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Quoted Micro 10 July 2017
NEX EXCHANGE
Coinsilium Group Ltd (COIN) has sold its remaining stake in nanopayments software and blockchain company SatoshiPay to AIM-quoted Blue Star Capital (BLU) for €725,000 (£650,000), which has been raised through a placing at 0.2p a share. Blue Star Capital owns 31.1% of SatoshiPay. Blue Star Capital has granted Coinsilium 85 million warrants, of which 42.5 million are exercisable at 0.6p and 42.5 million at 0.8p. Coinsilium has made a gain of 362.6% on its initial SatoshiPay investment in less than two years, even before any longer-term upside from the warrants.
Via Developments (VIA1) has secured an exclusivity agreement to acquire land in Luton, Bedfordshire for £8.25m. The residential development site has planning permission for 200 apartments. A non-refundable deposit of £50,000 has been paid.
Capital for Colleagues (CFCP) has invested £400,000 in Employee Owners Group Ltd, whose main business is timber frame buildings supplier Carpenter Oak, in return for a 30% stake. The cash will be used to grow the business which currently supplies around 90 frames a year.
First Sentinel (FSEN) has raised £700,000 at 11p a share and made three investments, including £35,000 at 7p a share in fellow NEX-quoted company Milamber Ventures (MLVP). The two firms are already working on an investor event at the Century Club, Shaftesbury Avenue in London on 11 July. First Sentinel plans to sell the Milamber shares in the market. First Sentinel has also invested $300,000 in a 13%, one year loan note for Red Rock Resources (RRR) with two year warrants exercisable at 2.2p a share, compared with a market price of 0.75p. The third investment is in newly floated AIM copper mining company Phoenix Global Mining (PGM), where First Sentinel invested £81,000 at the placing price of 4p a share.
Blockchain investments company Kryptonite 1 (KR1) has raised £750,000 at 2p a share. Chinese medicines firm MiLOC Group Ltd (ML.P) has raised £99,000 at 28.5p a share.
AIM
Premier Technical Services Group (PTSG) is acquiring Brooke Edge Industrial Chimneys Ltd for an initial £14m, plus £1m in acquisition costs, and the building services provider has raised £15m in a placing at 120p a share. There is deferred consideration of £6m payable in three yearly instalments, which fits with the owners staying on with the business for at least three years. The acquisition made a profit of £2.1m on revenues of £10.6m last year. This consolidates Premier’s position in lightning protection services, while specialist earthing and surge protection will be added to the group’s range of services. Although the acquired business has similar margins to Premier, it has lower margins than the same businesses already owned by Premier. This means that continued growth in revenues could be complemented by improvements in margins providing even faster profit growth. According to Numis, he acquisition will enhance earnings per share by 5% to 8.7p in 2017 and 12% to 9.2p in 2018.
Blur Group (BLUR) has managed to raise £1.7m at 1.75p a share in an oversubscribed placing that more than trebles the number of shares in issue. There is one warrant for every four shares with an exercise price of 3.5p. Robert Keith has increased his stake to 25% following the placing. The need for the cash is reflected in the low issue price, which is more than 40% below the all time low market price.
Superyacht painting and maintenance services provider GYG (GYG) joined AIM on 5 July and the share price has already risen from 100p to 120p. GYG raised £6.9m before expenses.
Thor Mining (THR) will start a drill programme for the Pilot Mountain tungsten project in August. Thor expects the results in the near future from a 50 hole drilling programme on the Dundas gold project in Western Australia. Further opportunities are being assessed.
Portmeirion Group (PMP) says that its sales were 16% higher in the first half of 2017 but excluding home fragrance products manufacturer Wax Lyrical, which was acquired in May 2016, the sales are 3% higher due to a boost from sterling weakness. Churchill China (CHH) continues to grow it exports and this has been helped by weaker sterling comparatives in the first half of 2017.
Walker Greenbank (WGB) has received its final insurance payment of £2.4m relating to the flood of its fabric printing factory at the end of 2015. This takes the total payment to £19.3m.
