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Andrew Hore – Quoted Micro 4 May 2020
AQUIS STOCK EXCHANGE
Ace Liberty and Stone (ALSP) says that £2.2m of loan notes has been converted into shares at 50p each. The property portfolio has a resilient tenant base, with the majority of rents owed by national and local government tenants. During March, 82% of rents were paid. Four tenants are facing short-term difficulty. Ace will defer dividend payments.
SG Recruitment Ltd (SGRL) has signed contracts to supply nurses to Saudi Arabia and domestic workers to Bahrain and Malaysia. There is also a contract to supply personal protection equipment to the NHS. These deals are worth £800,000 in this financial year. Aaamir Quraishi has resigned as a director.
Cadence Minerals (KDNC) is raising £645,000 at 6p a share. The cash will be used to finance the bridging loan, with an annual interest rate of 18%, to fund the start-up of shipping iron ore from the Amapa project.
GP software provider DXS International (DXSP) believes that it can still match last year’s revenues despite COVID-19. New product launches have been delayed. There is cash in the bank to cover working capital.
Ananda Investments (ANA) says that medicinal cannabis strains are being analysed by Dr Dedi Meiri in Israel. Dr Meiri is assessing the anti-inflammatory properties of cannabis for treating coronavirus. Ananda intends to broaden its licence application for cannabis growth to the anti-inflammatory area.
Gunsynd (GUN) had net assets of £1.72m at the end of January 2020, including £225,000 in cash. The investment in Brazil Tungsten has been written down from £400,000 to nil. Management is assessing potential investments in the Australian precious metals sector.
SulNOx Group (SNOX) intends to raise £400,000 at 40p a share. Each share will also come with a warrant exercisable at 40p.
Trading in Lombard Capital (LCAP) shares has been suspended until it makes a full announcement about the proposed recycling acquisition.
KR1 (KR1) has invested $75,000 in the Union Finance project, which is a credit mutual on Ethereum. Loans will be offered via blockchain.
NQ Minerals (NQMI) has appointed VSA Capital as corporate broker.
AIM
NWF (NWF) has traded strongly, although May is likely to be weaker. Even so, pre-tax profit in the year to May 2020 is set to be substantially higher than the previous year. Food distribution was highly active in March and April. There were initial inefficiencies, but the division has adapted. The Crewe warehouse has started operations. The fuels division has benefited from lower oil prices. Heating oil demand has been strong, although the decline in economic activity has hit demand from commercial customers. Feeds demand is in line with expectations, although increased commodity prices could make trading more difficult in the coming months.
Trans-Siberian Gold (TSG) has identified a significant extension of Vein 25 North at the Asacha gold mine. There is potential to significantly increase the mineral resource. Production from Vein 25 North should commence earlier than anticipated this year.
Ariana Resources (AAU) says that its Kiziltepe mine joint venture has repaid its $33m loan that it received to finance the construction of the mine.
MAIN MARKET
Seafox International has proposed a 9 cents a share bid for Gulf Marine Services (GMS) but it has been rejected. GMS will be hit by the low oil price and it has net debt of $390m. GMS argues that it is cutting costs and still winning new business.
Nanoco (NANO) has ended its formal sale process due to economic uncertainty and the lack of a realistic bid. There is enough cash to take the company into the second quarter of 2021.
Cardiff Property (CDFF) edged up its NAV to 23.03p a share in the six months to March 2020. The Thames Valley property market is holding up. The interim dividend was raised from 4.6p a share to 4.8p a share.
Andrew Hore
Andrew Hore – Quoted Micro 30 March 2020
AQUIS STOCK EXCHANGE
AQSE and AIM-quoted Arbuthnot Banking (ARBB) improved its underlying pre-tax profit from £4.4m to £5.8m in 2019, while the second interim dividend is 5% higher at 21p a share. This does not have to be agreed at an AGM. NAV rose from 1283p a share to 1364p a share. The total capital ratio has edged up from 17.2% to 17.3%.
Newbury Racecourse (NYR) says that its insurers stipulated that COVID-19 was excluded from the insurance for the abandonment of race meetings. There will be a significant loss of revenues even if horse racing remains suspended until the end of April. Events, the hotel and the nursery will also be hit. There are bank facilities that should be enough to cover needs for the foreseeable future and the company is talking with its lenders. Management still expects David Wilson Homes to make a further payment of £10.9m for the development sites it has acquired.
Employee-owned businesses investor Capital for Colleagues (CFCP) believes that the value of its investments has declined by up to 15% since the end of February. NAV will have fallen from 50.17p a share to a range of 42.6p a share to 45.1p a share. That offsets the increase in the previous six months.
Hydro Hotel, Eastbourne (HYDP) is cancelling its interim dividend of 14p a share. The hotel has been temporarily closed.
KR1 (KR1) has invested $65,000 in the Acala Network project and will receive 866,666.67 tokens at 7.5 cents each. Acala will offer a stablecoin that can be transferred across different blockchains and collateralised with digital assets.
Cadence Minerals (KDNC) says that its 4.1%-owned investee company Macarthur Minerals is seeking a partner for its Lake Giles iron ore project in Western Australia. Another investee company, 16.7%-owned AIM-quoted European Metals Holdings (EMH), has secured a strategic investment by CEZ in the Cinovec project. CEZ will subscribe for a 51% stake in the company that owns the project, subject to EMH shareholder approval. The price payable has been reduced from €34.1m to €29.1m.
AFH Financial (AFHP) non-executive director has invested nearly £25,000 in the IFA at 198p a share.
Clean Invest Africa (CIA) says that subsidiary Coal Agglomeration South Africa has stopped activities until 16 April, which is in line with the government lockdown.
EPE Special Opportunities Ltd (ESO) has cash of £26.4m and it could defer the July repayment of £2m of its £3.9m convertible loans, so it is in a strong position to cope with the effects of COVID-19.
Eastinco Mining and Exploration (EM.P) has suspended mining in Rwanda because of COVID-19. This will be for an initial two weeks. Planning for continues exploration will continue.
NQ Minerals (NQMI) has employed consultants to prepare a mine reopening due diligence study on the Beaconsfield gold mine.
TechFinancials (TECH) is exercising its option to acquire shares in Cedex Holdings and the resulting stake will be 97.3% or 90.8% fully diluted. The company will consider disposing of the stake.
World High Life (LIFE) is holding a general meeting on 14 April in order to gain shareholder approval for each existing share to be sub-divided into ten new shares.
First Sentinel (FSEN) has issued a further £245,000 of bonds. This takes the total value of bonds in issue to £1.23m. Trading in First Sentinel 7% bonds, February 2023, First Sentinel preference shares and EPE Special Opportunities 7.5% unsecured loan stock, 2022 has started again after the market maker resumed activities.
AIM
Novacyt (NCYT) has signed a contract manufacturing deal with Yourgene Health (YGEN) for its COVID-19 test. The initial plan is for Yourgene to manufacture critical components. A global distribution agreement for the COVID-19 test has been secured with Bruker-Hain Diagnostics for use on its instruments. The Philippines has approved the test for commercial use.
Graphene materials supplier Applied Graphene Materials (AGM) has successfully reduced its cost base and it had £4.3m in the bank at the end of January 2020. This should last until the second half of 2021. Revenues remain small but a number of coatings products using the company’s graphene have been launched in the past year. There is a pipeline of additional products.
Cyber security services provider ECSC (ECSC) is still losing money, but it is generating cash. In 2019, ECSC revenues grew by 10% to £5.91m. Managed services revenues increased by 48% to £2.61m. Managed services has additional capacity and as more work is won margins could continue to improve. Consulting revenues dipped slightly to £2.9m, although they did grow in the second half. The other revenues come from third party products and other services.
