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Andrew Hore – Quoted Micro 11 February 2019
NEX EXCHANGE
Primorus Investments (PRIM) says that investee company Sport:80 has delayed its flotation because it has been tidying up its shareholder register. Fintech company Engage Technology is also seeking to float later in 2019 following new product launches. Engage raised £2.6m at £22 a share at the end of 2018, whereas the average buying price by Primorus was £20.03 a share. Investee company, AIM-quoted Greatland Gold (GGP) has published results from the second drilling campaign at Havieron in Western Australia. Every drill hole intersected mineralisation and they extend the overall mineralisation. Drilling will recommence in March. Primorus has raised cash by selling most of the stake in UK Oil and Gas (UKOG) and Primorus was debt free at the end of 2018.
NEX has decided not to suspend trading in the shares of VI Mining (VIM) even though its corporate adviser Daniel Stewart is no longer a member of NEX. VI Mining had little or no notice of its adviser’s withdrawal. A new corporate adviser is being sought.
Milamber Ventures (MLVP) has acquired apprenticeship training provider Astara Training for £16,666 in shares at 9p each. Milamber lost £179,000 in the third quarter and there was £30,000 in the bank at the end of 2018.
Panther Metals (PALM) has announced the initial results of exploration activity at the Bear Lake project in Ontario. There was gold in soil anomalies at four of the five areas tested. Four areas have quartz vein sample assays above 5g/t gold. Two samples had large grade samples. The next phase of exploration is being planned and could start in the second quarter of 2019.
Auxico Resources Canada Inc (AUAG) has signed a deal that could enable it to earn a 70% interest in a joint venture that owns the Palha tantalum property in northern Brazil.
AIM (February 2019 AIM Journal available here)
DP Poland (DPP) is running short of cash and is more than doubling its share capital through a heavily discounted placing raising £5.3m at 6p a share, with the possibility of an additional £500,000. The Domino’s Pizza franchisee for Poland has found competition is getting tougher and growth has slowed. The cash is required to cover losses and open more outlets. Peter Shaw is stepping down as chief executive at the end of June, nearly a decade after founding the business.
Ticketing and queueing technology provider Accesso Technology (ACSO) is reviewing its investment priorities although it says that 2018 figures should be broadly in line with expectations. These will be published on 27 March. A deal fell through and this cost $1.7m. Tom Burnet is moving from executive chairman to a non-exec role. The share price is less than one-third of last year’s high. BlackRock has cut its stake below 5%.
Midatech Pharma (MTPH) has launched a placing and 0.318-for-one open offer to raise up to £4.75m at 3.85p a share on top of the £8m subscription by former AIM company China Medical System Holdings, which will licence products for the Chinese market. The clinical trial for cancer treatment MTD201 will cost up to £7m.
Duke Royalty (DUKE) is acquiring its UK rival Capital Step and this will double the size of the portfolio to eleven investments and diversify it in terms of sectors. There is an initial £10m cash payment and the assumption of debt of £11.65m. There is performance related consideration of up to £1.5m. The deal is immediately earnings enhancing.
Visa has increased its bid for Earthport (EPO) from 30p a share to 37p a share, which beats the Mastercard offer of 33p a share. The latest bid values Earthport at £247m.
Taptica (TAP) has launched a recommended bid for RhythmOne (RTHM) and this will create one of the largest video advertising companies in the US. The offer is 28 Taptica shares for every 33 RhythmOne shares. Taptica shareholders will own 50.1% of the enlarged group. A $15m share buyback programme is planned after the merger. Ofer Druker will become chief executive.
Polemos (PLMO) has finalised the details of its reverse takeover of Digitalbox Publishing for £10m in shares and it is also acquiring the owner of the Daily Mash satirical news website for up to £1.2m in cash and shares. The model for the Entertainment Daily website will be used to improve the performance of the Daily Mash. A placing will raise £1.02m at 14p a share. The company will change its name to Digitalbox.
Hardide (HDD) is raising £3.6m at 1.5p a share so that it can move to new premises in the UK and invest in additional equipment. The surface coatings company is experiencing increasing demand from the oil and gas sector and there is potential for orders from aerospace companies. It will take two years to fully equip and move into the new facility. Hardide also intends to consolidate 40 shares into one new share.
finnCap has raised its forecasts for Tracsis (TRCS) following recent acquisitions. There is a 3% increase in earnings per share for this year and an 11% rise to 30.5p next year.
Stride Gaming (STR) has traded in line with previously downgraded expectations. Cost cutting continues to cover higher regulatory and tax costs. The online gaming operator will report a lower profit in 2018 and it is set to fall again in 2019. Net cash was £22.1m at the end of 2018.
Bowmark Capital has offered 110p a share for Tax Systems (TAX) and discussions continue. Tax Systems reduced net debt from £20.5m to £13.9m by the end of 2018. Pre-tax profit of £5.8m is forecast for 2018.
Victoria (VCP) has sold surplus land in Kidderminster for £2m. The land was in the books for £100,000 but it has obtained planning consent for housing.
Starcom (STAR) has renegotiated its agreement with Xplosive in South Africa, having originally announced it in October 2017. Xplosive has signed a 36-month agreement to pay a monthly fee for each of the Kylos units supplied for the monitoring of cattle. The fees are higher in the first six months and then reduce. The agreement should be worth $500,000.
Strix Group (KETL) has offered to acquire most of the assets of HaloSource (HAL) for $1.3m. Strix has provided working capital of $100,000. Due diligence is being carried out on the water filtration technology and if the deal goes through the cash will pay creditors, but there will be nothing for shareholders.
Prospex Oil and Gas (PXOG) has announced that the Selva gas field in northern Italy has net 2P reserves of 13.3bcf and there are 2.26bcf attributable to Prospex, which has a 17% stake. Selva could start production in 2020 at a rate of up to 150,000 cubic metres/day.
Tau Capital (TAU) plans to raise cash via a placing through Peterhouse and then a capital distribution will be made to all shareholders. This will enable Tau to seek an acquisition. It has until 18 April to secure a deal or trading in the shares will be suspended. Armstrong Investments has increased its stake from 11.7% to 15.7%.
Evgen Pharma (EVG) says that the SFX-01 clinical trial for subarachnoid haemorrhage is on course having completed recruitment and the primary endpoints should be available in the second quarter. Partners Investment Company has acquired at 3.15% stake.
Sports Direct International (SPD) made a £15m offer to buy Patisserie Valerie from the administrator, but this was not deemed enough. Even a higher selling price won’t provide anything for Patisserie Holdings shareholders.
MAIN MARKET
Solicitor DWF plans to raise £75m via a March flotation an some of the cash will repay members’ capital contributions as well as invest in the business. Existing shareholders will also sell shares and partners’ remaining stakes will be locked up until April 2024.
