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Andrew Hore – Quoted Micro 15 January 2018
NEX EXCHANGE
Wines maker Chapel Down Group (CDGP) says that its open offer at 50p a share was oversubscribed. Excess applications will be scaled back. The additional £1.47m raised takes the total to £20m. BlackRock holds a 5.79% stake and Nigel Wray owns 16.2%.
Startup Giants (SUG) has made its first investment since floating. An undisclosed investment has been made in Go Show Ltd, which operates a brand marketplace designed to enable product placement deals (www.goshow.net), and it will be released when milestones have been achieved. Go Show initially applied for funding in 2015 and it has been mentored by Startup Giants. There is a target for revenue generation of up to £1m within 12 months. An accelerator round has also been launched by Startup Giants. It is aimed at early stage, UK-registered companies.
Coinsilium Group Ltd (COIN) has increased its shareholding in Indorse from 3% to 6.5% at cost of S$175,000. There is an option to acquire a further 3.5%, at the same cost, to take the stake to 10%. Indorse completed a token sales last September and those tokens are currently valued at $34m. The Indorse platform is designed to enable users to generate income from sharing their skills and validating the claims of others.
African Potash Ltd (AFPO) has entered into an agreement with Gibraltar-based TokenCommunities Ltd. This deal will help the blockchain joint venture that has also already been announced with FinComEco Ltd, which is developing platforms for agricultural markets in sub-Saharan Africa. TokenCommunities will advise on the deployment of tokens. The chain will link smallholder farmers, traders, brokers, storage, transportation and commodity buyers. There are plans for microloans to farmers at an annual interest rate of 12%, which is lower than existing rates. African Potash has completed the raising of £400,000 at 0.025p a share.
Black Sea Property (BSP) has completed the €2.76m purchase of four plots of land with permission to develop a camping complex. It has also invested €3.37 to help finance the development of the site, which could be completed by the middle of the year. Black Sea Property raised €3.53m at €0.01 a share late last year.
Lake Acquisitions (U.P) says that the contingent value rights holders will not get a distribution for 2017. The cumulative relevant revenues from the eligible nuclear power output was £41.1m. The cumulative base revenues were £41.9m.
UK Oil and Gas Investments (UKOG) has decided to drop its NEX Exchange quotation on 31 January. That is just over 27 months after it joined. The company says that there have been low levels of trading on NEX and it still has its primary quotation on AIM. Interestingly, oil and gas company UK Oil and Gas was formed many years ago out of the shell of a former technology equipment business, yet it is still classed under the technology hardware and equipment sub-sector of the technology sector in the AIM statistics.
Nexus Infrastructure (NEXS) reported maiden full year results as a quoted company that were slightly better than expected. The housebuilding infrastructure provider reported a dip in pre-tax profit from £10.8m to £9.1m on flat revenues of £135m. The total dividend is 6.3p a share. A 2017-18 pre-tax profit of £10.8m is forecast.
Ilika (IKA) reported a significant cash outflow in the first half but the outflow should be reduced in the second half. Interim revenues trebled to £1m and full year revenues of £2.9m are forecast. The loss is reducing. There are licensing proposals with a handful of potential customers and any one of these could transform the fortunes of Ilika.
EKF Diagnostics (EKF) has confirmed that trading was strong in 2017 and EBITDA will be much better than the £8.8m forecast. EKF plans to spin-off its sTNFR biomarker technology into a separate company. This technology has no value in the balance sheet.
Hormonal disease treatments developer Diurnal Group (DNL) says that its Akindi treatment has performed well in a food matrix study in the US and it will be able to move onto the next stage in the process of gaining US approval. European approval for Akindi is expected in a matter of weeks. There was £14m in the bank at the end of 2017. The interims will be published on 12 March.
Lombard Risk Management (LRM) is recommending a 13p a share cash bid, which was nearly double the market price. The bid from rival financial services technology supplier is valued at £52.1m.
Somero Enterprises (SOM) has sparked another forecast upgrade with the 2017 pre-tax profit forecast rising 8% to $25.9m. Net cash should be at least $18.5m and that could rise by around $10m by the end of 2018. That leaves room for another special dividend as well as growth in the ongoing dividend. The tax changes in the US had already led to a one-fifth increase in the 2018 earnings per share forecast to 34.4 cents, which has been raised again to 36.8 cents.