Home improvement products supplier entu (UK) (ENTU) is undertaking a strategic review. There are already plans to cut costs and improve efficiency but entu needs to secure long-term financing to improve the balance sheet. There could also be disposals of businesses.
Sula Iron & Gold (SULA) has completed six holes of the phase 3 drilling at Sanama Hill at the Ferensola gold project in Sierra Leone. So far, 2,000 metres out of a total of 5,000 metres of drilling has been completed. Part of the drilling will include further exploration of the new southern target. The assay results will be available at the end of July.
Veltyco Group (VLTY) says that first half trading is significantly ahead of market expectations. This is not the first time that Veltyco has beaten expectations and even before this the full year pre-tax profit was expected to jump from €1.74m to €4.62m.
TechFinancials Inc (TECH) expects to make a first half loss. Senior management has taken a 20% pay cut. There is still $5.8m in the bank.
Safestay (SSTY) has acquired second hostel in Barcelona for €2m. Safestay has eleven hostels and acquisitions have gathered pace following a £12.6m sale and leaseback deal.
MAIN MARKET
Share trading will commence on 12 July in standard list shell Rockpool Acquisitions, which is seeking to acquire a Northern Ireland-based company. Rockpool is raising £1.085m at 10p a share, having previously issued 1.875 million shares at 8p each.
RockRose Energy (RRE) has raised £8m at 150p a share and it continues to progress the acquisition of oil and gas assets.
Gresham Technologies (GHT) says that revenues will be 26% higher in the first half of 2017. Eight new Clareti Transaction Control software clients have been signed up in the first half. Net cash is £7.7m.
Quarto Group Inc (QRT) has sold its New Zealand business, which was the last non-publishing business owned by the group. Quarto will receive $600,000 over two years plus 50% of debtor receipts for the next year. Quarto is also entitled to 15% of pre-interest profit for three years.
Andrew Hore
Quoted Micro 27 March 2017
NEX EXCHANGE
Brewer Adnams (ADB), which sponsored last year’s Tour of Britain cycling event, continues to invest in its brewery with beer sales moving above 100,000 barrels in 2016. More of that beer is being sold in kegs. The decline in sterling increased the price of hops and wine, which hit the retail operations. In 2016, revenues improved from £65.7m to £70.3m, while pre-tax profit increased from £4.07m to £5.02m, predominantly down to a rise in asset disposal gains from £625,000 to £1.43m. Adnams sold the UK distribution rights to Lagunitas beer. The NAV has fallen to £27.5m because of an increase in the pension liability. There is a dividend of 150p per B share and 37.5p per A share. This year there will be the first beer duty tax increase in four years.
Investment company First Sentinel (FSEN) joined the NEX Exchange growth market on 24 March and pre-IPO £633,000 was raised at 10p a share. That is before costs of £130,000. The founding shareholders own 99.2% of the company with 50,000 shares issued to the market maker. The company’s strategy is to provide investments to small companies with an opportunity covering more than 1,000 quoted companies identified in the UK, Europe, Asia and Australia. First Sentinel is run by former Rangers International Football Club director Brian Stockbridge and the main shareholders are two other former directors of Rangers or its subsidiaries, James Easdale and Sandy Easdale. The company is employing Stockbridge’s corporate finance business First Sentinel Corporate Finance, which will receive an annual fee of 1% of First Sentinel’s assets under management (payable at 0.25% each quarter) plus performance fees based on 20% of pre-tax profit each year when the gross return on capital is less than 20% or 40% of pre-tax profit if the gross return is more than 20%. First Sentinel will be paid 50% of deal fees generated by First Sentinel Corporate Finance from any investment transactions involving the NEX-quoted company. Stockbridge and his partner Aimee Freeding each receive £2,000 a month from First Sentinal. The whole board will be paid £72,000 a year in fees. There are currently 6.36 million shares in issue, with nearly as many shareholder warrants, but the company intends to issue up to 100 million more shares. Stockridge and Freeding have director warrants that enables each of them to receive 10% of the enlarged share capital at the time they are exercised – they each currently own 8.1%. Fellow director Tom Dignall has directors warrants over 5% of the enlarged capital at the time of exercise. The warrants are exercisable over five years. Matthew Rice is the independent director and he has no interest in the present or future share capital. First Sentinel is an investment for fans of Stockbridge.
