundreds of jobs, mostly in the impoverished parts of the country i.e the north.”we have to ensure we have the right offer in the right locations” trumpets the director of retail operations. The only solution which this blinkered executive can come up with is store closures, reduce the locations. Not a word about getting the offer right. Did it never enter her head that there may be nothing wrong with the locations for most of which she will not have any personal responsibility. The real problem could be and probably is with the offer for which she has direct and personal responsibility. Anyway blame the location, at least that way your job will not be in any danger, just those of the unfortunates at the bottom of the pile who will be being made redundant. As long as you keep making and trying to sell highly priced clothing for the middle aged and the elderly, more closures are bound to happen. Only when the name of Marks strikes fear once more in the boardroom of Primark et al will the closures stop. Your successor may come up with the idea of opening some new stores instead of just accepting the steady decline of what was once Britains leading retailer. But to do that, the offer will have to be right.
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Ian Pollard – Marks Trounced By Tesco
Marks & Spencer MKS Brave words from Steve Rowe as he tries to explain away Marks continued decline both at home and abroad. Group third quarter sales for the thirteen weeks to the 30th December fell by 0.1%. In the UK total sales fell by 1.4% with clothing and home down by 2.8% which should not surprise anyone when clothing prices are high and uncompetitive.The decline at home however falls into insignificance compared to the mayhem abroad where international sales collapsed by 9.8%. Rowe describes it as a mixed quarter which must go down as the understatement of the year so far. The international debacle is explained away as being “planned” leaving Marks open to the question as to why they did not plan for international expansion, instead. Nevertheless in the year ahead Marks claims it will be getting its business back on track as its accelerated transformation continues. Brave words indeed, albeit based on this Christmas, somewhat empty sounding.What Marks can not explain away is that it is operating in the same market with the same market conditions as Tesco which has had a highly successful Xmas and third quarter.
Tesco plc TSCO A third quarter rise of 2.3% in like for like sales only exposed the glaring weaknesses in Marks performance. Tesco enjoyed a record Xmas and outperformed the market in sales and volume. UK food sales in the 4 weeks to Christmas Day rose by 3.4% but this was somewhat offset by weakness in general merchandise.. The only other weakness was in Asia where like for like sales fell by 11.1% over 19 weeks as Tesco withdrew from bulk selling in Thailand. As for the coming year the merger with Booker is now expected to complete in March.
Barratt Developments BDEV Gone are the days of heady growth for the UKs largest housebuilder whose forward sales as at the end of December showed a rise of only 2% and whose growth for 2018 is expected to be only modest. Nonetheless the first half performance is described as being strong, supported naturally by the government and by good mortgage availability. Total completions in the 6 months to the 31st December rose but only by 144 units on top of the previous total of 7.180 units. Where Barratts really won was on its average selling price which it managed to increase by 6.5% more than double that of its competitors who have reported recently. and way above the increase in average building costs during the period.
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M&S – Decline In All Sectors Produces Rise of 2%
Marks & Spencer MKS CEO Steve Rowe comes out of his corner fighting with claims that in the half year to the end of September, good progress has been made on the immediate burning issues which he faced a year ago, and that Marks is now a robust and profitable business. Only in Food are there still problems which he will be addressing later in the year. The company, he crows, is ready to accelerate the transformations which have taken place and he produces figures which he appears to hope, will lead people to believe him. International profits have trebled to £60.3m., full price Clothing & Home sales have risen by 5.3% and food revenue is up by 4.4% but all of that rise he admits is due to the opening of new space.
Now it would perhaps be unfair to say that is a load of porkies but the figures which really matter in the view of many, like for like revenue on a constant currency basis, show a somewhat different story which hardly yet justify that fighting stance. The truth is that on a like for like, constant currency basis, decline still prevails and does so in all sectors. Food is down 0.1%, Clothing and Home is down 0.7%, total UK revenue is down by 0.3% and even the much vaunted International business turns out to have declined by 3.1%. To add insult to injury the same table of statistics is used to show that all these falls add up to a rise of 2% in total group revenue. This mathematical sleight of hand is made possible by failing to specify whether that total revenue figure is like for like revenue, on a constant currency basis or what.
Persimmon PSN has enjoyed strong customer activity in the quarter to the 7th November and has now fully sold up for the current year, whilst forward sales reserved beyond 2017 now amount to nearly £1 bn. Not surprisingly in these circumstances pricing has also remained strong.
JD Wetherspoon JDW updates that the new financial year has started positively with sales at a slightly higher level than anticipated. Costs however have been significantly higher than expected. Chairman, Tim Martin, saves most of his update to lambast the media, senior company directors et all for providing completely false information about Brexit and the devastating effect it will have on companies and on the British economy, as a whole. He refers to quotes and articles by Sainsbury and Whitbreads and exposes their arguments as being deliberately misleading and makes the point that they and other majors, already have plans in place in readiness for brexit, deal or no deal and many of them are positively looking for ward to it.
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Marks Surrenders to Sainsbury
Marks & Spencer MKS is giving little away in its first quarter results for the 13 weeks to the 1st July. The subdued tone certainly seems to indicate a surrender to Sainsbury at least for the time being. The quarter did at least see an end to discounting in Clothing & Home, whilst Simply Food openings produced strong growth and food revenue rose by 4.5%. Like for like UK sales however were miserable with Clothing & Home down 1.2% and food down 0.5%, In constant currency terms international revenue for the quarter fell by 4% whilst group revenue rose by 2.7%.
Galliford Try GFRD updates that the year to the end of June has been one of excellent progress and robust market conditions. Underlying results are expected to be strong and the final dividend is expected to be in line with previous guidance.
Page Group PAGE In constant currency terms gross profit for the first half grew by 7.7% to record levels. The UK was bottom of the pile with a fall of 4.5% compared to the Americas which showed a rise of 13.8%. The weakness of sterling was a major factor benefitting the group and adding £28m to gross profits for the half year. In the second quarter growth in France rose to 23% but even this was dwarfed by SE Asia with a rise of 35%
Grafton Group GFTU performed strongly and better than the company expected in the 6 months to the 30th June. Group revenue rose by 9% or 5.7% on a like for like basis and 6.2% on a constant currency basis. However, it is important to note that the company remains cautious in the short term because of uncertainties in the economy and fears that spending on housing may decline because of pressure on real incomes. Housebuilders beware !
Ilika IKA continued development of its new batteries during the year to the 30th April but revenue remained small despite nearly doubling to £1.1m. Losses remained level at £3.5m.