Secure payments systems provider PCI-Pal (PCIP) is raising £5m at 30p a share. The cash will finance sales and marketing in North America and further product development. There will also be additional flexibility for any medium-term effects of COVID-19.
Georgia-focused oil and gas company Block Energy (BLOE) is acquiring two blocks adjacent to its own from Schlumberger. They include Block XIB, which is Georgia’s most productive block, although the peak production was in the 1980s. This will boost Block’s production by 245 barrels of oil per day. There is also another exploration block and a central production facility being acquired. There are 14 years remaining on the permits for the two blocks. Block is paying for the assets with 120 million options exercisable at nil cost. They are deemed to have a value of 5 cents each. The options can be exercised between 12 and 24 months from completion.
Replacement windows and doors supplier Safestyle UK (SFE) has temporarily ceased installations. Safestyle believes with cost reductions and government assistance it will be able to cope with the closure of activities until after the end of June.
Wynnstay Group (WYN) is still paying its 9.4p a share final dividend. Trading in the four months to February 2020 was subdued but in line with expectations. The company’s agricultural stores have been allowed to stay open. There may be some additional costs relating to COVID-19.
Geospatial software provider IQGeo (IQG) has secured an expansion to its contract with Tokyo Electric Power Company, which is worth £1.8m over three years.
MAIN MARKET
Trident Resources (TRR) is becoming a mining royalty company and moving to AIM. The first acquisition is a 1.5% free on board revenue royalty over part of the Koolyanobbing iron ore operation in Western Australia for a staged cash consideration of A$7m. There are plans to increase production from an annualised rate of 11Mtpa to 15Mtpa by the end of 2020. The initial payment is A$4m and the other A$3m is payable one year after completion. The most recent quarterly royalty was A$731,000. Further royalty interests are set to be acquired. A fundraising is planned and the company will change its name to Trident Royalties.
Dev Clever (DEV) says that COVID-19 restrictions have increased demand for its SaaS-based career guidance platforms. The US launch was in April.
Nanoco (NANO) says Merck has issued three-month notice of termination of its cadmium-free quantum dots licence agreement so that the licence can be renegotiated. The existing licence had minimum annual royalties. Merck continues to buy materials.
Spinnaker Opportunities (SOP) says that an investor commitment to provide £1.4m for the company when it acquires Kanabo Research has been terminated. This arrangement was made in July 2019 and the acquisition of the medicinal cannabis company has still not been completed.
Zenith Energy (ZEN) is amending the terms of the purchase of 80% of the Anglo American Oil and Gas (AAOG) subsidiary that owns 56% stake in the Tilapia oilfield in the Republic of Congo. The purchase price has been reduced by one-fifth to £800,000 and it will be paid in ten monthly instalments. Zenith will no longer issue any shares and it will not be providing a £250,000 secured loan facility.
Books publisher Quarto (QRT) says revenues fell from $149.3m to $135.8m in 2019 but it did return to profit. Banking facilities have been extended to July 2021.
Dukemount Capital (DKE) says the Wavertree project is at the final fit out stage, but work has been suspended due to COVID-19. There are 16 apartments and offices on the site in north west England.
Andrew Hore
Andrew Hore – Quoted Micro 24 February 2020
NEX EXCHANGE
The costs of a cyber-attack meant that National Milk Records (NMRP) interim pre-tax profit fell by two-thirds to £375,000. Revenues also declined from £11.7m to £10.7m, although that was mainly due to one-off revenues in the corresponding period. Disease testing services was the only part of the group where revenues improved. Underlying trading is within expectations. Net debt increased from £2.1m to £2.4m. Lower milk prices may reduce milk volumes from their high levels last year.
GP software supplier DXS International (DXSP) has raised just over £1m at 8p a share. The shares equate to more than one-quarter of the enlarged share capital. The cash will provide working capital required to market the company’s new products. The latest framework agreement has included a modest price rise. NHS accreditation of the company’s new software should be complete in April.
Cancer treatments developer Incanthera is planning to join NEX this week. Manchester-based Incanthera is developing Sol, a topical product for the treatment of solar keratosis and prevention of skin cancer, which could be licenced to a partner within 18 months. There is a pipeline of cancer therapeutics which have come through the Institute of Cancer Therapeutics at Bradford University, which owns 12.3% of the company. AIM-quoted Immupharma (IMM) will hold a 11.9% stake and has 7.27 million warrants, where the exercise price is being rebased to the issue price. Cairn is the corporate adviser and Stanford Capital Partners is the broker. The expected admission date is 28 February.
NQ Minerals (NQMI) is paying A$2m for 100% of the Beaconsfield gold mine and processing plant in Tasmania. This was a major gold mine up until 2012 and it could go back into production. The gold price has risen by 50% since production stopped. The initial payment is A$100,000.
NAV fell from 64p a share to 59p a share at Western Selection (WESP) in the six months to December 2019. The lack of a dividend from AIM-quoted Bilby (BILB) meant that dividend income nearly halved, although it was the one core investment that increased in value. There will be no interim dividend. Share disposals mean that net cash was £2.45m at the end of 2019.
Gunsynd (GUN) has decided not to take up its option to acquire a further 22.33% stake in the Kolosori nickel prospect in the Solomon Islands. Previously £45,000 was paid for a 7.76% stake. Gunsynd has received £20,000 of the £260,000 it is due to be paid for its stake in Oyster Oil and Gas.
Primorus Investments (PRIM) says that investee company SOA Energy UK hopes to join AIM by the fourth quarter of 2020. Drilling is due to commence at the Ofek well in Israel during May and it could last 40 days with a further 40 days of testing. The results will be known before the flotation. Primorus owns 14,977 SOA shares.
Belvedere Leisure Resorts (BELV) is still waiting for cash to cover the full subscription promised just after flotation and it does not appear likely that the investor can come up with the cash. Other investors may come up with the funds in the next six weeks.
Investment company First Sentinel (FSEN) has raised £196,000 from an issue of Green Finance preference shares at 100p each. There is a fixed interest rate of 5.05% a year and then a variable rate of up to 10.15% depending on whether certain conditions are met. The preference are convertible into ordinary shares. The focus is investments in the ethical, sustainable and renewable energy sectors.
Sativa Group (SATI) says subsidiary Goodbody Botanicals will have its products stocked in 100 of WH Smith Travel’s UK stores.
Angelfish Investments (ANGP) has appointed Novum Securities as its corporate adviser.
AIM
Rail optimisation software and equipment supplier Tracsis (TRCS) had a strong first half. Interim revenues increased from £18.8m to £26m. There were two acquisitions in January 2019, so they contributed for a full period this time. There is cash of £26m and it should reach £31.6m by the end of July.
Medical technology supplier Inspiration Healthcare (IHC) says it did better than expected in the year to January 2020. Revenues should be 15% ahead at £17.8m, which is equivalent to like-for-like growth of 12%. EBITDA should be one-fifth higher at above £2m.
4D Pharma (DDDD) is raising £22m at 50p a share, which is half the level that 4D floated at in June 2014. This cash will provide the additional funds required to support ongoing studies for IBS and oncology. The clinical study data is important when it comes the next step for the group.
Urban Logistics REIT (SHED) plans to raise up to £106.7m at 137.5p a share and this will be used to acquire logistics properties. The cash will be raised via a placing, offer for subscription and open offer. The share price equates to adjusted NAV and is a discount to the market price. A special dividend of 3.85p a share will be paid.
Stanley Gibbons (SGI) is acquiring trading inventory from 58.1% shareholder Phoenix SG Ltd for £1.07m. This will be paid as the inventory is sold, net of sales commission.