Angus Energy (ANGS) expects to issue a first tranche of bonds on or around 27 April. Angus plans to issue up to £3.5m secured bonds maturing on 30 June 2022 and these will be quoted on NEX.
A rise in the zinc price has provided further impetus for IMC Exploration (IMCP). A comprehensive zinc works programme on its licences that are between the existing Tynagh and Silvermines deposits in Ireland.
Imperial Minerals (IMPP) is more optimistic about the prospects of the resources sector than one year ago. There was £66,000 in the bank at the end of 2016 and since then Imperial has sold its remaining shares in North River Resources for £30,000.
MetalNRG (MNRG) has raised £295,000 at 0.5p a share – every two shares have a warrant to subscribe for one share at 1p – and directors have exercised options at the same price that provide a further £47,500 – every option exercised sparks the issue of a bonus option exercisable at 0.75p a share. This takes the cash in the bank to £480,000, which will be used as working capital as the company seeks suitable investments. Gervaise Heddle has become a non-executive director. Heddle already owns 9.51 million shares in MetalNRG and he will not receive any pay until the company’s NAV is more than £1.5m but he has been issued 3 million options at 0.5p each.
Ecommerce technology provider Netalogue Technologies (NTLP) has signed an agreement with Sage. Netalogue’s ecommerce platform complements Sage’s X3 ERP technology and the deal could help Netalogue to access new customers.
NQ Minerals (NQMI) has raised a further £32,000 at 8p a share.
AIM
Gatemore Capital Management has requisitioned a general meeting at DX (Group) in order to remove Bob Holt and Paul Murray from the board. The plan is to replace them with Ron Series (as chairman), Paul Goodson, Russell Black and Lloyd Dunn. Gatemore is an activist investor that has been involved with French Connection and Gym Group in recent months. Gatemore’s stake in the parcel deiivery company rose above 3% six months ago and the stake has been built up to 11.3%.Furious 7 live streaming film
Pebble Beach Systems (PEB) formerly Vislink, has taken a reduced payment for its broadcast technology division. Former AIM company xG Technology Inc, which has spent more than a decade failing to develop its own business into a profitable operation, is paying $2m of the $4.9m it still owed in the agreement. Net debt has been reduced from £17m to £12m via the disposal and there is potential to obtain $2m from a creditor. The problem is that the remaining software business is too small to prosper with that level of debt.
SalvaRx Group (SALV) is investing in Rift Biotherapeutics Inc, which is developing antibodies for use in oncology. An initial investment of $1m will give SalvaRx a 30% stake in Rift. If the company achieves milestones then SalvaRx could invest a further $1.5m at the same valuation and swap its shares for the shares in Rift held by the other shareholders.
Tracsis (TRCS) had already warned that its interims would be weak. In the end, revenues were one-fifth higher at £15.6m and underlying profit was 11% higher at £3.1m.The cash balance improved to £12.7m. The interim dividend was raised by one-fifth to 0.6p a share. Management is still confident that the second half will be significantly stronger.
Caledonia Mining (CMCL) increased its production, cut costs and received a higher gold price in 2016. The Blanket mine increased gold production from 42,804 ounces to 50,351 ounces and all in sustaining costs fell from $1,037/ounce to $912/ounce. The gold price achieved rose from $1,139/ounce to $1,232/ounce. Production and costs are set to continue to improve. There was $23m generated from operations last year, more than enough to cover capital expenditure and dividends. The annualised dividend is running at 5.5 cents.
