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Andrew Hore Quoted Micro 25 November 2019
NEX EXCHANGE
National Milk Records (NMRP) says that revenues in the quarter to September 2019 fell to £5.25m. They were £5.54m in the previous quarter and £6.08m last year, although that was boosted by one-off projects. A cyber-attack hit business, but systems have been restored. Canaccord Genuity has been appointed as corporate adviser.
Western Selection (WESP) has acquired nearly 3.64 million shares in the Bilby (BILB) placing. That has more than doubled the number of shares owned by Western Selection and it owns 10.8% of Bilby, up from 6.66%.
Belvedere Leisure Resorts (www.belvedereleisureresortsplc.com) is expected to gain a quotation for £10m of its 6.25% secured bonds on 29 November. The company is a subsidiary of Belvedere Leisure Park, which owns a site in Dumfries & Galloway with planning permission for a lodge park resort of 444 holiday lodges. The park will be built by Landal GreenParks.
Formerly AIM-quoted SAPO (www.sapoinvest.com), which was known as South African Property Opportunities, plans to join the NEX Growth Market on 2 December. The plan is to use the Isle of Man-based company as a shell to invest in the UK rural broadband market, although Labour plans for the broadband market could affect this strategy. Executive chairman Michael Meyer will own 40.55% of SAPO and three shareholders will own 84.8%.
Bracken Trading (BRAC) has decided to withdrawal is preference shares from NEX trading on 18 December. Trading had started on 9 September. There have not been any trades.
Altona Energy (ANR) is acquiring a petroleum exploration licence application within the Arckaringa Basin in South Australia. This is close to the company’s existing exploration licences. There could be potential for a gasification project. Management has decided not to invest in the potential vanadium investment.
Tectonic Gold (TTAU) says that its subsidiary has received a tax refund of $279,275. Drilling at Specimen Hill shows gold bearing mineralisation in all holes. There are targets for follow-up drilling.
BWA Group (BWAP) has not received £80,000 of the £100,000 subscription funds for convertible loan notes issued when Kings of the North Corp was acquired. Alternative funding is being secured. Vilhjamur Thor Vilhjalmsson, chief executive of 23.75% shareholder SX, has resigned as a director of BWA and been replaced by Mark Billings.
Block Commodities (BLCC) has appointed Ian Tordoff as chief executive. He has experience in the healthcare sector and has been involved in assessing the potential cannabis-based compounds.
DXS International (DXSP) chief executive David Immelman’s wife acquired one million shares at 10p each from Ron Rhodes during September. That takes David Immelman’s interests to 13.3%.
The ten-for-one share consolidation has been approved by World High Life (LIFE) shareholders. Dealings in the new share started on 20 November.
AIM
A competing bid approach led Hanover Acquisition to increase its bid for Brady (BRY) from 10p a share to 18p a share, which values the risk management and commodity software company at £15m. Hanover has bought shares owned by Kestrel and Coltrane Master Fund and these stakes have taken its shareholding to 46.1%, so the bid is mandatory.
Feedback (FDBK) has secured its first pilot study for its Bleepa communications platform that can be used to securely access medical grade images via mobiles and PCs. The Pennine Acute Hospitals NHS Trust will use Bleepa for respiratory requests. Bleepa will be the main focus for Feedback and it offers the potential for significant recurring revenues. Less money will be spent on TexRAD.
Keeping up with tradition Immunodiagnostic Systems Holdings (IDH) released its interims at 4.35pm on Friday. This was the same time as the previous trading statement and earlier than the previous interims which were released at 5.04pm on a Friday. Revenues remain flat and there was a pre-tax loss. Cash was £28.1m at the end of September 2019.
Nick Develin is stepping up from chief operating officer of Naked Wine (WINE) to takeover from Rowan Gormley as chief executive. The company has sold its other operations and is purely an online wine retailer. UK trading ahs been weak, but the US is going well.
Kape (KAPE) is almost doubling its earnings per share by acquiring Private Internet Access, which expands the range of security software the group can offer. The acquisition will cost up to $95.5m in cash and shares, plus debt. Kape will have net debt following the acquisition, but this should be paid down over the next two years.
Litigation finance provider Manolete Partners (MANO) is building up its business having raised cash when it floated at the end of last year. Interim revenues rose by 15% to £7.5m, but most of those revenues were unrealised gains. That meant that there was a cash outflow in the period. This is due to the higher number (and higher value) of cases being taken on and many of these will be completed and generate cash in the second half. Manolete focuses on insolvency cases and this means that they tend to be settled much quicker than ones handled by Burford Capital.
Having failed to secure the financing for its proposed acquisition, Stirling Industries (STRL) is cancelling its AIM quotation and management plans to place the company in liquidation.
First Property (FPO) increased like-for-like interim revenues by 10% to £8.1m. The spare space at CH8 in Warsaw is being filled. The interim dividend has been edged up to 0.46p a share. The underlying NAV is 50.7p a share.
Nostra Terra Oil and Gas (NTOG) has sorted out its interest in Egypt at no cash cost. The stake is being transferred to the operator. The deal is expected to be completed by the end of 2019, although it can be terminated if it is not.
