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Andrew Hore – Quoted Micro 10 December 2018
NEX EXCHANGE
TechFinancials Inc (TECH) is developing a blockchain-based sports ticketing business with Footies Tech Ltd. The new company will licence blockchain technology from TechFinancials, which will have a 75% stake in the company. TechFinancials will provide up to $500,000 to the company and this commitment is dependent on a client signing up within three months. The idea is to make the sports club take control of the initial sale and any secondary ticket transactions. Former Liverpool FC chairman Ian Ayre will be chairman of the new company.
Eight Capital Partners (ECP) has invested £60,000 in Pelican House (PHM) at 0.45p a share. Eight Capital will be issued 13.33 million warrants exercisable at 0.45p a share. Eight Capital is appointing John Treacy to the board of Pelican, which is changing its investment strategy from natural resources to sports and leisure.
Crossword Cybersecurity (CCS) has raised £2m at 290p a share and it will move to AIM on 14 December. The share price peaked at 430p in March. Crossword is valued at £13.6m at the placing price. Hargreave Hale AIM VCT has taken a 7.37% stake.
Early Equity (EEQP) is assessing additional investments that fit its strategy. There was £437,000 of cash in the balance sheet at the end of August 2018. The main investment is a 47.1% stake in healthcare products distributor Yicom Global.
Miton has increased its stake in Wheelsure Holdings (WHLP) from 15.5% to 17.8%. DXS International (DXSP) chief executive David Immelman has bought 20,002 shares at 9.9p each, taking his stake to 10.45%.
Welney (WENP) is considering a couple of proposals that can enable the company to move ahead. The loan note holders have agreed not to call in the loans for at least another 12 months. Net liabilities were £268,000 at the end of June 2018.
Block Commodities (BLCC) has launched the Farmer 3.0 (described as an integrated agri-business ecosystem) pilot project, which covers up to 1,000 Ugandan farmers. The plan is to expand the service to up 50,000 farmers.
AIM
Plastics Capital (PLA) has still to see the benefits of its investment in capacity and winning new business. In the six months to September 2018, revenues improved 11% to £40.6m and underlying pre-tax profit recovered from £1.2m to £2.1m. Net debt was £15.7m at the end of September 2018 to £14.5m by March 2019. Cenkos forecasts a 2018-19 profit of £5m, rising to £5.4m next year.
Broker finnCap (FCAP) joined AIM and completed the acquisition of Cavendish Corporate Finance last week. finnCap raised £3.75m at 28p a share.
The People’s Operator (TPOP) has the chance to receive an investment from the owner of LycaMobile. A share capital reorganisation is required before any shares can be issued. Every 2,000 shares will be consolidated into one share. An investment of £1.3m will be in shares (29.9%) and convertible loan notes – convertible at 10p a share.
Evgen Pharam (EVG) says that the final patient in the STEM:SFX-01 trial for metastatic breast cancer will take her last dose by the end of 2018. The final readout for the trial should be in March.
Ceres Power (CWR) has finalised its collaboration with Weichai Power. They will create a fuel cell manufacturing joint venture in China and technology will be licenced to the new venture, which could generate up to £30m in payments. There is also a £9m joint development agreement for range extenders for electric buses. Weichai will invest £28m at 164.5p a share.
Hagai Tal has resigned as chief executive of Taptica International Ltd (TAP) after he was criticised about his actions at a previous company. Rivi Bloch takes over as interim chief executive. The business appears to be changing with revenues not up to expectations but margins improving.
Panther Securities (PNS) is paying a special dividend of 15p a share after what it calls the best year it has experienced. Next year at least 12p a share will be paid.
Woodford has says that it will subscribe £8m in a fundraising for eve Sleep (EVE) and Channel 4 says that it will invest £900,000. Chairman Paul Pindar will invest £1m. Discussions continue with other investors in order to raise the £15m required.
Vianet (VNET) is growing its smart machines operations and it was responsible for the growth in revenues in the first half. The pubs market remains tough and smart zones revenues dipped, but there is the prospect of a large order in the US. Full year profit is expected to improve from £2.7m to £3m. The interim dividend is maintained and the total dividend for the year should be unchanged at 5.7p a share.
Versarien (VRS) has signed a supply agreement to supply a new graphene enhanced polymer range to AECOM. Interim revenues were 19% higher at £5.22m. There was cash of £6.07m at the end of September 2018. There was a £1.1m cash outflow in the six month period.
Omega Diagnostics (ODX) continues to lose money and net debt was £700,000 at the end of September 2018. The £2m overdraft facility should provide enough finance for the company’s needs. The commercialisation of Visitect CD4 is important to long-term progress for the company. CE marking for advance disease should be awarded soon. The timing of approvals and therefore revenues is difficult to predict.
Pebble Beach Systems (PEB) has resolved its dispute with xG Technology Inc over the disposal of its hardware business. No further liabilities are due by either party and the forecast cash balances for Pebble Beach will not be materially different.
Rose Petroleum (ROSE) has agreed an operational plan with the Utah authorities for its acreage in the Paradox Basin and this includes recently acquired acreage. A suitable drilling rig should be available in the first quarter of 2019. The plan is to secure funding for the drilling programme.
Zinc Media Group (ZIN) has appointed Mark Browning, who is currently boss of ITN Productions, as chief executive and he will start in the first half of 2019. He replaces former finance director David Galan, who became full-time chief executive in February.
Adam Formela has stepped down as chief executive of packaging manufacturer Robinson (RBN). Martin McGee has become interim chief executive.
Trading in the shares of MySQUAR (MYSQ) will end on 10 December. Additional cash is required and a sale of assets to a NEX-quoted company in return for shares could happen. The investigation of past financial transactions continues.
Fishing tackle retailer Fishing Republic (FISH) has appointed administrators.
MAIN MARKET
Cryptocurrency mining services provider Argo Blockchain (ARB) estimates that its current annualised revenues are $6.2m (£4.8m). Trading is ahead of expectations. Net cash was £15m at the end of November 2018.
Sand U (SUS) says trading is in line with expectations. There has been a reduction in demand for finance for used cars. This means that the loan portfolio is growing more slowly than expected.
Standard list shell Spinnaker Opportunities (SOP) is evaluating opportunities in the cannabis market.
Andrew Hore
Andrew Hore – Quoted Micro 12 November 2018
NEX EXCHANGE
Crossword Cybersecurity (CCS) plans to raise up to £2.25m prior to a move to AIM at the end of this year. The cash will be invested in sales and marketing, product development and working capital.
Primorus Investments (PRIM) says that investee company Stream TV Networks has secured a deal with Beijing Optical and Electrical, which will use Stream’s 3D display technology in large flat TV and monitor screens. Primorus has invested £1.4m in Engage Technology, which has 75 corporate clients for its construction software and a further 17 that are contracted but not yet live. Revenues are growing more slowly than hoped. Engage is talking with partners and potential corporate investors.
Angelfish Investments (ANGP) is increasing its shareholding in YBOO from 20% to 35% for an investment of £400,000. A working capital loan of up to £1.5m with an annual interest charge of 10%.
Inqo Investments Ltd (INQO) reported an increase in interim revenues from R7.65m to R8.37m and the loss declined from R4.52m and R4.12m. At the end of August 2018, net cash was around R11.5m. The South Africa-based social impact investor generated the majority of its revenues from Kuzuko Lodge with a contribution from Bee Sweet Honey.
KR1 (KR1) says that its investee company Volt Ltd has raised $2m. KR1 has converted loan notes and has a 7.94% in institutional digital asset custodian Volt valued at $1.4m. The initial investment of £200,000 acquired a 5% stake in September 2017.
MetalNRG (MNRG) has completed the acquisition of the Gold Ridge project in Arizona from Winston Gold for £530,000. The final payment is funded by shares at 1.75p each. The project area includes three former producing mines. There is potential for the discovery of further gold mineralisation.
Auxico Resources Canada Inc (AUAG) has raised $315,000 at 20 cents a share. This cash will fund geological work and the evaluation of opportunities in Colombia.
Healthperm Resourcing Ltd (HPR) is changing its name to SG Recruitment Ltd.
AIM
Gresham House (GHE) is acquiring investment manager Livingbridge for an initial £30m. Up to £10m more could be payable depending on performance. This deal will help to widen the customer base and provide product development opportunities. The combined group will have assets under management of more than £2bn. A placing raised £11.7m at 448p a share. The deal is immediately earnings enhancing even before cost savings. Gresham House Energy Storage Fund has raised £100m and will invest £57.2m in a portfolio of energy storage assets in development.