AdEPT Technology (ADT) raised £4.25m at 320p a share, which was more than it was initially seeking. This will reduce debt and provide funding for acquisitions.
Chris Pullen has resigned as chief executive of Staffware (STAF) and a search for a replacement is about to commence. The recruitment and training company continues to talk with its lenders. Net debt is estimated at £60m at the end of 2019.
Toys supplier Hornby (HRN) is raising up to £15m via a placing and one-for-3.006268641288 open offer at 36p a share. The cash will be invested in the company’s brands, digital marketing and corporate systems.
MAIN MARKET
Nanoco (NANO) has filed a patent infringement lawsuit against Samsung relating to Nanoco’s synthesis and resin technology for quantum dots. There was a collaboration with Samsung, but it ended without a licence agreement.
Stevia supplier PureCircle (PURE) has secured a waiver and amendment to its bank facility. This covers all previous defaults and provides an additional $8.6m of funds.
Career development platforms developer Dev Clever (DEV) has delayed the roll-out of its platform and that hit interim revenues. Management hopes to secure a partnership with a worldwide technology manufacturer that will enable an international roll-out. Chris Akers has increased his stake from 6% to 7.15%.
World Trade Systems (WTS) intends to cancel its listing on 27 March in order to save costs.
Andrew Hore
Andrew Hore Quoted Micro 9 December 2019
NEX EXCHANGE
GP clinical software supplier DXS International (DXSP) broadly maintained its interim revenues at £1.66m. Admin costs were lower so DXS returned to profit. There was also a higher tax credit. It made a pre-tax profit of £90,000 in the six months to October 2019, while the post-tax figure was £202,000. The final accreditation for the NHS Digital Care Services (GP IT Futures) contract is due this month. This will provide a positive outlook for the rest of this year and next year.
Formation Group (FRM) is investing £10m in Irish property development sites in Dublin, Limerick and Kildare. These sites were owned by major Formation shareholder Zandra Holdings, which also shares directors with Formation. Market Equities is buying the sites and it will be 45%-owned by Formation and 55% by Zandra.
Eight Capital Partners (ECP) has bought a 59.9% stake in Financial Innovations Team, which provides corporate finance services. Eight Capital also owns 40% of Finance Partners Group, which owns the rest of Financial Innovations Team. The strategy is to eventually become the single direct owner of the business.
Hellyer generated record profit for NQ Minerals (NQMI) in November. The gold mine has provisionally reported net profit before tax of A$2.44m on revenues of A$5.64m.
Belvedere Leisure Resorts has obtained a NEX quotation for its 6.25% secured bonds. Up to £25m of bonds can be issued. 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.
SAPO (SAPO) has joined the NEX Growth Market and set its sights on gaining some of the £200m that the government has set aside to make sure that rural people can have fast broadband.
Gunsynd (GUN) has bought a 7.67% stake in Kolosori Nickel, which owns 80% of the Kolorosi prospect in the Solomon Islands. Gunsynd has a 90-day option to purchase a further 22.33%. Gunsynd’s stake in Sunshine Minerals will be diluted to 15.5%, if Malachite Resources earns a 15% stake by financing geological data and technical work.
TechFinancials (TECH) is dropping its AIM quotation and concentrating on the NEX-quotation. The company is reviewing the future of its original financial trading software operations and closing its loss-making business-to-consumer operations. There will be a $2.6m write-off. Blockchain-based ticketing business Footies has still not signed up a client. The first version of the platform is being tested with clubs and the feedback is helping to focus development. The focus is mid-sized clubs. Diamond platform developer Cedex is still commercialising its technology and TechFinancials may consider selling its stake.
Block Commodities (BLCC) has sent a circular to shareholders to convene a general meeting to expand the investment strategy in terms of cultivation of medicinal cannabis, as well as to gain approval for issuing more shares.
Trading in Welney (WENP) shares has been suspended because it has not published its accounts for the year to June 2019.
AIM
A large contract has been won by telecoms marketing technology provider Pelatro (PTRO) has been won in the form of a recurring revenue deal rather than a one-off licence. This has led to short-term downgrades, but the longer-term prospects are better. The contract is worth up to $12m over five years, with $10m fixed and the other $2m coming from gain share with the global telecoms client. Pelatro has 50% of next year’s forecast revenues of $8m in the form of recurring revenues. That would generate pre-tax profit of $2.2m.
Shareholders have voted in favour of the DBAY rescue proposal for Eddie Stobart Logistics (ESL) and will acquire a 51% stake in the main operating subsidiary of the transport business.
Summit Therapeutics (SUMM) is raising £38.7m at 22.1p a share with most of the shares being acquired by Robert W Duggan who will own 72.8% of the antibiotics developer. He will also become a non-executive director. Summit will leave AIM and retain its Nasdaq listing.
ReNeuron (RENE) is expanding the scope of the phase IIa study of its hRPC stem cell therapy treatment in order to speed up the process towards a phase III study. Further data will be published next year. Patient recruitment for a treatment for stroke disability is being accelerated. The main data will be published in the middle of 2021. There was £21.3m in the bank at the end of September 2019.
Subsea cable protection services provider Tekmar (TGP) continues to benefit from increasing investment in offshore wind. Interim revenues were 140% higher at £17.1m and the business moved from loss to profit. Acquisitions boosted organic growth. The order book was at a record level of £15.9m at the end of September 2019.
Renalytix AI (RENX) will receive $950 per KidneyIntelX test used in the US from 1 January. This price lasts for three years and is set by the US authorities. Insurance companies are likely to pay a similar amount. Initial revenues have been generated by a pharma testing programme.
Fashion retailer Quiz (QUIZ) is still finding trading conditions tough with like-for-like store sales 10% lower so far this year. Costs have been reduced, but a pre-tax loss of £3.3m is forecast for this year.
Medical grade collagen components supplier Collagen Solutions (COS) is building up sales of tissue and starting to benefit from the collaboration with its major US shareholder. Investment in the Glasgow facility will increase collagen supply.
Antibody discovery company Fusion Antibodies (FAB) improved interim revenues from £660,000 to £1.75m. There was still £1.31m left in the bank at the end of September 2019. Belfast-based Fusion has launched its RAMP service, which helps clients to optimise the performance of an antibody. The Mammalian Antibody library should be launched by next September.
MAIN MARKET
Standard list shell National World (NWOR) has asked for trading in the shares to be suspended as it negotiates the potential acquisition of regional titles from JPI. There are also other acquisitions being assessed.
Zenith Energy (ZEN) has acquired the Italian gas production and exploration assets of Coro Energy (CORO) for an initial £402,000 in shares at 6p each. Up to £3.5m in also payable in shares if gas production averages 100,000 scm/day over a period of four successive months. Production is expected to reach 113,000 scm/day following developments planned over the next 6-9 months. The Italian authorities have to agree to the deal, which adds to Zenith’s existing assets in Italy.
Haynes Publishing (HYNS) says that interim pre-tax profit will be 37% higher than in the corresponding period last year. This is all organic growth. The interims will be announced on 30 January.
Digital inkjet technology developer Xaar (XAR) says that Stratasys has completed its increased investment in Xaar 3D and it has an option to acquire the rest of Xaar 3D within three years. Xaar sold 20% of the 3D printing business for $10m and Stratasys can buy the 55% it does not won for at least $33m.
Nanoco (NANO) says that interested parties have been asked to submit acquisition proposals by mid-December. The majority of contracted revenues of £3.5m will be delivered in the first half. Progress with new customers has been hampered by the formal sale process.
IMC Exploration (IMC) says that the exploration programme in the Goldmines River licence in Wicklow has confirmed gold values ranging up to 0.4g/t. Drilling results are still being analysed.
