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Quoted Micro 21 October 2024
AQUIS STOCK EXCHANGE
ProBiotix Health (PBX) has sent out a circular for the requisitioned general meeting on 1 November. The meeting has been requisitioned by Seneca Partners and related investors that hold 5.46% in total. Seneca Partners is also an investor in AIM-quoted OptiBiotix Health (LON: OPTI), which is also unhappy with the current management, but a relationship agreement means that it could not requisition a general meeting. OptiBiotix Health and related individuals own 37.95% and will vote in favour of the resolutions. ProBiotix Health wants to block these shares from being voted. The first resolution is to remove the chief executive Steen Andersen and the second is to remove non-exec Frederik Bruhn-Petersen, whose firm recently subscribed for shares, a funding that OptiBiotix Health was unhappy about. Seneca Partners and OptiBiotix Health are also unhappy that the chief executive wanted to leave the Aquis Stock Exchange.
Marula Mining (MARU) is finalising negotiations to establish a new joint venture with a Chinese battery manufacturer and lithium offtake partner at the Blesburg lithium and tantalum mine. This would be for a lithium acid leaching processing plant, which could be commissioned by next summer. This will use spodumene from the mine and could produce 2,000 tonnes of high-grade lithium product each year. A subscription of £750,000, which comes through the issue of 15 million shares at 5p each via the AUO Commercial Brokerage LLC subscription agreement, will be used to fund the installation of an ore sorter at Blesburg and the costs of other projects. Gathoni Muchai Investments, where Marula Mining board member Jason Brewer is a director, bought 430,000 shares at 5.96p each.
At the end of the three months to September 2024, Arbuthnot Banking (ARBB) customer deposit balances were £3.8bn and customer loans £2.5bn. Funds under management and administration have grown 18% to more than £2bn in the nine months to September 2024. Arbuthnot Banking has completed its move to new offices in the City of London. Management is assessing the proposed new capital rules and deciding if strategy changes will be required. The Budget could also affect strategy.
Substrate Artificial Intelligence (SAI) intends to leave the Aquis Stock Exchange, although it will remain on the BME growth market in Spain. The cancellation of trading on Aquis will happen on 15 November.
Invinity Energy Systems (IES) is extending the expiry date of the 8.67 million options, exercisable at 175p/share, held by Gamesa Electric to 10 May 2025. Employee share options will be extended until 21 November 2029.
Mendell Helium (MDH) has agreed to sell its plant-based health and wellness business to Orsus Therapeutics, which will leave the seller with a 28% stake plus six million warrants in the buyer. This is conditional on shareholder approval. The Orsus Therapeutics shares may be distributed to Mendell Helium shareholders. Mendell Helium has an option to acquire Kansas-focused M3 Helium.
Inqo Investments (INQO) has made an investment in Empower Clean Cooking. Uganda-based Empower produces biomass pellets for cooking fuel.
Vehicle electrification technology developer Equipmake (EQIP) is supplying its zero emission drivetrain for use in Textron Safeaero 220 airside de-icing vehicles. There were successful trials earlier in the year.
Former Made Tech (MTEC) finance director Deborah Lovegrove has taken on the same role at All Things Considered (ATC).
AIM
Pulsar Helium Inc (PLSR) shares were already trading on TSX-V and the OTCQB Venture Market and the additional cash raised by coming to AIM on 18 October and raising £3.875m at 25p/share. This will fund further exploration in of the Topaz helium project in northern Minnesota, close to the Canadian border. So far, an appraisal well has been drilled and this confirmed the presence of helium. This will be drilled deeper. There were 1.47 million shares traded on the first day. Having opened on 29p the shares closed the day at 27.5p.
Mothercare (MTC) shares returned from suspension following the 2023-24 results publication and refinancing. There is a new £8m two-year loan facility from Gordon Brothers, which receives 43.4 million warrants exercisable at 8.5p/share. There is also a joint venture with Reliance Brands, which will acquire 51% for £16m, covering the Indian sub-continent. In the year to March 2024, underlying pre-tax profit dipped from £3.4m to £3.1m. Overall revenues continue to decline, and Cavendish expects a small loss this year.
Joshua Alliance is offering 40p/share in cash for each share in N Brown Group (BWNG). The share price has not been this high since February 2023. The Alliance family and related parties already own 53.4% of N Brown. The bid values the fashion brands company at £191m. The chief executive and finance director of N Brown will elect for a share alternative.
Motor dealer Vertu Motors (VTU) had a strong September sales period, and it continues to outperform the sector, particularly in electric vehicle sales. Strong aftersales business and a stabilised second hand car market means that the outlook is positive. In the six months to August 2024, revenues were 3% ahead at £2.49bn. Full year revenues are expected to be flat and pre-tax profit slightly higher at £38m. NAV of 112.8p/share is forecast. A further £3m share buy back is planned.
Weak interior design markets, particularly in the UK, hit interim the figures of Sanderson Design Group (SDG). The timing of licensing revenues exacerbated the downturn in underlying pre-tax profit from £6.8m to £2.2m. The dividend has been reduced by one-third to 0.5p/share. Net cash fell to £9.6m at the end of July 2024.Trading continues to weaken with a 10% downturn in revenues so far in this financial year. The aftermath of the UK Budget and the US election could determine the full year outcome. Investec has reduced its pre-tax profit forecast by 8% to £7.5m, down from £12.2m last year.
Digital mental health services provider Kooth (KOO) says the State of Pennsylvania has terminated its contract with the AIM company. The contract started on 11 October 2022 and the end date was extended from June 2024 to June 2025. However, there is a right to terminate with a 30-day notice period. Kooth says that it was negotiating a new contract, and it is unsure what the status of ongoing work will be. When it was announced, the contract was said to be worth $3m in its pilot year.
Approval for further development of the Wressle field in Lincolnshire has been revoked, because of a legal challenge that greenhouse gas emissions were not taken into account in the original decision. Union Jack Oil (UJO) has a 40% interest in the Wressle development and Europa Oil & Gas (EOG) owns 30%. A revised application for Wressle can be made with additional data on emissions. The existing production continues.
Executive search company Norman Broadbent (NBB) says third quarter revenues are 16% lower than last year at £2.7m. Even so, it was the strongest quarter of the year. September was particularly strong.