Engineer Avingtrans (AVG) says that trading is on track and the integration of Hayward Tyler continues. A pre-tax profit of £2.2m is forecast for the year to May 2018 and this should generate nearly enough earnings to cover the forecast dividend of 3.6p a share.
Tough market conditions and adverse currency movements have not stopped motor dealer Marshall Motor Holdings (MMH) trading ahead of expectations. Forecasts had already been upgraded and the 2017 pre-tax profit estimate has been raised a further 2% to £28.8m. However, a decline in pre-tax profit to £23.5m is forecast for 2018.
Smart meter communications technology provider CyanConnode (CYAN) continues to progress but the timing of orders has been delayed. The order book is worth $100m but 2017 revenues were £1.2m and the loss more than £10m. This year’s revenues are forecast to be £10m and the loss £7m. There should be enough cash to last the whole of 2018.
Strategic Minerals (SML) generated fourth quarter revenues of $2.14m from magnetite ore sales at Cobre. The 2017 total revenues of $5.64m were quadruple the previous year. Strategic had $3.8m in the bank at the end of 2017.
Online Blockchain (OBC) has taken advantage of its rising share price to raise £1m at 100p a share.
Fashion retailer Footasylum (FOOT) increased revenues by one-third to £89.8m in the 18 weeks to 30 December 2017. The fastest growth came from e-commerce. The revenues for the 44 weeks to 30 December 2017 also improved by one-third to £173m. These are not like-for-like increases and six stores were opened in the past 18 weeks.
There was a small decline in the full year revenues of Shoe Zone (SHOE) from £159.8m to £157.8m. The shoes retailer did improve its gross margin from 62% to 63.2% but higher admin and distribution costs offset this and pre-tax profit fell from £10.3m to £9.5m. The total dividend was edged up from 10.1p a share to 10.2p a share. Net cash was £11.8m at the end of September 2017. The pension fund liability has fallen from £13.1m to £7.1m. Consumer demand and currency movements remain the main challenges.
BNN Technology (BNN) directors Harry Keiley and Lord Mancroft are following the nominated adviser out of the door. Mark Hanson becomes non-executive chairman.
Film completion contracts provider FFI Holdings (FFI) has acquired the motorsports entertainment insurance book of business from All Risks for $1.825m. The acquisition has been made by Reel Media, which itself was acquired before Christmas for $7.25m in total.
Background checking services provider ClearStar (CLSU) traded in line with expectations in 2017. Revenues were 11% higher at $17.8m and the loss was reduced. There was net cash of $1m. The loss should be further reduced in 2018.
Masawara (MASA) and Kimberly Enterprises (KBE) both plan to leave AIM. Two shareholders own 90% of Masawara. Minority shareholders are being offered 25p a share or the chance to convert the shares into preference shares. Eastern European property investor Kimberly has net liabilities of €24.1m and sold most of its property assets. The lease agreement for the Marina Dorcol project has been terminated.
Allergy Therapeutics (AGY) has completed the enrolment of its 560 plus patient phase III trial for a treatment for patients with allergic rhino conjunctivitis due to birch pollen. The results of the trial should be available before the end of this year. The potential market is worth around £3bn.
Two large clinical trial contracts have been delayed and this means that Cambridge Cognition (COG) 2017 revenues will be 18% lower than expected. This means that there will be a loss for the year.
Telematics equipment and services provider Quartix (QTX) pleased the market by growing its 2017 revenues by 5% to £24.4m. This means that earnings per share forecasts have been raised from 11.8p to 12.3p.
Geospatial software company 1Spatial (SPA) has won a five-year contract from the state of Michigan in the US worth $766,000. Liontrust has sold all its 9.35% stake.
Xeros Technology Group (XSG) has launched its domestic washing machine that can cut the use of water, detergent and energy by up to 50%. A second development agreement has been signed with a commercial washing machines manufacturer.
Oracle Power (ORCP) is acquiring the minority stake in coal mining lease owner Sindh Carbon Energy for up to £3.6m in shares.
APC Technology Group (APC) has acquired electronic components distributor First Byte Micro for £1.2m. In 2016, First Byte made a pre-tax profit of £194,000 on revenues of £1.3m.
Reconstruction Capital II (RC2) has acquired stakes in two funds that own 60% of Romanian paints and coatings supplier Policolor. This will mean that Reconstruction Capital II has an effective stake of 55.36% in Policolor and make it easier to liquidate the investment.
