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Andrew Hore – Quoted Micro 7 June 2021
AQUIS STOCK EXCHANGE
Chapel Down Group (CDGP) is raising up to £6.88m at 59.5p a share via a placing and crowdfunding offer. The directors and Michael Spencer have invested £1.43m in the placing. The rest of the cash will come via the crowdfunding with Seedrs. The financing will only go ahead if a minimum of £3m is raised. The wine maker wants to increase the scale of its winery so it can process more fruit and complete the planting of new acreage. Management also wants to improve the e-commerce capabilities. A new asset-based financing facility of up to £15m has been secured and it will refinance the HSBC debt. Chapel Down increased its revenues from continuing operations from £10.1m to £13.3m in 2020. The underlying pre-tax profit was trebled from £308,000 to £955,000.
TECC Capital (TEC) is a new shell that is seeking to buy technology or cannabis businesses. There is a wide list of potential sub-sectors that will be considered, including artificial intelligence and machine learning, telematics, life sciences, including cannabis products, cyber security and e-commerce, which includes the Internet of Things. TECC raised £1.1m, after expenses at 5p a share. There is pro forma cash of £1.15m, which is equivalent to just over 3.8p a share. Even so, the share price ended the week at 10p. Chris Akers owns 9.9%.
Pioneer Media Holdings Inc (PNER) is a Canada-based investment company with investments in eSports and mobile gaming businesses. It already has a portfolio of ten companies and a Canadian Stock Exchange listing. The shares floated at 45p each and they closed the week at 48p each.
Gledhow Investments (GDH) is raising £850,000 at 1.75p a share. That is at a 12.5% discount to the market price. Gledhow had net assets of £2.35m at the end of March 2021, including £374,000 in cash. That means it is a significant discount to net assets of nearly 4.8p a share. That figure will be significantly diluted by the new share issue. Gledhow does need to become bigger to warrant the quotation, though. Although it has a portfolio of investments, Gledhow would make a good shell for a business. Burns Singh Tennent-Bhohi has taken a 3.26% stake in Gledhow.
Non-executive director Dominic Burke has bought 10,000 shares in Newbury Racecourse (NYR) at 582.5p each. The racecourse will be able to have spectators at its 10 June meeting and if there is further easing of lockdown then the hotel and events businesses can reopen. Newbury Racecourse will continue to be loss making in the first half of this year. A joint venture has been set up with a subsidiary of Compass to provide catering for the racecourse and other businesses.
KR1 (KR1) has invested a further $200,000 in Automata, as part of a $2.4m financing. KR1 will receive five million ATA tokens and it already owned ten million tokens.
Startup Giants (SUG) increased revenues from £45,000 to £87,000 in 2020. Higher costs meant that the loss increased. However, there was a £9,000 cash inflow from operating activities. There was net cash of £651,000 at the end of 2020.
Wishbone Gold (WSBN) says that initial drilling of the Cottesloe silver project, which is close to the Red Setter project.
MiLOC Group Ltd (ML.P) has raised nearly £80,000 at 28.5p a share.
Capital for Colleagues (CFCP) directors Alistair Currie and Ed Jenkins have each bought 18,400 shares at 43.25p each. Currie owns 3.67% and Jenkins holds 0.75%. Chairman Jonathan Bixby has bought 1,000 shares in NFT Investments (NFT) at 2.9p each. Iain Livingston, the father of S-Ventures (SVEN) chief executive Scott Livingston, has sold 150,000 shares at an average price of 23p a share. Scott Livingston owns 49.1% and his family a further 3.5%.
AIM
Arecor Therapeutics (AREC) takes existing pharma products and reformulates them for new uses or to make them more effective. A placing raised £18.3m, after expenses, at 226p a share. The main focus is diabetes. Arecor’s insulin program AT247 is an ultra-rapid acting meal-time insulin product, while AT278 is an ultra-concentrated rapid acting insulin development, which could be used with miniaturised insulin pump delivery devices. AT299 is a co-formulation of pramlintide and insulin. These fast-acting insulins have an addressable market worth $6.4bn. There have been positive clinical studies for AT247. A phase II study should provide results in 24 months and that would be the point when a partner would be secured.