CloudCoCo (CLCO) is selling its managed IT services business for £9.2m. This will discharge liabilities, including the MXC loan notes, and leave cash of £950,000. If the sale does not go ahead management will need to consider if there is a future for the group. There are also discussions concerning the sale of the Connect business. The focus will be on the product reseller business.
Decision making software provider ActiveOps (AOM) grew first half revenues by 9% to £14.3m. Annualised recurring revenues are £26.2m. Net revenue retention is 1085. There is cash of £13.4m. Demand is being driven by organisations needing to reduce the cost base. Investment in sales will pay off next year.
Iodine supplier Iofina (IOF) is on course to meet iodine production guidance for this year. There was 163.9 metric tonnes produced in the third quarter. Iodine prices have been higher than in the first half when they were $66.84/kg.
Armadale Capital (ACP) proposes a cancellation of the AIM quotation because it believes that being public does not benefit the company because of the costs. Armadale Capital needs to reduce the cash burn and sell non-core assets. The resources company can be more flexible as a private company. A general meeting will be held on 1 November.
Emmerson (EML) says that the regional authority in Morocco have made an unfavourable environmental recommendation relating to the Khemisset potash project. The full decision is not yet available. Emmerson had previously appealed against the regional authority’s decision not to approve the project under environmental grounds.
MAIN MARKET
Online travel hostel agency Hostelworld (HSW) has moved into a net cash position and trading is in line with expectations even though there has been a small fall in revenues in the nine months to September 2024 due to lower average booking values. Direct marketing costs are down from 51% of revenues to 46%, while operating costs are also lower. Four-fifths of bookings are from social media. Capital allocation policy is being assessed.
Kitchenware retailer ProCook Group (PROC) says second quarter trading shows it is outperforming the market. Interim revenues are 8% ahead at £28.3m with like-for-like revenues 4% higher. The fastest growth is in ecommerce, helped by the relaunch on Amazon, but retail is also recovering. Higher inventory levels meant that net debt has moved up to £4.2m.
Property investor Town Centre Securities (TOWN) is no longer a REIT. That means that there is more flexibility for the business. EPRA net tangible assets slipped 2.5% to 277p/share at the end of June 2024. The loan to value ratio is 50.8%. The final dividend is 2.5p/share.
The space sector is attracting more investment and Seraphim Space Investment Trust (SSIT) will benefit. In the year to June 2024, the NAV improved from 92.9p/share to 96.2p/share, helped by share buy backs. Many of the investment portfolio are reaching maturity and Astroscale has floated on the Tokyo Stock Exchange.
Shell company Dukemount Capital (DKE) has raised £98,500 from a share issue at 0.025p/share and £51,500 from convertible loan notes with the same conversion price. Loans were previously converted into shares and £300,000 was raised earlier in the year at 0.04p/share. Th outstanding warrants are being repriced to 0.0375p. Richard Edwards has joined the board, and he owns one-quarter of the company.
Andrew Hore
Quoted Micro 10 May 2024
AQUIS STOCK EXCHANGE
Time to ACT is planning to join the Aquis Stock Exchange later this month and it has launched a fundraising ahead of the flotation. The flotation will take place even if there is no money raised. Time to ACT plans to develop a group of engineering-based energy transition businesses. Middlesborough-based Time to ACT has two subsidiaries. Diffusion Alloys is a long-established diffusion coating business. The technology provides an intermetallic layer that protects metal components at high temperatures. GreenSpur is a much newer business that is developing direct drive generator technology for use in wind power that does not require rare earths for magnets. The Winterflood Retail Access Platform is being used to raise up to £1m. The issue price and closing date have yet to be announced. Investors have to apply for shares via a broker. The minimum subscription is £100.
Cykel AI (CYK) has agreed a bid from standard listed Mustang Energy (MUST). The offer is 1.911 Mustang Energy shares for each Cykel AI share. Both companies’ shares have been suspended since 17 January. The Mustang Energy suspension price was 30.6p, but the bid is based on a much lower share price valuing the company, which has net liabilities, at £1m. That values the bid at 9.37p/share and Cykel AI is valued at £19.2m. Cykel AI is developing artificial intelligence products.
Newbury Racecourse (NYR) increased 2023 revenues by 9% to £19m and reported pre-tax profit improved from £130,000 to £720,000. However, there was a £700,000 exceptional gain relating to the release of a provision included. Cost increases reduced underlying profit. Raceday attendances fell from 141,000 to 130,000. The nursery has increased capacity by 18%. Shaun Hinds will become chief executive on 3 June.
Silverwood Brands (SLWD) executive director acquired 100,000 shares at 20p following the restoration of trading at the beginning of May. The share price recovered by 48.5% to 24.5p, but it is still not back to its suspension price.
Marula Mining (MARU) has appointed a new mine manager at the Larisoro manganese mine in Kenya. Bernard Kiprotich has five years of mining experience in Kenya. Marula Mining is investing in the established Larisoro manganese mining operation by securing a 60% commercial interest with an option to increase it to 70%. There are three shallow open pits. The purchase price is £300,000 satisfied by the issue of 2.4 million shares. Marula Mining will provide investment of $1.5m for equipment to enable production to be increased.
Essentially Group (ESSN) has completed the acquisition of Best Latin Foodstuff Trading for £1.945m in shares at 52.5p each. Catalina Onate, who founded the food importer, has been appointed as an executive director.
Shareholders passed resolutions at the AGM of Supernova Digital Assets (SOL), including a cancelation of the share premium account and authority to buy back shares.
TruSpine Technologies (LON: TSP) chief executive Laurence Strauss has resigned. He was appointed in April 2023.
RentGuarantor Holdings (RGG) raised £35,000 at 274p/share.
AIM
Metallurgical coal company Bens Creek (BEN) says a further court hearing related to the three US operations that are in Chapter 11 bankruptcy protection will be held on 6 June. The court has accepted the proposed Avanti debtor in possession financing and $2m has been drawn down. This provides enough cash until the end of May. The final terms of the facility are being negotiated.
