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Quoted Micro 20 February 2023
AQUIS STOCK EXCHANGE
EDX Medical Group (EDX) acquired Torax Biosciences for the issue of 1.67 million shares at a notional 6p each. Torax provides development and pilot scale fabrication of immunochemistry-based assays and diagnostic testing services. The experienced team at Torax was an attraction.
Marula Mining (MARU) signed a co-development and relationship agreement with a subsidiary of South African mining and investment company Q Global Commodities, which had already agreed to subscribe £3.75m for shares. Q Global chief executive will become Marula Mining chairman, subject to regulatory approval and admission to AIM. Marula Mining is expanding its graphite interests through the proposed purchase of a 75% stake in ten licences comprising the Nyorinyori graphite project in Tanzania.
Electric vehicle drivetrains developer Equipmake (EQIP) reported more than halved interim revenues from £2.32m to £1.05m and the loss increased to £2.76m. There was cash of £7.44m at the end of November 2022. The contracted order book is worth £9.1m. That includes 100% of second half expected revenues as well. There have been delays in delivering vehicles to First Group, so these will be in the 2023-24 figures.
Energy supplier Good Energy (GOOD) has launched a new smart export product for Feed-in Tariff for FiT customers, which could help them to earn more from electricity they generate. There are plans for a new domestic export tariff for households in the next few months.
AQRU (AQRU) has incorporated the London Carbon Exchange and it has a wating list of investors interested in using the platform when it is launched later this year. The platform allows trading in the voluntary carbon market.
RentGuarantor Holdings (RGG) has entered a three-year agreement with X1 Property Management, a residential and student letting company, which hopes to generate secure tenants.
Digital asset investor Kasei Holdings (KASH) raised £500,000 at 12p a share from Aalto Capital. This is a 12.5% stake. ChallengerX (LON: CXS) raised £250,000 through a share issue to Aalto Capital at 0.45p a share. An equal number of warrants exercisable at 0.45p each were also issued.
Spirits company Rogue Baron (SHNJ) non-exec Charlie Wood acquired an initial 600,000 shares at 0.846p each. He also has an interest in the 1.1 million shares owned by Orana Corporate, where he owns 25%.
Hikmat El Rousstom has resigned as non-exec director of Ace Liberty & Stone (ALSP), while at British Honey Company (BHC) Sophie Guifang Luo stepped down from the board to pursue other interests.
Love Hemp (LIFE) has withdrawn from trading on the Aquis Stock Exchange as of 14 February. Trading in Pioneer Media Holdings Inc (PNER) will end on the Aquis Stock Exchange on 9 March.
AIM
Purplebricks (PURP) is launching a strategic review because the board believes the company is undervalued. The share price slumped to 7.86p, which is a new low. Changes to the estate agency business have disrupted the third quarter performance. Instruction numbers were lower than expected. Management has identified an additional £4m of annualised cost savings. There will be £1.2m of one-off costs in the second half. The full year adjusted EBITDA loss will be between £15m and £20m. It was previously expected to be around £10m.
Semiconductors designer EnSilica (ENSI) moved into operating profit in the first half and momentum has continued in the second half. A €5m contract has been won to develop a chip for the satellite communications market, which will start generating revenues in 2023-24. Interim revenues are nearly one-quarter higher at £8.59m. The growth came from design and supply. There was a pre-tax loss of £202,000, but R&D tax credits meant that there was a £322,000 profit after tax. A small full year pre-tax loss is forecast for the full year with a £844,000 post-tax profit.
Semiconductors designer Sondrel Holdings (SND) says the project design for a customer in the automotive sector has been delayed because project design will not be completed until the first quarter of this year. The payment for the first milestone was in January and the second will not be until May. The 2022 loss is higher than forecast and there will still be a small loss in 2023.
Esports company Gfinity (GFIN) raised £2m at 0.15p a share, having originally sought £1.5m. The cash should last for 12 months. Technology platform Athlos still requires a strategic partner and there is enough funding for this for around four months. If not, then it could affect the restructuring and other plans for the rest of the business. At 0.1575p, down 33%, the current share capital is valued at Gfinity at £2.1m. Each placing share comes with a warrant to subscribe for one share at 0.15p and these warrants are exercisable between six and 18 months after the placing shares are admitted to AIM.
