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Andrew Hore – Quoted Micro 7 September 2020
AQUIS STOCK EXCHANGE
Daniel Thwaites (THW) had net debt of £65.4m at the end of March 2020 and this increased to £71.8m at the end of June following the closure of the company’s pubs and hotels. There is £12m of headroom in the current facilities but management is considering increasing the borrowing facilities. The sites were reopened on 4 July or shortly after. There has been steady growth in sales.
Altona Energy (ANR) has signed heads of agreement to acquire up to 75% of the Chambre rare earth project in southern Malawi. There is a backlog of exploration licence applications following recent elections. The trading suspension will end when new funds are raised. A funding will be launched via investment platform www.NRPrivateMarket.com once an exploration licence is granted in Malawi or heads of agreements are signed for another deal.
SulNOx Group (SNOX) has received a requisition from two shareholders (James Redman Jr and Sungold Escrow Nominees Ltd) for a general meeting. They own more than 5% of the company. A date for the general meeting has to be announced within three weeks.
European Lithium (EUR) has appointed Kimon Gkomozias to the board as part of its strategic agreement with EV technology metals project developer Talaxis. He will help European Lithium obtain funding. A placing is planned to raise $2m at 4.5 cents a share.
Cadence Minerals (KDNC) has obtained agreement in principle for the bank creditor settlement relating to the Amapa iron ore project.
EPE Special Opportunities (ESO) has made a £1.9m investment in Atlantic Credit Opportunities Fund (ACOF), a distressed credit fund. EPE’s investment advisor Epic Private Equity intends to acquire a controlling stake in Atlantic Capital Management, which manages ACOF.
Forbes Ventures (FOR) has set up Forbes Ventures Cell 1 Ltd to acquire UK-issued litigation funding loans. The rights to these loans will be assigned to and securitised by Malta-based Forbes Ventures CC1, which is planning to raise money via a bond issue. A Forbes subsidiary will receive a fee of 2% of the funds raised.
World High Life (LIFE) is assessing investment targets in the medicinal cannabis sector. This includes areas such as synthetic cannabinoids.
Trading in the shares of Sativa Group (SATI) has been suspended while Stillcanna awaits the approval of the Canadian Stock Exchange for the takeover of Sativa. The enlarged group plans to gain readmission to the Acquis Stock Exchange as Sativa Wellness Group Inc.
Alfred Henry Corporate Finance has been appointed as Eastinco Mining and Exploration (EM.P) corporate adviser.
Sumner Group Health Ltd (SGRL) has confirmed its withdrawal from the market on 8 September.
AIM
Capital equipment supplier Mpac (MPAC) has continued to secure orders even with the disruption caused by COVID-19. Interim revenues fell by one-fifth to £36.6m, but services revenues continue to grow. Underlying pre-tax profit fell from £4.5m to £2.5m. The order book is worth £45.4m. Net cash was £22.5m at the end of June 2020. Full year pre-tax profit is expected to fall from £7.5m to £5.2m.
CyanConnode (CYAN) was hit by delays to contracts in the 15 months to March 2020, but it appears to have a strong base for the current financial year. The smart meter technology developer is still losing money, but it has shown that it can manage its cash effectively by gaining advance payments on orders. Net cash was £1.2m at the end of March 2020.
Mattress supplier eve Sleep (EVE) says current trading is ahead of expectations and the full year loss is expected to be slightly lower than previously. Net cash of £5m is forecast for the end of 2020.
Cake Box (CBOX) has made a strong start to the new financial year. The franchised retailer of egg-free cakes is even offering a special dividend of 3.2p a share. Equity Development forecasts a rise in earnings per share from 7.8p a share to 9p a share in the year to March 2021.
7Digital (7DIG) has raised £6m at 2.25p a share, having sought a minimum of £5m. The streaming technology developer will be able to take advantage of opportunities in areas such as home fitness and social media.
Musical instruments retailer Gear4Music (G4M) has continued its sales momentum in the new financial year. There will be an interim trading statement on 22 October.
Driver monitoring systems developer Seeing Machines (SEE) has unveiled a new product strategy. This involves a focus on a chip whose performance is optimised by a neural processing unit called Occula. It will be made easier for automotive clients to integrate this technology. There are also plans to licence the Occula technology.