Genedrive (GDR) has raised £2.1m in a placing at 1.5p. This follow’s yesterday evening’s announcement of a fundraising, where the point of care pharmacogenetic testing company wanted to raise £2.5m via a placing. There is also a REX retail offer for up to £3.5m, which closes on 17 May, and a one-for-one open offer that could raise up to £2.1m. If the total amount raised is not at least £6m the fundraising will not go ahead, so a further £3.9m is required. The company’s tests are being commercialised and a direct to consumer strategy pursued in the UK, while there will be distributors in other countries. There will also be investment to improve manufacturing efficiency and to fund regulatory approvals.
Plant Health Care (PHC) generated a 72% increase in revenues to $4.3m in the first four months of 2024. There is cash of $2.3m. The loss could be reduced from $3m to less than $1m this year. A profit is possible in 2025.
Third quarter driver management systems units produced by Seeing Machines (SEE) have gone into 313,662 vehicles, which is 51% higher than the previous quarter. This is more than treble the number in the same period two years and 80% higher than one year previously with more contracts set to contribute. Monitored connections of the Guardian fleet units were 5% higher on the quarter at 59,706.
Push-to-talk and workplace management technology developer Mobile Tornado (MBT) has won a contract through its regional partner to supply technology for a mobile network in the Middle East and Africa, which has more than 50 million customers. Management believes that there should be increasing sales momentum following the deal.
Healthcare services provider Totally (TLY) reassured the market with its latest trading statement. Full year EBITDA was £2.3m, down from £6.9m, and net debt was £800,000 at the end of March 2024. Revenues fell 22% to £106m because of the loss of a contract. Cost reductions and efficiency improvements have offset the tough market. Annualised cost savings of £3.5m are expected.
Bushveld Minerals (BMN) has agreed the conditional disposal of Vanchem to Southern Point Resources Fund 1 for up to $40.6m. The initial consideration is $20.6m. This requires shareholder approval. Southern Point Resources is increasing the interim working capital facility it is providing that is secured on production at Vanchem. This, and a $9m working capital facility, will be offset against the initial consideration and be used to pay creditors. This will leave a cash payment to Bushveld Minerals of $3.5m when the disposal happens. The deferred consideration is based on 25% of distributable free cash flow with a minimum of $1.25m paid for each quarter of the three-year period.
Mothercare (MTC) reported a 13% decline in global system sales last year due to poor trading in the Middle East. Destocking is a problem. There was better trading in the UK and Indonesia. The retailer will improve EBITDA, but Cavendish reduced its forecast EBIDA by 9% to £7m, compared to £6.7m in 2022-23. Refinancing talks continue and a conclusion should reduce the interest bill.
Battery technology developer Ilika (IKA) is raising up to £3.4m at 28p/share to spend on the Goliath solid-state battery. This cash should last at least 12 months. A placing and subscription raised £1.7m and a one-for-26 open offer could raise up to £1.7m more. The open offer closes on 28 May. There will be £750,000 earmarked for the development of the Goliath battery and this supplements the grant assistance obtained. A further £750,000 will be used to increase testing capacity to 0.75MWh/a and for upgrading dry room facilities. Additional cash raised will support further capital expenditure and working capital for Goliath and the Stereax miniature battery.
MAIN MARKET
Packaging manufacturer and distributor Macfarlane Group (MACF) disappointed with its AGM trading statement and lost the majority of the share price gain this year. Prices are falling, but this reflects lower costs, so margins are being maintained. First quarter sales were 9.5% lower, which does reflect a reduction in volumes. There should be improvement in the second half.
Oxford Cannabinoid Technologies (LON: OCTP) plans to cancel the standard listing. Management believes that stockmarket uncertainty is making it difficult to raise cash at an acceptable share price. The development of the drug pipeline will continue. The cancelation date is 6 June.
Andrew Hore
Quoted Micro 25 September 2023
AQUIS STOCK EXCHANGE
Aquis Stock Exchange owner Aquis Exchange (AQX) reported interims showing growth in all four divisions of the group and the Aquis Stock Exchange remains profitable. Group revenues improved from £7.85m to £9.34m, while pre-tax profit rose from £699,000 to £1.15m. Net cash is £13.9m.
Brewer Adnams (ADB) says trading improved in the second quarter and cost savings started to kick in. This partly offset the decline in revenues in the first quarter, but the interim revenues were still slightly lower at £30m. Operating costs and interest charges increased, and the loss trebled to £3.13m. Adnams is taking on new customers, but the average order size has reduced. Trading conditions are uncertain, but the new customer sand listings will help to boost the second half.
Africa-focused battery metals company Marula Mining (MARU) is considering moving to the standard list as an alternative to AIM. Management believes that this would not add any additional time to the process, and it believes that the proposed investment by Q Global Commodities will make Marula Mining large enough to be eligible for the standard list. It is also planning listings on the Nairobi Securities Exchange and the Johannesburg Stock Exchange. Warrants exercised at 4p/share raised £50,000. A shipment of 27.5 tonne high-grade material processed from stockpiles at the Blesberg lithium and tantalum mine in South Africa has been delayed. The offtake agreement with Southern Jade Resources has been terminated and an alternative agreement is being finalised. Additional drilling at Blesberg is progressing and initial assay results should be published in late October.
Apollon Formularies (APOL) has executed a binding letter of intent with Sproutly Canada Inc, who will acquire the assets of the cannabis-based drug discovery company. After completion of due diligence, the assets will be acquired in return for shares equivalent to 49% of Sproutly. The effective valuation is C$7m (£4.2m). Sproutly has to go through audits and other regulatory requirements to become active and trading on the Canadian Stock Exchange.
Fuel additives SulNOx Group (SNOX) says it requires new equity investment from existing and new investors in order to achieve faster and sustainable revenue growth. There would additional industry hires for the board and sales personnel. There will also be increases in stock levels and new products will be developed. The board is seeking shareholder authority to issue new shares. Mohanned Nawaz Haq does not agree with the new strategy and the board recommends voting against his appointment at the AGM on 26 September.
Newbury Racecourse (NYR) improved interim turnover by 3% to £8.03m, but the company fell into loss because gross margins slumped. The nursery increased its contribution, but there were lower attendances at races. An event in July had the highest attendance for four years. Next year will get the full benefits of the media rights deal.