Castleton Technology (CTP) increased interim revenues by one-fifth to £12.9m and there was a 5% improvement in earnings per share. finnCap forecasts an improvement in full year earnings per share from 5.2p to 5.9p. The provider of software and managed services plans to pay a maiden dividend for this financial year.
Transportation software and services provider Tracsis (TRCS) has reported figures in line with recently upgraded forecasts. In the year to July 2018, revenues improved from £34.5m to £39.8m, mainly organic growth, while pre-tax profit rose from £7.6m to £8.5m, helped by a one-fifth increase in software sales. There is £22m in the bank to finance further acquisitions.
AdEPT Technology (ADT) has acquired unified communication services provider ETS Communications for £2.5m less net debt at the end of October 2018. This deal will be immediately earnings enhancing. Thebank facility has been increased to £35m in order to fund further acquisitions.
International benefits insurance provider GBGI Ltd (GBGI) is recommending a $1.515 a share cash offer from Elm Bidco. This values GBGI at $131.8m (£101.6m). There has been modest growth in earnings per share since GBGI floated at 150p a share in February 2018. Adividend of 1.4 cents a share was paid in June.
Myanmar-focused social media platform operator MySQUAR Ltd (MYSQ) is investigating into the use of proceeds of two recent fundraisings. Approximately £900,000 was paid out of company funds to former directors and third parties. Staff are being made redundant and additional cash is required. Trading in the shares is suspended. The nominated adviser SP Angel and joint broker Daniel Stewart have resigned. Piers Pottinger has stepped down as a director.
Floorcoverings manufacturer Victoria (VCP) has reassured investors about trading and the share price has started to recover. Victoria is not issuing a bond to refinance its debt because the potential pricing was unfavourable. Invesco has increased its stake to 22.1% and The Spruce House Partnership has built up a 13.6% stake.
Estate agency Purplebricks (PURP) has grown interim revenues in the UK by one-fifth. Trading in Australia is tough, and it is still early days in the US. Net cash was more than £100m at the end of October 2018.
First Derivatives (FDP) increased its underlying interim pre-tax profit by 15% to £10.6m. The interim dividend was 10% higher at 7.7p a share. The software and consultancy company with the fastest growth coming from licences for Kx software.
URA Holdings (URA) has gained EIS approval for the funding for its proposed reverse takeover of personalised digital entertainment content provider Entertainment AI. Complexities of the deal have been solved and documentation is progressing. URA has until 20 December to complete a reverse takeover.
Interim revenues and pre-tax profit at Best of the Best (BOTB) will be better than expected and this has led to a full year pre-tax profit upgrade from £1.4m to £1.6m, which is the same as the year before. The online competitions operator will be hit by the increase in remote gaming duty from 15% to 21% from October 2019. This will mean that 2019-20 forecasts will have to be reassessed.
Polarean Imaging (POLX) says that its phase III non-inferiority clinical trial of its Xenon polariser is up and running. Enrolment should be completed in the second quarter of 2019. A new order has been received to upgrade the polariser at SickKids Hospital in Toronto.
Remote tracking technology developer Starcom (STAR) has signed a deal with a distributor in North Africa covering Helios Advanced and BIO CAN fuel sensors. This year’s group revenues are expected to improve from $5.4m to $5.9m. Starcom has raised £400,000 at 2p a share.
Broadcast software provider Pebble Beach Systems (PEB) has won two new contracts that will underpin forecasts for 2018 and 2019. The two orders have a total value of £2m.
Zoo Digital (ZOO) reported interims in line with expectations. Revenues were 17% ahead at $14.9m and the main growth has come from dubbing services. The loss was slightly higher at $159,000. A major subtitling customer will increase its demand in the second half. The full year, underlying pre-tax profit is forecast to improve from $500,000 to $1.8m.
Recruitment company Kellan Group (KLN) plans to cancel its AIM quotation and the general meeting vote already has backing from the owners of 70% of the shares. The shares are tightly held and liquidity is limited.
Fastjet (FJET) says that it can continue operating in November, but it will require more cash.
Crawshaw (CRAW) has called in administrators to itself and four subsidiaries. Thirty five stores have closed and 19 are still trading. Administrators have also been appointed to Flowgroup (FLOW) because it could not find a suitable acquisition.
MAIN MARKET
Path Investments (PATH) says it is not proceeding with the farm-in for the Alfeld-Elze II licence having failed to raise the cash it required and reach agreement on the transaction structure. The deal would have led to a move to AIM. Trading in the shares remains suspended.
Beauty and personal care products supplier InnovaDerma (IDP) expects interim revenues to be similar to last year, while full year revenues are expected to increase from £10.7m to £14.4m. finnCap forecasts a rise in pre-tax profit from £700,000 to £1.7m.
Consumer goods supplier UP Global Sourcing (UPGS) reported revenues for the year to July 2018 fell by one-fifth to £87.6m and underlying pre-tax profit decreased from £10.7m to £5.6m. The main decline was due to discount retailers seeking tougher terms and delayed sales to a European retailer. Online sales increased and this helped to maintain margins. Brands include Salter kitchenware and Constellation luggage. The Kleeneze brand is being relaunched. Non-executive chairman Jim McCarthy has acquired 135,000 shares at 39.3p each. Equity Development forecasts a rise in earnings per share from 5.4p to 5.6p, while dividend per share should rise from 2.7p to 2.8p.
Trading in Blockchain Worldwide (BLOC) shares has been suspended ahead of a proposed acquisition of Chorum Group.
Shareholders have agreed to Titon Holdings (TON) moving to AIM on 10 December.
Andrew Hore
Andrew Hore – Quoted Micro 5 November 2018
NEX EXCHANGE
Brewer Shepherd Neame (SHEP) has secured long-term facilities of £50m, which expires in 2023, and a £35m private placement of loan notes with BAE Systems Pensions Fund which lasts for 20 years. These replace existing loans. A revaluation of pub assets has delivered a £24m gain on book value.
Mechanical and electrical services provider Field Systems Designs Holdings (FSD) has benefitted from strong spending in the water sector as Asset Management Plan 6 reaches its mid-point, as well as demand from the energy from waste sector. However, the energy from waste customer’s tough stance has held back group gross margin. In the year to May 2018, revenues improved from £17.2m to £25.9m, but pre-tax profit fell from £839,000 to £625,000. If the defined benefit scheme settlement gain is stripped out, then there is an improvement in profit from £463,000 to £558,000. There is £3.97m in the bank. The current order book is worth £12m.
Coinsilium Group Ltd (COIN) is pushing ahead with Flowstone Capital Ltd, which is a private crypto fund and it has set up Flowstone Management Ltd to manage the fund. Coinsilium has also secured a strategic advisory partnership with LC LITE, which is planning a token generation event to finance the development of a digital letter of credit system for importers and exporters.
Startup Giants (SUG) still had £665,000 in the ban at the end of July 2018. Thee are plans to raise more cash via the event management services provider Exponential Events’ platform.
TechFinancials Inc (TECH) is in talks with blockchain-based sports ticketing platform Footies Tech to establish a new subsidiary to develop a blockchain-based venue management system. The idea is that TechFinancials will own 75% of the company and it would provide finance of up to $500,000 to develop a proof of concept. TechFinancials will licence its technology to the new company for free.
Formerly AIM-quoted Metminco (MNC) has withdrawn from the proposed acquisition of Gunsynd (GUN) investee company Sunshine Minerals after it failed to complete due diligence. Gunsynd says that there are other interested buyers even though the nickel price has fallen since the original announcement about the proposed acquisition.
The chairman and chief executive of DXS International (DXSP) have bought further shares last week. Chairman Bob Sutcliffe bought 18,857 shares at 10.5p each, while chief executive Bob Immelman acquired 19,802 shares at 10p a share which took his stake to 10.4%.
Ananda Investments (ANA) executive director Melissa Sturgess has bought another 500,000 shares at 0.4501p each.
AIM
Gordon Dadds (GOR) is acquiring Ince and Co International LLP and its associates, which will make it the largest quoted law firm. Annual revenues will be more than £110m. The estimated consideration will be £34m, depending on revenues generated in the three years after acquisition. The merged company will be called Ince Gordon Dadds. Share trading remains suspended until the full details of the deal are published.
Watkin Jones (WJG) says that its full year figures will be slightly better than expected. Good progress is being made with the build to rent operations, but the benefits will come in the future. The sale of a client portfolio of the student accommodation management division has led to a termination fee and a share in the profit of the disposal, which totals £4m.