Two former AIM-quoted companies are coming together to join the standard list. Daniel Stewart Securities, which is closing its broking business, is making an offer for Atlantic Carbon, which was previously known as Atlantic Coal, where Adam Wilson, who has had connections with Daniel Stewart, is executive chairman. Singapore-based backer Epsilon Investments refused to put more money into the broker and that is why it is closing. Epsilon holds a majority stake in Hyde Park Holdings, which owns broker Novum Securities. Last October, SeeThruEquity research suggested that Atlantic had an equity value of $86.8m and $68m of debt. In 2017, Atlantic was the largest producer of anthracite in the US with a market share of one-third based on 1.18 million tonnes produced. Atlantic is expected to have moved into profit in 2018, although it did generate cash from operations in 2017. The owners of more than 50% of Atlantic shares have agreed to accept the bid of 1.5587 shares for each Atlantic share.
Thalassa Holdings (THAL) is offering 14.64p a share in cash and 0.26 of a share for each share in The Local Shopping REIT. Thalassa already owns 25.5% of the bid target, which is valued at 32.8p a share. The bid is an alternative to the winding up of The Local Shopping REIT.
Blockchain Worldwide (BLOC) is no longer acquiring blockchain technology developer Chorum Group because of political uncertainty affecting the UK equity markets. Former Avanti Communications boss David Williams is the director of Chorum. Blockchain Worldwide has more than £1m in the bank and is also looking at other technology sectors for acquisitions.
Drilling of the Colter appraisal well in Dorset has commenced and United Oil and Gas (UOG) has a 10% interest. The drilling should take three weeks. The Selva gas field in Italy has net 2P reserves of 2.7bcf attributable to United, which has a 20% stake. Selva could start production in 2020. United intends to move to AIM.
Oil and gas producer Zenith Energy (ZEN) has raised £607,000 in Canada and the UK at C$0.05 a share and 3p a share respectively.
Motor finance provider S and U (SUS) has confirmed that its figures for the year to January 2019 will be in line with expectations. The Aspen property bridging loan business had a loan book of £18m at the end of January 2019. Cautious lending criteria means that new business has slowed in recent months and this has led to a 5% 2019-20 earnings downgrade to 230.1p a share.
BATM (BVC) has won a $3.2m cyber security contract and this takes contracted revenues from this government customer to more than $10m. The latest contract will be delivered this year.
Chesterfield Resources (CHF) is expanding its exploration programme in Cyprus. Initial drilling in an area near historic mining has shown gold, copper and zinc mineralisation. Chesterfield is also applying for licences to extend its licence area.
Dev Clever (DEV) has launched pay per play multi-player, virtual reality game Vanguard: Fight for Rudiarius in Harlow shopping centre. The game will be rolled out to other UK sites.
Bluebird Merchant (BMV) has applied for a grant to help finance drilling at the Kochang project in South Korea and there should be news by the end of the month. There has also been a permit application to develop Kochang.
Andrew Hore
Andrew Hore – Quoted Micro 27 December 2017
NEX EXCHANGE
Good Energy (GOOD) has sold two operational 5MW solar farms in Devon and south Wales, plus further development rights, for £5.83m and £5.6m respectively. This should yield a profit of £750,000 on each solar farm. The south Wales site has additional land and development or sale of this land could yield an additional payment. Good will still acquire the energy from both sites.
OneLife Technologies Corp is acquiring One Media Enterprises Ltd, which has agreed to pay back the investment and loan made by Angelfish Investments (ANGP). There will also be management fees payable. This is dependent on the acquisition going ahead. In total, Angelfish will receive $1m in cash and 200,000 shares. Most of the investment has been written off, bar nearly $42,000, so the payment is nearly all profit.
BWA Group (BWAP) expects to be granted mining licences for the extraction of rutile sands in Cameroon. It would then enter an agreement with investee company Mineralfields Group, which would operate the mining concessions. BWA would increase its stake from 12% to 25%. BWA and its directors would own the majority of the shares. BWA has issued 8.37 million shares at 0.5p each in order to pay creditors of Mineralfields. BWA is also issuing £300,000 of 14% convertible unsecured loan stock 2020. The cash interest payment is 4% and the rest will be rolled up and the total loan converted into 36 million shares at 0.5p each.
Malcolm Burne has taken advantage of the sharp rise in the Coinsilium Group Ltd (COIN) share price to reduce his stake to below 3%. He owned 5.7 million shares in April. The share price reached 20p and has fallen back to 15p. Earlier this month, Coinsilium raised £720,000 at 9p a share.
AIM-quoted, spread betting business London Capital Group (LCG) has announced its intention to leave AIM having joined the NEX Exchange Growth Market on 15 December. Glio Holdings Ltd owns 78.1% of London Capital and it will vote in favour of the cancellation of the quotation.
Capital for Colleagues (CFCP) had an NAV of 42.12p a share at the end of November 2017. The provider of capital to employee-owned businesses is switching its investments from debt to equity.
Wheelsure Holdings (WHLP) reported an increased loss in the year to August 2017. Revenues declined from £290,000 to £226,000 and the loss rose from £262,000 to £330,000. An order from Italy was delayed and there were lower orders from London Underground. There was nearly £304,000 in cash at the end of August 2017. Wheelsure raised £630,000 last year. There have been initial orders for high speed rail infrastructure.
EPE Special Opportunities (ESO) has invested in David Phillips Holdings, which supplies furniture and furnishing services to the UK property sector. The business is benefiting from the growth of the private rental sector.
Gunsynd (GUN) has invested £130,000 in a 9% convertible loan note in Human Brands, which supplies Copa Imperial Tequila and Shinju Whiskey. US-based Human Brands made a pre-tax profit of $90,000 on revenues of $1.04m.
Trading in the shares of China CDM Exchange Centre Ltd (CCEP) has been suspended because of issues with the annual returns for the Jersey Registry.
Black Sea Property (BSP) has raised €3.53m at €0.01 a share. This will help to finance the acquisition of a property on the Black Sea coast. Via Developments (VIA1) has issued a further £70,000 of debenture stock.
AIM
The TLA Worldwide Award for contempt for investors goes this year to Real Good Food (RGD) after it announced it requires substantially more cash at 1.04pm on 22 December. That is the last half day of trading before Christmas. The three main shareholders will subscribe for £3m of loan notes with an annual interest of 10%. This should be refinanced via a share or convertible issue. Net debt was £35.8m at the end of September 2017. Hugh Cawley will become an executive director. The interim loss was £6.66m. Food ingredients returned to profit, helped by the acquisition of Brighter Foods, but the performance of the other parts of the business slumped.
Golden Saint Resources (GSR) intends to change its business by acquiring EMS Wiring Systems for shares and selling the mining assets. Trading in the shares is suspended ahead of due diligence and a share consolidation. EMS is a profitable supplier and installer of cabling, WiFi, CCTV, displays and building management systems in Asia and it intends to expand in Africa and South America. The new name would be Golden Saint Technologies Ltd.
Cradle Arc has a 60% stake in a producing copper mine in Botswana and a gold development project in Zambia. The expected admission date to AIM is 10 January.