Broker and wealth management company Oberon Investments (OBE) has raised £2.5m via a placing at 3.6p/share and a retail offer could raise a further £500,000. The share price dipped 2.78% to 3.5p. The cash will fund expansion, including the recruitment of revenue generating teams. The Winterflood Retail Access Platform offer has a minimum subscription of £50. Investors can apply for shares via their broker or intermediary and the closing date is 4.30pm on 25 September.
Silverwood Brands (SLWD) has been given an extension of the time to deliver its defence to the legal action by Lush and VSA resigning as corporate adviser and being replaced by Peterhouse. Lush is refusing to recognise the transfer of a 20% stake to Silverwood Brands. VSA Capital (VSA) owns 0.88% of Silverwood Brands and says that the share price slump will hit its interim results to September 2023. It will make the loss larger than expected.
Property investor Ace Liberty and Stone (ALSP) increased net assets by 1% to £34.4m at the end of April 2023. Disposals meant that full year revenues fell 2.5% to £5.56m. There is £6.23m in cash available for investment. No final dividend is declared, partly due to the lack of distributable reserves.
Cadence Minerals (KDNC) investee company Evergreen Lithium has completed the final analysis of its EXOSPHERE BY FLEET Ambient Noise Tomography geophysics survey at Bynoe. Nine pegmatite targets have been identified. Approvals are required for drilling.
Watchstone Group (WTG) had net assets of £7.6m at the end of June 2023, including cash of £8.3m. By 19 September, cash had fallen to £7.6m. The claim against PwC was dismissed by the High Court and Watchstone had to settle legal costs. Canadian legal action continues.
Helium Ventures (HEV) has raised £250,000 at 4p/share. There are plans to move to AIM rather than the standard list, while maintaining the Aquis quotation. It hopes to do this by the end of this year. The potential acquisition of tracking technology company Trackimo is progressing, and Mark Notton has been appointed as its chief executive.
MBH Corporation (M8H) has acquired caravan and motorhome retailers Lincoln Leisure Vehicles and Golden Castle Caravans for an initial £400,000 in cash and £2.58m in loan notes. There will also be share issues totalling £2.24m over the next two years. The companies made an operating profit of £660,000 last year. These businesses will be integrated with the existing caravan and motorhomes operations.
Pharma C investments (PCIL) says that the general meeting scheduled for 27 September will not go ahead because the requisition has been withdrawn. The proposals were to remove Gavin Hilary Sathianathan and appoint Paul Ryan and Noel Lyons to the board.
Medical device developer TruSpine Technologies (TSP) has appointed Victoria Sena and Samuel Ogunsalu to the board. The company is not appealing the disciplinary notice from the Aquis Stock Exchange and the new appointments will improve corporate governance.
SuperSeed Capital (WWW) says that the SuperSeed II LP has sold Garvis, a SaaS company offering language model technology and AI-native demand forecasting. The original investment was in September last year. There was a triple digit IRR on the investment.
Lift Global Ventures (LFT) subsidiary Miriad has been appointed as corporate communications agency to Imperial Diagnostix Laboratories, which plans to float next year. Imperial Diagnostix Laboratories provides point of care testing products and has been granted access to the NHS supply chain.
Wishbone Gold (WSBN) says drilling has started at the Red Setter project in Western Australia. Initial targets are at a shallow depth and the company is seeking broad spreads of mineralisation. Drilling at the Cottesloe prospect reinforces previous findings. Additional drilling will be 50% funded by the Western Australian government’s EIS scheme up to a total of A$220,000.
Invinity Energy Systems (IES) says that Canadian company Elemental Energy has commenced operation of the company’s 8.4MWh Invinity VS3 vanadium flow battery. This is the largest operation so far.
Majestic Corporation (MCJ) reported flat revenues of $13m, while pre-tax profit dipped from $980,000 to $862,000. There was $680,000 generated from operating activities. The metals recycler has $1m in the bank. Rising interest rates have had a negative impact on commodity prices.
EPE Special Opportunities (EO.P) directors and the managing partner of EPIC Investment Partners bought a total of 16,837 shares at 160p each.
Kasei Holdings (KASH) has switched its corporate adviser to VSA.
AIM
International retailer Mothercare (LON: MTC) reported a decline in full year revenues from £82.5m to £73.1m. A fall in admin expenses and interest costs, partly offset this decline, but underlying pre-tax profit still slumped from £8m to £3.4m before restructuring costs. The lack of contribution from Russia was a factor in the lower revenues – this is part of the Alshaya franchise area. Middle East demand remains subdued since Covid. Net debt rose from £9.9m to £12.4m. The loan facility is being renegotiated. The current interest rate is 19.2%. Since the year end, a reduction in pension contributions has been agreed. In the ten years to March 2033 the total contributions will be £34.9m, down from £73.7m in the previous ten years. The revaluation of the pension fund shows a deficit of £35m.
Finsbury Food (FIF) is recommending a 110p/share bid by a company backed by DBAY Advisors valuing the cake maker at £143.4m. There is a non-voting share alternative to the cash bid for eligible investors. The bid is less than ten times prospective earnings. The share price has not been at this level since early 2019.
Renewable electricity supplier Good Energy (GOOD) had a strong first half due to higher tariffs and lower supply costs, but the second half will be tougher. Interim revenues were 46% ahead at £156.1m and the company swung from a loss to a pre-tax profit of £13.1m. The energy services business is losing money as it is being built up. The interim dividend has been raised by one-third to 1p/share. Tariff reductions are happening ahead of falls in supply costs for the company and that will lead to a second half loss, but Good Energy will still be profitable for the full year.
Orcadian Energy (ORCA) announced that it has entered non-binding heads of agreement with a North Sea operator to farm out the Pilot project for a full carry until first oil. Orcadian Energy would retain a 18.75% working interest. The agreement includes the drilling of five subsea wells. Orcadian Energy will receive $100,000 when the agreement is completed, plus $100,000 if it is awarded an additional licence. Field development plan approval would trigger a payment of $3m.
Trading has deteriorated since August at replacement windows supplier Safestyle (SFE) and it is expected to lose £10m in 2023. Order levels are falling short of budget. Net debt could reach £6m at the end of 2023 – the credit facility is £7.5m. Management wants to strengthen the balance sheet.