Artisanal Spirits Company (ART) owns the Scotch Malt Whisky Society (SWMS) and it raised £13.2m after expenses at 112p a share, which was at the bottom of the 112p a share to 121p a share price range. First quarter sales in 2021 improved from £2.9m to £3.4m, even though venues and events revenues continued to be well down during the period. There was cask whisky and bottled stock of £21.7m at the end of 2020. That is the main asset in the balance sheet and an independent valuation believes that this stock is worth £9m more than book value – based on an orderly liquidation.
Franchised lettings agency Belvoir (BLV) has acquired The Nottingham Building Society’s mortgage and protection services business for £600,000. This year’s operating profit is expected to be £175,000. The deal could add 1% to earnings in a full year.
Coral Products (CRU) had £3.8m in the bank at the end of April 2021. That should be boosted by the Haydock freehold sale, which should be completed in the second half. In the year to April 2021, revenues from continuing operations increased from £8.7m to £10.7m. Even excluding the profit on disposals of £2.3m, the pre-tax profit was £700,000. There will be a final dividend of 0.5p a share.
CyanConnode (CYAN) has raised £3.15m at 9.5p, taking advantage of the strength of its share price. This was a small premium to the market price. CyanConnode could have made progress in the smart meter market without the additional cash, but this will help to accelerate its growth.
Cleantech company Verditek (VDTK) is raising up to £500,000 through a bond offering 7% interest, secured against the assets of the company. The offer is via Crowd for Angels, which is underwriting the first £225,000 of the two-year bond. Verditek wants to expand its Italian facility so that it can satisfy international contracts for its lightweight, flexible solar panels. The focus is the solar operations, but there are also minority stakes in BBR Filtration and Industrial Climate Solutions Inc.
Housebuilder Springfield Properties (SPR) says that its 2020-21 revenues and profit will be better than pre-Covid-19 levels. This was helped by two land sales. N+1 Singer forecasts an improvement in pre-tax profit from £10.2m to £18m.
Internet domain name registry and services provider CentralNic (CNIC) generated organic growth of 16% in the first quarter of 2021. Total revenues jumped from $56.9m to $84.4m, helped by acquisitions. Net debt is $79m.
MAIN MARKET
Sportech (SPO) and CML Microsystems (CML) both intend to switch to AIM. Sportech believes that the junior market is more suitable for its size and it will make it easier to complete transactions. CML also believes that AIM is more suitable following the sale of one of its divisions and it also expects its shareholders to benefit from the tax breaks.
Tarek Taksch has reduced its stake in Oxford Cannabinoid Technologies (OCTP) from 7.75% to 5.43%. The company has entered a consultancy agreement with Voisin Consulting, which will help with regulation and development plans for OCT461201, a treatment for ailments associated with IBS.
Shefa Gems (SEFA) is demerging its gems business, because it will take longer than expected to exploit the assets, and turning itself into a shell. Existing shareholders will receive shares in the gems business. There will be a 100-for-one share consolidation and then the company will raise $1.05m (£756,000) at 3.53p a share. The name will be changed to Alef Bet Advanced Technologies and seek an acquisition in web technology and software.
Imperial X (CDL) has raised £2m at 3p a share as part of its move from Aquis to the standard list. The resources company is changing its name to Cloudbreak Discoveries.
Motor dealer Caffyns (CFYN) manged to improve its underlying profit from £251,000 to £1.88m last year, even though revenues fell from £195.8m to £165.1m. Net debt was £10.3m at the end of March 2021. There has been a property valuation that shows the portfolio is worth £12.3m more than book value. Excluding that surplus, NAV is £27.6m.
National Word (NWOR) has already secured annualised savings of £4m from the JPI Media acquisition and is on course to secure savings of at least £5m. The online audience is increasing, and monthly content revenues are being generated from Google and Facebook. Overall revenues increased by 18% in April and May. The fastest growth is from digital.
Andrew Hore
Andrew Hore – Quoted Micro 4 January 2021
AQUIS STOCK EXCHANGE
BWA (BWAP) has been unable to sell Kings of The North Corp (KOTN) back to St Georges Eco-Mining and there are problems with the title to claims held by KOTN. It appears that two licences had not been renewed by St Georges. Three more licence areas are being reviewed. St Georges has claimed C$200,000 for work it is claimed that has not been done. There is already a claim for cash from a KOTN director and there could be further claims against directors of KOTN and St Georges.