Mirriad Advertising (MIRI) was valued at £63.2m at its placing price of 62p. The in-video advertising technology company raised £24.2m net of expenses. Potential customers are expressing interest in the technology and the cash will finance an increasing rate of growth. In 2016, revenues were £700,000.
Antibody development services provider Fusion Antibodies (FAB) raised £5.5m at 82p a share and by the end of the week the share price had doubled. Belfast-based Fusion will invest in the expansion of laboratory space and additional sales and marketing.
Close-ended investment company CIP Merchant Capital Ltd (CIP) raised £55m at 100p a share prior to Christmas. CIP will focus on quoted companies with a market value of less than £500m that have good fundamentals, which need help to improve operational effectiveness or management support to enhance growth. There should also be potential for a future exit. No more than 20% of funds will be invested in an individual company.
Software supplier Pelatro (PTRO) raised £3.8m at 62.5p a share when it joined AIM on 19 December. That valued the company at £15.2m. The company’s mViva software is developed in India and used for marketing by telecommunications companies.
An introduction at 20p a share valued Panthera Resources (PAT) at £12.4m. The main asset is a 70% stake in the Bhukia gold project in India. The company’s share of the JORC inferred resource is 1.22 million ounces. There are also gold exploration assets in Burkina Faso and Mali.
Video games development services provider Sumo Group (SUMO) floated on 21 December at 100p a share and ended the week at 113.5p a share. Sumo raised £38.5m and it was valued at £145m at the placing price.
Fletcher King (FLK) reported a dip in revenues from £1.68m to £1.49m, while pre-tax profit declined from £163,000 to £148,000. The interim dividend is unchanged at 1p a share. There were lower revenues from rating appeals and valuations but one or two SHIPS properties should be fully-let and sold by the end of the financial year.
NWF Group (NWF) says that its feeds division is benefiting from the recovery in the milk price and past capital investment. The fuels division continues to make progress but food distribution performance has been below the first half of last year. The interims will be published on 30 January.
Online gaming firm Nektan (NKTN) is raising £1.76m at 21p a share. That was a one-fifth discount to the market price. There are £10m convertible loan notes 2020, where the conversion price is a 25% premium to the previous placing, so it is currently 26.25p a share. The cash will be invested in technology and geographic expansion. In the year to June 2017, Nektan more than doubled its net gaming revenues to £13.3m.
Telecoms infrastructure equipment supplier Filtronic (FTC) expects a sharp fall in interim revenues from £21.6m to £12.8m and operating profit halved to £900,000. There have been delays in defence orders. Net cash was £2.9m at the end of November 2017. The interims will be published on 30 January.
Kodal Minerals (KOD) says that initial results from its drill programme at the Bougouni lithium project are expected very shortly. There was £4.09m of cash at the end of September 2017.
Tlou Energy Ltd (TLOU) has completed core-hole drilling at two locations at the Lesedi project and a third hole will be completed early next year. Coal samples are being assessed. The results will help to plan the first phase of development drilling. The Botswana Public Officers Pension Fund has taken a 5.84% stake.
Tri-Star Resources (TSTR) is raising up to £4.42m via a 2.250106-for-one open offer at 0.01p a share. That is a 92% discount to the market price and excess applications can be made. The cash is required for part pre-payment of $6m of loan notes issued to Odey Asset Management that carry an annual interest rate of 25%. That cash was used to finance a $6m mezzanine loan to the Oman antimony roaster project. First production should be in the second quarter of 2018. The cost of the project has increased from $96m to $110m. There should be £250,000 left for working capital for Tri-Star and $740,000 of loan notes still in issue. The first dividend from the Oman antimony roaster is expected for the year to December 2020.
Legendary Investments (LEG) has acquired a 9.7% stake in Crowd for Angels in return for 248.3 million Legendary shares at 0.145p each. Crowd for Angels intends to launch a £50m Liquid Crypto Bond. Legendary is swapping its interest in Manas Resources for a 2% stake in Circle Oil Tunisia, formerly a subsidiary of AIM-quoted Circle Oil, which has been liquidated. The stake in Manas was valued at £100,000.
Ambrian (AMBR) has failed to secure short-term financing or defer payment of interest on its convertible loan notes. Grant Thornton will be appointed as administrator. In October, a general meeting removed former chief executive Jean-Pierre Conrad as a director, having been given three months notice in August by subsidiary Ambrian Metals because he had lost the confidence of the board. Conrad was a large holder of convertibles. Ambrian has cement interests in Mozambique and there have been problems in moving cash.
Kromek (KRK) is on course to achieve full year revenues of £12.5m. This is without any contribution from the framework contract from the US authorities for radiation detector systems, which could be important in the future. There should be £14m of cash left by the end of the financial year.
Uranium Resources (URA) has sold its mining assets and is changing its name to URA Holdings. Melissa Sturgess and Peter Redmond have joined the board and £900,000 raised at 0.45p a share.
Redhall Group (RHL) says that its subsidiary Jordan Manufacturing has won business for specialist handling and containment systems for nuclear material at Sellafield. This could be worth £18m over three years.
Prospex Oil and Gas (PXOG) is acquiring up to 49.9% of the Tesorillo gas project in southern Spain. The purchase is in three stages and will cost €2.05m in total.
Problems with labelling in China have held up the fulfilment of demand by Concepta (CPT) for its fertility products. This means that 2017 revenues will be around £100,000 and sales delayed until the first quarter of 2018.
Integumen (SKIN) has raised £500,000 at 1.5p a share. This will help to fund the recently acquired Stoer range of male cosmetics and the commercialisation of the Visible Youth cosmeceutical range. Management is assessing all the group product lines because some are taking longer to generate significant revenues. Integumen intends to set up a joint venture to distribute Champion Shave products in the UK and Ireland.
The One Media iP (OMIP) share price more than doubled to 10p following the news that Lord Michael Grade and former Pinewood boss Ivan Dunleavy are joining the board as non-executives. They are also investing £375,000 at 2.5p a share.
Cross-border payments technology provider Earthport (EPO) says that 2017-18 revenues could be up to 15% lower than expected due to contract delays and a change in strategy by a client. Cash flow breakeven is still achievable during 2018-19. Hank Uberoi is moving from chief executive to executive chairman and a permanent replacement as chief executive has yet to be found.
Escape the Room experiences provider Escape Hunt (ESC) is adapting its strategy to focus on city centre sites. Five leases have been signed and three are being negotiated.
The People’s Operator (TPOP) has successfully raised £2.82m at 0.1p a share. Aidan O’Hara acquired an 8.78% stake prior to the placing. Trading in the shares has been suspended because of concerns over trading prior to the completion of the placing.
A €51 a share cash bid has been recommended by Taliesin Property Fund Ltd (TPF) and this values the company at €260m. The bid enables investors to liquidate their holding in the Berlin property investor at a premium to NAV. Taliesin floated in 2006 at €10 a share.