Harvest Minerals (HMI) reported interims showing a near-doubled loss as demand for fertiliser fell and pricing was lower in the period. The second half sales are normally much greater than in the first half, but they continue to be disappointing. Low crop prices mean that farmers are not investing to boost production. Cash has declined and the company has moved into net debt of £1.4m, partly due to a jump in inventories.
Eqtec (EQT) announced that the Billingham waste-to-energy project is not going ahead. Potential customers have closed facilities and the project is behind schedule. So far, £4m has been invested. There is a possibility of getting some of this cash back. Eqtec is also taking legal action against its partner in the Deeside project, seeking repayment of £4m of loans. The focus is other European markets. Forecast 2023 revenues have been slashed by more than three-quarters.
Scancell (SCLP) reports that early data from the phase II SCOPE study of SCIB1 in combination with checkpoint inhibitors as a treatment for advanced melanoma are positive. Tumour reduction at 13 weeks is 31-94%. This is for a relatively small number of patients, but it does indicate that there is strong potential for the treatment. The second stage of the study has a strong probability of success. This data will be available in the first half of 2024. Potential partners are likely to be interested.
Firering Strategic Minerals (FRG) raised £756,000 at 6.5p/share. This cash will be used to define identified pegmatite targets through a drilling campaign at the Atex lithium-tantalum project in Cote d’Ivoire. Firering Strategic Minerals holds 90% of the company that owns the Atex project. Firering Strategic Minerals also owns 75% of Bri Coltan, which owns the coltan rights for the Atex area. Coltan is composed of tantalum, niobium, iron and manganese. Nine target areas have been identified, including the six newer ones. The latest drilling is planned for the fourth quarter of 2023.
Alien Metals (UFO) says the latest drilling results from the 90% owned Hancock Iron Ore project in Western Australia indicate the potential for the project. There is high-grade mineralisation. The resource estimate will be upgraded.
Digital coupons and loyalty technology provider Eagle Eye (EYE) reported organic growth of 29% last year. International revenues grew strongly as new retailers were added to the service and when they sign up retailers tend to stay with the company. This year, pre-tax profit could improve from £4.3m to £6.2m. The cash pile reached £9.3m at the end of June 2023.
Cosmetics supplier Warpaint London (W7L) is bucking the trend of the consumer sector, where many other companies selling to the public are performing poorly. That is down to the fact that Warpaint London is in the value end of the cosmetics market. It is also adding retailers and benefiting from the international spread of the business. UK interim revenues were 28% ahead, while group revenues were 46% higher.
Structural steel supplier Billington (BILN) significantly improved margins in the first half and it still has a strong order book despite the contraction of the construction sector. This reflects the broad spread of projects being supplied. Revenues were 30% higher at £60.1m and pre-tax profit jumped from £1.3m to £4.59m.
There is not going to be a bid for Kinovo (KINO), which was not going to recommend the 56p/share offer and there was no increase tabled.
MAIN MARKET
Motor dealer Pendragon (PDG) plans to sell its entire core business to North American automotive retailer Lithia Motors for £250m. This would turn Pendragon into a software business and there could be a £240m payout to shareholders, equivalent to 16.5p/share. Lithia Motors would also subscribe £30m for 279.4 million shares and will roll out Pendragon’s Pinewood dealer management software to its existing 50 UK sites. However, there has been a bid approach for the whole company from Sweden-based Hedin Mobile and US transportation company PAG International. The initial 28p/share offer was turned down, but a higher bid of 32p/share is being considered.
First Tin (1SN) still has cash of £7.9m and that is enough to fund the DFS for the Taronga tin project in Australia. The cost of the project could be reduced by using solar power and more efficient processing. The mineral resource estimate has been increased by more than 240% to 133 million tonnes. The Tellerhauser project in Germany hopes to gain a mine permit in the third quarter of 2024.
Shipbroker Braemar (BMS) has reaffirmed that it will make an underlying pre-tax profit of at least £20m for the delayed results for the year to February 2023. The investigation into transactions between 2006 and 2013 is nearing completion. There may be adjustments to previous accounts.
Andrew Hore
Quoted Micro 8 May 2023
AQUIS STOCK EXCHANGE
Four shareholders owning a 19.4% stake have requisitioned a general meeting at TruSpine Technologies (TSP) on 31 May. They want four directors to be removed: Norman Lott, Nikunj Patel, Annabel Schild and Laurence Strauss. The only director they are not seeking to remove is Timothy Evans. They also want three nominees to be voted onto the board, which includes two of the requisitioners Peter Houghton and Todd Michael Cramer, as well as Anthony Swoboda. The board recommends voting against the resolutions. There are also disputes with the inventor of the company’s main technologies and the requisitioners talk about negotiating a new licence.
Music artist management and services provider All Things Considered Group (ATC) reported better than expected 2022 figures and managed to make a £10,000 pre-tax profit. A £300,000 loss had been expected. Stripping the deconsolidated Driift out of the figures, continuing revenues more than doubled from £4.5m to £9.45m. The share of the Driift loss will continue to hold back profit, but Canaccord Genuity forecasts a 2023 pre-tax profit of £200,00. That is on reduced revenues of £7.7m because of the deconsolidation of Driift and the one-off commission for facilitating the Napster reversal deal in 2022.
One Health Group (OHGR), which provides funded medical procedures, says results will be ahead of expectations. There was a 16% increase in patient referrals from the NHS and additional capacity is being brought on stream for weekend operations. New surgical hubs are being planned. Net cash was £3.3m at the end of March 2023.
SulNOx Group (SNOX) has diversified into the demulsification market through developing a product with Cleaner Fuel Solutions in South Africa. The new product reduces the time taken to separate water and oil from toxic waste oil.
Ananda Developments (ANA) says that the highlight of last month was the quality of the cannabis plants grown from second-generation seed genetics. They are better than the plants developed from clones. MRX1 unlicensed medicinal cannabis oil is set to be listed in three medicinal cannabis clinics.
Cadence Minerals (KDNC) says investee company Hastings Technology Metals has hired GR Engineering Services as engineering, procurement and construction contractor for the Yangibana rare earth project. The overall cost is $210m, which is lower than previously estimated. First concentrate delivery should be in the first quarter of 2025.
KR1 (KR1) had net assets of 61.29p a share at the end of March 2023. The income from digital assets was £583,000 during March.