Pembridge Resources (PERE) says that its Minto mine in Canada has received £3.7m in payment for copper concentrate. Sumitomo makes a 90% advanced payment for the concentrate. The rest is paid on delivery. Pembridge is on a roadshow to raise between £3m-£5m.
BATM (BVC) has gained a $4m contract in Asia for its agri-waste business. Three units will be supplied to two poultry processing facilities.
MATCHED BARGAINS
MESH Holdings, which recently left NEX will have its shares dealt on the JP Jenkins dealing platform. The acquisition option for AI company Sentiance has lapsed but management is in talks to agree a new option, which would require MESH to invest more cash in Sentiance, where it has a 16.8% stake.
Andrew Hore
Andrew Hore – Quoted Micro 11 November 2019
NEX EXCHANGE
Ecommerce technology developer Netalogue Technologies (NTLP) is recommending a 11.2p a share cash offer from TrueCommerce, which values the company at £5.73m. That is nearly double the share price of the most recent share deal. Netalogue clients include Transport for London, Greene King and Bunzl. The deal will bring together ecommerce and supply chain software in one platform and provide cross-selling opportunities. US-based TrueCommerce is a global connectivity business, which also has a B2B client base. The UK part of the business has revenues of £13.8m, but it is losing money. The group as a whole has revenues of $95.2m and made a net loss of $157,000. In the year to March 2019, Netalogue made a pre-tax profit of £300,000 on revenues of £1.35m. There should be potential cos savings from duplication of development spending and overlapping roles.
AFH Financial (AFHP) is acquiring the client portfolios of Warwickshire-based Groom Associates from the two retiring advisers. The initial cost is £321,000 and a further £294,000 could be payable depending on the performance of the acquired assets over 26 months.
AfriAg Global (AFRI) is selling its African operations and consolidating 100 shares into one new share. It can then concentrate on cannabis business Apollon Formularies.
Proton beam therapy firm Rutherford Health (RUTH) grew interim revenues from £197,000 to £2.5m, but the loss increased from £9.17m to £14.9m as the initial proton beam therapy centres get up and running. Since August, a further £12.5m has been raised and a £20m debt facility agreed. The focus is building up patient numbers for the three fully operational cancer centres. At the end of October, 412 shares were traded at 245p each. There is still the Woodford share overhang.
Two months after floating World High Life intends to consolidate every ten shares into one new share. The investment company plans to acquire businesses involved in medicinal cannabis and related products, including nutraceuticals and cosmetics. World High Life has announced plans to acquire Love Hemp in return for £4m in cash and the issue of 30 million (existing) shares. A further £2m could become payable in the next three years depending on the achievement of turnover targets.
Trading in Black Sea Property (BSP) shares has recommenced following its interim results announcement. Interim revenues improved from €272,000 to €312,000, but there was a €1.9m write-down on investment properties. The overall loss was €2.58m. NAV has fallen from 0.95 cents a share to 0.75 cents a share over a six months period.
Eight Capital Partners (ECP) has converted the €2m it is owed by Finance Partners Group into shares that take its stake in the investment company, which has an investment in Italy-based Avantgarde Group, to 40%. Avantgarde owns inventory finance fintech company Supply Me (www.supplyme.tech), which may list on the London market. Eight Capital Partners has paid £1,500 to John Treacy, one of its directors, for a further 30% of Epsion Capital, giving it 100% ownership. It has also invested a further £95,000 in the company, which is applying to the FCA for full regulatory status.
VI Mining (VIM) says that talks with the vendors of the Minaspampa and Rosario de Belen projects are likely to end with them taking back the projects because there is still $42.4m of the payment outstanding. VI will focus on generating cash from tolling operations. David Sumner is waiving the $1.61m of salary owed to him. Sumner, who already provides loans to the company, is raising money via a security token offering and cash raised will be used to finance VI.
Former NEX-quoted company MESH Holdings (MESH) is proposing to gain admission to the standard list. There is a timing extension to the acquisition of AI business Sentiance and the acquisition of additional shares and the exercising of an option has taken the Sentiance stake to 16.8%. The acquisition of a majority stake is dependent on ZASAi and related interests not having to make a bid for MESH after they receive shares in return for the Sentiance stake. MESH will then own 80.1% of Sentiance and be able to issue a prospectus for the listing.
AIM
In the year to June2019, Frontier IP (FIPP) made an unrealised profit of £3.85m on its investee company portfolio, up from £2.06m last year. NAV was £17.6m at the end of the year. A placing has raised £3.8m at 50p a share. This will help to develop and commercialise investee companies.
Rose Petroleum (ROSE) is acquiring a 10% of Captiva Energy Holdings II (CEH) Inc’s 89.5% net working interest in the 317-acre McCoy lease in Colorado. It will also have an option to acquire up to a further 80% of that net working interest. CEH is owned by the chairman and chief executive of Rose. Drilling should happen within one year and there are discussions about a funding partner. Rosehas raised£1.25m at 1.1p a share to provide finance to develop assets. This is expected to be the first in a series of deals. The Morton family trust has taken a 3.84% stake in Rose.
Zoo Digital (ZOO) was hit by a faster than expected decline in Blu Ray and DVD business, but the core localisation and dubbing business did grow its revenues. A stronger second half is expected, and Zoo should return to profit this year. New streaming services from Apple and Disney provide a strong back drop for demand.
Shares (SHRE) subsidiary The Share Centre won two awards at the Shares Awards 2019. They were best stocks and shares ISA provider and best customer service.
Competitions organiser Best of the Best (BOTB) is trading ahead of market expectations. This has sparked a 2019-20 profit forecast upgrade of 16% to £2.2m. The interims will be published on 30 January.
Faron Pharma (FARN) has raised £7.48m at 190p a share. This will finance the clinical programme for potential cancer treatment Clevegen.
Defenx (DFX) is seeking to cancel its AIM quotation. Strand Hanson will continue as nominated adviser until the cancellation. BV Tech, which owns 67.1% of Defenx, will vote for the cancellation.
LIDAR wine sensor technology developer Windar Photonics (WPHO) has been hit by the slow conversion of interest into orders. Revenues in the ten months to October 2019 were €1.2m. Full year revenues will be below expectations. There is limited working capital available. BDO resigned as auditor during October. A share swap has left the interests of Windar director Jorgen Jensen with a 11.2% stake and O-Net Communications with 4.5%.
MAIN MARKET
Nanoco (NANO) has entered into early discussions with potential buyers of the company. This has sparked a review of strategic options for the business. That includes potential additional funding. There are also talks with potential customers in the displays and infra-red sensing markets.
InnovaDerma (IDP) executive chairman Haris Chaudry has stepped down the day after the beauty products supplier’s AGM. He has reduced his stake from 28.6% to 0.2%. The shares were sold at 52.4p each. Edale Capital has taken a 9.11% stake. Revenues have grown by 38% in the first four months of the financial year. A new skincare product will be launched in 2020.
Robbie Rayne does not want Gresham House Asset Management to be reappointed as external manager of LMS Capital (LMS) and he and his family intend to vote their 42% shareholding against the reappointment at a general meeting. He wants a return to internal management of the portfolio of assets and a £7.5m distribution to shareholders.
Standard list shell Contango Holdings (CGO) intends to try to raise £1m at 5p a share in order to help finance the acquisition of the Lubu coalfield project in Zimbabwe. Contango has advanced $310,000 to the project. If the acquisition does not go ahead by Christmas Eve, then the money should be returned.