Nostra Tera Oil and Gas (NTOG) is acquiring a 100% working interest in the Caballos Creek oil field in Texas, which has an economic life of between 16 and 32 years. The cost is $425,000 and there should be a two-year payback. There are proved reserves of 92,100 (69,300 net) barrels of oil equivalent. Current production is 30 (22 net of royalties) barrels of oil per day, which increases Nostra Terra’s production by 25%.
Matthew Freud increased his stake in Reach4Entertainment (R4E) to 19.99% before trading on AIM ended.
Omega Diagnostics (ODX) has CE-marked Mologic’s lateral flow antibody test for COVID-19, which picks up infection at an earlier stage than most tests.
Allergy Therapeutics (AGY) has in-licensed the virus-like particle vaccine technology from Saiba and DeepVax for use in solid tumours, atopic dermatitis, asthma and psoriasis. This broadens the scope of the group, but it continues to focus on allergy treatments.
MAIN MARKET
Consumer products supplier Creightons (CRL) increased full year revenues by 9% to £47.8m, while an improved profit margin meant that pre-tax profit increased from £2.87m to £3.55m. A final dividend of 0.5p a share is proposed.
Papillon Holdings (PPHP) has signed heads of agreement to acquire gold assets in Africa. It plans to acquire 100% of Kilmapesa in Kenya and 70% of the Kakamoeka gold project in Congo Brazzaville. They could provide near-term gold production.
Andrew Hore
Andrew Hore – Quoted Micro 17 August 2020
AQUIS STOCK EXCHANGE
Brewer Adnams (ADB) reported a slump in revenues from £34.7m to £21m in the six months to June 2020 and there was a loss. That is no surprise given the problems of the hospitality sector. Online sales grew but could not offset the loss of on-trade sales. Net debt was £14m at the end of June 2020.
Medical device developer TruSpine Technologies (TSP) is on course to join the Aquis Stock Exchange on 20 August. TruSpine wants to raise £1.5m, which would give it a valuation of £31.5m. The investment is eligible for EIS-relief. TruSpine expects to make a FDA submission for Cervi-Lok, which is one of the three spinal stabilisation devices being developed, in the fourth quarter of 2020. Existing Aquis-quoted company Primorus Investments (PRIM) is an investor in TruSpine. In 2017, it invested £500,000 at a pre-money valuation of £15m. Another Primorus investment, Greatland Gold (GGP), has performed strongly in the second quarter and the share price is more than 155% ahead over the period.
NQ Minerals (NQMI) has raised a further £695,000 at 7p a share. NQ has also secured a $55m loan facility to refinance the project debt of the Hellyer gold mine. Interest savings should be $3.4m a year. Chairman David Lenigas has acquired 20,000 shares at $0.12 each.
Sativa Group (SATI) had a record July. The CBD products supplier has benefitted from sanitiser demand.
TechFinancials (TECH) reported a loss of $492,000 in the first half of 2020. There is $716,000 in the bank. The closure of the trading software operations will be completed in the second half. The Footies ticketing business still has not progressed in terms of signing up clients.
Recruitment company Sumner Group Health (SGRL) intends to withdraw from Aquis in order to save money. A general meeting will be held on 3 September.
IamFire (FIRE) has completed the purchase of a 10% stake in Bio2pure, in a deal that values the company at £8m. The investee company’s CoviPure disinfectant has been launched
AIM
Energy supplier Yu Group (YU.) has been criticised for its financial controls and systems back in 2018. A £300,000 fine has been waived because remedial action has been undertaken. Yu has acquired Bristol City Council-owned Bristol Energy’s B2B business for an initial £1.24m.
Appreciate (APP) was going to have a tough year even before COVID-19. In the year to March 2020, underlying pre-tax profit fell from £12.5m to £11.4m and there is likely to be a much larger profit decline this year. Trading has improved after a tough first quarter. If Appreciate had not been investing in its digital products it would have found recent months even more difficult. A property has been sold for £3.2m, which further enhances the cash pile of £29.6m at the end of March. The hamper business will be closed this year, but the overall Christmas savings business is holding up. Corporate demand is recovering.