Vulcan Industries (VULC) generated first quarter revenues of £197,000 and the loss was £383,000. The original businesses have been sold and a battery project acquired during March.
Fenikso Ltd (FNK) has received the latest payment of $614,000, which leaves the remaining loan at $49.9m. The next payment is at the beginning of June.
Semper Fortis Esports (SEMP) has changed its corporate adviser and broker to Novum Securities.
AIM
Japan Petroleum Exploration is acquiring a 49.9% stake in the Norway-based subsidiary of Longboat Energy (LBE) in return for a cash injection of $16m, plus a finance facility of $100m. There is a further contingent cash payment of $4m linked to an acquisition. If there is a discovery at Velocette then up to $30m more cash could be injected by the new partner.
Retailer Mothercare (MTC) beat the finnCap EBITDA forecast with an outcome of £6.5m-£7m in the year to March 2023. Excluding Russia, sales improved during the year. There is still destocking going on. The pension deficit has fallen to £39m and there is a full review in the autumn.
Cambridge Cognition (COG) made a small loss in 2022, but the recently acquired Winterlight Labs, which develops machine-learning based voice assessment using free-speech inputs, will significantly increase the loss this year. However, the deal enhances the company’s voice-based technology and provides cross-selling opportunities. Organic revenues are expected to grow by 10% in 2023.
Building and plumbing products distributor Lords Group Trading (LORD) reported better than forecast figures even though they were upgraded in January. The merchanting division grew like-for-like sales by 17%, more than offsetting a like-for-like dip in plumbing and heating revenues due to boiler component shortages. On top of this acquisitions helped revenues grow by 24% to £450m, while pre-tax profit improved from £12.3m to £17.4m. Profit growth is likely to be more modest this year.
Life sciences company Aptamer Group (APTA) says that potential deals are slow in converting into commercial projects and it will require more cash. In the ten months to April 2023, revenues were £1.4m and Liberum has slashed its full year forecast from £5m to £1.8m, down from £4m last year. The monthly cash outflow is £500,000 and costs are being cut. That could cut the cost base to £4.5m. Net debt is expected to be £1m at the end of June 2023 and £2.5m is estimated to be required to be raised to get the company to June 2024.
Supercapacitors designer CAP-XX (CPX) has raised £2.5m at 1.3p a share. Anthony Kongats is stepping down as chief executive, although he has subscribed for new shares. A retail offer that could have raised up to £500,000 generated £180,000. The cash will fund product development and marketing.
Graphite technology developer Versarien (VRS) is raising £532,000 at 1.25p. The cash will pay for commercialisation of products and fund working capital. More cash will be required and the fall in the share price will not help. A new strategic plan will be published in a few weeks and the mature cutting tools business may be sold.
Solgenics (SGN), formerly known as Ncondezi Energy, intends to leave AIM. Management does not feel that the quotation is effective for such a small company with a lack of liquidity, and it wants to focus on the Tete solar project. A working capital loan has been agreed in principle with directors. This represents a recovery on the initial share price decline after non-exec director Scott Fletcher acquired 31.4 million shares, taking his stake to 27.3%.
Argos Resources (ARG) also plans to leave AIM. JHI Associates will acquire the PL001 production licences in the North Falkland Basin in return for 8.47 million shares and £303,500 in cash. This would turn Argos Resources into a cash shell and requires shareholder approval. After settling with creditors, there should be eight million JHI shares to distribute to Argos Resources shareholders. Westmount Energy (WTE) owns 7.2% of JHI and it also owns one million shares in Argos Resources.
The NHS is funding the accelerated implementation of Lipid inCode, which has been developed by GENinCode (GENI). This follows a pilot programme. The funding is part of a strategy to identify one-quarter of patients with familial hypercholesterolaemia. Lipid in Code is faster than existing tests and provides additional data.
MAIN MARKET
Engineer Goodwin (GWIN) is making a tender offer for up to 180,000 shares at £48 each, which is a 25% premium to the previous market price. Qualified shareholders have a guaranteed entitlement to tender 2.34% of their shareholding if they wish to accept the tender.
Lookers (LOOK) is acquiring Chelmsford-based motor dealer Waterhouse Cars. This adds a Volvo dealership in Chelmsford and £2m will be invested in this site. Lookers also plans to invest £2.3m in its existing Colchester Volvo dealership.
National World (NWOR) has bought business information provider Insider Media. It has also acquired the Rotherham Advertiser.
Andrew Hore
Quoted Micro 19 September 2022
AQUIS STOCK EXCHANGE
ProBiotix Health (PBX) has secured a new commercial partner in Asia Pacific. Nutraceutical business Nutraconnect will develop and implement strategies for ProBiotix Health ingredients in Asia Pacific.
IamFire (FIRE) says investee company WeShop Holdings had 23,000 user downloads by the end of August. Transactions increased from 2,633 in July to 5,981 in August. Average spend per transaction has increased to £81. A US launch is planned.
Gunsynd (GUN) is making a further conditional investment of £100,000 in ASX-listed Rincon Resources. The investment is dependent on Rincon Resources shareholder approval.
Fintech investment company Eight Capital Partners (ECP) has generated £1m in fees from Zamaz (ZAMZ), which joined the standard list a fortnight ago. Zamaz believes that its technology platform can help to efficiently build direct to consumer brands via e-commerce. Other Eight Capital Partners revenue have been modest.
Evrima (EVA) says investee company Premium Nickel Resources has created a new metals division.
Spirits brand Rogue Baron (SHNJ) says that a third party has been contacting investor saying it is raising cash for the company, which is not true. Rogue Baron is considering ways of raising further funds.
SulNOx Group (SNOX) has won a new order from Ghana for SulNOxEco fuel conditioner. There is enough to treat six million litres of diesel, which is a larger order than the previous one. New agreements are being discussed in other African countries.
Site works have commenced at the Blesberg lithium and tantalum project in South Africa. Marula Mining (MARU) says mining permits have been applied for.
A company associated with Asimilar Group (ASLR) non-exec director Mark Horrocks has acquired 750,000 shares at 4.1p each, which takes his share interest to 5.27%.