Social video company Brave Bison (BBSN) expects to make a full year loss on reduced revenues of £16m. That is worse than expected. Changing Facebook policies have made trading difficult. Management is trying to reduce the dependence on Facebook. There was £3.8m in the bank at the end of October 2019. Costs are being reduced. Robin Miller will step down as chairman at the end of 2019. CIP Merchant Capital (CIP) recently increased its stake in Brave Bison to 11.7%.
Digital TV software developer Mirada (MIRA) increased underlying revenues by 11% to $5.74m, but it is still losing money. However, contracts are being won with potential for more over the next few months. Net debt has fallen to $3.53m following the sale of Mirada Connect for £2.12m ($2.72m).
City of London Group (CIN) says that its subsidiary Recognise Financial Services has applied to become a bank. The plan is to offer financial services to smaller companies and savings products. The company hopes to be authorised later in 2020, but that may prove optimistic. City of London Group will have to raise cash to finance the development of the bank.
Shareholders took up 10.9% of the open offer shares in Xeros Technology Group (XSG) and this raised £217,000.
A general meeting requisition has been lodged with Plutus PowerGen (PPG) and the intention is to remove all the current directors. They would be replaced with Nicholas Lee, David Horner and Dr Nigel Burton.
Mporium (MPM) has appointed an administrator and the business has been sold to management. There is unlikely to be anything for shareholders.
MAIN MARKET
Semiconductors supplier CML Microsystems (CML) reported a decline in revenues and profit in the six months to September 2019. The storage products revenues fell by nearly one-quarter, while there was a 4% decline in communications revenues. However, an overall improvement on the first half is expected in the second half. Interim pre-tax profit fell from £2.4m to £900,000. A full year pre-tax profit of £2.6m, down from £3m is forecast.
Macfarlane Group (MACF) has increased revenues by 4% in the four months to October 2019. The packaging supplier has reduced overheads to offset price deflation. Full year performance is expected to be better than last year.
Fasteners supplier Trifast (TRI) has increased market share, but that has only partly offset the tough underlying markets. Interim revenues were 2% lower at £103.1m, while underlying pre-tax profit was 8.5% down at £10.6m.
Rainbow Rare Earths (RBW) has acquired ten mining claims in northern Zimbabwe and they cover carbonatite type bodies. The properties were previously explored for phosphates.
Kin + Carta (KCT) has made its first digital transformation acquisition in the form of Colorado-based Spire. The initial payment is $14.8m with a further performance-based payment next February and another after that. The company has raised £13.6m at 89p a share.
Specialist Fund Market-quoted Marwyn Value Investors Ltd (MVI) is returning £5.31m to realisation shareholders. That includes £5.28m from the takeover of BCA Marketplace and a small amount of liquidation proceeds from Gloo Networks. There will be a pro rata redemption of realisation shares. The shares will go ex-redemption on 6 December.
Andrew Hore
Quoted Micro 23 November 2015
ISDX
Blockchain technology investor Coinsilium (COIN) has raised £1.15m of the £1.5m it is seeking via crowdfunding site Seedrs.com. Coinsilium has also raised additional cash via a placing ahead of a potential flotation on ISDX. There are still 39 days to go for the crowdfunding. Coinsilium already has a portfolio of eleven investments. Blockchain technology groups digital transactions into blocks that can be accessed easily and provides a permanent record of transfers of assets. This means that transactions can be verified and reconciled without the need for a centralised third party.
Property investor Ace Liberty & Stone (ALSP) has completed the sale of the remaining units of Telephone House in Sheffield. The property is owned by a 38%-owned associate but it was consolidated in the Ace figures. The latest disposal proceeds were £4m taking the amount raised from the site to £8.1m. Ace will receive £2.2m, which includes a profit of £456,000. This can be reinvested in other properties. The strategy is to acquire properties with short-term tenancies with government or other blue chip tenants. These are properties that can be converted into residential or student accommodation, or other new uses. Once planning is approved then Ace will probably sell them on to developers, although it could choose to develop some sites itself. Dr Abdel-Karim El-Rousstom has bought 2 million shares and Hikmat El-Rousstom 2.91 million shares at 2.75p each. That raised £135,000 for Ace and takes their stakes to 18.7% and 2% respectively.
Online secondary school operator and consultancy Wey Education (WEYP) wants to raise £1.75m as part of a move to AIM on 7 December. The cash will be used to grow the business. At 4.5p (4p/5p) a share, Wey is currently valued at £2m.
GP software provider DXS International (DXSP) says that its revenues have increased by 42% in the five months to September 2015. Annualised revenues are £3.2m. The interims will be published in the middle of December. At 13p (12.5p/13.5p) a share, DXS is valued at £4.3m.