Investment in VW emissions case work will hold back profit in the second half at credit hire firm Anexo (ANX). Lockdown led to a sharp fall in interim profit, but business is building up again. Profit could return to the 2019 level of £23m in 2021, even if there are no VW case revenues. A 0.5p a share interim dividend is being paid.
The geographic and sector spread of recruitment firm Empresaria (EMR) has helped it cope with difficult trading, particularly in its airline-related business. The business was profitable in the first and second quarters. The underlying interim pre-tax profit fell from £3.7m to £2.4m. There is no full year forecast.
Touchstone Exploration (TXP) has commenced drilling at Chinook on the Ortoire block in Trinidad. Chinook is valued at 2p a share by finnCap, but it could be significant like previous find Cascadura, which is valued at 78p a share. Cost cutting has helped to reduce year-on-year per barrel operating costs by 28% in the second quarter. There was still a second quarter loss. Production has declined to 1,396 barrels/day in the second quarter, but this will rise substantially when Cascadura comes into production.
STM (STM) has acquired pensions administrator Berkeley Burke for up to £2.9m. this will add to the UK operations. The business will be rebranded.
Pennant International (PEN) has an order book worth £36m and net cash of £2m. Annualised cost savings of £1m will help the second half performance and a profit is expected. That may not be enough to cover the first half loss.
Pires Investments (PIRI) investee company Getvisibility has signed a US distribution agreement. The data security business will gain access to US government work.
Matthew Freud has taken his stake in Reach4Entertainment (R4E) to 18.7%. The company’s chief executive has increased his stake to 18.7%. The general meeting to vote on the proposal to leave AIM is on 21 August.
MAIN MARKET
Tex Holdings (TXH) says interim revenues fell from £21.8m to £18.5m and the loss has increased from £351,000 to £1.36m. There is £2.54m in the bank, but net debt is £10.7m. The board still wants to raise more cash. The plastics business is still profitable, although it made a lower contribution. The engineering loss was slightly lower, but boards and panels fell from profit to loss.
MATCHED BARGAINS
Fastjet (FJET) is moving from AIM to Asset Match and the airline is reregistering as a private limited company. Trading is expected to start on 24 August. The first auction will be on 30 September.
Andrew Hore
Andrew Hore – Quoted Micro 10 August 2020
AQUIS STOCK EXCHANGE
National Milk Records (NMRP) generated revenues of £5.35m in the quarter to June 2020, down from £5.6m in the previous year. Milk recording revenues declined because of COVID-19 restrictions. There was limited disruption to other parts of the business. The second half of the year to June 2020 was still better than the first half.
British Honey Company (BHC) has signed a four-year global licensing and distribution agreement with English Heritage. Spirits will be sold under the English Heritage brand.
The Hellyer gold mine operated by NQ Minerals (NQMI) achieved record production levels in July. The new processing plant had a monthly throughput of 106,365 tonnes. There was 4,075 tonnes of lead concentrate, 1,509 tonnes of zinc concentrate, 461 ounces of gold and 89,854 ounces of silver produced.
Sport Capital Group (SCG) intends to refocus its investment strategy on the natural resources sector and change its name to Evrima. An investment has been made in Kalahari Key Metals Exploration. A share consolidation of ten shares into one new share is planned.
Clean Invest Africa (CIA) says that its subsidiary CoalTech has signed heads of agreement for a feasibility study and commercialisation of a 5,000 tonnes per month pelletising plant in New South Wales. The study will take three months and it would take a further nine months. The plant would be near to a power station.
MiLOC Group Ltd (ML.P) increased its revenues from HK$10.7m to HK$15.4m in the year to December 2019, but the loss still increased to HK$40.6m, partly due to stock write-downs. Both traditional Chinese medicine products and the company’s clinics made higher contributions to revenues.
Asia Wealth Group Holdings (AWLP) reported a decline in revenues from $2.4m to $1.43m in the year to February 2020. There was a swing from profit to loss.
AIM
NWF (NWF) benefitted from strong demand for heating oil and the slump in the oil price. There were bumper profits from the fuel distribution business in the year to May 2020. Operating profit nearly doubled to £11m and this won’t be repeated. Opening cost of the new Crewe facility led to a dip in profit contribution from food distribution. The feeds business increased market share but profit fell. Group pre-tax profit improved from £9.7m to £11.5m. A pre-tax profit of £10.7m is forecast for next year.