BOS Global (BOS) wants to raise £1.2m at 1.25p a share to settle debts and provide working capital. The software company says the directors will not be paid until April and one of them, William Giles, will subscribe up to £300,000 in the placing and open offer.
Connemara Mining (CON) has announced drilling results from the Mine River gold project in Wicklow and Wexford. Most of the intersections contained gold at grades of less than 1g/t but two were more positive with 4.53g/t over eight metres and 16.1g/t over two metres.
Versarien (VRS) is collaborating with an Asia-based global textiles manufacturer on incorporating graphene into fabrics via yarns and finishes.
MAIN MARKET
E-commerce-focused cash shell AIQ Ltd (AIQ) soared as trading commenced on the standard list and trading in the shares had to be suspended after three days. There appear to have been nearly 1.4 million shares traded over three days, which is 2.8% of the shares in issue. Cayman Islands-based AIQ, raised £3.6m after expenses, at 8p a share. The suspension price is 125p. That means that the quotation and £3.6m in cash are valued at £62.5m. The plan is to seek an e-commerce acquisition, which has a strong management and is near to cash generation.
Bio-decontamination products supplier Bioquell (BQE) has completed the £122,000 disposal of the UK AirFlow parts and manufacturing business and received the final £70,000 for the sale of the service business. There was already net cash of £14.5m at the end of 2017. Full year revenues were better than expected at £29.3m, up from £26.8m and pre-exceptional profit will be much better, even before the £250,000 gain on the Airflow disposals. The 2017 figures will be published on 7 March.
Software supplier Gresham Technologies (GHT) says 2017 revenues were 24% ahead to £21.3m and more of these revenues are coming from Clareti enterprise data integrity software. There is £8.5m in the bank. Kestrel has trimmed its stake from 14.9% to 12.5%.
BATM Advanced Communications (BVC) has won a cyber communication technology contract with a government worth $4m over 12 months. Delivery will start in the second quarter of 2018.
Thomas Charlton has further increased his stake in North Midland Construction (NMD) from 7.24% to 8.2%. This appears to have sparked a recovery in the share price.
Avocet Mining (AVM) has deferred the completion the sale of its Burkina Faso assets for $5m. The buyer, the Balaji group of companies, wants more time to settle a claim from International Royalty Corporation, a creditor of the holding company of the assets. Avocet has received a deposit of $500,000.
Bluebird Merchant Ventures Ltd (BMV) has announced the results of preliminary grab samples from the Gubong gold mine. The majority of samples had gold grades of more than 1g/t and silver grades of 10g/t or more.
Zenith Energy Ltd (ZEN) has entered an exclusivity agreement for the acquisition of production and exploration licences in a Central Asian country. Azerbaijan-focused Zenith would be acquiring assets in a proven petroleum system and they produce 250 barrels of oil per day.
Rainbow Rare Earths (RBW) has started drilling at the Gakara project in Burundi. Gakara has an estimated in situ-grade of 47%-67% total rare earth oxide. The drilling is focused on the production area at Gasagwe and anomalies that have been identified. The first results will be in April. A second phase of drilling is planned later in the year and this could produce a JORC-compliant resource before the end of 2018. Production is building up and the run rate target for the end of 2018 is 5,000tpa. In December, Rainbow raised £2.8m at 14p a share in an oversubscribed placing. The cash will be used to acquire capital equipment.
Quoted Micro 12 June 2017
NEX EXCHANGE
Brewer and pubs operator Daniel Thwaites (THW) says that net debt has increased from £34.1m to £47.6m at the end of March 2017 because of investment in the brewery and pubs plus acquisitions. The benefits of this investment is starting to show through. Full year revenues from continuing operations were slightly lower at £84.4m, while operating profit improved from £11.5m to £12.1m. The total dividend is unchanged at 4.46p a share.
Churchill Mining (GHL) has switched from AIM to NEX although trading in the shares remains suspended. Churchill’s main focus is the international arbitration claim against the Indonesian government.
Good Energy (GOOD) received applications for more than £10m of the corporate bonds on offer. The energy supplier has closed the online offer but postal applications close on 12 June – assuming the maximum application level of £20m has not been reached before this.
Coinsilium Group Ltd (COIN) has invested £56,000 in Singapore-based Indorse Pte Ltd, which is developing Indorse, a blockchain-powered professional social network. Coinsilium will also receive a number of Indorse digital tokens in the next few months.