West African Mineral (WAFM) is disposing of its iron assets through a share distribution of the company holding the assets to its shareholders. They will receive one share in Ferrum Resources Ltd for each West African Mineral share they own. A general meeting will be held on 18 January to agree to the plan. Loans to Ferrum have already been written off but a sale of the assets could spark all or part of the repayment of the $4m loan. West African Minerals will have £2.1m in the bank and it wants to move to the standard list and seek life sciences acquisitions. The company will change its name to OKYO Pharma Corporation.
Property investor Caledonian Trust (CNN) increased its NAV from 152.9p a share to 161.7p a share in the year to June 2017.
TechFinancials Inc (TECH) will receive a total of $1.46m in dividends from two subsidiaries. One of these subsidiaries is part of the previously announced disposals that should generate $400,000.
All bar one of the directors of BOS Global Holdings (BOS) has left the board. Trading in BOS shares has been suspended because of the uncertainty of its financial position and because the annual report has not been published.
MAIN MARKET
Contango Holdings (CGO) is moving ahead with the possible acquisition of Consolidated Growth Holdings’ interest in a near-term producing mining asset in Zimbabwe. The purchase would be funded at 5p a share, which is a 33% premium to the suspension price. Contango hopes to complete the reverse takeover by the first quarter of 2018. Contango floated on the standard list on 1 December.
Shefa Yamim (SEFA) has joined the standard list. The Israel-based gemstones explorer raised £4.15m at 110p a share and was valued at £15.3m on flotation. The cash will be used to fund further exploration of the Kishon Mid Reach project and production could commence within 24 months.
Dukemount Capital (DKE) reported an interim loss of £113,000 due to the costs of being a listed company. There was £230,000 in the bank at the end of October 2017. Supported living property developer Dukemount has completed a 50-year agreement to lease on the first property it acquired with a supported living housing association. This should generate £234,000 a year and is linked to CPI. It will take 18 months to complete the development but institutions may acquire the lease before then. A second project has also been secured with more under negotiation.
Spinnaker Opportunities (SOP) has raised a further £170,000 at 5p a unit. The unit is one ordinary share and 0.5 of a warrant exercisable at 7.5p a share. The current NAV is 4.2p a share. SI Capital has been appointed as joint broker.
Standard list shell Fandango Holdings (FHP) still had £468,000 in the bank at the end of August 2017. There is currently no industrial or services acquisition under consideration.
Avocet Mining (AVM) has agreed the sale of its Burkina Faso assets for $5m. There will be $2.5m paid on completion and the rest will be deferred over seven years. Avocet will have no trading business. Given Avocet’s debt, if it is wound up there will be little or nothing for shareholders.
Bluebird Merchant Ventures Ltd (BMV) has returned from suspension following publication of its annual report. Chief executive Colin Patterson says he will fund the Gubong gold project through to the completion of the report on feasibility. He and fellow director Aidan Bishop are taking their remuneration in shares.
Andrew Hore
Quoted Micro 11 September 2017
NEX EXCHANGE
Milamber Ventures (MLVP) has signed non-binding heads of terms to acquire vocational training provider Essential Learning Company Ltd and it wants to raise up to £2m. Milamber already owns 15% of Essential, which it acquired for £75,000 last May. The other 85% would be acquired for a deferred payment of £800,000 in cash and £100,000 in shares. There will be an initial payment of £30,000 in shares and the rest is dependent on a number of things including winning a warranty case against the previous owners of Essential, receiving R&D tax credits and the achievement of quarterly profitability. It is also depends on Milamber raising the funding. Loss-making Essential, which provides training for the health, care and education services, generated revenues of £888,000 in the year to March 2017. Essential is in a good position to benefit from government funding of apprenticeships and some of the cash raised by Milamber will go towards growing the business. The two businesses have been working together for six months. A formal agreement should be completed before the end of 2017.
In the first half of 2017, cyber security software developer Crossword Cybersecurity (CCS) more than doubled its revenues from £164,000 to £397,000, although the loss increased to £584,000 due to a rise in administration expenses. There was £1.07m left in the bank. Crossword is working with nine universities.
Housebuilder St Mark Homes (SMAP) plans to raise up to £2m through the issue of bonds with an annual interest charge of 6% via the Crowdstacker platform. The bonds can be put in an ISA. This cash will enable more projects to be taken on. There is currently a development in Sutton and two other developments in south west London where St Mark has a 40% interest. St Mark reported a dip in interim pre-tax profit from £315,000 to £211,000 following a slump in revenues from £1.42m to £71,000. The profit was boosted by a non-cash release of negative goodwill and higher interest receivable. The NAV per share has dipped from 137p to 136p, including £955,000 in cash. That was prior to the payment of the interim dividend of 5.5p a share.
WMC Retail Partners (WELL) says that its Cornucopia development in Cornwall is performing poorly and stemming the loss is a priority. Elsewhere, trading is in line with expectations but the interim loss will be much higher than in the first half of 2016. Cornucopia has been a drain on cash and additional finance is required. A party related to a director has lent WMC £75,000. The interims will be published by the end of September.
AIM
Polemos (PLMO) has secured an initial agreement to acquire US-based cyber security firm SecurLinx Corporation. A share issue at 0.035p a share would value the company at £17.8m. SecurLinx supplies biometric identity management and access control systems for the healthcare sector. Polemos will advance $500,000 to SecurLinx and this is convertible into 3.21% of the company. The consideration could be varied depending on whether on conversion of the loan note in Oyster Oil and Gas the shares are worth more or less than £600,000. A one-for-1,000 share consolidation is planned. Trading in Polemos shares has been suspended.
Energy and commodities software provider Brady (BRY) is in the process of moving towards a SaaS-based model. This led to a higher interim loss and, even though a second half profit is forecast, the full year loss is still expected to treble to £1.8m.A move back into profit is on the cards for next year.
WANdisco (WAND) has cut its cash outflow in the first half of 2017. There was still $9.9m in the back at the end of June 2017, although there is also debt of $3m. Big data and cloud revenues are beginning to grow. Interim bookings for big data and cloud increased from $2.6m to $7m. The addressable market is growing as WANdisco gains contract in new sectors, including healthcare and retail.
Starcom (STAR) has secured a strategic collaboration agreement with a European industrial group, covering track and trace technology for logistics. An initial order for 1,000 Kylos Air units should be delivered in 2017. The arrangement is for three years.
Prospex Oil and Gas (PXOG) is raising £650,000 at 0.35p a share. The cash will finance the work programme for the Suceava concession in north east Romania. There will also be cash left for assessing other oil and gas prospects.
MAIN MARKET
Nanoco (NANO) has signed a commercial supply and licence agreement with a US corporation that wants to use its cadmium-free quantum dot technology in medical devices. The light-therapy devices will treat pain, soft tissue injury and dermatology ailments. Nanoco is also involved in developing optical imaging, diagnosis and therapy for pancreatic cancer with University College London.