Telecoms hardware manufacturer Filtronic (FTC) reported full year figures in line with the recent trading statement and there was a small pre-tax profit. Revenues are building up as demand for 5G products increases. There is spare manufacturing capacity and efficiency will improve as capacity is used up. The US-based subsidiary is in a good position to win 5G orders.
Applied Graphene Materials (AGM) has signed two new distribution agreements. A deal with Arpadis Benelux will enable Genablle graphene dispersion technology to be sold in the main speciality chemicals markets in Europe. An agreement with Maroon Group provides access to the coatings and polymers sectors in North America.
Construction materials distributor Brickability (BRCK) generated revenues of £23.8m in the three months to June 2020. There was a loss in April but Brickability returned to profit in May and June.
Telecoms customer engagement software provider Pelatro (PTRO) is raising £21m at 47p a share. This will fund investment in sales and marketing and working capital. Pelatro is profitable but cash generation has been relatively poor, although it was better last year.
Lawyer Ince Group (INCE) has reported 2019-20 figures that show an underlying pre-tax profit of £7m, although earnings per share declined following share issues. The consolidation of international acquisitions has been completed and IT is being improved. First quarter trading is 10% below plan but the business is still profitable.
Intelligent Ultrasound (MED) was quick to develop a COVID-19 module for its machines and this helped to partly offset a drop in first half revenues. Losses continue but the potential launch of AI-based products in 2021 and 2022 will put the company in a good position to move into profit.
K3 Business Technology (KBT) is a much smaller business following the sale of its UK Dynamics subsidiary, but it has a more solid and profitable base. Interim revenues slipped from £27.9m to £27.2m. K3’s own IP contributed 48% of revenues.
Fulcrum Utility Services (FCRM) has a better base going into the year to March 2021, even though the multi-utility infrastructure services provider was hit by the construction lockdown in the first quarter. Housebuilding activity is improving. Operational inefficiencies are being addressed.
Entertainment events marketing services provider Reach4Entertainment (R4E) intends to leave AIM in order to save money and enable greater flexibility. The share price slumped after the announcement, but it has moved back above the price at the beginning of the week. Chief executive Marc Boyan has bought 70 million shares at 0.2155p a share. That takes his stake to 16.1%. Herald has sold its 14.4% stake and Matthew Freud has bought a 14.95% stake.
Pensions administrator STM (STM) says that interim trading was in line with expectations thanks to its recurring revenues and control of costs.
Mergers adviser K3 Capital (K3C) has acquired Quantuma Advisory, which is focused on insolvency and restructuring, for an initial £20.2m. A further £6.7m could be payable depending on performance over three years.
Yourgene Health (YGEN) is acquiring Coastal Genomics for an initial $5.5m and up to $8m dependent on performance. Vancouver-based Coastal is a sample preparation technology company. The technology complements Yourgene’s technology and gives it a North American base. Yourgene raised £15m at 17p a share.
MAIN MARKET
Castillo Copper (LON: CCZ) joined the standard list on 4 August. Castillo raised £1.3m at 1.7p a share and the share price ended the week at 2.45p (2.2p/2.7p). There are three core projects, but the one that management is focusing on is Mt Oxide. The plan is to develop a copper mine. The Ayra prospect is the main exploration target and £450,000 will be spent on the Mt oxide area. The other core projects are the Cangai copper project in Australia and the Zed projects in Zambia.
BATM (BVC) says Vodafone has completed proof-of-concept on the ARM-based uCPE, which includes BATM’s network functions vizualisation (NFV) operating system. Field trials are likely to follow. This shows that both the networking and biomedical have good growth prospects. Stifel forecasts a rise in BATM pre-tax profit from $4.8m to $7.7m in 2020.
Construction and infrastructure services provider NMCN (NMCN) had a strong first quarter but a tougher second quarter meant that interim pre-tax profit fell by three-quarters. Even so, an interim dividend of 10p a share has been announced, which partly compensates for the lack of 2019 final dividend. There was an improved performance in telecoms and water is at the lower point in the cycle. Construction sites are becoming more active. Progress Equity Research forecasts a full year pre-tax profit of £1.9m, before recovering to £7.6m next year. A forecast total dividend of 15p a share for 2020, would not quite be covered by earnings.