Zenith Energy (ZEN) is planning an all share offer for Nordic Petroleum. One Zenith shares will be offered for every 100 Nordic shares. This will require the issue of up to 9.1 million shares. Nordic is involved in heavy oils in Canada. It has tax credits in Norway and a legal claim against a UK party, the rights to which will be retained by Nordic shareholders. A prospectus has been approved for an issue of up to €25m of Euro Medium Term notes at par.
Andrew Hore
Andrew Hore Quoted Micro 21 October 2019
NEX EXCHANGEThird quarter trading at Arbuthnot Banking (ARBB) shows a one-third increase in loans to £1.6bn, while deposits are 17% ahead at £2bn. Impairments are rising, though. The private bank is adding 40 new clients each month.
Although Vox Markets has called off merger discussions with PCG Entertainment (PCGE) the latter’s shareholders will have preferential rights to participate in the flotation of Vox. Shareholders have to be on the register on 11 October to benefit. PCG has released any claims it may have against Vox, although Vox has the right to sue Align Research, the third party in the merger plans. PCG says nothing negative was found about Align in due diligence. First Sentinel has resigned as corporate adviser to PCG and trading in the shares has been suspended.
Good Energy (GOOD) has launched One Point to offer electric vehicle charging. The company has also been awarded he green classification and mark.
The Home Office has awarded Sativa Group (SATI) a controlled drug licence to grow medicinal cannabis. This covers cannabis with a THC content of greater than 0.2%. Sativa already has a low-THC industrial hemp licence.
AfriAg Global (AFRI) says that its investee company Apollon Formularies has received its third medical cannabis licence in Jamaica. This is for experimental research and development.
World Health Life (LIFE) has completed the acquisition of Love Hemp and a £2m convertible debenture fundraising. A second tranche of debentures should be issued in the next few weeks. Love Hemp has product distribution agreements with supermarkets and health food stores.
Triple Point Investment Management is providing a £20m loan facility for Rutherford Health (RUTH) and this will be drawn down in phases. The loan terms improve as patient numbers increase at the three proton beam therapy centres.
Tectonic Gold (TTAU) has received the first quarterly interest payment from Silverstream. The 12-month note matures in August 2020.
Primorus Investments (PRIM) will consolidate 20 shares into one new share and trading will commence on 22 October.
Secured Property Development (SPD) had £537,000 in the bank at the end of June 2019, but it is finding it difficult to find a suitable acquisition.
AIM
Immunodiagnostic Systems Holdings (IDH) is as consistent as ever. It has published a trading statement related to its interims at 4.35pm on Friday. The 2018-19 trading update was published at 4.35pm on Thursday 18 April – the last day before a long weekend. There was no particular reason to hide the latest statement. First half revenues were flat compared with a first quarter decline of 2%. Cash fell £300,000 to £28.1m over a three-month period.
Murgitroyd (MUR) is recommending a 675p a share bid from a company set up by Sovereign Capital Partners LLP. This values the patent and trademark attorney at £62.8m. Murgitroyd joined AIM 18 years ago at 121p a share and has been a consistent dividend payer.
Fully listed logistic services provider Wincanton (WIN) is considering a bid for Eddie Stobart Logistics (ESL) and DBAY Advisers is also still assessing whether to bid.
Disinfection products supplier Tristel (TSTL) plans to grow its revenues by up to 15% a year in each of the next three years. This follows an 18% increase to £26m in the year to June 2019, while pre-tax profit grew by one-fifth to £5.6m. The dividend was 21% higher at 5.54p a share. International markets account for 55% of revenues. Tristel is waiting for a response from the FDA, which should be forthcoming by the end of 2019.
Power projects developer Kibo Mining (KIBO) has raised £1.99m at 0.45p a share. This will be used to fund the development of power generation projects in Africa. The portfolio includes 1,055MW of power generation capacity with 355MW having heads of terms power purchase agreements. Each new share comes with a warrant exercisable at 0.8p a share.
Filtronic (FTC) has agreed to pay a warranty claim of $2m (£1.6m) and change a faulty component in antennas supplied in 2016-17. The fault relates to certain bandwidths in hot countries. The cash is payable in four instalments up until December 2020. On 23 October, Filtronic is set to report sales from continuing activities of £15.9m, down from £21.6m, and a small positive EBITDA. Filtronic has already received more than £10m of orders for its 5G backhaul transceivers due for delivery in 2019-20.
Woodford Investment Management has cut its stake in GYG (GYG) from 19.98% to less than 5%. That appears to have been a relief to the market because the share price of yacht painting services provider has recovered since the disposal. UBS has taken a 11.2% stake.
Kestrel Partners continues to build its stake in Pebble Beach Systems (PEB), taking its stake from 25% to 26.1%. Kestrel owns 23 million shares in Brady (BRY) and, even if it makes a loss, it will be having a cash inflow. Hanover Acquisitions is offering 10p a share for the risk management software company, which values it at £8.3m.
Construction consultancy services provider Driver (DRV) says it will report underlying pre-tax profit of £3m for the full year, after £400,000 of rationalisation costs. That represents a strong performance in the second half. Net cash was £5m at the year-end, after share buy backs.
Frontier IP (FIPP) has taken a 43% stake in Elute Intelligence Holdings, which is developing software to search complex documents and detect plagiarism. Frontier IP is providing some of its own IP to an existing business to form Elute with the rest of the stake coming from providing services to the company.
Blue Star Capital (BLU) is raising £900,000 at 0.1p a share and the cash will be equally split between six investments in esports companies.
Power transmission products manufacturer Renold (RNO) says that cost savings are offsetting a downturn in trading. It is still on track to report an underlying full year pre-tax profit improving from £10.1m to £10.4m. Order intake remains weak.
Rose Petroleum (ROSE) has announced a restructuring of the Paradox project. This will enable the oil and gas company to focus on the most prospective acreage.
MAIN MARKET
Quantum dots developer Nanoco (NANO) still has a cash buffer so that it can find a new manufacturing partner to replace the US one that has withdrawn from an agreement. There could still be net cash of £1.5m at the end of July 2020.
Zenith Energy (ZEN) is planning to raise cash at NOK0.35/share in Norway. That is equivalent to 2.95p/share, compared with a market price of 3.5p. The Azerbaijan-focused oil and gas company has a drilling rig that will be mobilised before the end of the month and well M-247 has been identified as a target. It was previously in production. Zenith has identified wells in the Muradkhani oilfield in which perforations of untapped intervals can generate additional production. This will happen in the next fortnight.
OTHER MARKETS
Former AIM company Getmapping has launched a strategic review and a formal sales process. Management of the believes that the geospatial services provider could grow faster with additional investment. A company taking a minority stake is another alternative. The process should be completed by the end of 2019. The shares are traded on the Britdaq matched bargains market.
Vienna-listed Fashion On Screen is moving into theatre by acquiring musicals producer Shaftesbury Avenue. The all-share purchase is valued at £2.5m. Fashion On Screen believes that some of the musicals could become film productions.
Andrew Hore
Andrew Hore Quoted Micro 19 August 2019
NEX EXCHANGE
Brewer Adnams (ADB) reported a decline in first half revenues from £35.5m to £34.7m, while the loss increased from £840,000 to £1.15m. Beer volumes were 2% ahead, compared with a 1% decline in the market. Low alcohol beer sales grew. Gin sales fell because of greater competition. A fire at the Ship at Levington hampered the performance of the pubs business. Adnams made an underlying profit in 2018, thanks to a better second half performance. The new IT system went live in March and the implementation has been a distraction to management. The dividends are unchanged at 78p a share for each B share and 19.5p per A share.
Bruce Pubs (PUB) has decided to cancel trading in its 7.2% secured bonds, 31 March 2022. There are £20,000 worth of bonds admitted to the market and there have been no trades. Bruce Pubs had wanted to raise up to £20m from the bond issue. It is therefore not a surprise that Bruce Pubs believes it is not worth having a trading facility. The bonds can be redeemed early by the company.