Starcom (STAR) continues to be accident prone. Last year, it could not satisfy demand for Watchlock Pro because parts were not delivered. This meant that full year revenues were flat at $5.13m although the post-tax loss fell from $1.76m to $1.36m. There was $35,000 in the bank at the end of 2016.
MAIN MARKET
Falcon Acquisitions Ltd (FAL) is acquiring two businesses involved in technology, distribution and content operations in the Over The Top television sector. Falcon has raised £4m at 25p a share to provide finance for the enlarged business. The plan is to offer a platform to customers as well as its own content via its own channels. The shares should be readmitted on 27 March. The company will be renamed Falcon Media House Ltd.
Telecoms company Toople (TOOP) is finding it difficult to win business. Apparently, Toople’s main offering to small businesses is not as competitive as it thought so it is focusing on its cloud-based telephony service, which is building up its revenues. The share price has slumped from 8p to 3.25p in less than one year. According to last year’s prospectus, chief executive Andrew Hollingworth gets £120,000 per year (as well as 35 days holiday plus bank holidays) while he acquired his 26 million shares in Toople at 0.0667p each. Finance director Neil Taylor gets £60,000 a year for a two day week. In 2015-16, gross profit was £78,000 while the cash outflow from operations was £1.42m. It appears that the outflow should slow in the first half of this financial year but it will still be significant. There was £744,000 in the bank at the end of September 2016 but there was also debt of £469,000. Given the vast overheads for a company of this size it is no surprise that Toople needs to raise working capital. The trading statement also says that the board “continues to focus on tight cost control” and hopefully they will be able to think of some excess costs that could be reduced.
Books publisher Quarto Group (QRT) has sold its 75% stake in Hong Kong-based Regent Publishing Services for $7m – a gain of $3.3m on book value.
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 15 August 2016
ISDX
Beer and spirits volumes were both higher in the first half for Adnams (ADB). Beer volumes were 7% ahead, while the volumes of the less-mature spirits business were 60% higher in the first half. However, increased marketing costs meant that operating profit fell from £962,000 to £624,000, while disposal profit jumped from £407,000 to £1.42m – including the sale of UK distribution rights for Lagunitas to Heineken. The second half is always stronger for the pub and retail operations. A £7m investment is being made to increase brewery capacity by next summer. The A and B dividends have been increased by 5.6% to 19p and 76p respectively. The record date for the dividends is 9 September. There were 132 shares traded during the week at prices between 10500p and 10850p.
WMC Retail Partners (WELL) expects to make a lower interim loss this year. WMC has agreed in principle a funding package of £1.8m plus revised terms for the lease of Cornish Market World, which is still losing money even though a reconfiguration has improved performance. Interests related to two directors are lending the company £300,000, taking the total outstanding to £400,000, ahead of completion of the funding package. These loans are repayable at the end of November but longer term loans, which shareholders have to approve, are being negotiated.
National Milk Records (NMRP) has appointed Mark Frankcom, who has previous experience in the dairy industry, as its new finance director. Since April 2011, Frankcom has been a director of Gloucestershire-based Combined Brewers, which was known as Cotswold Spring Brewery prior to its merger with Severn Vale Brewery, where he owns 33.3% of the shares. At 77.5p (76p/79p) a share , NMR is valued at £5.8m. The latest trade was 320 shares at 76p each on 10 August.
There has been mixed news for blockchain technology investor Coinsilium (COIN). Factom, which has developed technology to time stamp trading data, has done a deal with digital information platform DataYes to publish pricing data on the “3,000 most valuable Chinese stocks”. Coinsilium has a 1.9% stake in Factom. The management of Mexico-based digital currency exchange MeXBT, where Coinsilium has a 17.6% stake, has temporarily suspended its exchange operations in order to perform a review.
Diversified Oil & Gas (DOIL) has bought back £197,000 worth of 8.5% unsecured bonds from a bondholder fund. There are £9.93m worth of bonds in issue, including the bonds bought back.