Concepta (CPT) has obtained a CE Mark for its myLotus fertility testing technology. This enables women to test for their optimal level of fertility. The self-test platform has been launched at the Fertility Show in London. Initial sales will be via the company’s own website. It will take time to build up sales and it is likely to be next year when they become more significant. Concepta raised £2m in August so it is well-funded for its current requirements.
Goldplat (GDP) says that first quarter production fell to 6,100 ounces of gold because of problems sourcing raw materials in Ghana and South Africa, but there has been a recovery in the second quarter and it should be able to achieve full year production estimates of 39,5000 ounces of gold. The Kilpesa mine is being put on care and maintenance if a partner cannot be found and that could knock 3,700 ounces off the production figure.
Next Fifteen Communications (NFC) has raised £20m at 475p a share. The PR firm will use some of the cash to finance the acquisition of Activate Marketing Services for an initial $9m in cash. This technology-focused business is data-led and will continue to be operated separately. This is the latest example of Next Fifteen’s strategy of growing its digital marketing operations.
Gama Aviation (GMAA) says that growth has been slower than anticipated in the second half. The main culprits are the US air associate and slower than expected growth at the new Bournemouth ground services facility. This equates to a $3m cut in forecast operating profit for 2018 and the earnings per share forecast has been reduced by 19% to 21.3 cents.
The share price of floorcoverings manufacturer Victoria (VCP) slumped on the back of a warning that margins were coming under pressure. Like-for-like revenue growth was more than 3% in the six months to September 2019, but less profit is being made. Victoria is attempting to refinance its two-year bank facility through the issue of a five-year €450m bond, which has been given a BB minus credit rating by Standard & Poors.
Safestay (SSTY) has acquired a 20-year lease on a site in Vienna. This is currently a hotel and it will be converted into a 234 bed hostel at a cost of less than €300,000. Safestay will have 13 hostels.
Pires Investments (PIRI) had a NAV of £950,000 at its year end. The £200,000 increase was mainly due to investments in SalvaRx and Eco (Atlantic) Oil and Gas.
Imaginatik (IMTK) has launched its six-for-nine open offer to shareholders. This could raise up to £253,000 at 1.1p a share. The closing date is 26 November.
Market research firm System1 Group (SYS1) has declared a maintained interim dividend of 1.1p a share, but the final dividend may be reduced. Interim revenues declined by 5% and pre-tax profit was lower without the £250,000 exceptional credit. That is due to investment in the Ad Ratings business. There was £3.55m in the bank at the end of September 2018.
Mporium (MPM) has signed a deal with BPC Land and Sales Marketing, a services provider to property developers. BPC will use Mporium’s IMPACT technology for digital advertising campaigns. This is a new sector for Mporium.
Biome Technologies (BIOM) has increased nine months revenues by 59% to £7m, which is more than for the whole of 2017. Biome is profitable and it had £2.5m in the bank at the end of September 2018. The main growth has come in the RF Technologies division. The bioplastics business increased its third quarter revenues, but nine months revenues are still lower.
Parity (PTY) has warned that there will be a significant shortfall in profit in 2018 because of the continuing delay of a major contract. WH Ireland has slashed its pre-tax profit forecast from £1.9m to £850,000, suggesting limited profit in the second half.
Meat and delicatessen products retailer Crawshaw (CRAW) is appointing an administrator because it was unable to raise the cash it required.
Elektron Technology (EKT) has increased its nine months revenues from £22.1m to £25.8m and the full year outcome is set to be ahead of expectations. Sight screening technology developer Elektron Eye Technology is expected to move into profit. Net cash was £8.5m at the end of October 2018.
Transportation software and services provider Tracsis (TRCS) has received a renewal and extension of data hosting services and software with a rail client. The contract is worth more than £2m over two years.
More bad news from superyacht painting and maintenance services provider GYG (GYG) as 2018 figures are set to be well below expectations that have already been revised downwards. There will be a full year loss on revenues of €44m. There will be no dividend. Refit projects have been delayed and one shipyard undergoing maintenance. New build contracts have been won for 2019. The order book is worth €31.3m, of which €18.2m relates to 2019.
BlueRock Diamonds (BRD) has raised £626,000 at 0.3p a share with every two new shares coming with a warrant to subscribe for a share at 0.4p. The directors have invested £170,000. The cash will be used to open two of the five kimberlite pipes at the Kareevlei diamond mine in South Africa.
Tern (TERN) has invested a further £1.1m in in virtual reality training and data analysis technology platform developer FRVS.
PhotonStar LED Group (PSL) has appointed Menzies as administrator of its subsidiary PhotonStar LED Ltd. That business generated £1.15m of first half revenues of £1.33m. It also made most of the loss. More cash will be required for the remaining subsidiary.
TomCo Energy (TOM) has raised £100,000 at 8.5p and disposed of its stake in Red Leaf Resources for $133,333, which had no value in the balance sheet. This will take cash resources to £335,000. The field test on the Holliday block has been delayed due to a failure of couplings.
Ascent Resources (AST) is still finding it difficult to obtain the permits it is waiting for from the Slovenian authorities so that it can generate revenues from gas. Ascent is considering taking action in the European Court.
N4 Pharma (N4P) says clinical data suggests that its Nuvec technology is suitable for use with multiple antigens. It has delivered mRNA and pDNA in sufficient levels to generate the required immune response. The results of the next study should be available in the first half of 2019.
Wey Education (WEY) reported good results but WH Ireland has downgraded its forecasts for this year and next year. The broker is being more cautious about international growth prospects and cut the 2018-19 pre-tax profit forecast from £1.95m to £1.31m and the following year’s from £5.2m to £3.3m.
Frontier IP (FIPP) has made its second Portuguese investment. Des Solutio is developing greener versions of chemicals used to make beauty, pharma and personal care products. Frontier IP has taken a 25% stake.
Myanmar-focused social media platform operator MySQUAR Ltd (MYSQ) is raising £600,000 at 0.35p a share. Management is focusing on active users and in the first quarter of this financial year there were 412,338 active users of the mobile games offer and 426,750 media and mobile apps users. Last year’s revenues were $1.84m but they need to be much higher than that.
Property investor Safeland (SAF) has acquired North Downs golf club in Surrey for £1.07m and it will invest in the facilities.
Rose Petroleum (ROSE) says that the US Bureau of Land Management has approved the application for a permit to drill the GV 22-1 well on the Paradox acreage in Utah.
MAIN MARKET
Zotefoams (ZTF) has improved revenues by 16% in the nine months to September 2018. Full year profit is expected to be slightly better than anticipated. HPP sales have nearly doubled due to demand from the footwear and aviation sectors. Capacity is being increased.
Books publisher Quarto Group (QRT) has extended its facilities to the end of August 2020. The bank facility has been reduced. Large shareholders have agreed to provide unsecured and subordinated loans of $13m, repayable on 31 August 2020.
Stem cell services provider WideCells Group (WDC) is restructuring its Wideacademy educational subsidiary and closed its London office. Annualised savings are worth £400,000. Alan Greenberg has stepped down from the board.
Social media investment company Sealand Capital (SCGL) has published its full year figures and subsequent interim results. Trading in the shares has recommenced. The SecureCom business has been sold. Sealand has subscribed for a 55% interest in Guangzhou Ruiyou Information Technologies Co, which is a mobile game distributor. It is also party to a licenced operator agreement of the WeChat advertisement product in the UK and UAE. There was £758,000 in the bank at the end of June 2018.
Gems explorer Shefa Yamim (SEFA) has raised £250,000 at 80p a share. The shares each come with one warrant exercisable at 100p a share.
Dukemount Capital (DKE) has gained planning permission for a minor extension on its second property in north west England.
Andrew Hore
Andrew Hore – Quoted Micro 8 October 2018
NEX EXCHANGE
National Milk Records (NMR) is recommending a dividend of 2.5p a share after it moved from an operating loss of £11.9m to an operating profit of £1.9m in the 12 months to June 2018. If one-offs are stripped out, then the operating profit has improved from £1.1m to £1.9m. Net debt is £1.8m. There has been an improvement in the dairy market over the past year. Demand is increasing for services related to animal welfare and health, as well as for reproduction services.
Coinsilium Group Ltd (COIN) has signed a strategic partnership with Lition Technology, which is developing a new blockchain infrastructure. This will be the first blockchain with deletable data features. A Lition token sale has commenced and the funding target is $25m.
EQE Special Opportunities (ESO) has sold its investment in Process Components for £13.6m and this has added 11.16p a share to EPE’s NAV, which is 216.31p a share.
KR1 (KR1) has sold its remaining Golem tokens for nearly $134,000. They were bought for 1.3 cents each and sold for 22 cents each in less than two years. The remaining Qtum tokens have been sold for $125,000, which is equivalent to more than twenty times the price per token they were acquired for.