Gunsynd (GUN) says trading in investee company Empress Royalty commenced on the TSX Venture Exchange. Gunsynd invested £146,000 in October and owns 1.4% of Empress.
MiLOC Group Ltd (ML.P) has terminated its endorsement agreement with BrandKing Worldwide and First Strong Workshop for AKFS+ haircare products and also ended the commission agreement with CN Workshop. In the recent interims, inventories increased in part due to AKFS+ haircare products.
Vulcan Industries (VULC) generated revenues of £5.74m and lost £2.96m in the period between 24 October 2018 and March 2020. This was before Vulcan raised £2.2m. The subsequent quarter trading was poor, but the second quarter was ahead of expectations. Further acquisitions have been identified.
TruSpine Technologies (TSP) lost £448,000 in the six months to September 2020. There was £567,000 in the bank.
Evrima (EVA) has sold a commercial property in Leeds for £200,000, which after costs is slightly below its purchase price in 2017. The cash will be reinvested in Kalahari Key Mineral Exploration.
AIM
Small business finance provider Vector Capital (VCAP) joined AIM on 29 December. It raised £3.1m at 38p a share and ended the week at 39.5p. In the six months to June 2020, revenues increased from £1.59m to £2.13m, while pre-tax profit jumped from £954,000 to £1.26m, even though new loans were not issued in the second quarter. The business has been profitable for the past four years. The loan book was worth £34.7m at the end of September 2020. The Jain family owns 80.85% of Vector Capital. Prior to flotation the original shareholders received a total dividend of £400,000.
Xpediator (XPD) has sold its online shopping logistics business in order to concentrate on the core freight business. EshopWedrop Holdings was losing money and the total consideration is £300,000 paid in equal instalments over three years. The book value was £700,000. Xpediator will achieve annual cost savings of £350,000 following the disposal.
MJ Hudson (MJH) is acquiring fund performance analytics business PERACS and this will widen the services it can provide to the asset management sector. The initial payment is 586,016 shares and there is deferred consideration in cash and shares over a three-year period.
Shareholders voted against the reappointment of Ian Visagie as a director of Goldplat (GDP).
Cyber security services provider Shearwater Group (SWG) says that October and November revenues were 39% ahead of the same period last year and the momentum continued into December.
UFG Asset Management has a total shareholding in Trans-Siberian Gold (TSG) of 54.9%.
DBAY Advisers has sold more of its stake in Wynnstay Group (WYN) and it has fallen to 3.7%.
MAIN MARKET
National World (NWOR) is paying £10.2m for the former Johnstone Press group of newspapers. No debt is being taken on. JPI Media Publishing is the third largest local news group in the UK and includes titles, such as Yorkshire Post, Portsmouth News and the Scotsman. JPI is estimated to have generated revenues of £85m and EBITDA of £6m in the past year. National World will use the assets to build a local online news publishing model. There is an initial cash payment of £5.2m with two further instalments. National World is issuing £8.425m of 10% loan notes and plans to issue more. Trading in the shares remains suspended until a prospectus is published and it may not resume until April.
Oil-focused shell Wildcat Petroleum (WCAT) joined the standard list on 30 December. It raised £600,000 at 0.1p a share and was capitalised at £2.4m.
Argo Blockchain (ARB) is investing $100,000 in hashrate management platform Luxor Technologies. The technology can help cryptocurrency miners to increase their returns.
Standard list shell Rockpool Acquisitions (ROC) is still talking to Greenview Gas in its attempt to find a Northern Ireland-based acquisition. Greenview has downgraded its 2020-21 pre-tax profit expectation from £1.4m to £1m. Rockpool had loaned more than £1m, including interest, to Greenview. The initial loan agreement was three years ago. In November, this was repaid out of new borrowings.
Marwyn Acquisition Co I Ltd (MAC1), one of three shells floated by Marwyn during December, has appointed Vin Murria as chairman. She has built up two software companies on AIM and then sold them. The appointment means that the focus of this shell will be the software sector, with the first acquisition likely to be worth more than £100m. Last month, Vin Murria joined the board of AIM shell Summerway Capital (SWC) and it is also seeking software and digital acquisitions, but it is likely to be assessing smaller acquisitions.