Fertiliser producer Harvest Minerals (HMI) had cash of A$2.72m at the end of 2022. Sales of KPFertil are growing and that has enabled the repayment of A$1.2m of debt. A court ruling requires Agrocerrado to pay $463,000, because it failed to acquire the minimum tonnes of KPFertil required by the agreement between the companies.
Medical devices developer Creo Medical (CREO) raised £28.5m from the placing at 20p a share, which was more than the £25m initially targeted. The cash will be used for further development and commercialisation of Creo Medical’s minimally invasive electrosurgical devices. With up to £5.2m more to come from the open offer, Cenkos believe that this is enough cash to fully commercialise the current product portfolio. Revenues of £100m are forecast by 2027.
Clontarf Energy (CLON) is forming a joint venture with US-based NEXT-ChemX Corporation, which covers the deployment and marketing of the latter’s direct lithium ion extraction technology in Bolivia. There is limited water and energy consumption with this technology. The share price soared by 129% to 0.172p. Pilot testing and extraction starts in March. Clontarf Energy will contribute $500,000 towards the pilot plant for exclusive use of the technology. There will also be share issues to NEXT-ChemX.
Promotional goods supplier software platform provider Altitude (ALT) says results for the year to March 2023 will be much better than expected. Zeus has upgraded its pre-tax profit forecast from £500,000 to £800,000 and that is the second upgrade in three months.
Deferral of contracts by clients has led to forecast downgrades for Jaywing (JWNG) and 2022-23 pre-tax profit expectations have been more than halved to £1m, while next year’s forecast has been slashed from £3.7m to £2m. The digital marketing services provider won an Australian online education services contract which will help to offset some of the decline in forecast revenues in 2023-24.
Mkango Resources (MKA) raised £3.5m at 12.5p and this will fund further development of the Songwe Hill rare earths project. Talks with potential funders for the project continue. Mkango Resources will also provide a €2.5m loan facility in HyProMag, which is developing a rare earth recycling production facility in Baden-Wurttemberg. The company’s stake in HyProMag could increase to 66.8%. Chief executive William Dawes acquired 400,000 shares at 12.95p each and 400,000 shares at 12.75p each. He owns 4.42%
WH Ireland has reduced its forecasts for SaaS-based retail software provider itim Group (ITIM) because of contract delays. Revenues for 2022 will be slightly below previous forecasts and that increases the loss by £200,000 to £1.1m. The 2023 loss is expected to be the same. Annualised recurring revenues are £13m, which is lower than expected. Net cash is £3.9m.
Mark Horrocks has increased his stake in cloud-based international payments services provider Cornerstone FS (CSFS) from 8.66% to 13.4%.
Dekel Agri-Vision (DKL) achieved record local process for its crude palm oil in January and there were strong extraction rates from the fruit bunches. However, there were disappointing volumes because of aggressive rival bidding for fruit bunches, although this has eased this month. There no changes to 2023 expectations of a sharp rise in profit.
MAIN MARKET
The ignominious life of Hawkwing (HNG) as a quoted company appears to be coming to an end. Kroll Advisory has been appointed administrator to the company. Hanover Investment Management demanded repayment of £2.2m relating to a convertible loan note. Hawkwing is owed £13.7m plus interest and add-ons by IFG (SPP), where liquidators have been appointed. This is secured on two subsidiaries and their assets, but it is uncertain how much can be clawed back. The cash shell was formerly sports representation and marketing company TLA Worldwide, a past AIM embarrassment which released a profit warning after the market had closed for Christmas.
Zamaz (ZAMZ) has acquired Dallatte Italia, a manufacturer of dairy products. This fits with the Bella Dispensa subsidiary and its Made in Italy ecommerce service. Management wants to change the terms of its bonds by extending their life and increasing the interest rate.