Avation (AVAP) reported full year figures in line with expectations with revenues one-third higher at $94.2m. Pre-tax profit was 18% ahead at $21.4m, including aircraft disposal gains of $3.4m in the second half. The dividend was increased by 85% to 6 cents a share.
Andrew Hore
Quoted Micro 14 August 2017
NEX EXCHANGE
Brewer Adnams (ADB) continues to grow its beer volumes and Ghost Ship is behind much of that growth. Interim revenues improved from £31.2m to £33.2m, while there was a swing from a pre-tax profit of £1.86m to a £284,000 loss. There is a one-off cost of £721,000 mainly due to a write down in the value of the Swan Hotel and the costs of removing asbestos and a reduction in the disposal profit from £1.42m to £526,000. Even so, there was a still a sharp drop in underlying profit. The closure of the Swan Hotel knocked £550,000 off profit even before the one-off charges. Beer and spirit sales improved even though the Lagunitas beer distribution rights were sold one year ago. The B share dividend has been increased by 2p a share to 78p a share and the A share dividend has been improved by 0.5p a share to 19.5p a share. The capital investment programme is near to completion and bank debt has risen to £14.4m.
Secured Property Developments (SPD) is still finding it difficult to suitable investment. There was a £12,000 loss in the six months to June 2017. There is £310,000 in the bank and debtors of £415,000. Mark Jackson has increased his stake from 7.6% to 8.6%.
NQ Minerals (NQMI) has raised A$1m at 10 cents a share and A$49,000 at 12 cents a share. NQ has also appointed Adrian Lungan to the board as a non-executive director. He effectively owns 11% of NQ.
Coinsilium Group Ltd (COIN) has an option to acquire 7% of Singapore-based Indorse for SG$350,000. The option lasts for three months and Coinsilium has already invested SG$100,000 (£56,000) via a convertible loan. Along with the convertible, the stake could be 10%. Indorse plans to develop a blockchain-based decentralised network for professionals and it has raised $5.37m from a token pre-sale, which continues until 7 September. Coinsilium received Indorse tokens as part of the convertible investment.
AIM
Share (SHRE) had a strong first half in 2017 and Cenkos has upgraded its forecast on the back of the interims. Revenues generated by the owner of The Share Centre retail stockbroker, increased from £7.2m to £8.9m even though interest revenues continue to decline. Underlying pre-tax profit jumped from £110,000 to £310,000. The investment in digital, such as the upgraded website and app, are starting to pay off but there should be much more to come. Assets under management were one-quarter higher at £4.3bn. The 2017 earnings per share forecast has been raised by 94% to 0.3p and the 2018 forecast by 36% to 0.4p.
Conroy Gold & Natural Resources (CGNR) is being asked to hold another general meeting by Patrick O’Sullivan, who owns 28% of Conroy. O’Sullivan successfully removed six directors at the general meeting last week. However, Conroy says that the proposed appointments of Patrick O’Sullivan, Paul Johnson and Gervaise Heddle did not comply with the company’s constitution. The plan is to remove the three directors not affected by the original requisition: Professor Richard Conroy, Maureen Jones and Professor Garth Earls.
There have been more departures from Real Good Food (RGD) and this includes executive chairman Peter Totte. Finance director David Newman has also stepped down and he is replaced by Harveen Rai. Hugh Cawley becomes a non-executive director and Pat Ridgwell is interim chairman. Christopher Thomas moves from non-executive to executive director.
Fiserv has edged up its bid for Monitise (MONI) from 2.9p a share to 3.1p a share, which values the mobile technology company at £75m. Gross cash was £22.2m at the end of June 2017.
Fox Marble Holdings (FOX) has signed a three year agreement with US distributor Pristine Stone NYC, which will act as marketing sales and distribution agent in the US. As part of the deal Fox Marble gets a 5% stake in Pristine, which itself will receive 750,000 warrants in Fox Marble exercisable at 2p a share although that depends on achieving minimum volumes of $1.5m over three years.
Prospex Oil & Gas (PXOG) is acquiring a 50% economic interest in the EIV-1 Suceava concession in north east Romania for €750,000 plus the promise to finance €550,000 of this year’s work programme. The operator Raffles Energy owns the other 50%. The area includes an undeveloped discovery but the investment does not include the two producing fields in the area.
LiDCO (LID) has signed its first high use contract in the US. The patient monitoring devices developer has signed a two year contract with a potential two year extension. This order covers 44 monitors. However, disappointing sales in Europe and China, where a registration process has been messed up, have led to a forecast downgrade for this year. Interim revenues are 4% ahead at £3.94m but the full year revenues forecast has been cut from £9.5m to £8.6m, still higher than the £8.2m made last year. This means that the loss will be higher than originally forecast and LiDCO is not expected to move into profit next year.
Altona Energy (ANR) has agreed with its joint venture partners that there should be a different strategy for the coal asset at the Arckaringa site in Australia. The new strategy involves producing coal to create gas to generate electricity. Other by-products will be methanol and ethanol. A specialist adviser has been appointed to report on the best way of progressing with the strategy.
MAIN MARKET
North Midland Construction (NMD) reported a more than doubled interim profit. In the six months to June 2017, revenues increased from £129.6m to £135.1m and pre-tax profit jumped from £512,000 to £1.22m. The main reason behind the improvement was a swing into profit by the telecommunications division. There were lower contributions from construction, because of project delays, and water divisions. The power division fell into loss. One customer still accounts for two-fifths of group revenues. The interim dividend was doubled to 3p a share. The FCA has concluded that it will not take any further action on a breach of the related party rules by the Moyle family as controlling shareholders.
Rainbow Rare Earths (RBW) says that the laboratory assessment of material from the main vein at Gasagwe, which is part of the Gakara project in Burundi, showed an average total rare earth oxide grade of 62.17%. Rainbow hopes to start production at Gasagwe by the end of 2017 and it should produce ore for two years. Rare earths prices have strengthened so the ore is becoming more valuable.
Andrew Hore
Quoted Micro 6 February 2017
NEX EXCHANGE
Bondholders in US-focused oil and gas company Diversified Gas & Oil (DOIL) have overwhelmingly opted to take the cash alternative ahead of the flotation of the ordinary shares on AIM on 3 February. A total of £10.35m worth of bonds (97.1% of bonds in issue) are taking cash, while £198,000 of bonds will be swapped for 380,769 ordinary shares. There will be £106,640 worth of bonds remaining in issue but there will be no trading facility. The ordinary shares of Diversified Oil & Gas (DGOC) raised £39.7m at 65p a share, valuing the company at £68.6m. The share price slipped to 56.25p at the end of the first day’s trading.
