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Andrew Hore – Quoted Micro 16 August 2021
AQUIS STOCK EXCHANGE
Yooma Wellness Inc (YOOM) has a dual quotation on the Canadian Securities Exchange and obtaining the Aquis quotation is part of the stated strategy to become the largest CBD business in the world. Acquisitions have been made this year and at least three more are lined up. Prior to joining Aquis, Yooma raised £7.46m at 52.32p a share. As well as the cash raised in the placing, there is an option granted to a strategic investor to subscribe £5m for 9.56 million shares. Administrative delays relating to the investor mean that the share issue has not been completed yet. Yooma Wellness says that annualised 2021 sales could be $32m if it makes the expected acquisitions.
Ecotricity has posted its offer document for Good Energy (GOOD), which continues to reject the approach.
Clean Invest Africa (CIA) is in discussions with a potential investor. A fundraising could be secured within weeks. There are also discussions concerning a joint venture. CIA has been hit by Covid-19 measures in South Africa.
Pioneer Media Holdings Inc (PNER) has made an additional investment in connected gaming platform developer Paidia eSports Inc and a new £200,000 investment in Streaks Gaming. Pioneer will own 40% of Paidia. London-based Streaks operates a conversational gaming platform. Users are matched with a personalised digital conversational partner generated by AI. Pioneer will own 16.1% of Streaks.
Sativa Wellness Group Inc (SWEL) increased revenues by 828% in the second quarter of 2021. Revenues in the six months to June 2021, revenues jumped from £733,000 to £4.86m, while the loss reduced from £2.37m to £1.27m. The business is being restructured into three divisions: Goodbody Botanicals, Phytovista and Goodbody Wellness.
Construction of the DJT Plants medical cannabis growing facility started on 4 July. Ananda Investments (ANA) continues to make progress with the purchase of the 50% of DJT it does not own.
Rutherford Health (RUTH) is partnering with genomic and theranostic company OncoDNA, which will enable its patients to obtain genomic testing that can help to secure the most appropriate cancer treatment.
Administrators have been appointed to NQ Minerals (NQMI).
Chris Akers has increased his stake in Oscillate (MUSH) from 3.1% to 9%. Thomas Grant Nominees owns 9.95%. Robert Johnson has a 3% stake in TECC Capital (TEC).
AIM
Drug developer BiVictriX Therapeutics (BVX) has a low capital cost model which outsources the main operations. It has a lead asset called BVX001, which is targeting adult leukaemia. BVX001 has already indicated an anti-tumour effect in animal models. No adverse effects were observed. The £7.5m raised at 20p a share will accelerate the optimisation of BVX001, so it reaches pre-clinical milestones. The share price ended the week at 23.5p.
Marlowe (MRL) has decided not to bid for Restore (RST), which has acquired PRM Green Technologies, which is an IT recycling business. This acquisition will be immediately earnings enhancing.
Crestchic revenues increased by 44% in the first half of 2021 and Northbridge Industrial Services (NBI) group revenues are 22% ahead at £19.6m. The 2021 pre-tax profit forecast was increased from £2.1m to £2.5m.
Self-storage sites operator Lok’nStore (LOK) is increasing occupancy rates and adding new sites. Self-storage revenues increased by 21% over the year to July 2021, which is well ahead of forecasts. The first half growth rate was 11%. Over the 12-month period, occupancy rates have increased from 69.6% to 85.8%.
Oil and gas producer Southern Energy Corp (SOUC) concentrates on areas with proven low-cost producing assets, with the current focus in Mississippi. The strategy is to grow production through acquisitions. Alberta-based Southern Energy plans to increase production to 25,000 barrels of oil per day over the next two year. This will require larger acquisitions than in the past. No cash was raised, and the shares will continue to be traded on the TSX Venture Exchange. The share price opened at 6.5p on the first day and stayed at that level until the end of the second day when it fell to 5p (4p/6p) and that price was maintained.
Science Group (SAG) has made a bid approach for TP Group (TPG). Science group has acquired a 10.2% stake in TPG, with the shares being acquired for 5p each.
Best of the Best (BOTB) says that there has been a 15% decline average weekly sales of competition entries. finnCap has cut its earnings forecast from 142.4p a share to 53.3p a share. There should still be £12m in cash at the end of April 2022.