China CDM Exchange Centre Ltd (CCEP) reported a decline in full year revenues from £1m to £898,000. Pre-tax profit fell by two-thirds to just over £2,000. There is £2.3m in the bank and the NAV was £52.1m at the end of 2016. The company is investing in blockchain technology as part of its growth strategy.
Asia Wealth Group Holdings Ltd (AWLP) says that the 45,000 shares it owns in Ray Alliance Financial Advisers have been transferred to the other two Ray Alliance shareholders without any authorisation. Asia Wealth paid $318,000 for the shares back in 2012. Asia Wealth has demanded that the shares are transferred back.
Valiant Investments (VALP) has raised £45,000 at 0.1p a share. The cash will provide working capital and provide the ability to invest more in apps business Flamethrower.
AIM
DX Group (DX.) has renegotiated the terms of the merger with Menzies Distribution which involves the payment of £40m in cash and shares equivalent to 65% of the enlarged share capital – this includes a 5% stake that will be held by the John Menzies pension fund. DX will still have to take on 17% of the pension fund. Cost savings of £10m a year are expected and a dividend is promised. Rebel shareholder Gatemore is backing the revised transaction. Things are still not running smoothly, though. The City of London police is investigating an allegation concerning DX.
MP Evans (MPE) harvested 180,000 tonnes of oil palm fruit bunches in the first five months of 2017, which is one-quarter higher than in the same period of 2016. This is due to a mixture of improving weather conditions and maturing plants. In the same period, palm oil production increased from 37,900 tonnes to 60.100 tonnes. The average selling price has increased by $51/tonne to $606/tonne, while palm kernel prices moved from $414/tonne to $503/tonne. There could be some downward pressure on prices in the second half.
Somero Enterprises Inc (SOM) has announced a special dividend of 13.3 cents a share on top of the normal dividend. This will cost $7.5m and leave the construction equipment company with much more than $10m in the bank even before allowing for cash generated so far this year. Shareholders on the register on 28 July will receive the dividend. Trading in Europe has been strong and the only disappointment has been North America where business has been delayed.
Best of the Best (BOTB) is also paying a special dividend out of its cash pile. Full year revenues grew 7% to £10.8m, while pre-tax profit improved from £1.1m to £1.5m. A normal dividend of 1.4p a share will be paid plus an additional 6.5p a share as a special dividend. There are also plans for the competitions organiser to increase marketing spending.
Waste to energy systems developer PowerHouse Energy Group (PHE) has secured a collaboration agreement with a UK partner that will provide two tranches of funding for the demonstration unit and five systems. The total funding will be up to £500,000.
DP Poland (DPP) has raised £5.25m at 43p a share. The cash will help finance 15 new Domino Pizza stores in Poland this year and finance loans for sub-franchise store openings in 2019.
Trading in Savannah Petroleum (SAVP) shares has been suspended following an exclusive agreement to buy the oil and gas assets of a west Africa-focused company. The structure of the transaction has been agreed in outline and it will involve debt, shares and cash. Due diligence has been going on since January. The shares will remain suspended until a document is published for the reverse takeover.
Nostra Terra Oil & Gas (NTOG) says that the general meeting requisition at US-focused oil and gas company Magnolia Petroleum (MAGP) is by former chief executive and founder Steven Snead using the shares that Nostra Terra has agreed to purchase. The proposals include the removal of chief executive Rita Whittington and the appointment the Magnolia board of Ewen Ainsworth, chairman of Nostra Terra, and Donald Phillips.
Vianet Group (VNET) has restructured its business into two divisions: smart zones and smart machines. Smart zones is based on the fluid measurement and telemetry business with pubs. The US business is moving towards breakeven. The smart machines division is focused on vending machines and there is a significant addressable market. There was a dip in underlying pre-tax profit form £2.8m to £2.6m last year, with a small improvement forecast for this year. The dividend is set to continue to be unchanged at 5.7p a share.
LiDCO (LID) has received 510k clearance from the FDA for the LiDCO Unity version 2. This will enable LiDCO to offer a high usage programme for a fixed annual licence fee. The head of US operations is already in place and ready to push ahead with the strategy. LiDCO is expected to move into profit in the year to January 2019.