Property investor Ace Liberty & Stone (ALSP) had a property portfolio worth £28.5m at the end of October 2016 and this generates annual rental income of £2.31m. The NAV was £18.25m at the end of October 2016 with a £500,000 revaluation gain partly offset by the final dividend payment.Net debt was £6.7m, down from £7.7m at the year end and there are assets held for sale worth £6.3m. Since October, a property was acquired at Hanley for £9m. The deal was financed by a £13.75m loan facility from Lloyds Bank with the rest of the cash used to refinance debt relating to five other properties.
DagangHalal (DGHL), which operates an e-marketplace for Halal verification, has parted company with its chief executive and trading in the shares has recommenced. Mohamed Hussain was paid the compensation that he was entitled to in his contract but he is claiming for twice his annual salary – equivalent to £195,000. Ali Sabri Sani Abdullah has stepped up from finance director to chief executive, while Jeff Teo and Derek Marsh have been appointed to the board. Cairn has replaced Arden as corporate adviser. The share price has not changed since trading recommenced.
AIM-quoted Metal Tiger (MTR) has sold its 28.2% in MetalNRG (MNRG) to Value Generation Ltd, a business associated with MetalNRG director Paul Johnson, and Gervaise Heddle, which each own 14.1% of the resources shell. The sales price was 0.26271p a share, whereas Metal Tiger had paid 0.2628p a share nearly one year ago.
BWA Group (BWAP) says it has been in talks with three potential acquisitions but none of the potential deals progressed. There was a £16,276 cash outflow from operations in the six months to October 2016, which was partially offset by the sale of an investment. BWA had a NAV of £562,000, with £41,593 in the bank, at the end of October 2016.
Botswana-focused oil and gas explorer Karoo Energy (KEP) says that exploration work on its two licences has confirmed the company’s geological model which predicts a deep sedimentary basin that could contain shale gas. In the six months to October 2016, there was a £326,000 cash outflow including capitalised exploration spending. Karoo had £168,000 in the bank at the end of October 2016, and £11,000 has subsequently been raised.
Property development and management services provider Formation Group (FRM) plans to consolidate its shares and shareholders will get to vote on the proposal at the AGM on 27 February. If the five-for-one consolidation is approved it will take place on 28 February.
Valiant Investments (VALP) has raised a further £34,000 at 0.1p a share. Valiant’s 84.7%-owned subsidiary Flamethrower has set up a new company called Slot Right In, which will be the social casino division and Flamethrower plans to acquire and trade domain names. Flamethrower continues to add to its portfolio of apps.
Property investor Ecovista (EVTP) says it is looking at investments in London, Essex and Hertfordshire. An offer of £275,000 has been accepted for a cottage owned by the company, while a house in Bishop Stortford, acquired for £665,000 last year, has been demolished and construction of a new building with a gross value of £1.35m will start in the spring. A planning appeal has been lodged for the development of car park site near Stansted Airport.
Grant Thornton will step down as corporate adviser to Chinese medical products and services provider MiLOC Group (ML.P) on 6 March.
AIM
AdEPT Telecom (ADT) is acquiring Our IT Department, an IT services provider in London and the South East, for an initial £4.75m with up to £3.75m more payable depending on performance. This is a profitable business that brings additional IT skills to the telecoms business. AdEPT has secured a £30m, five-year bank facility from Barclays and RBS, which will help to finance further acquisitions.
Everpower International is acquiring a 9.9% stake in Haydale Graphene Industries (HAYD) in return for a £3.26m cash payment – equivalent to 170p a share. This is part of an agreement that will enable Haydale products to be manufactured for the Chinese market. Commercial revenues from the Huntsman agreement are not likely to come through until 2017-18 and with other strategy changes this means that the revenues for the year to June 2017 will be lower than expected.
Automotive acoustics and thermal insulation designer Autins (AUTG) has shocked the market with a profit warning less than six months after joining AIM and the chief executive has resigned. First quarter sales have been in line with expectations but a major customer has reduced orders. The share price has fallen from the August placing price of 168p to 145p – but it had been as high as 240p. Miton had added to its stake in January.
Ascent Resources (AST) says the flow test at the Pg-10 well was better than expected. The maximum stabilised flow rate was 8.8 million cubic feet of gas per day.
LED lighting technology developer PhotonStar LED (PSL) says that its 2016 revenues will be slightly lower than expected and the loss will be higher because of a challenging second half. Revenues were around £5.4m and the pre-tax loss was £1.3m. There was £230,000 in the bank at the end of 2016 with £830,000 of invoice financing. Cost savings have been made and this helps to improve the outlook for 2017, although the poor second half trading has continued into January.
Eagle Eye Solutions (EYE) says that interim revenues have grown 72% to £5.1m, which is better than expected. The nationwide roll-out of the Asda contract has increased coupon redemption numbers. Cavendish Asset Management has increased its stake to 8.26%.
ECR Minerals (ECR) says that the Australian government has given consent to for drilling at the Byron target in the Bailieston project area. ECR has applied for two more licences and is awaiting news of the renewal of the Avoca licence.
Tissue Regenix Group (TRX) says that dermal allograft product DermaPure, which includes the company’s dCELL technology, has been included in the US Department of Veteran Affairs Federal Supply Schedule. This covers 152 hospitals and 800 outpatient units. This will boost the commercial prospects of the wound care product.
Prospex Oil & Gas (PXOG) is raising £850,000 at 0.5p a share and this will help to finance the evaluation of potential projects. The share price has slumped since the beginning of the year because of a disappointing result from a well on its Kolo licence area in Poland. The placing price is about one-fifth of the share price prior to the drilling news.
New management at Quantum Pharma (QP.) says trading is in line. This suggests that the pre-tax profit for the year to January 2017 will be £6.7m, down from £10m in the previous year, although there will be exceptional reorganisation charges. The loss-making NuPharm business has been closed. Net debt was £13.5m – after most of the reorganisation costs have been paid. The share price is less than one-third of its peak less than two years ago but it is higher than the 34p a share placing price in October.
Vela Technologies (VELA) is raising up to £550,000 from a bond issue via the UK Bond Network. There is already interest for £250,000 of bonds and the other £300,000 have been underwritten. The interest rate is 10% and the bonds can be repaid after one year, including interest. If they are repaid earlier than one year’s interest has to be paid. Vela will use £150,000 to increase its investment in Portr, the airline passenger facilitation and baggage transport service.
BP Marsh (BPM) has subscribed for a 30% cumulative preferred ordinary shareholding in Stewart Speciality Risk Underwriting Ltd, a Toronto-based start-up headed by a boss with 25 years of experience. Stewart specialises in insurance for the construction, manufacturing, onshore energy, transport and public sectors. A £480,000 loan facility is also being provided.
Reconstruction Capital (RC2) is returning €17m of cash to shareholders. This equates to €0.115 a share.
MAIN MARKET
Engineering and environmental consultancy Waterman Group (WTM) says that its interim revenues and profit will be in line with last year. Net cash was £6.7m at the end of 2016. This will enable Waterman to continue to increase its dividend.