NQ Minerals (NQMI) has produced 10,164 tonnes of lead concentrate, 7,431 tonnes of zinc concentrate and 46,863 tonnes of pyrite concentrate in the first half of 2019. An operating profit of A$3.6m was made on sales of A$23m.
TechFinancials (TECH) had $1.23m in the bank at the end of June 2019. A reduction in trade receivables meant that there was a small cash inflow from operating activities, but there was $402,000 capitalised developed on the blockchain ticketing system.
China-focused healthcare company MiLOC Group Ltd (ML.P) has raised £755,000 at 30p a share.
Queros Capital Partners (QCP) has gained a quotation for its bonds on the Frankfurt Stock Exchange
AIM
ICAMAP has acquired 7.94 million shares in easyHotel (EZH) at its offer price of 95p a share, taking its stake to 44.1%. This means that it is a mandatory cash offer.
Iofina (IOF) has launched IofinaEX Global to deal in hemp derived products in Central America and the Caribbean. Iofina will potentially link up with a government in the region that wants to develop its country as a hub for hemp derived products. There are no details of this potential partnership. The company believes that its regulatory expertise in the iodine market will be helpful in the CBD market. The US is likely to be a major market.
LightwaveRF (LWRF) has raised £1.3m at 7p a share. The smart homes equipment supplier wants the cash to finance further growth. There are also plans to secure a facility for stock.
Altitude (ALT) is considering the disposal of its Manchester-based promotion products supplier AdProducts.com. This would enable Altitude to concentrate on its AIM platform for promotional products suppliers.
Greatland Gold (GGP) has raised £4.2m at 1.85p a share and that will be used to finance exploration in the Paterson region of Australia. There has been positive exploration news from the Scallywag prospect in the Paterson region. A ground gravity survey starts this month and an induced polarisation survey next month. Then 3D modelling using the data will come up with drill targets.
Cyber security software and services provider Corero Network Security (CNS) says interim revenues are lower, but operating costs are unchanged. That means that the interim loss has increased. However, full year revenues are expected to be one-fifth higher, but higher investment in sales means that the loss will still be higher. Net cash was $3.6m at the end of June 2019.
Equals Group (EQLS) is raising up to £16m via a placing and open offer. The international payments company has raised £14m at 110p a share and up to £2m will come from the one-for-90 open offer. The cash will be used for acquisitions and working capital.
Tanfield (TAN) says that 49%-owned Snorkel International has moved back into profit in the second quarter of 2019, although the first half was still loss-making. Last year, the value of this investment in the access equipment supplier was cut from £36.3m to £19.1m.
Oil and gas producer President Energy (PPC) says that there should not be a material effect on its operations from a change in Argentinian president. Revenues are US dollar based and cash is held in the same currency, so the decline of the Argentinian peso should not be too much of a problem.
Anthony Laiker has subscribed £25,000 in Vela Technologies (VELA) at 0.1p a share. A general meeting has to approve the share issue to the executive director, as well as an issue of 6.25 million warrants exercisable at 0.15p. Approval of the conversion of £200,000 of loan notes plus interest into nearly 241 million shares will also require the company to be given the ability to issue more shares. Laiker would than own more than 301 million shares.
Gfinity (GFIN) is pulling out of its Australian joint venture because the esports company wants to focus its cash on the US and other important markets.
Workspace software provider Essensys (ESYS) says that its revenues were one-quarter higher at £20.5m in the year to July 2019. That was better than expected. Annual recurring revenues run rate is £17.3m.
MAIN MARKET
Associated British Engineering (ASBE) made an increased loss of £1.81m, up from £582,000 the previous year. The company’s main pension fund remains a worry and there are ongoing discussions with the Pensions Regulator. There are net liabilities of £3.71m after the pension deficit of £4.98m.
Nanoco (NANO) generated revenues of £7.3m in the year to July 2019, more than double the previous year. The cadmium-free quantum dots developer had £7m in cash at the end of July and expects to have £6m at the end of 2019.
Highway Capital (HWC) has issued €30,000 of new convertible loan notes. These are convertible to a value in excess of 50% of the net asset value of the company at the time of conversion. The terms of an existing convertible loan note of £100,000 have been changed and the conversion price is 5p a share.
Shareholders in Avocet Mining (AVM) have voted against the resolution to wind up the company. This means that it is likely to go into administration unless there is a viable transaction that the board can assess.
Global Resources Investment Trust (GRIT) wanted shareholders to approve the voluntary liquidation of the company, but there is not enough support for the proposal. GRIT has sold 430 million shares in Kalia for £225,000 in order to provide working capital. A new board is being appointed to undertake a strategic review. James Normand will become chairman and Martin Lampshire as an executive director. Stephen Roberts will become a non-executive director.
IMC Exploration (IMC) has been awarded two additional licences in County Wexford. They adjoin an existing licence where there are indications of gold.
Book publisher Quarto (QRT) reduced its interim loss from $6.6m to $4m on flat revenues of $56.4m. There was a change in the mix of revenues with children’s books increasing revenues by14% and in geographic terms more of the revenues were in the US, which moved into profit. Net debt has fallen by 11% to $65m.
Zenith Energy (ZEN) says that drilling has commenced at well C-37 in the Jafarli oilfield.
Pendragon (PDG) is selling its Chevrolet dealership in California for £17.2m. GM can alternatively nominate another purchaser if it wants. The rest of the US business will be sold.
Andrew Hore
Andrew Hore – Quoted Micro 5 August 2019
NEX EXCHANGE
Netalogue Technologies (NTLP) increased its revenues by 26% to £1.35m in the year to March 2019. Pre-tax profit jumped from £82,000 to £300,000 thanks to the ecommerce technology provider keeping overheads flat. There is £770,000 in the bank. Netalogue will consider paying a dividend when it reports its interim results. Netalogue focuses on the B2B market and it continues to win new customers.
European Lithium Ltd (EUR) has secured a A$10m finance facility in the form of convertibles from Winance Investment, which replaces the existing facility. The company is still seeking a strategic investor to help finance the development of the Wolfsburg lithium project.
None of the three Morgan Ashley extra care schemes that Ashley House (ASH) was expecting have closed. They could close over the next couple of months, but Ashley House was hoping to get the cash and it is investigating additional funding.
Trading in the shares of Equatorial Mining and Exploration (EM.P) was restored after the annual report was published. There was a £221,000 loss in 2018 but the business is very different now. A placing has raised £400,000 at 0.01p a share. The date for completing the acquisition of tantalum business Eastinco has been extended until the end of September. This is a part of the strategy to consolidate mining operations in Rwanda. Align Research believes that Equatorial could generate revenues of £1.19m this year, rising to £9.19m in 2020, which would enable it to make a pre-tax profit of £1.77m.
Social impact company Inqo Investments Ltd (INQO) increased its revenues from R23m to R23.8m in the year to February 2019, while additional finance income and fair value adjustments meant that the loss was cut from R5.99m to R2.5m. There was also an increased share of revenue from Bee Sweet Honey in Zambia. Trading is improving at Kuzuko Lodge with room rates and occupancy rising thanks to the weak Rand.
Coinsilium Group (COIN) says that its Gibraltar-based blockchain consultancy has signed a new advisory agreement with IOV Labs Ltd. This involves supporting the RSK Smart Contract Network and RSK Infrastructure Framework blockchain services. These are focused on Asia.
Eight Capital Partners (ECP) has launched a bond to raise up to €5m and it will be traded on the Vienna Stock Exchange. The interest rate is 7% and the redemption date is 26 July 2022.