Trading in Net Zero Infrastructure (NZI) shares recommenced last week following publication of accounts and interim figures. The share price fell from 2.2p to 1.55p.
RC365 Holding (RCGH) intends to issue 18 million shares to Hatcher Group Ltd and in return it will receive 38.64 million shares in Hatcher Group. The two firms will collaborate in research and development of smart algorithm technology and other fintech services.
Andrew Hore
Quoted Micro 21 November 2022
AQUIS STOCK EXCHANGE
EDX Medical (EDX) completed its reversal into shell TECC Capital in a deal valued at £12m and £1.2m was raised at 6p a share. The share price returned from suspension and increased by 64.1% to 5.25p, but it is still below the placing price. EDX Medical develops digital diagnostic products and service for cancer, heart disease, neurology and infectious diseases.
Non-fungible token platform developer Looking Glass Labs Ltd (NFTX) has been introduced to the Access segment of Aquis on 14 November. Web 3.0 Holdings Ltd was acquired prior to the flotation. This is a Web3 technology company that owns a retail technology platform. The company’s brand House of Kibaa has designed a next generation metaverse for 3D assets. This enables functional art and collectibles to exist across different NFT blockchains. Sales of digital assets have totalled C$6.2m and there is a 5% royalty stream on secondary sales. There were early deals at 17p a share and the share price has fallen to 13.5p.
Oscillate (MUSH) is planning to acquire Hi55 Ventures Ltd, a fintech platform designed to help companies with payroll flexibility. Trading in the shares was suspended at 0.75p each. The share-based deal values Hi55 at £28m at a notional share price of 1.29p. Existing Oscillate shareholders will be given a warrant exercisable at 1.29p for each share they own. Hi55 allows employees to access their salary as they earn it. This finance can be delivered in partnership with MasterCard.
Vulcan Industries (VULC) has not been able to conclude the proposed agreement to acquire Peregrine X Ltd. Discussion continue so a different structure to the deal might be possible. Vulcan Industries continues to sell its other interests. Components manufacturer Tim Rainham has been sold for £1. The business had net liabilities. Earlier this month, raised £157,000 in a placing at 8.2p a share.
Quetzal Capital (QTZ) says that proposed acquisition target Tap Global has no direct exposure to the defunct cryptocurrency company FTX.
Watchstone Group (WTG) has agreed settlement terms with former auditor KPMG. The final payment is £4.95m. Net assets were £11.4m at the end of June 2022, which was mainly cash. The share price increased by 11.5% to 29p, which values Watchstone at £12m.
Tectonic Gold (TTAU) has recommenced drilling at the Specimen Hill project in Queensland. This is drilling below a previous mine and one result was 8.17g/t gold over one metre in distal veins. A shortage of drilling rigs delayed the restart. The drilling should be completed in a fortnight.
Wishbone Gold (WSBN) has exercised its option to acquire the Anketell gold-copper project in Western Australia. This cost £320,000 in shares at 14.75p a share and £50,000 in cash.
Web3 gaming and infrastructure company Pioneer Media Holdings Inc (PNER) has closed the first tranche of the previously announced placing, and this raised C$580,000 at C$0.10 a unit – one share and 0.5 of a warrant exercisable at C$0.25. This is a huge discount to the market price. The share price slumped 14.3% to 30p. This cash will finance technology development and working capital. Olivia Edwards has been appointed to the board.
Diesel additives supplier SulNOx Group (SNOX) has secured an order in South Africa and a repeat order in Costa Rica. Agriculture has proved to be a large customer base.
Aquaculture and geotracking technology developer OTAQ (OTAQ) increased interim revenues by 11% to £2.03m and the reported loss fell from £881,000 to £538,000. The cash raised when OTAQ moved to Aquis will finance further technology investment. Management says that there will be a period of adjustment. Nigel Wray increased his stake from 15.8% to 19.35%.
IamFire (FIRE) is raising £3.5m at 2.5p a share.
BWA Group (BWA) has £7,367 of cash and net liabilities of £168,000. It is seeking to raise more cash.