Publisher Quarto (QRT) is on course to increase its pre-tax profit from $14.1m to $15.5m. Net debt was $62.2m at the end of 2016. A buyer has been identified for the Australian distributor Books and Gifts Direct. This will raise $1m in cash with the other $4.75m of the disposal price in loan notes. Even after a 46% increase in the share price, the 2016 multiple is less than eight. There are plans to change the way that the backlist of titles is valued.
Rainbow Rare Earths (RBW) commenced trading on the standard list and the share price ended the week at 12p, compared with the placing price of 10p. Rainbow has issued £260,000 worth of shares at the placing price to cover a majority of the costs of its flotation.
Challenger Acquisitions Ltd (CHAL) has sold Starneth less than two years after buying the designer and engineer of giant observation wheels. Challenger completed the acquisition of Starneth in July 2015 when an initial €1.25m was paid in cash and €825,000 in shares at 75p each. The second cash payment of €1.25m was delayed. Challenger will receive $6m in fees when the Jakarta wheel’s funding arrangements are finalised and the €1.25m payment will be taken out of that. There had been a third payment due but that does not appear likely to happen. This is a complicated deal but it is difficult to see this as a positive deal for Challenger but it will continue to work with Starneth and it will have a stake in the New York wheel. Acquisitions of businesses in the leisure and entertainment sectors that are close to revenues are likely.
Andrew Hore
Quoted Micro 24 October 2016
ISDX
House broker Daniel Stewart expects energy efficiency and home automation products supplier Sandal (SAND) to move into profit this year. In the year to May 2016, Sandal made a loss of £268,000 on revenues of £3.3m and this year the profit is forecast to be £105,000. The Energenie energy efficiency and home control products are expected to nearly double their sales to £1.4m this year and then double them again next year. The revenues of connectors business PowerConnections are expected to be flat.
Rail safety products developer Wheelsure Holdings (WHLP) plans to raise £106,000 at 1p a share and chief executive Gerhard Dodl says he will acquire some of the shares. The cash will be used for working capital.
Mechan Controls (MECP) says that it is still investigating the possible disposal of some of its business and it has received further approaches from potential buyers, including approaches from management teams of some of the subsidiaries. The offers do not appear to be high enough to provide the exit price wanted by the Mechan board. Mechan has gained shareholder approval to buy back up to 10% of its share capital.
Wealth management adviser Asia Wealth Group Holdings (AWLP) is talking to a number of potential acquisitions. In the six months to August 2016, revenues improved from $578,000 to $601,000 and the loss was halved to $11,000, helped by lower expenses. There was a $91,000 cash inflow in the six month period. There is nearly $1.4m in the bank.
EPE Special Opportunities (ESO/EO.P) will be left with a 24.3% stake in LED lighting products and wiring accessories supplier Luceco following its flotation on the Main Market. EPE sold shares worth £38m and had £10m of loans repaid. The cash will be The share price has risen from 130p to 148p. The stake is valued at £57.8m and this is still more than two-fifths of EPE‘s gross asset value.
AIM
Vislink (VLK) is selling its original core business to a former AIM-quoted company with an even worse track record. Vislink hopes to complete the $16m sale of the loss-making broadcast and surveillance hardware business to xG Technology Inc by the end of the year. It appears that xG Technology will have to raise cash in order to fund the acquisition. xG Technology left AIM at the end of 2013 after seven years on the junior market when it failed to build up significant revenues from the technology it had developed. The buyer has recently bought another business, which is much smaller than the Vislink business but the acquisition will undoubtedly form the core of the enlarged business. The Vislink hardware business was in the books at £22.7m, before central net liabilities, at the end of June 2016 – nearly £30m lower than six months before thanks to losses and write-downs. That is still well below the stated disposal price. Vislink had net assets of £22.9m at the end of June 2016. Executive chairman John Hawkins was appointed to the board on 1 April 2011 and net assets were £47m at the end of June 2011. There have been further share issues since then. If the disposal does go ahead then Vislink will be left with its profitable broadcast software business and have minimal debt.
Lok’nStore (LOK) has grown its underlying NAV by 28% to 386p a share thanks to the continued investment in the portfolio of self storage sites and strong trading. This year the valuer was changed to Jones Lang LaSalle. Supply is limited compared with the demand for self storage. Occupancy rates increased by 2% last year and prices also increased. There are plans for a further four sites – two managed stores and two owned in Gillingham and Wellingborough – over the next year or so, at a cost of £10m, while the recently opened Chichester, Bristol and Southampton sites are still building up their occupancy. There was also a much better contribution from document storage after a few years of flat performances.
Trading continues to improve at security and facilities management services provider Mortice (MORT). Interim revenues are expected to be 57% ahead at around $80m through a combination of acquisitive and organic growth. The fastest growth has been in facilities management where revenues have more than doubled thanks to the UK business with more to come due to recent contract wins. The Indian operations also continue to grow. This means that Mortice is on course to grow full year revenues from $133.5m to $170m, which should enable pre-tax profit to rise from $2.4m to $4.2m.
Core infection control products have grown fast enough to more than offset a continued decline in older product sales by Tristel (TSTL). In the year to June 2016, revenues grew 12% to £17.1m. Overseas revenues grew by more than one-fifth and they account for nearly two-fifths of group revenues. North America remains a major potential market and the first FDA approvals for products should be next year. There will be additional regulatory costs this year. House broker finnCap forecasts a rise in pre-tax profit from £3.3m to £3.6m.
BP Marsh & Partners (BPM) increased its NAV from 243p a share to 253p a share in the six months to July 2016. There is £7.9m of cash available for new investments after taking account of commitments to existing investee companies. The investment company has plenty of opportunities in the insurance broking and related markets but it is very careful when making a new investment.
Gold producer Orosur Mining Inc (OMI) has reduced its cash operating costs to $693/ounce in the three months to August 2016, which is well below expectations and the figure of $954/ounce in the corresponding period in the previous financial year. This cost reduction was helped by the mining of higher grades and costs will rise in the second quarter. The price received for gold sold was also higher but year-on-year production fell from 12,471 ounces to 9,950 ounces so revenues fell from $14.5m to $12.7m. Even so, Orosur moved from a loss to a profit of $2.76m and there was a $4.8m cash inflow from operations. Net cash was $4.7m at the end of August 2016. Orosur expects to produce between 35,000 and 40,000 ounces of gold and cash operating costs are expected to be between $800/ounce and $900/ounce. Orosur is capitalised at less than £19m.
Kyrgyz Republic-focused Chaarat Gold Holdings Ltd (CGH) has rejected a bid approach, which was at a 30% premium to the then market price. That suggests a bid of 11p a share or more. The bankable feasibility study for the Tulkubash heap leach project.
Prospex Oil and Gas (PXOG) has received government approval to drill the Boleslaw-1 well in the Kolo licence area in Poland and this should happen before the end of the year. The final application for the drilling permit has to be submitted. Well pad construction should begin early in November. The intial target has been identified as having potential for near-term production. Prospex owns 49% of the company that owns the Kolo licence.