Venture Life Group (VLG) says interim revenues were lower this year because of the lack of hand sanitiser sales and lower sales of Dentyl in China. Sales of other products grew. Forecasts have been updated for recent acquisitions. Share issues mean that earnings are expected to be flat at 2.5p a share. The full benefits of the acquisitions will come through in 2022 when earnings are expected to be 4.6p a share.
Verditek (VDTK) has raised £353,000 from its Crowd for Angels bond offering.
MAIN MARKET
Foams manufacturer Zotefoams (ZTF) improved its interim pre-tax profit by 49% to £4m even though it was reduced by currency movements. Footwear generates one-third of revenues. The new manufacturing site in Poland has opened.
Argo Blockchain (ARB) generated revenues of £31.1m from mining 883 bitcoin in the first half of 2021. Although revenues are improving, there will be higher than expected tax and finance charges this year. finnCap has reduced its 2021 earnings estimate from 7.6p a share to 5.6p a share.
Plaza Centers NV (PLAZ) has received a revised proposal from GC Hevron Capital. The company’s assets would be transferred to a trustee of managed for the benefit of bondholders. Hevron would be issued shares equivalent to 74.99% of the enlarged share capital. There will be a NIS 2 million payment to cover creditors. Hevron will then inject a new business, which is part of its investment portfolio, into the shell. The target is a nutritional food technology company.
Danakali (DNK) is cancelling its standard listing on 24 September and retaining its ASX listing.
Mast Energy Developments (MAST) has acquired Pyebridge Power, which owns a 9MW gas-powered standby generation facility, for £2.5m in cash. The site could generate EBITDA of £488,000 a year.
Hawkwing (HNG) is raising £16.5m through the issue of 8% convertible loan notes. They are convertible at 6p a share. The cash will be loaned to ecommerce aggregator Internet Fusion Group to finance two acquisitions – an outdoor lifestyle brand and an online fashion accessories retailer. Hawkwing plans to acquire Internet Fusion for an enterprise value of £115m through an issue of shares at 6p each. Trading in Hawkwing shares remains suspended.
Path Investments (PATH) has agreed to acquire DG Innovate for £32m in shares at 0.6p each. DG is developing electric motor technologies and energy storage systems. There is enhanced drive technology, which is being used to develop lightweight and cost-effective electric motors, and enhanced battery technology, which is developing fully-recyclable, sodium-ion batteries offering greater energy density than current technologies.
Andrew Hore
ABF Expects Good Full Year Growth From Primark
AB Foods ABF Markdowns at Primark have fallen even more since the third quarter, further improving the outlook for the full year to the 16th September. Good growth is now expected in both adjusted operating profit and earnings per share. The weakness of sterling has also played its part and will provide a currency windfall of some £85m.
Restore plc RST has produced strong organic growth across the group for the half year to the 30th June and the interim dividend is to be increased by 26% to 1.67p pr share. Like for like revenue rose by 57%, EBITDA and profit before tax were both up by 59% and earnings per share by 38%. It is anticipated that the full year performance will be slightly ahead of previous expectations.
P
ennant Group PEN managed to deliver a pre tax profit for the six months to the 30th June with revenue rising from £6.6m. to £9m. Profit before tax rose from a lowly £10,582 in the first half of 2016 to £935,353 and earnings per share showed a similar sharp rise from 0.04 to 2.84p per share. Delays in a major UK contract however, mean that for the full year revenues will be below current market expectations. in the longer term, the company has a strong order book and an encouraging pipeline for the three years to 2020 and beyond.
Seeing Machines Ltd. SEE saw second half sales rise by 250% over the first half and full year Fleet business at A$9.1m almost tripled that of 2016. The Fleet business is described as being a tremendous success with strong growth in the markets in which it participates. The strong momentum is expected to continue in 2018. However continuing major investment has meant that the net loss before tax has soared from last years A$1.6m to A$28.5m.
Science in Sport plc SIS has reached agreement with Team Sky for the renewal of its contract for a further three years.