Andrew Hore
Andrew Hore – Quoted Micro 5 October 2020
AQUIS STOCK EXCHANGE
Wine and beer maker Chapel Down (CDGP) made a similar interim loss this year. Wine revenues were one-fifth ahead even though sales were lost in pubs and the company’s own retail site. Online sales offset those declines. Wine stocks have increased by one-third to £11m. Beer and cider sales fell by 38% and gross profit slump by 59%. There was £5.83m in cash at the end of June 2020.
Coinsilium Group Ltd (COIN) reported an increase in interim revenues from £109,000 to £140,000. Reversal of impairments and unrealised gains helped to generate a pre-tax profit of £27,000, down from £242,000 because of lower unrealised gains. NAV was £2.52m, including cash of £129,000, at the end of June 2020. Since then, there has been an increase in the value of cryptocurrency and tokens held by the company.
Western Selection (WESP) has sold its stake in AIM-quoted Brand Architekts (BAR) and raised £1.43m at 109.78p a share. The shares were valued at £1.63m in the recent balance sheet. Peter Gyllenhammr increased his stake in Brand Architekts from 6.1% to 10.5%.
KR1 (KR1) reported an interim pre-tax profit of £522,000, including an unrealised gain of £711,000. The NAV was 6.18p a share at the end of June 2020. The latest digital asset investment is $100,000 in the Moonbeam Network project. This is a smart contract platform and KR1 will receive Glimmer tokens that will power Moonbeam’s blockchain.
Incanthera (INC) has announced positive data for a skin sensitisation study for skin cancer technology Sol. This shows it to be non-irritant. ImmuPharma has subscribed £250,000 for shares at 9.5p each. That takes the stake to 15.3%. A total of £350,000 was raised with directors subscribing for the other £100,000.
Housebuilder St Mark Homes (SMAP) has an NAV of 125p a share, compared with a share price of 87.5p (85p/90p). There was a swing from interim profit to loss.
Gunsynd (GUN) has invested £58,000 in gold explorer Angold Resources, subject to its reversal into ZTR Acquisition, which was formerly Oyster Oil and Gas, where Gunsynd already has a stake.
Property investor Ace Liberty and Stone (ALSP) has completed the £1.43m acquisition of a property in Scarborough leased to Skipton Building Society. It has exchanged contracts on a Carlisle property costing £1.71m.
NQ Minerals (NQMI) says that processing rates at the Hellyer gold mine have increased to 165 tonnes per hour. The average annualised production rate was 1.23Mtpa in July and August.
Gowin New Energy Group (GWIN) says it is near to appointing a new corporate adviser so that trading can resume in the shares. Management is working towards launching a tea business.
Primorus Investments (PRIM) has invested £1m in construction payments software company Zuuse. Thi is part of a £2.2m fundraising to pay for a transaction expected in the next few weeks. Primorus already owned shares and warrants in Zuuse, so it owns 1.7% of fully diluted share capital. Primorus has sold six million Greatland Gold (GGP) shares at an average price of 14.8p each. That leaves Primorus with 20 million Greatland shares.
Capital for Colleagues (CFCP) had an NAV of 51.53p a share at the end of May 2020.
IFA group AFH Financial (AFHP) says that business is recovering and it continues to be profitable and cash generative.
Eurocann International (BUD) is changing its name to DiscovOre (ORE) and the investing strategy broadened to include natural resources as well as cannabis-related activities.
SativaWellness Group Inc (SWEL) has been readmitted to the AQSE growth market following the reverse takeover of the company.
AIM
Avingtrans (AVG) improved its 2019-20 pre-tax profit from £5.3m to £5.9m despite loss contributions from recent acquisitions. One of those acquisitions, Booth Industries, has won a £36m doors contract for HS2. finnCap forecasts a 2020-21 pre-tax profit of £7.3m and Avingtrans is likely to reinstate the dividend.
Demand for the type of data erasure and cyber security services provided by Blancco (BLTG) remains strong, although April and May were tough. In the year to June 2020, revenues improved from £30.5m to £33.4m, helped by acquisitions. Pre-tax profit grew from £3m to £3.9m. Investec expects further profit improvement to £4.3m this year, but it will be second half weighted.