Shareholders are trying to requisition a general meeting at Irish gold explorer Conroy Gold and Natural Resources (CGNR) in order to remove six directors. Seamus FitzPatrick, James Jones, Dr Sorca Conroy, Louis Maguire, Michael Power and David Wathen are the directors that the requistioners wants removed and replace them with Patrick O’Sullivan, Paul Johnson and Gervaise Heddle. The three directors not affected by the requisition are Professor Richard Conroy, Maureen Jones and Professor Garth Earls.
Disruptive Capital has made a bid approach to Stanley Gibbons (SGI).
MAIN MARKET
Telecoms services provider Toople (TOOP) raised £1.41m, before expenses of £150,000, and five million shares were issued to directors’ in lieu of a portion of the fees that they are owned. The subscription and offer are still open. On the day of the announcement, the share price fell 1.13p to 2.13p. There was a cash outflow of £552,000 in the six months to March 2017.
Rainbow Rare Earths (RBW) has discovered several unrecorded veins at Gasagwe, which suggests that there is plenty of upside in the mineralisation resources at the Gakara rare earth project in Burundi. Mine construction is on course to deliver rare earth concentrate before the end of 2017.
WideCells Group (WDC) says that it is authorised to sell its CellPlan financial product that helps people to afford stem cells treatment. There are plans to start selling CellPlan to Biovault stem cell storage customers.
Cathay International Holdings (CTI) says that its 50.56%-owned subsidiary Lansen Pharmaceutical plans to pay a special dividend.
Andrew Hore
Quoted Micro 20 March 2017
NEX EXCHANGE
Health and care properties developer Ashley House (ASH) is widening its area of operations through the acquisition of a modular off-site construction business by its subsidiary F1 Modular, which already works with the company. The acquired business was in administration and assets have been acquired for £113,500 and a lease taken out on its premises – there is an option to acquire the premises. Ashley’s stake in F1 Modular has been raised from 52% to 76% for up to £250,000 depending on performance and the repayment of a previous loan. If F1 Modular makes more than £4m in profit over the next three years then the additional stake will be transferred to the minority shareholders. F1 Modular could win housing business and there are already potential housing deals with two local authorities, as well as a prospective customer for retail pods. Other potential markets are schools and student accommodation. There are also opportunities in Ashley’s core business. Ashley has reiterated it warning that the figures for the year to April 2017 because of contract delays due to a consultation on supported housing. This means a small full year profit is likely. Non-executive director John Moy acquired 2.4 million shares at 7.5p each from his son and then transferred his entire holding of 6.9millionshares to his wife, although he is still deemed to have an interest in this 11.6% stake.
Bulgaria property investment company Black Sea Property (BSP) has successfully tendered for a Sofia office building called the UniCredit Building. UniCredit is the current occupier and owner. Black Sea Property bid €10.52m and €7.6m of this will come from a loan, while the rest will have to be raised from shareholders. A deposit of €1.04m has been paid. That deposit will be forfeited if the deal does not go ahead. UniCredit can remain in the building for six months after the transaction is completed, expected to be May assuming the fundraising is successful, and will not have to pay rent. The property is more than 100 years old, has five floors and covers 98,000 square feet.
Capital for Colleagues (CFCP) has been taken on by cosmetics firm LUSH to help it introduce employee ownership. An initial stake of 10% will be held by the employee benefits trust.
AIM
There could be a bid battle for FIH (FIH), formerly known as Falkland Islands Holdings. Staunton, which is backed by the Rowland family, has bid 300p a share and has acceptances of just over one-third of the shares in issue – it owned 25% prior to the bid. Eduardo Elsztain has entered the fray via Dolphin Fund, which says it is willing to offer even more. Elsztain is an Argentinian who has built up significant property and agricultural interests having initially been backed by George Soros in 1990. FIH has refused requests for further information because it was not provided with answers to its request about ownership and control of Dolphin. There has been a change to the current bid which no longer require 90% acceptances to go unconditional. The figure has been reduced to 50%.
Audio visual products distributor Midwich Group (MIDW) grew its 2016 revenues by 18% to £370.1m via a combination of acquisitions, currency movements and organic growth. Gross margins are strong for a distribution business but they still edged up from 14.9% to 15.3%. Underlying pre-tax profit was 23% higher at £17.9m. Net debt was £15m at the end of 2016, while the dividend for the eight months that Midwich was quoted on AIM was 8.62p share. Displays and technical products are becoming more important and there was also growth in projection products sales although not as fast as the main parts of the business. Sales of scanners and other document-related products fell. France, Germany and Australasia made significantly better contributions. Further acquisitions are likely to supplement continued organic growth.