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Primark Sales Fall as UK Weather Bites
Associated British Foods ABF Whoever would have thought that ABF would be reduced to the state where it has to blame poor sales at Primark on unseasonable UK weather. First Christmas was too hot and then March and April were too cold, it bleats. It has also joined that raft of companies which has now started to benefit substantially from the weakness of sterling, which was supposed to help the UK’s manufacturing industries export more not save the management of companies like ABF from embarassing results. At constant currency Primark sales are expected to have been 9% ahead for the 53 weeks to 17th September but the unavoidable truth is that like for like sales fell 2%.
Overall ABF expects the second half operating performance will have been ahead of expectations plus added benefits coming from sterling weakness. Full year earnings per share are expected to be marginally ahead of last year, as are grocery revenues.
Anglo Asian Mining AAZ Stronger metal prices have helped Anglo Asian return to profitability for the half year to 30th June, last years loss of $4.1m being turned into a profit of $3.5m. Strong first half production figures saw record copper and silver production with gold slightly down but gold bullion sales fell sharply. The figures were also helped by a fall of 26% in cash operating costs.
Restore plc RST is increasing its interim dividend by 33% after like for like adjusted profit before tax rose by 26% for the half year to 30th June. Revenue for the half year rose by 26% on a like for like basis and EBITDA by 37%
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Quoted Micro 9 November 2015
ISDX
Leni Gas Cuba Ltd (CUBA) joined ISDX on 2 November and its shares went to a sharp discount to the 5p a share offer price. The share price ended the week at 1.875p (1.5p/2/25p), which values Leni Gas Cuba at £9.3m, which is still more than double the pro forma net asset value of the company. There have been 2.3 million shares traded at prices ranging from 1.25p to 2.5p. Most of the cash that has been raised by the company was at 2p a share but the majority of shares in issue at the end of July 2015 were issued at 0.01p a share. Leni Gas Cuba has set up a joint venture trading company with Cuba-focused Groombridge Trading Corporation, which is a Canadian company with approvals to trade in Cuba.
Chapel Down (CDGP) brewing subsidiary Curious Brew has raised £790.500 in its crowdfunding offer via Seedrs.com. This is more than double the level a fortnight ago. The minimum investment is £1m and the maximum is £3.65m and the offer closes in 112 days. Meanwhile, the wine maker has reported its second largest harvest, following last year’s record harvest. Chapel Down is holding a general meeting to get permission to issue a new type of share. The growth shares will be issued to management and will only have value if the Chapel Down share price exceeds 33.6p. The management will each receive £2,000 of ordinary shares in returning for giving up redundancy and other employment rights. There will be a total of just over 18.1 million growth shares. If the share price reaches 60p then the board says that the growth shares would have a value equivalent to 14% of the market capitalisation of Chapel Down, which is £32.8m at 32.5p (31p/34p) a share.
Capital for Colleagues (CFCP) is investing £200,000 in Cotswold Valves Ltd, a Stroud-based supplier of specialist valves for the process industries. This will give the employee owned businesses investor a 49% stake in Cotswold Valves, while the cash has been used to provide the company’s employee ownership trust with the funds to acquire the other 51% from the retiring owner. Capital for Colleagues has also made a further loan of £75,000 to The Homebuilding Centre.
Via Developments (VIA1) joined ISDX on 5 November having issued £530,000 7% debenture stock 2020. The Manchester-based residential property development funder is raising up to £3.5m.
Western Selection (WSE) has acquired 600,000 shares in AIM-quoted Northbridge Industrial Services (NBI), taking its stake to 13.6%. Western Selection director David Marshall is a non- executive director of the electrical testing and oil equipment rental business and along with chief executive Eric Hook and chairman Peter Harris a total of 4.6% of the share capital was acquired. Investec halved its stake to 3.74%. Although the share price has recovered since these purchases, it is still well below the peak of just over 600p less than 15 months ago. The share price was more than 300p six months ago. Northbridge depends on demand from the oil and gas sector and it has slumped into loss this year. Reduced need for capital investment and working capital means that net debt could be halved to £9m in the two years to the end of 2016 despite reported losses and the expected final dividend of 1p a share. Banking covenants are being renegotiated. At 91p a share, Northbridge is trading at a discount to its net tangible assets of around one-quarter.