Seafox International was successful in persuading Gulf Marine Services (GMS) shareholders to appoint Hassan Heikal and Hesham Halbouny to the board of the offshore oil services provider. They each received 57.7% of the votes.
Standard list shell Boston International Holdings (BIH) had £310,000 in cash at the end of June 2020, although there is also an unsecured loan of £200,000.
Argo Blockchain (ARB) mined 165 bitcoin in July, down from 180 in June. There were problems in the middle of the month. Mining revenue was £1.25m in July.
Andrew Hore
Andrew Hore Quoted Micro 25 February 2019
NEX EXCHANGE
Western Selection (WESP) has reported a 22% decrease in NAV to 75p a share, due to the decline in smaller quoted company share prices. The NAV has recovered to 79p a share. The investment in Swallowfield (SWL) declined by nearly one-third and the value of the Bilby (BILB) stake fell by two-fifths in the six months to December 2018. Net debt was £1.25m at the end of 2018. The interim dividend is maintained at 1.1p a share.
Early Equity (EEQP) has acquired a 60% stake in MEI Home, a ecommerce platform for household, health and food products, for £282,000. The Malaysia-based business was profitable in the first financial year. The founder will retain a 40% stake and he also owns 6.12% of Early Equity. He also promises that annual pre-tax profit will be at least £95,000 in each of the next two financial years.
Tectonic Gold (TTAU) has taken a 50% stake in a joint venture with Vast Mineral Sands covering diamond mining concessions at the government-owned Alexkor diamond mine in South Africa. This should generate cash, through planned production of 900 carat per month, to invest in other projects. Tectonic is paying $650,000 in shares at 2.2p each. A year long research study has confirmed that there is an interaction of two styles of mineralisation at Mount Cassidy prospect in Queensland, Australia. There is stratabound copper and zinc, gold and silver mineralisation and epizonal to epithermal gold and silver mineralisation.
MiLOC Group Ltd (ML.P) has extended the life of its convertible bond by one year to 19 January 2020. The annual coupon increases from 6% to 7.2%. The conversion into shares can take place if an alternative quotation on a recognised stock exchange is secured.
First Sentinel (FSEN) has completed a £4m bond issue. These 7% bonds 2023 are due to start trading on NEX.
AIM
Michelmersh Brick (MBH) has made its first acquisition outside of the UK. Michelmersh is paying up to €9.9m (£8.7m) for Antwerp-based Floren and Co in a deal that should be immediately earnings enhancing. A placing raised £5m at 90p a share. In 2018, Floren generated EBITDA of €1.75m on revenues of €5.7m. Michelmersh is planning to increase production levels from 19.5 million bricks a year. The acquisition includes 120 acres of land, of which 60 acres is used in production.
IP legal services provider Murgitroyd Group (MUR) is acquiring Southampton-based Chapman IP for £6.6m and Helga Chapman has been appointed a non-executive director. Net cash was £2.03m at the end of November 2018. Interim pre-tax profit edged up from £1.67m to £1.7m. The interim dividend was increased by 8% to 7p a share. Edward Murgitroyd is retaining his role as chief executive and handing over the role of finance director Keith Young.
Carpets and hard flooring manufacturer Victoria (VCP) continued to sacrifice margins in order to add market share in a declining flooring market in the UK in the second half of the financial year to March 2019. Full year EBITDA should be between £95m-£97m, with underlying pre-tax profit of at least £55m. This is not as much as previously forecast. There are additional inventories ahead of Brexit. Restructuring measures and capital investment should add more than £14m to pre-tax profit for the year to March 2020.
JD Sports Fashion (JD.) has acquired 21.3% of Footasylum (FOOT) and it says it may acquire up to 29.9%. FIL Ltd’s stake has fallen below 5%. Artemis has sold its 5.74% stake.
Angling Direct (ANG) expects to report full year revenues of £42m, up from £30.2m. Three new stores have been added to the group, taking the total to 24. International sales doubled. The full year results will be published on 13 May. Angling Direct is considering the acquisition of Glasgow-based Chapmans Angling Ltd, which is a subsidiary of The Glasgow Angling Centre Ltd.