Engineering company Vulcan Industries (VULC) has raised £132,000 at 0.92p a share. Superseed Capital Ltd (WWW) has issued £1m of convertible loan notes to SuperSeed Venture LLP, which is its investment manager. The conversion price is 130p a share.
Barry Hersh is a 9.98% shareholder in Rural Broadband Solutions (RBBS). PEU SA has a 7.56% stake in Eastinco Mining and Exploration (EM.P).
AIM
Churchill China (CHH) had an extremely strong first half in 2022 because of demand for hospitality products. Sales of plates and other products to restaurants and hotels were behind the 73% growth in revenues to £41.4m. Sales of retail products declined as production focused on hospitality products. Churchill China is gaining market share in the UK and internationally. The interim dividend is 57% ahead at 10.5p a share. A full year pre-tax profit of £8.8m is forecast.
New admission Aurrigo International (AURR) has risen a further 9.52% to 57.5p. The transport technology products supplier raised £8m at 48p a share when it joined AIM. The cash will be invested in the aviation technology division and to develop new products.
Broker and administrator Jarvis Securities (JIM) has appointed Ocreus to review systems and controls at its main subsidiary after it ran into trouble with the FCA. This will take between three and six months. Jarvis has voluntarily agreed not to take on new clients from certain existing Model B corporate clients until the systems have been reviewed. The restrictions should not hamper forecast revenues and profit, although the costs of the review could hamper shareholder dividends from Jarvis Securities. This news was announced late on Friday and the share price nearly halved.
Retail brand Joules (JOUL) has ended its talks with retailer NEXT (NEXT) about a cash injection, leaving it with the need to find another source of funding. That is likely to require a share issue.
Baby products retailer Mothercare (MTC) reported revenues falling from £85.8m to £82.8m, but it returned to profit. The figures were at the top end of expectations and the company was cash generative. finnCap forecasts a fall in pre-tax profit from £8m to £1.9m this year. The pension deficit is declining.
TV and film production services provider Facilities by ADF (ADF) had tough comparisons for its interim figures and reported pre-tax profit was lower. Revenues improved from £11.5m to £12.6m, but the lack of large productions and higher overheads since flotation mean that profit was lower. There will be more, and higher value, productions in the second half, so some of the profit shortfall should be offset. Flotation funds are being used to increase the size of the vehicle fleet.
Artisanal Spirits Company (ART) increased membership by 24% in the first half of 2022. This growth was international, and the current membership is around 36,000. Full year revenues are expected to increase from £18.2m to £21.6m. The value of the casks of whisky in stock has increased from £430m to £455m in the latest six month period.
Cyber security services provider Corero Network Security (CNS) improved sales in the first half and growth could accelerate in the second half. Full year revenues are forecast to increase by one-third to $27.9m. Demand for cyber security continues to increase. Corero should breakeven this year.
Strong growth in first half revenues at plant-based polymers developer Itaconix (ITX) means that it is set to double full year revenues to $5.2m. Revenues trebled from cleaning applications. There was $900,000 of net cash at the end of June 2022.
The Property Franchise Group (TPFG) increased interim revenues by 18% to £13.1m and pre-tax profit was 9% higher at £3.8m. The interim dividend was increased by 11% to 4.2p a share. Trading remains strong even though house buying incentives were ended last year.
Building and architecture software supplier Eleco (ELCO) did not surprise the market with the 3% decline in interim revenues to £13.4m, although recurring revenues were 9% higher at £8.2m. This reflects the change to a SaaS model. Pre-tax profit was 23% down at £2.1m due to higher costs.
Ncondezi Energy Ltd (NCCL) has replaced a working capital facility with a convertible loan and more cash is being made available. The shareholder loan repayment cannot be demanded before 30 November 2023.
Shell company Advance Energy (ADV) raised £425,000 at 0.085p a share. There are warrants attached to each new share that are exercisable at 0.13p a share. The cash will enable management to investigate a suitable reverse takeover candidate and fund due diligence. Management is in talks with the majority owner of a European oil and gas company and trading in the shares is suspended. Any deal will be funded with shares and via an earn-out based on production. The suspension will continue until a prospectus is published or the deal does not happen.
Tertiary Minerals (TYM) has signed a technical co-operation agreement with First Quantum Minerals for two copper projects in Zambia – Mukai and Mushima North. Mukai is next door to First Quantum’s Trident project. First Quantum also has interests in the same region as Mushima North. First Quantum will supply historical exploration date for the areas. First Quantum does not have first right of refusal over the projects.
MAIN MARKET
Fintech Asia Ltd (FINA) is seeking fintech acquisitions. This includes mobile banking, digital payments and blockchain. It raised £1.46m at 50p a share, before expenses of £613,000. The cash should finance the operating of the company and investigating potential acquisitions for more than one year. Further share issues will be required when any targets are identified, and deals secured. There were no trades reported on the first two days. The current share price is 55.5p (53p/57p).
Ikigai Ventures Ltd (IKIV) is looking to acquire businesses with a positive social impact strategy, particularly those based in Asia. It has a similar shareholder base to Fintech Asia. Ikigai Ventures raised £2.09m at 50p a share, before expenses of £714,000. That cash should last more than one year. There were no trades reported on the first two days. The current share price is 55.5p (53p/57p).
Innovative materials developer HeiQ (HEIQ) increased interim revenues by 17% to $30.3m and it is making progress with newer products, such as AeoniQ and GrapheneX. Hygiene products generated 43% of total revenues. Service and licence revenues more than trebled. There was $9.5m in the bank at the end of June 2022. Cenkos expects revenues to grow from $57.9m to $69.4m in the full year and grow by a further 10% next year. The 2022 pre-tax profit is expected to be $4.8m.
Andrew Hore
The High Street – Still Alive And Kicking But Online Threat Grows
Marks & Spencer MKS gives a very brief summary of its trading for the 13 weeks to the 31st December. Group sales rose by 5.9% on a reported basis. Food did well with a rise of 5.6% or 0.6% on a like for like basis and continuing to increase its market share. Sales in clothing and home did even better on a like for like basis with a rise of 2.3%. Total like for like sales were up by 1.3%. The high street may still be a battleground but at least Marks emerged unscathed from the most important trading period of the year.