Geospatial services provider 1Spatial (SPA) reported an 8% rise in interim revenues to £11.7m, although the core business revenues made up a greater proportion of the total. There was an interim loss but positive operating cashflow of £1.7m. Net cash was £3.4m. 1Spatial could make a small full year profit.
Grant Thornton has decided to settle litigation with AssetCo (ASTO) rather than appeal the court judgement. This means that AssetCo can access the £28.6m lodged with the court plus the balance of money owed by Grant Thornton. Once this is received, AssetCo will have cash of £55m and net assets of around £52m. The market capitalisation already takes this into account.
The FDA has approved adrenal treatment Alkindi in the US and Diurnal (DNL) should receive a $2.5m milestone payment from distributor Eaton pharmaceuticals when sales start next year. That is on top of licence income. That means that Diurnal’s cash will last longer.
New Trend Lifestyle Group (NTLG) changes its name to Conduity Capital (CCAP) on 5 October. The former activities have been sold and Conduity becomes a shell.
Erris Resources (ERIS) plans to buy a 50% stake in Zinnwald lithium project owner Deutsche Lithium from Bacanora Lithium (BCN) in exchange for shares and a net profit royalty.
Yu Group (YU.) reported a decline in first half revenues from £56.6m to £45.9m due to lower energy consumption by its commercial energy customers. There was a lower loss in the period but reduced working capital requirements meant that there was a significant cash inflow from operating activities. There was £17.9m in the bank at the end of June 2020. Management has invested in marketing in order to win new business.
Intelligent Ultrasound (MED) is launching its first AI software product alongside GE Healthcare. GE has 480,000 ultrasound machines in use and the AI software will be integrated in a range of women’s health ultrasound machines. It could be rolled out across other machines in the future.
M and C Saatchi (SAA) has failed to publish its results and trading in the shares has been suspended. Windar Photonics (WHPO), Clear Leisure (CLP), Malvern International (MLVN), Tri-Star Resources (TSTR) and Hydrodec (HYR) have had share trading suspended for the same reason. The acquisition of Bristol Energy customers will boost scale and help Yu to move towards profitability.
MAIN MARKET
Car finance provider S and U (SUS) generated revenues of £42.8m in the six months to July 2020. That was a 3% decline, but the effects of the Covid-19 lockdown will be greater in the second half. Net receivables were down by 6% to £281.9m, but new loan volumes fell by one-third in the first half. Bad debt provisions were increased by £13.8m to £21.7m and this led pre-tax profit to slump from £17.1m to £6.3m. The property bridging loan business made a lower profit contribution, although the market has subsequently inproved. Even so, a dividend of 22p a share was announced, down from 34p a share.
Guild Esports (GILD) raised £20m at 8p a share. The share price ended the first day of trading at 8.15p.
Mining shell Critical Metals (CRTM) joined the standard list on 29 September. The placing price was 5p and the price was 5.5p at the end of the week.
Toople (TOOP) is on course to achieve £1.6m of annualised cost savings from integrating DMSL. The focus is on margin rather than just growing revenues.
Ross Group (RGP) reported a reduced loss of £830,000, down from £3.15m, in the first half of 2020. There were no revenues, but the company is trying to build up supply chain operations.
InnovaDerma (IDP) reported full year figures in line with its trading statement in July. The skincare products supplier slumped into loss due to higher marketing costs. There was cash of £1.2m at the end of June 2020.
Newspaper publishing consolidator National World (NWOR) had £4.31m in the bank at the end of June 2020. It is still evaluating acquisition opportunities.
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 23 September 2019
NEX EXCHANGE
Newbury Racecourse (NYR) continues to progress its development plans and some of the benefits are shown by the near-doubling of conference and events revenues in the first half. The remodelling of the main parade ring has been completed and a contractor appointed for work on the Royal Box, which will cost £2.5m. In the six months to June 2019, revenues were 3% higher at £7.57m, even though one race day was lost, and there was a slightly lower pre-exceptional loss of £317,000. There is a danger that legislation relating to fixed odds betting terminals could have a knock-on effect on Newbury’s revenues from bookies in the second half.