Botswana-focused oil and gas company Karoo Energy (KEP) is confident that it will be able to raise the cash it requires before the end of the year. Contax Partners is keen to be involved in a fundraising. There are also plans to move to AIM and gain a listing on the Botswana Stock Exchange.
Via Developments (VIA1) has completed the construction of the Napier House development in Luton and 23 of the 30 apartments have been sold. Cash of £702,000 has been received with a further £3.64m to be paid on completion. The other seven apartments are valued at £1.5m.
Anthony Carr, a new investor, has acquired 1.785 million shares in healthcare IT supplier DXS International (DXSP) at 7p each. That is a 5.07% stake. Director Bob Sutcliffe has acquired 12,960 shares at 7.88p each, which takes his shareholding to 0.96%.
IMC Exploration (IMCP) has raised £120,000 at 1.2p a share and the cash will be used to finance the companies three main projects in Ireland. New IMC chairman Eamonn O’Brien subscribed for 4.34 million shares taking his stake to 2.5%. NQ Minerals (NQMI) has raised £250,000 at 12.5p a share, while convertible loan notes worth £81,000 were converted into shares at 8p each. Imperial Minerals (IMPP) is raising up to £300,000 from an issue of unsecured convertible notes with an annual interest rate of 10%.
AIM
Gooch and Housego (GHH) says trading for the year to September 2018 was in line with guidance. The optical equipment supplier improved its undersea cable equipment revenues in the second half and the industrial sector demand was strong. Acquisitions in aerospace and life sciences will help to offset any cyclicality in the industrial sector. The order book is worth £96.1m.
Avingtrans (AVG) reported slightly better than expected figures. The engineering company has started to reap the benefits of the Hayward Tyler acquisition but there is more to come. Revenues were 247% higher at £78.9m with the acquisition helping gross margin to improve to 25.5%. The underlying pre-tax profit was £2.4m and the total dividend 3.6p a share. A £4.3m profit is forecast for this year, rising to £5.3m in 2019-20.
Telecoms sector marketing services provider Pelatro (PTRO) will offer its loyalty management solution to Telenor’s global operations. The Danateq acquisition has helped Pelatro have the chance to win this work.
Event driven marketing services provider mporium (MPM) has deployed its IMPACT sports syncing technology with two large global advertising networks. This provides access to even more brands and will help to build revenues in order to reduce the loss.
DX (Group) (DX.) reported a reduced loss in the second half but the parcel delivery firm still made a large full year loss. A £4.5m profit is forecast for next year.
Myanmar-focused social media platform operator MySQUAR Ltd (MYSQ) generated revenues of $1.84m in the year to June 2018, with gaming revenues more than offsetting a decline in advisory income. However, second half revenues were barely higher than the first half revenues. Current monthly games revenues are flat. There is $2m in the bank.
MAIN MARKET
Standard list cash shell Trident Resources (TRR) started trading on 1 October after £4m had been raised at 20p a share. Trident is seeking to acquire in the mining sector. Ongoing costs are expected to be £130,000 a year with additional costs for due diligence on potential acquisitions.
Avocet Mining (AVM) says that it has enough cash for the next 12 months, as long as Elliott, which is the company’s largest shareholder, does not ask for its loans of $29.9m to be repaid. Avocet’s only asset is in the Tri-K development.
Flavour and fragrance ingredients supplier Treatt (TET) has done well enough in the second half to offset negative currency movements, so pre-tax profit for the year to September 2018 is in line with expectations. Like-for-like revenues grew by 9%. US manufacturing capacity expansion is on time and the relocation of the UK site is progressing well. The full year figures will be published on 27 November.
Andrew Hore
Andrew Hore – Quoted Micro 25 June 2018
NEX EXCHANGE
Shareholders have agreed to the proposed broadening of investing policy for Sativa Investments (SATI) and the first acquisition under the new policy is George Botanicals. Sativa paid £415,000 in cash and shares for the UK-based wholesaler and distributor of cannaboid medicinal products, including CBD oil. The company is being acquired from the interests of Sativa chief executive Geremy Thomas.
Gas and electricity supplier Good Energy (GOOD) says that this year’s results will be weighted towards the first half because of the cold weather earlier in 2018. There will also be increased investment in the sales team and a digital app in the second half. Good supplies more than 70,000 homes and less than 1% of the business market.
Wishbone Gold (WSBN) nearly doubled its revenues to $8.2m in 2017. There is $257,000 in the bank.
Pelican House Mining (PHM) has bought a 15% stake Mighty Oak Explorations, which has three licences to explore for cobalt and two to explore for lithium in Uganda.
NQ Minerals (NQMI) says the commissioning of plant for the Hellyer project is on course for August. The mine is a few months away from production.
Block Commodities (BLOC) has raised £165,000 at 0.035p a share. The cash will help to finance the launch of a pilot blockchain project in Uganda.
AIM
Alliance Pharma (APH) is acquiring the marketing rights to Nizoral, an anti-dandruff shampoo brand in Asia Pacific, for £60m. Alliance raised £34m at 91p a share. The rights being acquired, which cover 15 countries, generated net sales of £18.5m in 2017. They would have generated pro forma EBITDA of £7.1m.
Shoe retailer Footasylum (FOOT) has followed up the announcement of its exit from the FTSE AIM 100 index with a set of results that mean it is likely to be a long time before it gets back in the AIM 100. Peel Hunt has reduced its 2018-19 pre-tax profit forecast by one-quarter to £5.3m. Footasylum has been hit by discounting and the weak consumer market. Rental costs are higher than expected.
Social housing software and services provider Castleton Technology (CTP) continues to grow sales to new and existing customers. Two-fifths of customers take more than one product. Full year revenues were 15% ahead at £23.3m with organic growth of 13%. Net debt was 30% lower at £6.3m. There is a contracted backlog of £26.8m.
Frontier IP (FIPP) has taken a 24% stake in Cambridge Material Testing, which is developing software and hardware to measure material characteristics of metal components. The non-destructive tests are quick and require small samples.
Northbridge Industrial Services (NBI) has raised £2.5m at 125p a share. Northbridge will use £1.05m to pay the deferred consideration for the Tasman acquisition. This was originally due in January 2016 and has been incurring an annual interest charge of 8%. The rest of the cash will be invested in rental equipment as demand recovers. Gearing will fall below 20%
Rose Petroleum (ROSE) has published a maiden contingent resource for its interests in the Paradox Basin, Utah. The competent persons report shows a net 2C contingent resources of 12.3mmboe with gas accounting for nearly one-quarter of that resource. A post-tax NPV of $86.9m has been estimated. This assumes a 75% success rate for wells drilled and a recovery of up to 550,000 barrels per well. Each horizontal well is expected to cost $7m. These estimates are based on less than one-quarter of Rose’s acreage.
Myanmar-focused social media platform operator MySQUAR Ltd (MYSQ) is acquiring MyPay Myanmar for £1m in cash and 72.5 million shares issued at 1.38p each. An issue of unsecured convertible bonds has raised £2.22m. Bid talks have been terminated.
Touchstone Exploration Inc (TXP) has extended its credit facility for a further year. The $15m facility lasts until November 2022. The existing oil and gas assets in Trinidad are generating cash and this is also helping to fund the drilling of 12 wells this year. Next year, an exploration well will be drilled on the Ortoire block.
Michael Rowan is switching from chairman to chief executive at Active Energy Group (AEG) and the previous chief executive will focus on developing the forest management operations in North America and CoalSwitch in Poland.
Trading in the shares of URA Holdings (URA) has been suspended because it has not completed a reverse takeover. URA has signed heads of agreement to acquire Entertainment AI Ltd, which has developed tagging technology that enables viewers of video clips to purchase items in the video. It also owns the GTChannel, which runs automotive-related channels across YouTube generating revenues from advertising.
Project management services provider Progility (PGY) plans to cancel its AIM quotation. Praxis, which owns 64.75% of the company is backing the move. There is total support from shareholders owning more than 81% of the company so the cancellation is a foregone conclusion. Praxis is offering 55p a share for shares it does not own.
N4 Pharma (N4P) is making good progress with its therapeutic nanoparticle platform Nuvec. There should be results from studies in he fourth quarter. N4 is conducting studies to identify human cell types that are most responsive to Nuvec. The Sildenafil MR Viagra reformulation commenced a proof-of-concept trial in April and the results are expected in August.
Uvenco UK (UVEN) continues to hold discussions with its main creditor following the placing of its vending machine subsidiaries in administration. Those assets were sold for £1.8m and Uvenco is left with net debt of £1.6m.