AIM
Premier Technical Services Group (PTSG) continued to grow strongly in the first half and it has not been hit by the Brexit vote. In the past two weeks, Premier has secured two access installation contracts worth £2.5m. The construction-related order book stretches out to 2018 and the testing and maintenance operations also have a strong order book. The two dry and wet riser systems installation businesses acquired in July will contribute to the second half.
Staff turnover is holding back the progress of energy procurement services provider Utilitywise (UTW) and it has overhauled its management, including the appointment of a new chief executive. Brendan Flattery is joining the company at the beginning of October, having previously headed Sage’s European business. Sales grew by 19% in the year to July 2016, while EBITDA will be slightly higher than last year at around £18m. Earnings per share forecasts have been reduced by around 10% to 17.7p, which is slightly lower than the previous year.
Digital media company Milestone (MSG) is providing NaPo with a white label version of its Backstage HD music publishing platform. NaPo is a mobile reward platform and revenues generated will be shared 50/50.
Audio visual services provider MediaZest (MDZ) says that it is targeting its first ever post tax profit in 2016-17. In the year to March 2016m revenues grew from £2.48m to £3.14m, while the post tax loss was cut from £656,000 to £109,000, excluding share-based payment charge. There are two large projects that could come through later this year or early in 2017.
Self-storage sites operator Lok’nStore (LOK) says that like-for-like storage occupancy was 2% higher last year and prices have increased by a similar percentage. This lead to a 5.2%increase in sales and means that Lok’nStore is on course to increase earnings per share buy one-third to 10.3p. There are plans for new outlets including one in Gillingham, Kent.
Information management software provider Ideagen has acquired Covalent, which is similar to its own business, for £3.6m. Covalent has a customer base that includes the NHS, local government and housing associations and annual recurring revenues are £1.9m. This deal has led to a 8% increase in forecast 2017-18 earnings per share to 3.5p.
Mining services provider Management Resource Solutions (MRS) has agreed to acquire the min assets of SubZero Group Ltd for A$6.12m in cash and shares. This cost includes the assumption of A$2.85m of equipment finance and employee benefits. SubZero, which has generated annual revenues of A$40m, fits with MRS’ project management and labour hire businesses and will double group revenues. Operating sites will be consolidated and corporate costs reduced. Rising coal prices should lead to recovery in demand for the group’s services in Australia.
MAIN MARKET
Publisher Quarto (QRT) has acquired becker&mayer publishing assets for $9.8m. The US-based business is a book publisher and toy business and a further $1.25m could become payable. The US will account for 45% of group revenues, while children‘s publishing will be 30% of group revenues. Quarto is second half weighted so the interim loss is no surprise. The interim dividend is unchanged at 5.13 cents a share but in pence terms it will be higher. Full year profit is expected to improve from $14.1m to $15.5m.
Tex Holdings (TXH) says that a change in mix of work meant that profit did not reflect the improvement in interim turnover from £17.8m to £20.6m. Pre-tax profit was flat at £495,000. Plastics turnover fell in the first half but sales volumes have picked up in the second half. The interim dividend has been increased by one-quarter to 2.5p a share.
Andrew Hore
Quoted Micro 8 February 2016
ISDX
Ace Liberty & Stone (ALSP) has launched an open offer at a large discount to the market price. Ace wants to raise up to £3.5m via a one-for-two open offer at 1p a share. The open offer is not underwritten and the minimum subscription level for it to go ahead is £2m before expenses. Shareholders can apply for more than their entitlement. The mid price is currently 3p (2p/4p), having fallen from 3.75p prior to the open offer announcement. There had been a number of trades during January at around 3.75p a share. Prior to the open offer, Ace raised just over £1m at 3p a share. Management says that the cash will enable Ace to buy properties in a higher price bracket and continue to build the portfolio. The latest acceptance date is 22 February.