Shepherd Neame (SHEP) will be releasing its annual results on Wednesday. Peel Hunt expects pre-tax profit to be 5% lower at £11.2m, because there was no contribution from the Asahi brewing contract that ended in 2018. Excluding that contract, profit could have risen. Pubs have grown their like-for-like income and brewing volumes have recovered, but second half profit could be minimal. NAV of 1664p a share is forecast.
Healthcare IT provider DXS International (DXSP) has been hit by a short-term lack of sales activity in the NHS. In the year to April 2019, DXS reported an increased loss of £200,000, up from £46,000. Revenues dipped from £3.41m to £3.35m. More than £1m was spent on developing products during the year.
Ananda Developments (ANA) says that dry herb medical inhalation system Hapac has been refined and sales of the device and Hapac sachets are growing. However, legal uncertainty in Italy means that Hapac has been removed from sale while a court case over labelling and cannabis content is heard in Parma. There are plans to launch Hapac in other markets. Ananda has a 15% stake in Hapac’s owner. Edward Nealon has increased his stake in Ananda from 5.31% to 6.91%.
AfriAg Global (AFRI) says that Apollon Formularies, a Jamaican cannabis company where it owns 2.325% and it intends to acquire the rest of the shares, has completed a six week pilot opening of a medicinal cannabis therapy centre to treat patients.
Karoo Energy (KEP) is in discussions with investors so that the company can be recapitalised and settle outstanding creditors. NEX has agreed to defer the withdrawal of Karoo shares from trading ahead of the publication of a circular.
AFH Financial (AFHP) has bought another IFA. It is paying up to £3.2m for Wirral-based Broadleaf Financial Services.
LF Woodford Equity Income Fund and Woodford Patient Capital Trust own 50.6% of Rutherford Health (RUTH) following the latest cash injection of £12.5m at 176p a share.
AIM
StatPro (SOG) is recommending a 230p a share cash bid from Confluence Technologies. That is a 55% premium to the market price and the share price has never been anywhere near that level. It is equivalent to more than 32 times last year’s earnings. Nearly two-thirds of the shares have agreed to accept the offer, which values the asset management software supplier at £161m.
Fulcrum Utility Services (LSE: FCRM) has managed to avoid publicity of its full year figures. On the plus side, they were released before the end of September so there is no danger of trading in the shares being suspended. They were in line with previous indications after multi-utility construction services provider Fulcrum and its auditors finally agreed on the way to interpret IFRS16, which relates to recognising revenues. Fulcrum is no longer allowed to take the revenues and profit from constructing its own utility assets through the income statement. Revenues were one-fifth higher at £48.9m, while underlying pre-tax profit improved from £7.9m to £8.6m. NAV is 20.5p a share.
Background and medical screening checks provider ClearStar (CLSU) grew its interim revenues by 17% to $11.6m and it is getting nearer to profitability. The underlying pre-tax loss was $500,000. This has prompted a small upgrade in the revenues forecast to $23.5m, but additional marketing costs mean that pre-tax loss is still likely to be $600,000. Net debt could be $700,000 at the end of 2019. Demand from the US labour market remains strong and ClearStar is building its presence in newer sectors.
MAIN MARKET
Standard list shell AIQ Ltd (AIQ) is in talks to buy Alchemist Codes, a Malaysian IT consultancy and e-commerce app developer, for £2.3m in shares. Trading in the shares has been suspended. Due diligence is ongoing, and the shares will remain suspended until a readmission document relating to the reverse takeover is published.
Advanced materials supplier Low and Bonar (LWB) is recommending a 15.5p a share cash bid from Germany-based FVB that values the company at £107m. The bidder says that its geographic reach will widen, and it will be able to enter the coated technical textiles market. Recent trading at Low and Bonar has been poor.
National Word (NWOR) is a standard list shell that has been launched by former Mirror boss David Montgomery so that he can acquire UK local newspapers.
Toiletries manufacturer Creightons (CRL) has agreed to acquire its premises in Peterborough for £3.8m. This needs to be agreed to be shareholders at a general meeting.
Argo Blockchain (ARB) has installed a further 1,000 cryptomining machines, taking the total to 6,000. That figure could double by next spring. In the six months to June 2019, Argo generated revenues of £2.93m and made a pre-tax profit of £947,000.
Andrew Hore