Marula Mining (MARU) has increased its fundraising to £519,500 at 2p a share. Richard Lloyd withdrew himself from re-election as a director.
AIM
Totally (TLY) reported further progress in its latest interims with trading generally back to pre-lockdown levels. Demand for insourcing of operations has grown significantly and used up more working capital. Revenues grew but underlying pre-tax profit was flat at £2m. However, earnings fell because of a higher tax charge. Contracts worth £37m were extended. Underlying full year pre-tax profit is expected to improve from £3.7m to £5.7m, helped by insourcing demand as the NHS tries to reduce waiting lists.
Delays in commencing manufacturing and building up sales of Stereax small battery cells have knocked the Ilika (IKA) share price, which slumped 34.7% to 32p. The commercial prototypes will not be available until the end of 2023. It is also taking longer than anticipated for the larger Goliath batteries to reach the position where they have equivalence with lithium-ion cells. Forecast group revenues have been cut for this year and next year, while the 2024-25 forecast has been slashed from £18.1m to £2.7m by Berenberg. That indicates the length of the delays. That would put Ilika into a net debt position.
Wynnstay Group (WYN) is acquiring Cornwall-based feed supplier Tamar Milling for an initial £1.4m. This is immediately earnings enhancing. In 2020-21, Tamar Milling revenues were £6.4m and pre-tax profit of £420,000. Wynnstay says that its 2021-22 results will be better than expected. Grain, seed and fertiliser revenues have been strong and joint venture businesses will make a higher than expected profit contribution. There is also a boost in the figures from the accounting treatment of the hedging of wheat contracts.
Chain and transmission equipment manufacturer Renold (RNO) continues to trade well in tough times. Interim revenues were 22% ahead at £116.3m, while underlying pre-tax profit was two-fifths higher at £7.3m. The acquisition of Industrias YUK in Spain meant that net debt increased to £34m, but management is still confident that it can finance further acquisitions when they are identified. Higher interest rates have helped to reduce the net pension deficit by one-quarter to £56.6m. The order book is worth £99m, which is a record.
Digital coupons and loyalty technology provider Eagle Eye (EYE) is acquiring France-based Untie Nots, which provides promotion and gamification SaaS products to retailers. The deal will cost up to €38.8m. The initial payment is €9.1m in cash and €5.9m in shares at 555p each. A placing will raise £7m at 555p a share and the rest of the cash will come from existing net cash of £3.6m. The deferred payments of up to €23.8m will depend on achieving revenue targets in 2022, 2023 and 2024, which equate to annual growth of 60%, as well as achievement of a minimum EBITDA margin.
Harland & Wolff (HARL) is involved in Team Resolute, a consortium that is preferred bidder for a £1.6bn contract to build Royal Navy support vessels. This will require significant investment in the Belfast shipyard. The Appledore shipyard in Devon will also be involved.
Poolbeg Pharma (POLB) and consortium partners have been awarded a €2.3m grant by an Irish government fund to develop an oral vaccine candidate from pre-clinical to phase I readiness. The aim is to induce mucosal immunity. The week before Poolbeg identified multiple novel drug targets for the treatment of respiratory syncytial virus (RSV) through it s collaboration with OneThree Biotech.
N4 Pharma (N4P) is raising £1m at 2p a share. A broker offer could raise up to £1m more. The share price slumped by 30.5% to 2.05p. The cash will be used for the development work relating to loading SiRNA onto delivery vehicle Nuvec, plus for funding the investigation of possible acquisitions.
MAIN MARKET
Standard listed BSF Enterprise (BSFA) says that its subsidiary 3d Bio-Tissues has produced three small prototype fillets of cultivated meat, which is a step towards a full-scale cultivated meat fillet. This comes at a time when the US FDA has given approval to a cultivated meat product for the first time. The cultivated meat fillets were 30mm in height and 15mm in diameter and weighed 5 grammes. They were some of the first 100% cultivated meat fillets produced in the world. The comparisons with conventional meat were described as “comprehensively positive”. The first full-scale cultivated meat fillet should be showcased early next year.