Industrial equipment distributor Slingsby (HC) (SLNG) says that a stronger April and May means that sales are 1%lower in the first five months of the year. Compared to a 6% shortfall in the first quarter. Pre-tax profit is also slightly lower. Net debt was £1.4m at the end of May 2018.
Duke Royalty Ltd (DUKE) has increased its interim dividend by 17% to 0.7p a share. The dividend will be paid on 12 July.
RA International Group Ltd provides services to remote locations and it wants to raise £18.8m when it joins AIM. In 2017, RA generated revenues of $53.3m and profit of $13.7m, up from $5m the previous year.
MAIN MARKET
Oil and gas explorer Upland Resources Ltd (UPL) has completed a placing raising £3m at 2.5p a share. The cash will help to fund the drilling of a well at Wick in the UK and finance potential ventures in Sarawak and North Africa.
Beauty and personal care products supplier InnovaDerma (IDP) continues to find trading tough and it will report a full year pre-tax profit that is £650,000 lower than expected. Revenues will increase from £8.9m to £11m. finnCap had forecast a 2017-18 pre-tax profit of £2.4m on revenues of £13.8m following the 2016-17 full year figures. Last October, InnovaDerma raised £4.4m at 276p a share and that has helped to shore up the balance sheet.
Stewart and Wright (STE) is offering to buy 21.5% of its share capital at 590p a share as part of the cancellation of its listing. That is a 7% discount to NAV. There has been one trade in the shares so far this year. The property investor has been hit by the downturn in the high street.
Pembridge Resources (PERE) is trying to raise $40m and prior to that there will be a ten-for-one share consolidation. The cash will finance the acquisition of Minto Explorations from Capstone Mining, which will cost $37.5m in cash plus shares that would give Capstone 9.9% of Pembridge. Minto is a copper producer in the Yukon. The deal could be completed by the end of July.
Tom Charlton has increased his stake in North Midland Construction (NMD) from 8.4% to 9.4%.
Andrew Hore
Andrew Hore – Quoted Micro 2 April 2018
NEX EXCHANGE
Sativa Investments (SAPI) joined NEX on 29 March after raising £1.1m at 1p a share. The share price has already reached 3.125p. Sativa has £1.5m in cash that it can invest in businesses involved in medicinal cannabis. The initial focus is Canada.
Capital for Colleagues (CFCP) reported a slight reduction in NAV to 41.5p a share at the end of February 2018. The portfolio includes 17 unquoted employee owned businesses with a value of £5.24m.
NQ Minerals (NQMI) has entered into a three-year, $10m loan facility with a US private equity firm and this will be used to develop the Hellyer mine. The facility has a 12% annual interest charge and it is secured on the company’s assets. NQ has entered into a silver purchase deed with the finance provider and has to sell them 30% of the first 8 million ounces recovered from the Hellyer mine and 10% of the payable silver for the lifetime of mine. The price will be the lower of $6/ounce or 80% of market price.
Gunsynd (GUN) says that investee company Human Brands is acquiring a 10% stake in wine and spirits distributor Milestone Beverages HK Ltd, which can help to increase the distribution coverage of the investee company’s drinks brands. Gunsynd owns 6.18% of Brazil Tungsten Holdings, which has been forced to suspend operations after a fatal accident. The investment is currently valued at £500,000.
Welney (WENP) made a broadly similar interim loss of £37,000 and it has net liabilities of £234,000.
Block Commodities (BLOC) has reduced its interim loss from $1.19m to $782,000.
Angelfish Investments (ANGP) has reached agreement with 4Navitas, which will make a payment to cover the majority of costs incurred when Angelfish was trying to negotiate a joint venture agreement.
Etaireia Investments (ETIP) has raised £50,000 at 0.06p a share.
EPE Special Opportunities (ESO) has sold 50% of its stake in Pharmacy 2U, for double its cost, at the same time as the digital pharmacy services provider raised £40m of new cash.
Walls and Futures REIT (WAFR) has extended the closing date of the one-for-four open offer to raise up to £1.05m at 94p a share from 26 March to 30 April.
AIM
MySQUAR Ltd (MYSQ) slipped out its interim figures at 5.32pm after the market had closed for Easter. They show near-doubled cash outflow from operating activities of $2.22m. There was $68,000 in the bank at the end of 2017. Management is hopeful that the $218,000 of trade receivables at the end of December 2017 can be collected by June. Since then, MySQUAR has issued £2.11m of convertible bonds at 90% of their face value to Atlas Capital Markets Ltd. There are also more than 20 million warrants exercisable at 3.15p a share. There is talk of an acquisition of a mobile payment services business.
Conviviality (CVR) is calling in administrators after a rescue fundraising failed to win the backing of investors.
Publisher Axel Springer is investing £125m in Purplebricks (PURP) and this will give it 11.9% of the estate agency. The shares are being acquired at 360p each and £25m worth of existing shares are being acquired from management. Full year revenues will double but a weak UK market, exacerbated by the weather and potentially by negative publicity. There was £51.7m in the bank at the end of February 2018. The additional cash will enable a faster roll-out in the US and entry into other markets.
Royal Bank of Scotland has bid 120p a share for FreeAgent (FREE) and that values the accounting software provider at £53m. The founders will take shares and have a 23.5% stake in the bid vehicle. FreeAgent floated 18 months ago at 84p a share. At the beginning of 2017, FreeAgent signed a deal with RBS, which offers the company’s SaaS-based software to small business customers. More than 10,000 customers have taken up the software.
Polarean Imaging (POLX) joined AIM on 29 March and raised £3m at 15p a share. Polarean has developed xenon gas-based technology that enables MRI scans to produce better images. Amphion Innovations (AMP) retains a 23.2% stake.
Polemos (PLMO) has withdrawn its general meeting resolutions. The placing and 100-for-one share consolidation will not go ahead for the time being. There could be an open offer and placing at the previously proposed price of 0.01p a share.
Thor Mining (THR) is acquiring 40% of an exploration licence, which has 13 outcropping tungsten deposits and one copper deposit and 100% of a prospective copper exploration licence. Thor is issuing A$550,000 of shares to Rox Resources in payment for these purchases. The 60%-owner of the first licence has the right to match the price offered.
Tracsis (TRCS) increased its interim profit by one-third to £2.4m as revenues grew by 18% to £18.1m. The software division increased its profit and there was a recovery in the traffic and data services division. There is more improvement to come from the latter division. The interim dividend is 17% higher at 0.7p a share. There is £18.5m in the bank. There will be a second half contribution from the rail sector delay repay businesses acquired in February. Progress is being made in selling remote condition monitoring technology in North America.
Internet gaming software supplier GAN (GAN) reported a reduced loss of £4.2m for 2017. There was £2.7m in the bank at the end of 2017 and since then has raised £2m via an unsecured 9% convertible loan note. There could be further fundraisings in order to make the most of the prospects for real money internet gaming in the US.
Inland Homes (INL) increased its adjusted EPRA NAV by 6% to 97.63p a share. Interim pre-tax profit improved from £4.95m to £5.37m. The interim dividend was raised 30% to 0.65p a share. The landbank has been expanded to 7,372 plots.
Altona Energy (ANR) slightly increased its first half loss to £260,000 and there was £690,000 in the bank at the end of 2017. The current focus is conventional coal mining at the Arckaringa coal project in Australia. Altona is assessing less wet coal seams.
RM2 International (RM2) is raising £25.3m at 1p a share, just over 50% after a general meeting and the rest dependent on the reduction of operating costs and commercial launch of new technology, and converting preferred shares into 3.16 billion shares. There are also plans for an open offer to raise around £4.5m. The new cash will be used to retrofit existing pallets with ELIoT track and trace devices and produce new RM2 ELIoT pallets. Former chief executive John Walsh has stepped down from the board, as has Frederic de Mevius. Woodford appears likely to end up owning around two-thirds of RM2. The second tranche is dependent on Woodford agreeing that key performance indicators have been met. Three members of RM2’s management will acquire shares in the placing via a reduction in their salaries over an 18 month period.
STM Group (STM) reported better than expected 2017 and this led to an upgrade for 2018. Last year’s pre-tax profit improved from £2.6m to £4m, helped by an increased provision release from the acquired life book. The underlying pre-tax profit is expected to rise from £3.2m to £4.2m in 2018.
Caledonian Trust (CNN) reported a NAV of 185.7p a share at the end of 2017. This was helped an increase in the valuation of St Margaret’s House, which is in the process of being sold.