Crossrider (CROS) has refocused its business on apps and a mobile security acquisition further boosts this side of the business. CyberGhost will cost an initial €6.2m in cash and shares with up to €3m more payable dependent on performance. The acquisition should be earnings enhancing in 2017. Last year, Crossrider group revenues fell from $84.6m to $56.5m but the core apps business grew both its revenues and its profit contribution. Net cash was $72.1m at the end of 2016. Next year, revenues and profit should start to grow again and Crossrider may even pay a dividend.
University technology commercialisation business Frontier IP (FIPP) has raised £3m at 40p a share in order to finance existing investments and make new ones.
Igas Energy (IGAS) wants to raise £45.2m via a placing and up to €5m through an open offer as part of its financial restructuring. There is also a proposed debt for equity swap and the majority of these bondholders have indicated that they will accept this proposal.
Software provider Cerillion (CER) has won a €2.4m (£2.1m) with a European wholesale telecoms company. So far this financial year, £13.2m of work has been won. That will not necessarily all be delivered this year but, along with the year-end order book, this provides backing for the £16m revenues forecast for 2016-17.
Trading and risk management systems provider Brady (BRY) is restructuring its business but the 2016 figures do not show the benefits. The company has grown by acquisition and the strategy is to fully integrate them all into one platform. Revenues increased 11% to £30.3m, mainly due to currency changes, and Brady returned to profit before exceptional charges.
Recurring revenues continue to grow at performance measurement software provider Statpro (SOG) and they were running at a rate of £39.7m at the end of 2016. House broker Panmure Gordon expects an increase in underlying pre-tax profit from £2.7m to £3.3m in 2017. The dividend is being maintained at 2.9p a share in order to build up earnings cover and invest in software development.
Training technology and services provider Pennant International (PEN) has already secured orders that underpin the 2017 revenues forecast by house broker WH Ireland, although the timing of orders can be delayed. Revenues are expected to grow from £17.2m to £18m and pre-tax profit should edge up from £2.2m to £2.4m. There was £3.5m in the bank at the end of 2016. Two additional facilities have been secured to help cope with demand for the group’s services. Defence clients dominate the business but there are plans to increase exposure to other markets. Phil Walker has taken over permanently as chief executive.film Sandy Wexler 2017
Wealth adviser Brooks Macdonald (BRK) has increased its discretionary funds under management by 19% to £9.33bn. Underlying interim pre-tax profit were one-quarter higher at £8.87m. New chief executive Caroline Connellan will start work in April.
Investment manager Miton (MGR) has grown its funds under management despite a large decline in its value fund due to the departure of its manager. The funds under management increased from £2.78bn to £2.91bn with a recovery in multi-asset funds and growth in other funds covering the loss of value investment funds and growth coming from market improvements. Miton is seeking a new chairman and it will then find a permanent chief executive. On 23 March, Miton is launching its new global infrastructure fund, which is aiming for a 4% yield.
C4X Discovery (C4XD) has raised £7m from a placing at 85p a share. The cash will be used to strengthen the balance sheet while c4X is negotiating with potential partners and strategic collaborators.
EMIS (EMIS) has managed to grow its business even though there is continued uncertainty in the NHS. The GP, pharmacy and health-related administrative software provider reported a 2% increase in 2016 revenues to £158.7m, while operating profit was 6% higher at £38.8m. Net debt fell to £400,000. The total dividend was increased by 10% to 11.7p a share, which is covered more than four times by earnings.
Somero Enterprises Inc (SOM) continues to benefit from the global upturn in construction activity, particularly in North America and Europe, although the revenues from the latter are still not back to their peak levels. The dividend payout level has been raised from 30% of earnings to 40% of earnings but there is still more than $20m in the bank so a special dividend is possible later in the year.
Ilika (ILK) admits that it is unlikely to generate any licence income until the next financial year. The advanced materials developer still has plenty of cash in the bank. Development deal revenues should still double revenues to £1.2m in the year to April 2017. A £1m bioelectronics deal and an additional agreement with Toyota mean that there is a good revenue base going into the new financial year, which should reduce the annual loss even without licence deals.