Braemar (BMS) increased interim revenues by 46% to £69.4m, helped by the strength of the dollar. Underlying pre-tax profit more than doubled to £10.5m and Braemar moved into a net cash position of £1.8m. The interim dividend was doubled to 4p a share.
Trading continues to improve at Castings (CGS) and interim revenues were 23% higher at £85.6m, while pre-tax profit recovered 38% to £7.5m. Price increases offset cost rises. There is strong demand for HGVs and short-term component order books remain strong. The interim dividend is 3.84p. Net cash is £25.6m and that should rise significantly in the second half.
J Smart Contractors (SMJ) is paying a final dividend of 2.27p a share. In the year to July 2022, revenues fell from £10.4m to £7.43m as construction activity declined. Thanks to a £6.06m profit on the sale of investment properties a pre-tax profit of £8.19m was reported. That is down from £14.9m the previous year, although that included a revaluation surplus of £12.1m. NAV is £124.7m, including net cash of £20.7m.
Standard list Rockpool Acquisitions (ROC) announced heads of terms for the purchase of Amcouri Group, which is a holding company for nine engineering and manufacturing businesses. The potential cost is £22.3m in ordinary shares based on the forecast profit forma EBITDA of £5.4m.
Net Zero Infrastructure (NZI) has terminated acquisition talks with Taylor Construction because it could not raise the cash required for the deal. NAV is £650,000.
Andrew Hore
Quoted Micro 23 May 2022
AQUIS STOCK EXCHANGE
Nigeria-focused oil company Lekoil Ltd (LEK) made the switch from AIM to Aquis on 18 May. Trading in the shares will remain suspended until audited accounts are published. Lekoil is in dispute with Lekoil Nigeria, where it has a major interest, and former chief executive Mr Olaekan Akinyanmi, who is being funded by Lekoil Nigeria. The board wanted shareholders to have a trading facility, while the litigation is being pursued. The main source of assets will be the recovery of intercompany debts and there is likely to be little value in the oil and gas operations.
Valereum (VLRM) is still going through the regulatory process to acquire 90% of the Gibraltar Stock Exchange. There is a government review of the Gibraltar financial services community.
Quantum Exponential (QBIT) is investing £450,000 in Brighton-based Universal Quantum Ltd, which is trying to build the first million quantum bit quantum computers. The cash will help to develop the processing unit. The investment is via an advanced subscription agreement, and this will be converted into shares after one year or if there is a fundraising of at least £10m.
Hemp and CBD wellness products company Yooma Wellness Inc (YOOM) generated revenues of $10.2m in 2021, while the loss was $35.7m, including $22.5m of asset write-downs and £1m of listing costs. The company’s products are being rolled out in additional high street and online stores. The US operations are being rationalised and the focus moved to other markets.
SuperSeed Capital Ltd (WWW) made two investments in the first quarter of 2022. Investors in the company’s fund during January have already made a 43% gain. There was seed capital provided to the two investments. Ai Build is a software developer for 3D printing additive manufacturing, which will enable the 3D printing of larger objects. ThingTrax is developing technology that will help manufacturers to monitor and automate production.
RentGuarantor Holdings (RGG) has obtained a non-exclusive to use the Propertymark trademark in the UK. Propertymark has 18,000 of property letting and sales businesses. Propertymark will promote RentGuarantor rent guarantees for tenants.
Major shareholder Neo London Capital is providing a lending facility to Black Sea Property (BSP) to finance the exploration of property development opportunities.
Wishbone Gold (WSBN) has completed the survey of additional targets at the Red Setter project in Australia. The first phase of drilling at Red Setter is 3,000 meters.
Ace Liberty and Stone (ALSP) has sold a flat in Chelsea for £2.185m, which is above the book value of £2.1m.
Oscillate (MUSH) has a stake in Psych Capital, which is joining Aquis on 25 May.
The incoming finance director Robert Smith has bought 500,000 Chapel Down (CDGP) at 42.5p each.