The SimplyBiz Group provides regulatory and support services to financial advisers and is set to join AIM on 4 April.
Sosandar (SOS) has gained momentum since floating last year. The online women’s fashion retailer continues to lose money but the customer database has increased nearly ten-fold to 36,328.
NetScientific (NSCI) is running out of money and it needs more by the end of June. A placing and subscription will raise up to £6m at 52.5p a share. The cash will be used to provide additional financial backing for investee companies.
Manx Financial Services (MFX) has acquired Blue Star Business Solutions, which is a broker for IT equipment funding, for an initial £1.5m in cash. This could increase to up to £4m depending on performance.
Connemara Mining (CON) is focusing on three main areas: the Inishowen gold project in Donegal, the Mine River gold project in Wicklow and Wexford and multiple zinc exploration projects. The next exploration is at the 100%-owned Mine River gold project where high grade intersections will be targeted.
Wynnstay Properties (WSP) has increased the value of its investment properties by £1.63m to £30.1m in the year to March 2018. The NAV has increased by 100p a share to more than 770p a share.
Real Good Food (RGD) has agreed a loan note facility of up to £4m with three major shareholders. Longer-term, a share issue will be required.
Vernalis (VER) lost £37.6m in 2017, mainly down to exceptional write-downs and unrealised foreign exchange movements. There was £46m in the bank. US commercial activity should finish by the end of September and that will slow the ongoing cash outflow.
Kestrel has increased its stake in Pebble Beach Systems Group (PEB) from 15.2% to 16.6%. The share price has been on a downward trajectory and borrowings are significant but Kestrel must believe that the software company will survive.
Life science software provider Instem (INS) coupled its 2017 figures with a contract announcement for its SEND software. Revenues were 18% ahead at £21.7m, and that included organic growth of 5%, while pre-tax profit recovered from £500,000 to £1.9m. A further improvement to £2.7m is expected this year.
Feedback (FDBK) has raised £440,000 at 1.25p a share and it will invest in sales and marketing for the TexRAD and Cadran technology, as well as developing a clinical evidence base for TexRAD.
Oracle Power (ORCP) has raised £550,000 at 1.4p a share to provide cash for the company as it moves to financial close for the development of the Thar Block VI lignite coal mine and power plant in the Sindh province in Pakistan.
GoTech Group (GOT) plans to sell its Sportsdata business to Starnevesse for £1. The company was a shell prior to the acquisition of the business in May 2016 and it effectively became a shell again when it stopped supporting the business at the end of 2017. There is £566,000 in the bank and there will be a £100,000 cash payment as part of the settlement of indebtedness to Starnevesse.
Microsaic Systems (MSYS) has signed an agreement with Unimicro Technologies Inc, which will integrate Microsaic’s 4500 MiD mass spectrometry detector into its Capillary Electrophoresis instruments.
Collagen Solutions (COS) is restructuring its New Zealand operations. The plan is to focus on tissue collection and processing and then consolidate collagen production in Glasgow. Annual cost savings should be £200,000 and one-off costs will be £150,000.
Chris Akers has increased its stake in YOLO Leisure (YOLO) from 6.8% to 7.93%.
MAIN MARKET
S&U Group (SUS) reported a one-fifth increase in pre-tax profit to £30.2m. The car finance provider achieved this despite a start-up loss from the bridging finance business Aspen. The total dividend for the year was increased from 91p a share to 105p a share. A rise in pre-tax profit to £35.8m is forecast for this year.
Book publisher Quarto Group Inc (QRT) slumped into loss in 2017, although the underlying pre-tax profit fell from $13.9m to $3.9m. Net debt was $64m. The year end is being changed to March.
Shefa Yamim (SEFA) had NIS6.49m in the bank at the end of 2017 following its flotation. Bulk sampling results for the Kishon Mid-Reach gemstones project have been positive and the processing plant has been upgraded.
Path Investments (PATH) has postponed its exit from the standard list until further notice. The plan is to move to AIM when the proposed oil and gas asset acquisition is made but the timing remains uncertain.
North Midland Construction (NMD) reported a fall in profit in 2017 even though revenues increased from £250.5m to £291.8m. Pre-tax profit more than halved from £2.06m to £1m. That is because the loss on legacy contracts increased from £3.85m to £7.29m. The final dividend is unchanged at 3p a share even though the total dividend is one-third higher at 6p a share.
NCC (NCC) has sold its web performance business for £7.5m. The sale process for the software testing business is continuing.
Andrew Hore
Andrew Hore – Quoted Micro 18 December 2017
NEX EXCHANGE
Wine and beer maker Chapel Down Group (CDGP) has raised £18.53m at 50p a share and could raise up to £1.47m more via a one-for-35 open offer at the same share price. The latest acceptance date is 5 January. Chapel Down will invest in an additional 500 acres of vineyard land and more money will be put into marketing. The family interests of Michael Spencer have invested in the fundraising. Nigel Wray has invested a further £500,000 but his stake has fallen to 16.5%, prior to the open offer. This year’s turnover is expected to be at least £11.6m and management expects growth to accelerate after the additional investment. New gin and vodka brands have been launched and the Ashford brewery should be up and running by the end of 2018.
Ashley House (ASH) has signed a joint venture with Morgan Sindall to develop extra care and supported living housing. This deal sparked a 55% increase in the share price to 14.75p. Morgan Sindall is paying £4m in total for the 50% stake in the joint venture, with £1.5m of this dependent on certain completion factors. It should all be paid by the end of 2018. The Ashley House housing division will complete two existing schemes and then own 50% of the joint venture, which will develop any further schemes. This additional cash will help to accelerate the growth of this part of the business. There is already a pipeline of potential developments. Ashley House will make an interim loss but expects to profitable for the full year.
e-commerce technology provider Netalogue Technologies (NTLP) reduced its interim loss as revenues grew from £317,000 to £479,000. There has been a lower number of larger projects, particularly in the food and drink sector, and Netalogue would have been profitable without the investment in the company’s technical team. A move towards a SaaS-based model could hold back short-term revenues.
AIM-quoted, spread betting business London Capital Group (LCG) has joined the NEX Exchange Growth Market on 15 December. Glio Holdings Ltd owns 78.1% of London Capital.
Early Equity (EEQP) has made two more investments. It has invested £60,000 in TruSpine Technologies Ltd, which plans to join AIM next year. TruSpine has developed the Faci-LOK and Cervi-FAS minimally invasive spine stabilisation devices and the VOSC catheter atherosclerosis treatment product. The plan is to gain FDA authorisation for Faci-LOK next year and then float. TruSpine is valued at £15m. A £35,000 investment in the profitable corporate finance and asset management business Farina Investments (UK) Ltd has been made ahead of a flotation. Early Equity raised £115,000 at 0.6p a share.
Hydro Hotel, Eastbourne (HYDP) has declared an unchanged total dividend of 21p a share for the year to October 2017.
Lombard Capital (LCAP) says that it is progressing towards the issue of an investment bond that will be quoted on a recognised bond market. There was nearly £60,000 in the bank at the end of September 2017.
Coinsilium Group Ltd (COIN) raised £720,000 at 9p a share and this will be used to invest in blockchain companies and expand the company’s own advisory business. Last June, £250,000 was raised at 2.2p a share. Coinsilium has been appointed as an adviser to token generation event of Hdac Technology AG, which is developing payment platforms for connected devices.
Equatorial Mining and Exploration (EM.P) has raised £5,000 at 0.01p a share and issued further shares for convertible loan notes and warrants at the same price. Valiant Investments (VALP) has raised £34,000 at 0.1p a share. Via Developments (VIA1) has issued a further £50,000 of debenture stock.
AIM
Satellites owner Avanti Communications Group (AVN) has revealed a financial restructuring that could put it on a firm footing. Certainly, without this restructuring the outlook would be bleak. The $557m of 2023 loan notes will be converted into two billion shares, while investors in the 2021 loan notes are being asked to accept and extension of the term and lower income. Annual interest charges would still be $36.6m
Best of the Best (BOTB) says that it expects to pay remote gaming duty and this will knock £300,000 from profit this year and £600,000 next year. This year’s pre-tax profit is forecast to decline from £1.5m to £1.4m, with a further fall to £1.2m in 2018-19. Net cash is expected to be £2.6m at the end of April 2018. The company is still claiming £4.5m of VAT so this could provide a cash boost in the future.
Plant Impact (PIM) is suffering continued delays in demand for its Veritas product in Brazil. A new partnership with Albaugh Brazil will commercialise other Plant Impact products in Brazil. This has sparked the decision to consider putting the company up for sale. Cash is running out and a further £7m would need to be raised to keep the company going well into 2019.