AIM
Transport services provider Xpediator (XPT) has not performed as well as hoped this year and earnings estimates have been cut by one-quarter. There has also been some additional investment in the business, which will double central costs.
Information management software provider IDOX (IDOX) has raised £7m via a placing at 28.5p a share, which will be used to finance the acquisition of Northern Ireland-based Tascomi for up to £7.15m. Tascomi is a cloud-based software supplier to local authorities.
Beximco Pharmaceuticals (BXP) has launched a fifth product in the US. Blood pressure drug Nadolol is the generic equivalent of Corgard tablets. The market is worth $63m.
Elektron Technology (EKT) is selling its original Bulgin electricals business for £105m, £94m after costs, and intends to return a substantial amount of the cash to shareholders. Net cash will be £95m after the transaction. The company will change its name to Checkit and become a Software-as-a-Service business.
The Property Franchise Group (TPFG) says that its lettings brands grew revenues by 3% in the first half. Online estate agency EweMove increased revenues by 11%. Group revenues were £5.5m in the first half. Net cash was £2.8m at the end of June 2019. Ian Wilson will step down as chief executive at the end of 2020.
Property adviser Fletcher King (FLK) reported an improvement in full year pre-tax profit from £274,000 to £282,000 on slightly lower revenues. Management says that market conditions will make it difficult to maintain profitability, although there are substantial funds available for investment when the uncertainty ends. The total dividend is maintained at 1.75p a share. There is £2m in the bank.
Digitalbox (DBOX) subsidiary Daily Mash will publish video content from NextUp on its site. This will enable the company to generate advertising on the back of the videos.
MAIN MARKET
A US customer has released Nanoco (NANO) from the obligation to pay back £4.25m of capital funding. This relates to the investment in the Runcorn facility where demand for nanomaterials has not come through from the customer. The book value of the facility, after depreciation, is £3.7m and may be written down further, along with the value of some materials. The facility is available if Nanoco can secure demand from customers.
BATM (BVC) has completed the sale of its stake in a new fibre optic network being developed in Israel. This should generate cash of $3.4m and add $3m to profit. Net cash could be $38m bythe end of 2019.
Oil and gas company Zenith Energy (ZEN) has secured the financing it requires for its drilling programme. A placing in Canada has raised the equivalent of £1.2m at C0.04 a share.
Trading in the shares of Associated British Engineering (ASBE) has been suspended because it has not published its accounts. This should happen this week.
Standard list shell Landscape Acquisition Holdings (LAHL) still has more than $496m in cash and it has done well to preserve the cash it raised when it floated at the end of 2017. There is a broad remit, but the main focus is a property-related/backed business in Europe or North America.
Stranger Holdings (STHP) is still seeking to close a reverse takeover after its first deal fell through. The shell is in talks to acquire local government supplier HCS. There is no cash in the bank and Stranger has net liabilities.
Andrew Hore
Andrew Hore Quoted Micro 24 June 2019
NEX EXCHANGE
Proton Partners International (PPI) has set up a partnership with Northumbria Healthcare NHS Foundation Trust, which means that the company’s Rutherford Cancer Centre North East will treat 120-150 patients a year. Woodford Investment Management has a 46.15% stake in Proton.
AfriAg Global (AFRI) intends to increase its stake in medicinal cannabis company Apollon Formularies to 2.34%. The long-term plan is to make an all share offer for Apollon. The Jamaican operation of Apollon has completed its third cannabis harvest. AfriAg has raised a further £250,000 at 0.1p a share. Sativa Group (SATI) has appointed Cenkos as its corporate adviser and broker, replacing Peterhouse. Stanford Capital has been appointed as joint broker of medicinal cannabis products developer Ananda Developments (ANA) and Peterhouse is staying on as corporate adviser and joint broker. Stanford has been issued with 3.33 million warrants exercisable at 0.45p each.
First Sentinel (FSBN) has published its 2018 figures, which were hit by a loss on its investment in Curzon Energy (CZN) and this led to a halving of NAV to £671,000. There are plans for a £7m bond listing on Euronext. Trading in First Sentinel shares has recommenced.
Since the year end, rail safety products developer Wheelsure (WHLP) has received further orders from London Underground, DLR and Siemens in Germany. Wheelsure may need additional working capital.
Gunsynd (GUN) will receive 225 shares (22.5%) in Oyster Oil and Gas Ltd as part of a settlement with creditors. Oyster requires additional cash in order to finance work on exploration assets.
Skills verification platform Indorse, where Coinsilium Ltd (COIN) has a 10% stake, will receive an investment of up to $6.5m from Brand Capital, the investment arm of India media company Times Group. Indorse has been valued at $15m for this investment, which means that Coinsilium’s stake has increased in value by 350% to $1.5m.
AIM
ULS Technology (ULS) has maintained its share of conveyancing transactions and reported flat pre-tax profit of £5.4m in the year to March 2019. This year will also be one of consolidation. Investment is being put into launching DigitalMove, which is an online platform that will make the business more efficient and provide access to additional customers. It can also be used to add new products and services.
Castleton Technology (CTP) is paying a maiden dividend of 1p a share. The provider of software and managed services to the social housing sector is expected to grow revenues by 7% this year and this could be supplemented by acquisitions. Strong cash generation means that there are spare debt facilities that can be used for acquisitions. This year pre-tax profit is forecast to improve from £5.6m to £6.4m.
Malvern International (MLVN) says that an unsettled claim means that there will be a profit shortfall in 2018. Originally a profit of £400,000 was expected but it will end up being just above breakeven. Trading in the first four months of 2019 is ahead of budget but the second half is the most important.
ClearStar Inc (CLSU) is on track this year even though the US market has softened. US unemployment has edged up, but the US remains the key market for the background checking services provider.
Telecoms marketing services provider Pelatro (PTRO) has won a contract with a large telecoms company in Asia. The contract is for the mViVa contextual marketing platform on a licence fee model. This contract and other recent work will add $1.5m to revenues. This provides an underpinning for the full year revenues forecast of $10.5m.
Diaceutics (DXRX) has acquired 16 million patient records a year to add to its patient data. Diaceutics has invested £1m to expand this global data.
Totally (TLY) has completed the acquisition of Greenbrook, which means that 90% of revenues will be generated by urgent care services. This deal should make Totally significantly profitable and enable it to start generating cash.
Some good news for Quartix (QTX) as subscriptions and new installations are increasing. This has led to a 5% upgrade in forecast 2019 revenues for the telematics business to £25.3m, although the profit forecast is unchanged at £6.5m.
Paragon Entertainment (PEL) intends to appoint an administrator following discussions with its bank, HSBC. There is not enough cash to pay all creditors.
MAIN MARKET
Sports Direct International (SPD) is making a mandatory offer for GAME Digital (GAME) at 30p a share. The offer is open until 11 July. Sports Direct already has a 38.5% stake and it does not believe GAME can prosper on its own.
A major US customer is not going ahead with a contract with Nanoco (NANO) lasting until the end of 2019. The ending of the deal has nothing to do with the performance of the nanomaterial technology. Nanoco should have £6m in cash at the end of 2019.
BigDish (DISH) says its food booking platform is going live in Reading and Brighton, which is a particular region where expansion is targeted. BigDish says that it is fully funded to 2021.
Andrew Hore
Andrew Hore Quoted Micro 15 April 2019
NEX EXCHANGE
High Growth Capital (HASH) is increasing its stake in Sentiance to 15% and is negotiating an option to acquire a majority stake in the artificial intelligence and machine learning business. The additional 5% stake will cost £7m in shares issued at 0.8p each. The option would enable an increase in the total stake to between 51% and 84.8%. The company would offer 100,000 of its own shares for each Sentiance share and the option is subject to High Growth Capital raising at least £25m. High Growth Capital has also acquired the intellectual property of Malta-based BDD, a company founded by Chris Akers, for £4m in shares at 1p each. The project involves an annual blockchain raffle that would raise money for social impact and environmental initiatives.