Premier African Minerals (PREM) has bought a 4.5% stake in Casa Mining, which in turn owns 71.25% of the Misisi gold project in the Democratic Republic of Congo. For $250,000. This was funded by a £300,000 placing at 0.32p a share. Premier could add a further 30% stake. Premier also owns 2% of Circum Minerals, which expects to be awarded a mining licence for its Danakil potash project in Ethiopia by the end of this year. Morgan Stanley is assessing ways of moving the project forward, including a strategic partner or flotation.
More good news for Thor Mining (THOR) about the Molyhil project. The assay results have confirmed elevated levels of tungsten. More drilling is planned on the three targets that have been identified.
Starcom (STAR) has raised £300,000 for working capital after a $100,000 loan facility failed to be secured. The share placing was at 2.5p a share. The previous placing in March raised £450,000 at 1.5p a share. The cash is needed because some payments will not be received until early next year. There was recently a judgement against a subsidiary and two of the Starcom directors in the ongoing litigation brought by Top-Alpha Capital, although Starcom believes this could be overturned by a higher court. Starcom should at least meet the expectation of improved revenues in 2016.
Investment company Mercom Capital (MCC) is pending £600,000 on a 16% stake in Mexican fintech company Mobile Wireless and Satellite SAPI (MOWISAT). The strategy is to offer lending, payments and e-commerce services to unbanked people as a mobile virtual network operator. There are 109 million mobile users in Mexico and the vast majority are on prepay packages. Meanwhile, Mercom’s 10.2% shareholder Calvet International plans to requisition a general meeting at Mercom to propose board changes and a change in strategy.
MAIN MARKET
Standard list shell Mila Resources (MILA) is seeking to acquire an interest in a resources project, most likely in emerging markets. The ideal target would involve a project that is already well down the line and would benefit from a cash injection to move it towards production. Mila has around £1m in the bank after the costs of the flotation. The share price has risen from 5p to 8.25p in the fortnight since it floated.
Andrew Hore
Quoted Micro 11 April 2016
ISDX
DagangHalal (DGHL), which operates DagangHalal.com, a global e-commerce platform that provides Halal verification, joined the ISDX Growth Market on 7 April. Prior to the flotation Malaysian investors subscribed £3.9m and a placing with UK investors raised £300,000. The original website was launched in 2008 and the company also has an online database of Halal certificates. The flotation should raise the profile of the business. There are plans for geographical expansion in Japan, Thailand, Indonesia and China and to develop a mobile platform. The share price ended the week at 24.5p (22p/27p).
English wine producer Chapel Down Group (CDGP) says that its Kent-based subsidiary Curious Drinks has raised more than £1.7m from crowdfunding and a share placing – £1.15m via crowdfunding and £500,000 through a placing. The placing remains open until 29 April but the minimum investment is £25,000. There are 895 new shareholders, one-third of them from Kent. The maximum target for the fundraising, which was eligible for EIS relief, was £3.65m. Curious Drinks produces Curious Brew lager, Curious IPA, Curious Porter and Curious Apple cider. The cash will finance a new brewery at Ashford, Kent, which should be open in 2017. Curious Drinks was valued at £16m prior to any new shares being issued. Chapel Down raised £3.95m in 2014 through a crowdfunding offer via Seedrs, the same crowdfunding platform.
Prospex Oil & Gas (PXOG), which was previously known as Premier Gold Resources before becoming an investment company, plans to join ISDX on 13 April and maintain its AIM quotation. The focus of the company is natural resources investments and projects, predominantly in Europe. The main investment is 49% of Hutton Poland, which has been offered the Kolo licence area in the Polish central lowlands, west of Warsaw. This is an area where there are indications of gas and oil in shallow water wells. A number of conventional oil and gas targets have been identified.
Crossword Cybersecurity (CCS) and Coventry University have set up a subsidiary called CyberOwl Ltd, which will commercialise cyber security research into target centric network monitoring for smart cities. The Crossword share price fell 15p to 175p (150p/200p).
Angelfish Investments (ANGP) has loaned £77,500 to 4Navitas (Green Energy Solutions) for a maximum period of three months. 4Navitas has developed a vertical axis wind turbine in partnership with Siemens. It is smaller, easier to install and cheaper than conventional turbines. The cash will be used to upgrade a 55kwh turbine to 75kwh. Angelfish has an option to acquire this turbine and could end up in partnership with 4Navitas to help roll out other turbine projects. Angelfish has raised £875,000 from a preference share issue, yielding 7.1%, and the subscribers get warrants to subscribe for new ordinary shares at 0.25p each. The bid/offer spread for the share price is 0.1p/0.25p.
Diversified Oil & Gas (DOIL) has issued a further £1.56m of 8.5% unsecured bonds 2020 in the past month, taking the total raised to £6.7m. Diversified recently agreed to acquire 1,000 oil and gas wells in the US for $4.8m, which is a 70% discount to estimated future cash flows. At current oil and gas prices, these wells should generate annual revenues of $6.5m and EBITDA of $1.5m.
AIM
Instem (INS), which provides IT systems and software for pharma development businesses, increased its revenues by 22% to £16.3m in 2015. In the past, it has been particularly difficult to forecasts revenues for Instem because a lot of business was won late in the year but recurring revenues were £10m last year and that means that revenues are more predictable. Underlying pre-tax profit jumped from £1.1m to £1.7m. Net cash was £1.35m at the end of 2015 and £5m has been raised since then. Instem is winning more orders relating to the FDA’s SEND initiative for reporting, which is being rolled out for all sizes of pharma companies, and this is underpinning expectations for 2016. N+1 Singer forecasts a 2016 profit of £2.1m, rising to £2.5m in 2017. Instem is seeking further add-on acquisitions.
Medical technology developer IXICO (IXI) has won a five year contract with Oxford BioMedica, where it will support the use of brain scanning in a clinical trial of an experimental drug for Parkinson’s disease called OXB-102. The phase I/II study should start in the summer and will evaluate safety and assess the optimal dosage. IXICO has also joined the Critical Path for Parkinson’s Consortium (CPP), which includes seven global pharma companies. Data from past trials will be collected, integrated and assessed in order to provide ideas for designing clinical trials focused on early-stage Parkinson’s disease.
MAIN MARKET
Macfarlane Group (MACF) is expanding its packaging distribution division through the acquisition of Middlesbrough-based protective packaging supplier Colton Packaging Teesside. The business generated sales of £3m last year and fits well with Macfarlane’s existing business in Newcastle. Macfarlane is paying up to £1.25m depending on the achievement of financial objectives over the next 12 months.
BATM Advanced Technologies (BVC) has won a contract to supply cyber security systems to a national defence agency. The contract will be worth around $4m over three years. The equipment will begin to be shipped in the third quarter of this year and there is scope for the customer to increase the size of the order. Other governments are interested in acquiring similar networking and cyber security systems.
ANDREW HORE