Van Elle Holdings (VANL) has defeated the five resolutions proposed by former chairman Michael Ellis at last week’s general meeting.
Recruitment and outsourcing services provider Servoca (SVCA) reported better than expected full year figures. Pre-tax profit improved from £3.5m to £3.9m. Education and healthcare will be the main growth areas.
Evgen Pharma (EVG) is collaborating with King’s College London to examine the use of SFX-01 as a therapy against ischaemic stroke. Multiple doses will be assessed and this will take nine months. This could lead to a clinical trial that might be funded by a charity organisation associated with King’s College.
Range Resources Ltd (RRL) returned to AIM following the reverse takeover of producing oil and gas assets in Trinidad from Trinity Exploration and Production (TRIN).
Defence equipment and services supplier Cohort (CHRT) had a weak first half but it expects to more than make up for that in the second half. There was a mixed performance with some parts of the business finding trading conditions difficult. The order book is worth £132m. Full year pre-tax profit is forecast to improve from £14.5m to £15.4m.
Savannah Resources (SAV) says that it has discovered high-grades and large intercepts in the latest drilling at the Mina do Barroso lithium project. A maiden mineral resource estimated could be announced before the year end with potential for upgrades from further drilling.
Daniel Stewart expects China New Energy (CNEL) to report a jump in pre-tax profit from £400,000 to £2.6m in 2017. The shares are trading on less than four times fully-taxed 2017 prospective earnings. The company constructs bioenergy plants that convert feedstock into ethanol. The most recently reported order book was worth £28.7m with the orders due to be fulfilled in 2017 and 2018. Demand from China is strong and there is also international business.
Coal bed methane projects developer Tlou Energy Ltd (TLOU) has secured a listing on the Botswana Stock Exchange and trading commenced on 13 December. Tlou raised £2.4m at 11p a share.
Synairgen (SNG) has secured a £5m cash injection from a deal with Pharmaxis, which will take over the development of LOXL2 in fibrotic diseases. Synairgen will also receive 17% of any partnering revenues. This compares with £3m invested by Synairgen in LOXL2. The cash will enable Synairgen to fund the phase IIa study for SNG001 for COPD. The trial should be complete by the end of 2018.
New management has turned around the performance of contract disputes and expert witness services provider Driver (DRV) and it moved back into profit last year. Cost savings have been made and the focus is on profitable business rather than just growing revenues. Cash collection is improving with net debt down to £200,000 and there is likely to be net cash of £2m in one year’s time. This year’s revenues are likely to be flat at around £60m but pre-tax profit should improve from £2.5m to £2.7m.
One month after its previous trading statement IDOX (IDOX) says that an internal audit has found that it should not recognise all the revenues that it originally intended to. This will knock £3m off profit for 2016-17. The software company reported its full year figures in December but the attest full year figures have been delayed until February. Chief executive Andrew Riley is away ill and former boss Richard Kellett-Clarke has taken over on a temporary basis.
Abzena (ABZ) reported interims in line with expectations. Growth came from the chemistry and manufacturing businesses. This is a period of capital investment as various parts of the company move to new facilities. The ADC master services agreement with a US biotech will yield at least $5m in services revenues over the next 12 months. This deal is shared between chemistry and manufacturing divisions.
Surface coatings provider Hardide (HDD) is starting to improve its gross margin as demand improves. There is even some signs of improved demand from the oil and gas sector. Even so, Hardide remains loss-making but it still has not gained any orders from Airbus. It raised £2.5m for capital investment earlier this year. A new reactor will be installed in the US in this financial year and another next year.
MAIN MARKET
Titon Holdings (TON) continues to benefit from strong demand for its window ventilation components in South Korea. The majority of profit comes from South Korea and that is where all the growth came from last year as the contributions from the UK and North America fell. In the year to September 2017, revenues were one-fifth ahead at £28m, while pre-tax profit improved from £2.14m to £2.49m. The dividend growth of 20% to 4.2p a share is ahead of earnings per share growth. A pre-tax profit of £2.81m is forecast for this year.
Avation (AVAP) has secured an initial $100m revolving facility to finance the acquisition of aircraft.
Sealand Capital Galaxy Ltd (SCGL) has secured an agreement with AIM-quoted MySQUAR (MYSQ) for the distribution of its games on MySQUAR’s platform and MySQUAR’s games on the Huawei InTouch platform. This is initially a two year deal.
Standard list shell Stranger Holdings (STHP) says that it expects to complete the acquisition of biogas and renewable energy business Alchemy Utilities. A five-year £20m bond is being raised.
Andrew Hore
Quoted Micro 16 October 2017
NEX EXCHANGE
This month marks the 22nd anniversary of the launch of NEX Exchange, although it was then originally called Ofex. A number of companies have gone on to bigger things, including Genus, which is in the FTSE250 index and accesso Technology, which is one of the top 50 companies on AIM. Further information can be found at http://www.hubinvest.com/AIMPDFOctober2017_97.pdf
MetalNRG (MNRG) has applied for two cobalt licences at Palomino and north Palomino in Western Australia but a rival has applied for the latter licence. There has also been interest from potential acquirers of this interest. A report has been received about the company’s US cobalt interests and this is being reviewed. A potential uranium project has been brought to the company and it is considering the opportunity.
Indigo Holdings (INGO) has invested £10,000 in 3sootjobs, a job search platform in Iran, giving it a 1.53% stake. Turquoise, which owns 32.1% of Indigo, and related parties, including Indigo directors, own around two-thirds of 3sootjobs.
Ecovista (EVTP) has bought a 80% stake in a company that owns a four bedroom property near Stanstead and it has paid £10,000 for an option on the next door property. The properties cover 1.72 acres.
AIM
Parcel delivery company DX (Group (DX.) is raising £24m from an issue of convertible loan notes. The conversion price will be 10p a share and the interest rate 8%. There is potential to issue a further £2m of loan notes. Lloyd Dunn has been appointed as chief executive but he is not on the board. Along with three directors, he is subscribing for £5.25m of loan notes.
Angle (AGL) has further positive indications of the effectiveness of its Parsortix liquid biopsy technology and it has also raised a further £2.8m, taking the total raised at 37.5p a share to £15m. Heinrich Heine University researchers has been able to able to continue to grow circulating tumour cells harvested using a Parsortix device.
Fashion retailer Quiz (QUIZ) performed strongly in the first half and online sales have increased to one-quarter of the total. This was before the launch of a website focused on Spain and there are plans for other international websites. The UK stores grew sales by 15%. Overall revenues were 35% ahead at £56.1m.
Orogen (ORE) is acquiring Thread 35 Ltd and changing its name to Sosandar (SOS), which is the acquisition’s online womenswear brand. The brand was launched on 19 September 2016 by the founders of fashion magazine Look and is aimed at the affluent professional woman. Orogen is paying £6.3m in cash and shares for the acquisition. Ten Orogen shares are being consolidated into one new share. A placing at 15.1p a share will raise £4.8m net to cover the cash portion of the acquisition cost.
Toilet tissue supplier Accrol Group Holdings (ACRL) expects to pay between£550,000 and £2.9m and because of its guilty plea the amount will be discounted by one-third. The figure will be announced early next year. Talks continue with major shareholders and the bank.
Wynnstay Group (WYN) has appointed administrators to Just for pets and 18 of the stores have been sold to PSR Ltd. The other seven have been closed. The loss-making pet products retailer had net assets of £2.2m.
Crop enhancement products supplier Plant Impact (PIM) increased its full year revenues by 17% to £8.5m even though sales in Brazil were disappointing. Higher research and development spending meant that there was a £3m loss. There was £7.2m in the bank at the end of July 2017. Plant Impact is moving into new geographic markets as well as building share in its existing markets.
Motor dealer Vertu Motors (VTU) intends to use some of its cash to buy back up to £3m worth of shares. There was net cash of £20.8m at the end of August 2017. Interim revenues were flat at £1.45bn buy underlying pre-tax profit was 7% higher at £20.9m.
Patrick O’Sullivan, who failed to gain a board seat at Conroy Gold and Natural Resources (CGNR), has reduced his stake in the Irish gold explorer to three million shares (24.6%). Conroy was awarded costs of the court proceedings made by Patrick O’Sullivan and the level is still to be assessed. Conroy has decided to cancel its quotation on the Dublin-based Enterprise Securities Market on 6 November. Conroy will still be quoted on AIM so shareholder approval is not required. Andrea Gonella currently owns less than 3% of Conroy, having owned more than 6% in July. Conroy has raised €240,000 via a €0.30 a share placing and a further €167,000 was raised from warrants taken up by directors Professor Richard Conroy and Maureen Jones.