EPE Special Opportunities (ESO) had a net asset value of 205.2p a share at the end of January 2019, which was 12.5% lower than the year before. The stake in fully listed LED lighting products manufacturer Luceco (LUCE) is a significant part of the portfolio and its valuation fell by 27.7%. There has been a recovery in the Luceco share price since the end of January, even though there was a decline of three-quarters in 2018 pre-tax profit to £3m. The EPE NAV had risen to 232.8p a share on 9 April on the back of Luceco share price rise. The EPE share price is 180p.
Angelfish Investments (ANGP) is subscribing £150,000 for a 9.14% stake in Just Bee Drinks and is also providing a loan facility of up to £100,000 at a annual interest charge of 10%. Just Bee has developed a natural juicy water drink sweetened with honey. This means that there is no added sugar. More than one million bottles were sold last year, and revenues doubled. The drink is already sold in Waitrose and Boots. Just Bee had net assets of £83,000 at the end of March 2018. Angelfish has also provided a £100,000 debt facility at the same interest rate to Wallet Ads. The previous loan of £150,000 was converted into a 20% stake.
NQ Minerals (NQMI) nearly doubled zinc concentrate production at the Hellyer mine in Tasmania to 3,015 DMT in the first quarter of 2019, while lead concentrate production increased by 18% to 4,712 DMT. Pyrite concentrate production jumped by 331% to 18,488 DMT.
AIM
Video games developer and services provider Sumo (SUMO) reported better than expected 2018 revenues of £38.7m and pre-tax profit of £9m. Sumo has been acquiring businesses to give it extra capacity as well as opening new studios. There is plenty of demand for Sumo’s services so utilisation rates are high and there is further upside from performance-based royalties and its own IP.
Destiny Pharma (DEST) had £12.1m in the bank at the end of 2018 and this will last into 2020. That should be long enough for the phase IIb study of XF-73 for the prevention of post-surgery infections.
Maiden full year results from legal services and credit hire business Anexo (ANX) have led to an upgrade by its broker Arden. The 2019 pre-tax profit forecast has been edged up from £17.8m to £18.1m, up from £16.1m in 2018, and the 2020 figure is 4% higher at £20.1m. Net debt is expected to increase from £17.3m to £26.3m in order to finance the growth of its legal business.
RA International (RAI) continues to win contracts, but larger contracts are taking longer to secure. RA provides services to remote locations in nine countries in Africa and the Middle East. Having joined AIM last summer, RA has $27.8m in the bank and this is helping it to tender for and win larger contracts. The average contract term is 4.4 years. This makes revenues relatively predictable and they are expected to rise by 10% this year to more than £60m.
Property investor Safeland (SAF) intends to leave AIM and secure a matched bargain facility on Asset Match. It is tendering for shares at 42.5p each, which compares with an NAV of 140.2p a share at the end of September 2018.
Having sold the RTLS SmartSpace business, the continuing revenues of geospatial software and services provider IQGeo (IQG) fell from £16.5m to £9.98m, although recurring revenues were 22% higher, and gross margin improved. There were lower software revenues, but the main decline was in the sale of third party products. There is a significant market for the company’s products and new modules are being launched. However, the full benefits of changes being made by management will probably not show through until next year. There is £30.9m in the bank and some of this will be returned to shareholders after a capital reorganisation is completed.
Interim revenues generated by LightwaveRF (LWRF) have more than doubled to £2.5m which is nearly as much as the £2.8m generated in the previous 12 months. Direct sales, e-commerce and telesales have contributed to the growth, as has the development of retail clients.
Legal firm Gordon Dadds (GOR) has acquired Gibraltar-based Rampart Corporate Advisers for up to £1.34m depending on performance. Rampart specialises in e-gaming, fintech and distributed ledger technology, and made a profit of £400,000 in the year to June 2018. Five former Ince network firms are joining Ince Gordon Dadds, although they remain independent. This would add £23m to existing group annual revenues of £77m. The firms are based in Hong Kong, Singapore, Dubai, Greece and Germany. This will boost profitability.
Strategic Minerals (SML) says the Cobre magnetite operations generated cash of $206,000 in the first quarter and the group cash balance was $1.24m at the end of March 2019. Volumes were lower because customers were undertaking plant maintenance and the continued suspension of a major client’s contract. There should be seven years of magnetite stockpile. The company expects to acquire the other 50% of the Redmoor tin/tungsten project by the end of May. This will cost £2.66m.
PhotonStar LED (PSL) says that it has enough cash for its immediate needs, but the blocking of the issuing of more shares by shareholders means that there is not enough cash to follow the strategy to find a reverse takeover target. The company may launch an open offer or ask shareholders for a second time for the authority to issue shares without offering them to existing shareholders a second time. Having become a cash shell, the company has been dropped from the FTSE AIM All Share index. It has six months to find an acquisition. A number of potential acquisition targets have been met by the board. Additional directors will be appointed.
Rose Petroleum (ROSE) has raised £275,000 at 1.1p a share in order to finance the appraisal of projects. The shares are being acquired by new executive chairman Robert Bensh, who has experience of the US oil and gas sector. Chief executive Matthew Idiens has more than doubled his stake to 2.52% by acquiring two million shares at 1.75p each. The finance director Chris Eadie has also more than doubled his stake to 1.2% at 1.67p a share. New non-executive director Tom Reynolds also bought shares.
Concepta (CPT) is raising £2.3m at 3p a share to finance marketing and further development of its myLotus fertility test.
MAIN MARKET
Cadmium-free quantum dots developer Nanoco (NANO) had £6.2m in cash at the end of January 2019. There was a total cash outflow of £4.57m in the latest six month period. The main capital investment at the Runcorn site is almost complete. Non-executive director Chris Batterham has bought 125,000 shares at 47.354p each. Miton has reduced its stake to 4.96%.
Bonmarche (BON) says the mandatory cash bid of 11.445p a share by Spectre undervalues the retailer. Bonmarche is reducing costs. Cavendish Asset Management has edged its stake up to 10%.
Standard list shell Contango Holdings (CGO) has entered into an agreement to acquire the Lubu coalfield project in Zimbabwe for £6.45m in shares at 5p each. Once regulatory approvals have been gained the acquisition should go ahead and trading in the shares can recommence. That should happen by the end of June. There will be a placing to raise cash to fund initial trial mining.
Telecom services provider Toople (TOOP) says that it had more than £1.1m in the bank at the end of March 2019. That is a £1m reduction on the level at the end of September 2018, when there was also a shareholder loan, which was assigned a value of £572,000 in the balance sheet but has a cash value of £607,000. There is no indication if this loan has gone down. Last year, admin expenses were £1.55m, net of other income, and that was more than revenues. Revenues have grown but even if gross margin were to improve there will still be a significant first half loss.
Nuformix (NFX) has signed an agreement for cannabinoid therapeutics development, licensing and commercialisation for an initial upfront payment and other research and development and milestone payments that could total up to £51m. Canada-based Ebers Tech Inc will use Nuformix technology to develop a range of consumer and pharma products.
Zegona Communications (ZEG) has increased its stake in Euskaltel to 21%.
European High Growth Opportunities Securitization Fund has transferred 35.4 million shares in WideCells (WDC) to David Sefton and Linton Capital, which has promised to hold them for 12 months. European High Growth Opportunities still owns 18.2% of WideCells.
Andrew Hore