Green Chemicals (GNCP), which is developing cleaner and safer consumer and cleaning products, has decided to withdraw from the ISDX Growth market. The share price slumped from 22.5p to 4.5p on the news. There was one trade during the week at 2p a share. The board is asking shareholders to vote for the withdrawal in order to save £35,000 a year and in the hope that an investor in unquoted companies can be attracted. News will be published on the website (www.greenchemicalsplc.com) and broker Keith Bayley Rogers will provide a matched bargains service for the shares. Earlier this month, IP Group provided a loan facility of up to £1.5m to Green Chemicals. This can be converted into shares. IP Group along with two other associates has a total interest of 29.5%.
Diversified Gas & Oil (DOIL) has raised a further £1m (£990,000 after expenses) through the issue of 8.5% unsecured bonds 2020. This means that there will be £3.2m of unsecured bonds in issue. There should be more than £3m in total to invest in developing the company’s oil and gas assets in Ohio and West Virginia.
AIM
Structural steels supplier Billington Holdings (BILN) is adding additional capacity through the £4.85m acquisition of property and assets five miles away from the company’s Barnsley facility, which is operating at record levels. The purchase will be funded by a £2.5m mortgage and from the company’s cash pile. Capacity will be increased over a two year period as the acquired facilities are adapted to optimise production. The site has long-term tenants which generate annual rents of £400,000. Assuming the deal goes through it should add £200,000 to profit in 2016 before the benefits of the additional capacity show through.
Inland Homes (INL) has sold a major part of the former RAF Stanbridge site to Catalyst Housing Association for £14m. Inland has retained a 0.5 acre retail site pre-let to a major food retailer and another small parcel of land. The disposal will help to underpin the 2015-16 profit expectations of £16m. Inland has invested £1m in a 25% stake in housebuilder Troy Homes. Inland will also be providing a further £2m to Troy in loan notes. Troy is run by former Banner Homes boss Richard Werth. Inland has also secured a £20m revolving credit facility with Barclays, which matures in October 2019. There is scope for a further £10m to be added to the facility.
Property lettings and sales business franchisor Belvoir Lettings (BLV) says that its franchisees have made acquisitions in Southampton and Brighton, which will add network revenues of £250,000. This means that they should add £30,000 to Belvoir’s franchise revenues, plus additional interest income of £10,000 a year from the loans. Belvoir has loaned £118,500 to help finance these acquisitions. In Southampton, lettings and estate agency Langford Charles has been bought, while in Brighton a property portfolio was acquired.
Fifty Four Four Ltd, which is owned by YCO director Charles Birkett, has increased its stake in former AIM company YCO to 71% following its 1p a share bid, which valued the superyacht services provider at £485,000. Fifty Four Four already owned 50.4% prior to the bid but it does not have a high enough stake to compulsorily purchase the rest of the shares. YCO was trading at 7.25p a share prior to the announcement of its intention to leave AIM in May 2012 – it left in July 2012 and re-registered as a private company in 2014. Net cash was £2.46m at the end of 2011 following the disposal of a fuel business.
MAIN MARKET
Specialist Fund Market-listed Marwyn Value Investors Ltd (MVI) has raised £50m at 220p a share with the founders Mark Watts and James Corsellis investing an additional £2m in total. The cash raised will go into the Master Fund, whose portfolio includes BCA Marketplace, Zegona Communications, Gloo Networks and Le Chameau Holdings SAS. There will be a special dividend of 2p a share paid in January and from then on the dividend will be quarterly. Last year’s dividend was 8.255p a share and this will be the minimum total payment in 2016 – not including the January dividend. The disposal of the Entertainment One stake will provide cash to distribute to shareholders. There could also be special dividends following any disposals from the portfolio. In October, Marwyn paid 24.6p a share to investors. Marwyn is trading at a 16% discount to estimated NAV of 256.3p a share.
Dr Qu Li has been appointed as a non-executive director of cash shell Flying Brands Ltd (FBDU) and she will be seeking an acquisition in the area of logistics and/or technology. LCP Consulting (http://www.lcpconsulting.com/) has been taken on to identify an acquisition. LCP has been researching city logistics, including the use of electric vehicles in order to improve air quality. Annual costs are around £70,000 and there was £247,000 in the bank at the end of October. Since then, a further £100,000 has been raised via the issue of convertible loan notes, taking the total issued to £369,800. The new loan notes are convertible at 1.5p a share.
Aminex (AEX) has signed a disposal and farm out agreement for its Tanzania oil and gas assets with AIM-quoted Bowleven. The deal will raise cash of $8.5m and Aminex will receive $5m of shares in Bowleven, which it will have to retain for at least nine months. Bowleven is buying a 25% stake in the Kiliwani North development licence and earning a 50% gross interest in the Ruvuma PSA. Aminex will have a net carry of $10m on Ruvuma activity. Aminex is also entitled to a bonus of $500,000 in cash when drilling is completed on the Ntorya-2 well and $4m in cash or shares when Ruvuma has been in production for at least 30 days. Current partner Solo Oil is entitled to 25% of the net carry and 25% of the bonus for Ruvuma. Aminex will be able to reduce its debt but it remains as operator of the assets with 30.575% in Kilwani North – Solo can purchase a further 6.5% stake from Aminex – and 37.5% of Ruvuma. The deal has to be approved by Aminex shareholders and by Solo.
ANDREW HORE
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