Digital Barriers (DGB) has decided to sell its video business for up to £27.5m. It will concentrate on its Thruvision people screening business.
InterQuest Group (ITQ) has appointed Allenby as its nominated adviser and Peterhouse as its broker so trading in the shares has recommenced. Chisbridge Ltd ended up with 58.3% of InterQuest after its bid. It still wants to ditch the AIM quotation and it can buy shares in the market in order to increase the stake.
Patient monitoring device developer LiDCO (LID) has gained its first long-term high use programme contract with a US customer but that did not contribute in the first half. In the six months to July 2017, revenues were 4% higher at £3.9m and the loss was £1m. That was due to higher sales and marketing costs without the benefits of higher sales yet showing through.
1Spatial (SPA) has sold its non-core assets so that it can focus on geospatial data. There is particular potential in the US market. Although interim revenues were flat at £12.1m but a greater proportion were from the geospatial business. The operating loss was reduced from £1.9m to £1.2m and the cash outflow in the period was minimal. Claire Milverton has been confirmed as chief executive.
Two graphene-related companies are raising cash. Applied Graphene (AGM) has raised £9m at 36p a share and existing shareholders are being given the chance to subscribe for up to £1m via a one-for-eight open offer. There was £4.7m in the bank at the end of July 2017. The cash is being used to finance joint development activity for the strategic ink programme, which uses 2D inkjet printing to deliver graphene-based inks. Other potential uses are also being explored. Haydale Graphene Industries (HAYD) is raising £10m via a placing and offer at 120p a share, which was a 32% discount to the market price. Haydale recently changed broker to Arden. The cash will be used to provide working capital for existing orders and to develop new uses for graphene, including cookware.
SaaS-based accounting software supplier FreeAgent Holdings (FREE) says that it generated interim revenues of £4.6m, compared with £3.6m. There was a smaller first half loss and had net cash of £3.4m at the end of September 2017.
Top level domain names owner and distributor Minds + Machines (MMX) has received approval from the authorities in China to sell .law, .work, .beer and the Chinese equivalent of .shopping. Four more extensions are going through the approvals progress. So far, revenues from China for .vip have been a significant contributor to group revenues.
A consortium led by former chief executive Peter Earl is in early discussions with Rurelec (RUR) about a bid that could be backed by Rurelec’s joint venture Patagonia Energy Ltd.
An application to enable Redx Pharma (REDX) to get back control of its main subsidiary will be heard on 26 October. If approved, the subsidiary will come out of administration and the suspension of trading in Redx shares could be lifted.
Realm Therapeutics (RLM) has completed the £19.3m placing at 29p a unit (one unit is one share and a warrant for 0.4 of a share). The warrants provide an opportunity to subscribe for a share at 58p each. The initial focus of the cash will be the treatments PR022 for atopic dermatitis and PR013 for allergic conjunctivitis. There are also plans for a phase II trial for the PR023 treatment for acne vulgaris.
PipeHawk (PIP) has sold its 28.4% stake in south east England-based survey practice SUMO Ltd to its own executive chairman Gordon Watt for £197,499. That is the equivalent of the investment in loss-making SUMO and is more than its value in the books.
Dr Cliff Holloway has been appointed as chief executive of Scancell Holdings (SCLP) and he will push forward the immunotherapy platforms being developed by the company. His predecessor Dr Richard Goodfellow is remaining on the board. Scancell had £2.67m in the bank at the end of April 2017, which was less than the cash outflow in the previous 12 months.
Ashanti Gold Corp says that the Anumso gold project, where Goldplat (GDP) is earning up to 75% through a $3m investment in exploration, has broader and new mineralised zones. Soil sampling has produced good results and suggests high gold recovery rates.
Former AIM company Zenith Hygiene has agreed a cash bid from BCPE Diamond UK. The deal values Zenith at £100m, based on its enterprise value, although the final amount depends on performance.
MAIN MARKET
Cash shell J2 Acquisition Ltd (JTWO) commenced trading on the standard list on 10 October, having raised $1.25bn. The shell is seeking a company with a strong market share and proven track record. If an acquisition is not made within two years, shareholder approval will be required for a further 12 months of operation.
Levrett (LVRT) has completed the acquisition of Nuformix Ltd for £12m in shares at 4p each and it has changed its name to Nuformix. A further £2.3m has been raised at 4p a share. Trading will recommence on 16 September.
Sealand Capital Galaxy (SCGL) has signed a memorandum of understanding with AIM-quoted MySQUAR (MYSQ) that will enable the two companies to distribute each other’s mobile games.
Monchhichi (MCC) still intends to follow Pembridge Resources (PERE) from AIM to the standard list but the move has been delayed until mid-November. This will follow shareholder approval for the €10m investment in artificial intelligence, machine learning and behavioural data science company Sentiance and the approval of the prospectus by the UKLA. Sentiance lost more than €2m on revenues of €1.4m in 2016.
WideCells Group (WDC) plans to launch its CellPlan insurance for stem cell treatment in Spain before the end of the year. A partner has been secured for the expansion of stem cell services in the Middle East, north Africa and Asia Pacific. White Apex General Trading will be exclusive strategic partner for three years.
Andrew Hore
Quoted Micro 11 January 2016
ISDX
Healthcare recruitment business Positive Healthcare (DOC) has raised £2m from a bond issue that was admitted to trading on ISDX on 5 January. The focus of the core Positive Mental Health business is providing doctors and nurses that are specialists in mental health. Positive Mental Health, which has been operating since February 2014 and was acquired from Recruitment Capital Partners, generated revenues of £601,000 and a pre-tax profit of £28,000 in the first half of 2015. The directors include Garry Ashworth, who is executive chairman of InterQuest. The strategy is to build up a group of recruitment businesses offering a full range of services to the NHS and the healthcare sector. The money raised from the bond could finance one or two add-on acquisitions.
Mining investment company Imperial Minerals (IMPP) has raised £50,000 at 0.5p a share and the newly issued shares account for 34.5% of the enlarged share capital. There was £46,000 at the end of June 2015 plus £282,000 of financial assets available for sale. James Hamilton has been appointed as a non-executive director and he owns 18.1% of Imperial. Frank Moxon has resigned from the board.
MiLOC Group Ltd (ML.P) has signed a distribution agreement with a distributor of traditional Chinese medicine skincare products in Taiwan. The minimum order level of MiLOC’s TCM PLUS skincare products for the first 12 months is HK$20m.
AIM
Business aviation services provider Gama Aviation (GMAA) is acquiring Jersey-based Aviation Beauport for £2.6m in cash and one million shares – a total payment of £5.325m. In 2015, Beauport is estimated to have generated revenues of £6m and EBITDA of at least £725,000. This deal should be earnings enhancing this year. Beauport offers aircraft charter, maintenance and handling services, as well as managing four aircraft. Gama is keen to be involved in the Jersey market, where aircraft traffic appears set to increase. A new £10m bank facility has been secured from RBS.
Digital music streaming business 7digital (7DIG) plans to acquire French rival Snowite, which will help to update the group’s digital platform without additional cash costs. 7Digital is paying 7.32 million shares for Snowite and taking on debt of around £1.3m. The deal should add £1.2m of annual revenues, of which £864,000 is recurring. There should be £500,000 of annual cost savings next year. Snowite is in French bankruptcy protection so the completion of the acquisition depends on negotiations with the French courts but this should happen by the end of March.
Myanmar-focused social media business MySQUAR (MYSQ) has increased its number of users to more than two million, up from 775,000 at the end of May. The original target was to double the number of users by the end of 2015. MySQUAR needs to focus on generating revenues from these users and the MyPAY mobile payment operation is the first step. There is also a cross-promotion agreement with telecoms provider Ooredoo.
MAIN MARKET
Electronics designer and distributor Acal (ACL) is paying £17m in cash and shares for custom cabling and connectors designer Contour. This more than doubles Acal’s business in this area and is expected to lead to a 4% earnings upgrade for the year to March 2017. There is a deferred payment of £1m due in April 2019 and contingent payments of up to £6m depending on performance. The deal is part of Acal’s strategy of increasing its exposure to higher margin operations.
ANDREW HORE
ADVFN Podcast – Alan Green discusses MySQUAR, heading up the social media revolution in Myanmar
Alan Green discusses MySQUAR (MYSQ), the company heading up the social media revolution in Myanmar, with Justin Waite on the ADVFN podcast. The interview takes place 3 minutes 55 seconds in.
Click here to listen to the podcast.