Tesco TSCO claims its first increase in market share since 2011 following strong and sustained progress in its 3rd quarter, covering the 13 weeks to the 26th November, which also produced the 8th consecutive quarter of volume growth. Over the 6 weeks to the 7th January the rise in like for like sales continued with growth of 0.3%, the UK being particularly strong with a rise of 0.7%. Clothes and toys produced over all sales rises of 4.3% and 8.5% respectively. The one weak point was International which produced like for like falls in both the 3rd quarter and over the 6 week Xmas period.
Mothercare MTC showed a return to growth in the UK for the 13 weeks to 7th January with a 1% rise in like for like sales but International sales still has problems with a total fall of 6% in constant currency terms, the day being saved by currency fluctuations which turned that into a rise of 13% in real terms. Online growth was particularly strong with a rise of 5.5% taking online’s percentage of total sales up to some 40% of total sales. Perhaps this is an indication of the future of retailing.
Debenhams DEB Is pleased with what it claims to be a resilient performance, with like for like sales over the 18 weeks to 7th January up by 3.5% or 0.5% on a constant currency basis. Online sales were strong with a rise of 13,9% taking online’s growth over 2 years to more than 25%. The 7 week Xmas period to 7th January produced like for like growth of 5% or 1.7% on a constant currency basis.
ASOS ASC provides more evidence of the growing power of online retailing with growth which dwarfs that of the high street retailers. Total group revenue rose by 30% on a constant currency basis for the 4 months to the end of December. The UK looked positively pedestrian against this with a rise of only 18%, which ASOS nonetheless claims is a strong performance in a more promotional market.
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Mothercare Impacted By Unseasonable Weather.
Mothercare MTC Senior management seems not to understand one of the basic facts of life about the UK, namely that it does not have a climate, it has weather and for much of the year its weather is unseasonable, thoughtlessly providing mini heat waves in February, snow in May and year round excuses for management’s failures.
So MTC goes unthinkingly into the excuses drawer and plucks out unseasonable weather as having impacted it during the quarter to 9th July, when UK sales fell by 2.1% although on a like for like basis they rose by 1.2% after allowing for closures. International sales in actual currencies rose by 5.1% and worldwide sales by 2.7%, after an increase of 2.3% in space. As for the future, MTC says that its vision is clear, except of course when it is foggy in summer.
Supergroup SGP is paying a a final special dividend of 20p per share, on top of the full ordinary dividend of 23.2p after a year of significant progress in which revenue rose by 21%, underlying profit before tax by 16.3% and basic earnings per share by 21.8%. The company exudes with confidence for the future.
Dart DTG is increasing its final dividend from 2.25p. per share to 3.10p making an increase for the full year of 33%. Profiut before tax soared by 159%, basic earnings per share by 169% and group operating profit by 216%
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Mothercare Delivering at Last
Mothercare MTC The turnround in the UK is continuing apace with group underlying profit before tax up by 51% and statutory profit before tax of £9.7m, being the first after four years of losses. Like for like UK sales rose by 3.6%
Internationally the picture is much blacker and having set the UK on a path to growth, the company is now turning its attention to the problems there and intends to export the lessons it has learned at home to bring recovery and profits back to the international side of the business. The aim is to become world leader in its markets and it is many a long year since anybody at Mothercare dared to even dream of that.
Thomas Cook Group TCG claims it has fundamentally changed its attitude to its customers. Not before time many would say. This must be one of the best pieces of news to come out of the travel industry for years where customers seem to be regarded as a necessary evil.
It claims that group revenue for the half year to the end of March rose slightly whereas the figures seem to show that it actually fell – a minor matter in the world of TCG. Both operating loss and loss before tax showed good falls of 13% and 15% respectively. excluding Turkey, summer bookings are up by 6% or if you include Turkey they are down by 5% overall. Bookings for Spain are strong and the US is leading the way with a rose of 29%
Shanks Group SKS. Tough market conditions have not prevented both revenue and profit growth for the year to the end of March. The weak spot was the municipal division which was impacted by unspecified headwinds with the result that trading profit in that division was down 15%.
Trading profit rose by 4% and last years loss of £12.4m was turned into an operating profit of £9.8m and the previous basic loss per share of 4.6p was reduced to 1p. The loss after tax has been substantially reduced from £18.2m to a more acceptable £4m. The company claims it has the vision, strategy and organisation, to deliver growth.
Mitchells & Butler MAB claims strong earnings growth for the half year to 9th April, with profit before tax growing to £83m from last years £75m. and earnings per share up from 14.4p to 18.4p. Total revenue, however, was down by 1.5% and the company admits that there is much to do for it to acclerate its trading performance.
National Grid NG has had a strong year and is raising its dividend by 1.1%. Operating profit for the year to the end of March rose by 6%. profit before tax by 9% and earnings per share by 10%.
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Is Tesco The Xmas Winner ?
Tesco (TSCO) enjoyed a strong Xmas and perhaps surprised many of the pundits, not to to say the opposition, with all round growth as sales rose both at home and abroad. Like for like group sales for the 6 weeks to 9th January rose by 2.1%, even UK like for like sales were up 1.3% and international led the way with a rise of 4.1%.
Home Retail Group HOME admits to a mixed performance over the 18 weeks to the 2nd January but Argos sales rose 0.9% despite reduced store footfall on the high street. Homebase like for like sales were up by 5% but that figure is rather meaningless because total sales fell by 4% as a result of the aggressive store closure plan.
Profit before tax for the year to the end of February is expected to be at the bottom end of market expectations.
Mothercare MTC had a fairly disastrous third quarter on the international front, reflecting economic and currency headwinds for which management is in no way to blame. International sales were down 9.5% in actual currency, over the 13 weeks to the 9th January, whilst UK like for like sales rose by 4.2% following weeding out of weaker stores. UK online won the day with a rise of 11%.
Group worldwide sales fell by 5.5%, double the fall in the previous quarter. Mothercare was another store to get its weather forecasting wrong, so blames the unseasonably wamr weather for having a lot of unsold stock left over for the sales.
Associated Brtish Foods ABF saw Primark sales up by 7% over 16 weeks to 2nd January and group revenue up by 3%.
So in the end it looks like the surprise winner will have been Tesco. It remains to be seen if Tesco can now start regaining market share and clamber its way back up to being number one.
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