AIM
Fishing tackle retailer Angling Direct (ANG) managed to beat previously upgraded forecasts for the year to January 2022. Revenues increased from £67.6m to £72.5m even though online sales fell. UK online sales increased but European online sales because of difficulties with prompt delivery. The new Netherlands distribution centre will help. There was £16.6m in cash at the end of January 2022. Pre-tax profit jumped from £2.7m to £4m, but this is not expected to be maintained. Singer forecasts a pre-tax profit of £2.8m on revenues of £82m in 2022-23.
Compliance and energy saving services provider Sureserve (SUR) continues to grow and it is set to supplement this growth with acquisitions in the energy efficiency and renewables sectors. Interim revenues from continuing operations increased by 24% to £126.2m, while pre-tax profit was one-third higher at £4.3m. The non-core fire and lift businesses are profitable, and they made a slightly higher pre-tax profit of £1.24m on revenues of £17.3m, which is not included under continuing operations. Those non-core businesses have net assets of £13.1m. Assuming Sureserve receives a similar amount when they are sold this would boost the cash position. There was £8.86m in the bank at the end of March 2022.
Designer and supplier of automotive interior components CT Automotive (CTA) reported its maiden full year results as an AIM company. There was a strong recovery in the first half, but component shortages have reduced the demand from car manufacturers in the second half. Even so, full year revenues recovered from $109.9m to $132.9m, although the company remained loss making. There is a strong order book, but revenues are still likely to be hit by lack of demand due to component shortages. These problems could last for most of this year with automotive volumes set to recover in 2023. A new factory in Mexico should be open in July.
Vela Technologies (VELA) invested £750,000 in convertible loan notes in EnSilica, which is about to join AIM. This investment should convert into 1.75 million shares, which is a 2.3% stake in the integrated circuits designer and supplier.
Chariot Ltd (CHAR) has raised £20.4m ($25.5m) at 18p a share and more could come via an open offer. This will help Chariot to make progress with the Anchois gas development in Morocco. Some of the cash will go on renewables projects.
Begbies Traynor (BEG) says 2021-22 results will be comfortably ahead of expectations and insolvencies are increasing.
Digital coupons and loyalty technology provider Eagle Eye (EYE) says that the roll out of services to a US retailer has helped 2021-22 EBITDA to potentially be 10% higher than expected.
MAIN MARKET
Standard list shell BSF Enterprise (BSFA) completed the reverse takeover of Newcastle-upon-Tyne-based tissue engineering 3D Bio-Tissues Ltd for £2.5m in shares. There was £1.75m raised in a placing at 7.37p a share, which is the same price at which the 33.9m consideration shares were issued. That valued the company at £6.32m on readmission. The share price ended the week at 9p. There are three main types of technology that are being developed. City-mix is a serum-free media for culturing muscle and fat cells in an animal-free process that can be used to grow meat and leather in a laboratory. There is less variation between batches than for some rivals and it could cost less. Another technology is based on Lipopeptide Etsyl, which helps to increase collagen production in human skin cells, and it can be used dermatological products. This will be sold as an ingredient to skincare product manufacturers. The third technology is tissue templating. This includes the original substitute cornea technology, as well as other uses.
In the year to February 2021, Braemar Shipping Services (BMS) expects an underlying operating profit of £9.8m, up from £7.7m. The annual dividend will be two fifths higher at 7p a share. The operating profit expectations for 2022-23 have been upgraded from £10m to £12m.
Macfarlane Group (MACF) is buying German protective packaging distributor PackMann. This is a profitable business, and it will help Macfarlane to expand in northern Europe.
Nanoco (NANO) has received an official decision that its 47 disputed patent claims are valid. This is an important step in the legal proceedings against Samsung, which used its quantum dot technology without agreement. There is still some way to go, but a settlement could generate more than £100m for Nanoco, even after the litigation funder gets its payment.
Net Zero Infrastructure (NZI) is in talks to acquire specialist equipment hire company Taylor Construction Plant and Solar Highways. Trading in the shares has been suspended.
Andrew Hore