Egdon Resources (EDR) has competed drilling at Biscathorpe-2 in Lincolnshire. There are signs of an effective petroleum system even though the sands were poorly developed. The reservoir may be better developed to the north of the well. Egdon owns 35.8% of the exploration licence and Union Jack Oil (UJO) owns 22%.
Trinidad-focused oil and gas producer and explorer Touchstone Exploration Inc (TXP) has raised £3.8m at 12p a share in order to finance the 9,000 feet of exploration drilling at Ortoire.
Pelatro (PTRO) has gained a contract to supply its mViva contextual marketing service to Vietnam-based Vinaphone. The deal with the telecoms company should be worth $1.5m over three years. Pelatro gets a fixed monthly fee plus a share of incremental revenues generated. This provides additional confidence that the 2019 revenue forecast of $10.5m can be met. That is expected to generate pre-tax profit of $6m because of the high operational gearing of the business.
SkinBioTherapeutics (SBTX) has raised £1.5m at 16p a share from Seneca Partners. There was £2.52m in the bank at the end of 2018. The cash will be invested in further development of products and commercialise them.
Duke Royalty (DUKE) has provided £10m of royalty finance to recreational vehicle parts wholesaler Miriad Products. The monthly payments are expected to provide a yield the equivalent of 13% a year.
Biopesticide products developer Eden Research (EDEN) has a second approved product thanks to its commercial partner Eastman Chemical Company. Nematicide formulation Cedroz has received authorisation in Malta and Eastman will apply to gain approvals in individual EU member states. The full benefit of these approvals is likely to show through next year.
EKF Diagnostics (EKF) has received US FDA clearance for the use of the Quo-Test glycated haemoglobin analyser in clinical laboratories.
It has been a mixed start to the financial year for Gooch and Housego (GHH) with softer demand in microelectronics, due to trade tariffs, but the second half improvement in subsea cable business has continue. The AGM statement has led to a reduction in the underlying profit forecast for this year from £21.5m to £19m, which is slightly higher than last year’s outcome.
Social housing software provider Castleton Technology (CTP) has acquired its software development partner in India for £350,000 in cash and shares.
eServGlobal (ESG) says that its 35.7%-owned mobile transfer payments joint venture HomeSend increased its average transaction value by 35% in the second half following a change in strategy to focus on account-to-account transactions rather than remittances.
Beximco Pharmaceuticals (BXP) is acquiring eight abbreviated new drug applications in the US from Sandoz Inc. This takes the number of US approved drugs to 14, with four currently being exported to the US.
Haydale Graphene Industries (HAYD) has raised £4m at 2p a share and wants to raise up to £4m more through a seven-for-one open offer closing on 11 March. If these shares are all issued they will account for 93% of the total shares in issue. Haydale needs cash to invest in its inks business as well as to cover continuing losses. Keith Broadbent will become chief executive.
Reach4Entertainment (R4E) has acquired the arts and entertainment advertising agency trading as Sold Out for an initial £3.94m in cash and £250,000 in shares. The total purchase price is dependent on performance in the period from 1 June 2017 to the end of 2021 and is capped at £10m. In the year to May 2018, Sold Out made a pre-tax profit of £1.3m.
Paragon Entertainment (PEL) has sold its current administration offices in York for £550,000. The relocation to other group premises should save £100,000 a year. The cash will pay off the mortgage of £134,000 and reduce the overdraft from £1.04m. The overdraft limit will be cut from £1.2m to £882,000. A creditor owing £168,000 has filed for protection from creditors. Management want to raise additional capital.
Medical devices supplier Inspiration Health (IHC) says revenues for the year to January 2019, will be £15.5m, which is £1m below forecast, and pre-tax profit will be slightly lower than forecast at £1.2m.
Holders Technology (HDT) has more than trebled its full year pre-tax profit of £177,000 thanks to a reduced LED loss and improved profitability at the printed circuit board materials business. There was still a cash outflow from operations. The dividend has been increased by 50% to 0.75p a share.
Arc Minerals Ltd (ARCM) has raised £2.2m at 3p a unit. The unit includes a share and one warrant exercisable at 4.5p each and lasting for 36 months. The cash will finance exploration and development at the Zamsort copper project in Zambia. Arc has also sold its 18.5% stake in Andiamo Exploration for $250,000.