DXS International (DXSP) reported a 31 % increase in revenues for the first half but the IT supplier to healthcare professionals reported a similar loss. In the six months to October 2015, revenues grew from £1.16m to £1.52m, while the underlying loss was £11,000. That reflects a rise in admin expenses in order to comply with NHS conditions of service. Management says that DXS is generating cash. Annualised revenues are running at £3.4m and DXS is supplying 37 client commissioning groups and is set to win more. There was£308,000 in the bank at the end of October 2015. At 13p (12.5p/13.5p) a share, DXS is valued at £4.3m.
Blockchain technology company investor Coinsilium Group Ltd (COIN) says that its investee company SatoshiPay, which has developed technology that enables online payments of a few pence per transaction, has undergone a beta launch of the platform for web publishers. Coinsillium owns 14.5% of SatoshiPay, having invested a total of €200,000. At 7.5p (6p/9p) a share, Coinsillium is valued at £5.4m.
Carduus Housing (CHPD) has raised a further £1m from an issue of 6.5% unsecured bonds due in 2020 and this takes the total in issue to £3.5m. Carduus is focused on the affordable residential housing sector and it will initially invest in Scotland in areas where rental demand is greater than supply. The purchase of a portfolio of 15 properties was announced last December.
AIM
Immupharma (IMM) has raised £8.3m at 26p a share. However, £3.76m of this cash is subject to a sharing agreement with Lanstead Capital. This appears to effectively be the same as what used to be called an equity swap, so just how much cash the company receives, whether it is more or less than the £3.76m figure, will be dependent on the performance of the share price. The benchmark share price of the agreement is 34.6667p, which is significantly higher than the placing price and the market price. The cash will be paid in 18 instalments but if the share price at the time of the transaction is not as high as 34.6667p then Immupharma will receive less than one-eighteenth of the £3.76m figure. If the share price is higher then the company will receive more. The cash will finance the phase III trial for Lupozur, the potential lupus treatment.
Imperial Innovations (IVO) is raising an additional £100m for investment in new and existing investee companies and it manged to raise the cash at a premium to the market price. The 425p a share placing price was a 8% premium to the market price and a 39% premium to the last reported NAV. The placing was backed by existing shareholders Woodford, Invesco, Lansdowne and Imperial College. Imperial Innovations is estimated to have had cash of around£90m before the placing.
OptiBiotix (OPTI) has raised an additional £1m at 78p a share from Seneca Partners, which has increased its stake to 7.13%. This follows the £1.5m raised at 75p a share at the end of 2015. The cash will help OptiBiotix to invest in the various products and opportunities that it is developing through its microbiome expertise and technology.
TechFinancials Inc (TECH) has entered into a B2C joint venture with Hong Kong-registered developer of online businesses, IBID Holdings. The 51/49 joint venture will operate a B2C binary options brand. TechFinancials will provide the trading platform and other intangible assets for its 51% stake and IBID will inject $300,000 in cash and provide working capital until the joint venture is making a net profit of at least $100,000 a month for three months in a row. It will take three months to integrate the platform into IBID’s systems. This follows a previous joint venture with Optionfortune late last year. The expected improvement in pre-tax profit from £303,000 to £663,000 in 2016 has not been adjusted for the latest joint venture.
Technology-focused investment company MXC Capital Ltd (MXCP) is proposing to launch a tender offer for one in every 142 shares at 3.6p each– slightly higher than the market price at the time of the announcement. Shareholders can tender more than their entitlement but they may be scaled back. Up to £800,000 will be paid back to shareholders. The closing date for the tender is 19 February and it has to be agreed by shareholders at a general meeting. The strategy is to distribute up to one-fifth of realised gains from its portfolio. At the end of August 2015, MXC had £28.4m in cash and in the subsequent months it has invested £22.5m in AIM-quoted companies Castleton Technology, Castle Street Investments, Pinnacle Technology and ECV, as well as unquoted big data analytics company Sagacity Solutions Ltd.
MAIN MARKET
Quarto Group (QRT) has acquired The Harvard Common Press, which publishes cooking and childcare books. This deal will add hundreds of titles, built up over four decades, to Quarto’s back catalogue.
ANDREW HORE