AIM
Transportation software and services supplier Tracsis (TRCS) has reported another set of better than expected full year results. The underlying profit for the year to July 2015 improved from £5m to £5.8m. The total dividend was increased from 0.8p a share to 1p a share. As expected, the revenues from remote condition monitoring equipment fell sharply due to ordering patterns. This was made up for by a full year contribution from software company Datasys and organic growth. There was net cash of £13.3m at the end of July 2015, with just over £2m of this spent on two subsequent acquisitions. SEP provides event parking and management services and fits into the traffic and data division. Mobile analytics provider Citi Logik, where Tracsis acquired a 29% stake, analyses the interaction of people and transport via the Vodafone network. WH Ireland forecasts a 2015-16 profit of £6.2m but history shows that the final outcome should be better than that, particularly if the remote condition monitoring orders pick up faster than forecast. The shares are trading on 24 times prospective earnings.
Document storage services provider Restore (RST) is paying £55.7m for Wincanton’s records management business and this will consolidate the AIM company’s number two position in the sector. The purchase will be financed by a £34m placing at 260p a share and new debt facilities, which total £80m. Wincanton Records Management has operations in the UK and Ireland and the occupancy level of its premises is 71%. In the year to March 2015, the business made a pre-central charges operating profit of £4.9m on revenues of £22.4m. Last year, Restore’s document management division made an operating profit of £11.5m on revenues of £37.4m.
Alliance Pharma (APH) has agreed compensation of £6.7m in settlement of its claims against Sanofi following the suspension of manufacturing of bladder cancer treatment ImmuCyst in the middle of 2012. Alliance hopes to recommence selling ImmuCyst in the UK before the end of this year but there could be supply constraints. Net debt was £26.5m at the end of June 2015.
Premature ejaculation treatment developer Plethora Solutions (PLE) has agreed in principal to an all share bid from Hong Kong listed Regent Pacific. Regent is offering 15.7076 shares for each Plethora share, which on 3 November valued Plethora at £102.9m or 12.5p a share. Regent already owns 29.9% of Plethora and it will be able to provide the finance to help commercialise the PSD502 premature ejaculation treatment.
NWF (NWF) has boosted its fuels division through the acquisition of Staffordshire Fuels, which will increase its annual fuels volume by 8%. The business was established in 1996 and sells 32 million litres a year under the Jet brand.
EKF Diagnostics (EKF), which recently ended talks with potential bidders, says that it will not have to pay any earn out for molecular diagnostics business Selah Genomics. EKF paid an initial $32m (£19.2m) when the return of the shares in escrow is taken into account. The total cost was going to be up to $70.6m (£42.3m).
Magnolia Petroleum (MAGP) says that Continental Resources is drilling 10 wells on the Woodford formation in Oklahoma. Magnolia has a 0.525% working interest in each of these wells. Five will be drilled in November and the rest next March. Gas is being targeted. Magnolia has proven reserves independently valued at $21m and these reserves are still profitable at the current oil price. Magnolia’s share of the production of the wells it is interested in is running at 309 barrels of oil equivalent per day.
MAIN MARKET
CIC Gold Group Ltd (CICG) has announced the potential acquisition of Gobi Minerals Ltd for £5.6m in shares at 2p each but it depends on a share issue raising sufficient cash for the deal to go ahead. Trading in the shares was suspended at 1.4p a share. Due diligence still needs to be completed on the acquisition. Gobi owns 100% of the mineral title to the Tsagaan Suvarga gold and copper prospect in the South Gobi region of Mongolia. There is no proven resource in this mineral interest so the valuation appears high but it is hard to judge without further information. HE Barsbold Ulambayar will be appointed as chief operating officer.
Commercial aircraft leasing company Avation (AVAP) is acquiring an eight year old Boeing 737 operated by a major Chinese airline. The remaining leases term is 5.5 years. This is the first Boeing aircraft acquired by Avation and it takes the number of aircraft owned to 34. .
Electronics designer and distributor Acal (ACL) has acquired magnetic components Flux AS for £3.7m. Flux will broaden the product range and provide an additional customer base. Next year’s profit forecast has been edged up slightly to 18.6p a share.