Malvern International (MLVN) has raised £606,000 at 4p a share. This is more than the education services provider originally asked for in order to cover working capital requirements and investment in a new college in Brighton and online course material.
AIM-quoted blockchain and technology investment company Vela Technologies (VELA) is taking advantage of the discount to cash by buying 500,000 shares in cryptocurrency mining services provider Argo Blockchain (ARB) at 3.072p a share. This compares with cash of 5p a share. Vela has 3 million shares in Argo, equivalent to 1.02%. The rest of the shares were bought prior to Argo’s standard listing and cost 8p each, compared with the flotation price of 16p a share. The average cost is 7.17p a share, so the average cost exceeds the value of cash in the business. Argo is refocusing on its own currency mining. Ongoing costs will be cut by one-third, although there will be some one-off cash costs. Net cash is £15m and that is much more than the market capitalisation of Argo.
ReNeuron (RENE) has released early data on three patients in phase I/IIa clinical trial the human retinal progenitor cell product. There have been significant improvements in vision for the patients, but this is a small sample size over a short time. Cash should last until the end of 2019.
Pires Investments (PIRI) has received a requisition notice for a general meeting in order to make changes to the company’s board.
Best of the Best (BOTB) has received tenders for just over 4 million shares, which is 5.6 times the number that it was tendering for. Best of the Best will pay £3.5m for 721,327 shares (485p a share).
FAIRFX Group (FFX) has become a direct participant in the UK faster payments scheme. It is the fourth non-bank to be a direct settling member.
Crossword Cybersecurity (CCS) says Kinnerton Confectionery will be using its Rizikon Assurance secure third party assurance platform.
Former AIM company Lionsgold Ltd (LION) is changing its name to Tally Ltd. Mobile banking app Tally is in beta testing and could be released by the end of February. Once this has been released the company will seek to gain a new quotation. The exercise of warrants, mostly by directors, at 1.2p a share has generated £288,000.
MAIN MARKET
Packaging group Macfarlane Group (MACF) increased its pre-exceptional profit by one-fifth to £11.2m in 2018. Both distribution, helped by acquisitions, and manufacturing divisions increased their profit contributions. Manufacturing sales grew fastest but margins fell. The dividend was increased by nearly 10% to 2.3p a share. Net debt was £13.2m and there are plenty of unused bank facilities to fund any further acquisitions. The pension deficit was reduced by £2m to £9.8m.
In the six months to December 2018, Avation (AVAP) reported doubled earnings per share thanks to the gain on the sale of a A321-200 aircraft. The NAV is 288p. The aircraft fleet continues to increase, particularly turboprop aircraft. Although full year pre-tax profit is set to rise even more than originally forecast, earnings per share are likely to be flat at 31.7 cents. Next year’s profit will be lower, assuming no aircraft disposals.
InnovaDerma (IDP) reported interims in line with expectations and there are plans for a mid-March launch for Skinny Tan in Boots. This will help the second half performance, which is normally stronger. Full year pre-tax profit is expected to more than double to £1.5m, a downgrade of 10%. Net cash was £700,000 at the end of 2018. A cash inflow is expected in the second half, but fluctuations in cash in terms of working capital requirements, such as Boots order levels, during the period could lead to InnovaDerma deciding to raise more money.
Anglo African Agriculture (AAAP) reported a reduction in turnover from £2.13m to £1.74m in the year to October 2018. Even so, gross margins improved and the pre-tax loss edged up from £550,000 to £573,000. Net cash was £856,000. The company is assessing acquisitions outside of the agriculture sector.
Trading in the shares of daVictus (DVT) has been suspended ahead of finalisation of a deal where the standard list shell will buy the rights to a restaurant concept from Typical Dutch NV for £100,000. This is deemed to require a prospectus before the company can be readmitted to the standard list. The Havana Rolled Cigar Music Café concept has been developed at a site in Aruba. daVictus had £431,000 in the bank at the end of June 2018.
Offshore support vessels operator Gulf Marine Services (GMS) has sent out the document for its requisitioned general meeting on 18 March. Rival Seafox International wants to remove the chairman and appoint three new directors. Ithmar Capital Partners wants to appoint another director.
Andrew Hore