Active Energy (AEG) has raised £11.6m via a convertible loan note issue. The five-year convertibles will be quoted on the Channel Islands Securities Exchange. The yield is 8% and the conversion price is 3.3p a share. The cash is required to build a commercial scale plant to produce CoalSwitch biomass fuel for use in coal-fired power stations.
Sunrise Resources (SRES) has identified additional potential for the CS project in Nevada. New zones of pozzolan and perlite have been discovered in the Tuff zone and another zone. A project development concept study is due in the next few months.
Haydale Graphene Industries (HAYD) has secured a four year deal to supply silicon carbide micro-fibre to a manufacturer of tooling and wear-resistant parts. The deal has been won by the US subsidiary acquired last September. The minimum annual order quantity should generate revenues of $600,000 a year.
MAIN MARKET
Sportech (SPO) is investing £100,000 in 123gaming Ltd as part of a £1m fundraising via crowdfunding platform Seedrs (www.seedrs.com/123bet). The offer is eligible for EIS relief. The cash will be used to update the US betting platform and to launch an online site in the UK. Sportech already provides technology for the US online wagering site and the pari-mutuel-type offering, which combines traditional wagers and fantasy elements as part of the game. Several US racecourses licence 123gaming’s free-to-play contests as a marketing tool. Sportech is selling its football pools business for £83m – that is lower than the £97.25m offer that fell through last year. Sportech plans to return £20m to shareholders via a tender offer. The result of the tender will be announced on 21 March. There could be a further tender offer after the disposal proceeds are received.
Avation (AVAP) has decided to sell six of its turboprop aircraft at a price above book value. This could generate $31m after related debt repayments. A deposit of $3m has been received and the deal should be completed by the end of June. A further 16 turboprop aircraft are being retained and the additional cash can be used to widen the portfolio of aircraft. House broker WH Ireland estimates an underlying value for Avation of 270p a share.
PRE-IPO / OTHER TRADING FACILITIES
Former ISDX and GXG company US OIL & Gas (USOP) has raised £1.18m at 27p a share via a ten-for-63 open offer to existing shareholders. That is 54% of the amount that the oil and gas company was seeking. A placing had already raised £470,000.
Andrew Hore
Pharmas, Builders Supplies and Construction Boom
Today’s mix of results clearly indicate continuing boom conditions in well managed pharma companies with new successful products – (viz AMS yesterday) and in companies which can prosper on the tailcoats of the house builders whose boom seems never ending. ( except for the warning signs in Central London)
Marshall’s MSHL showed a strong rise of 31% in profit before tax for the year to the end of December. Basic earnings per share followed suite with a rise of 32% The final dividend was increased by 22% and the recommended supplementary dividend will be up by 50%, making a total rise for the year of 30%. This was all achieved on a rise in revenue of only 3%. Since the start of the new year both sales and order intake have been strong.
Clinigen CLIN achieved over 30 growth across all its key financial measure in the half year to 31st December and is increasing its interim dividend by 23%. Adjusted gross profit and earnings per share rose by 34% and 31% respectively and more strong growth is promised for 2017.
Forterra FORT A strong second half performance resulted in both revenue and profit increases for the year to the end of December, its first year as a misted company. Profit before tax surged by some 75% from £22.2m to £37.1m. The outlook for the first half of 2017 is good, buoyed by strong activity from the major house builders.
Hikma Pharmaceuticals HIK claims that its business became stronger than ever in 2016, with group revenue rising by 39% and operating profit up by 14%, both in constant currency terms. A final dividend of 22 cents per share is to be paid making a total of 33 cents for the full year, a rise of 1cent. A significant increase in intangibles and exceptional items, led to reported operating profit falling by 9% in constant currency terms.
Somero Emterprises SOM enjoyed an excellent year in 2016 and is increasing its final dividend by 61%. Revenue for the year to the end of December rose by 13%, profit before tax by 22% and adjusted EBITDA by 23%. The company is excited about the prospects for 2017 with more strong growth expected.
Villas & Houses For Sale in Greece; http://www.hiddengreece
Quoted Micro 16 January 2017
NEX / ISDX
Ecommerce technology provider Netalogue Technologies (NTLP) has secured three contracts in the drinks sector. Brewer Marston’s, pubs operator Enterprise Inns and drinks wholesaler Matthew Clark have bought ecommerce portals. They all used the iTradeNetwork online ordering system previously but this will no longer be available from August so this provides a significant opportunity for Netalogue.
Goldcrest Resources (GCRP) has raised £217,000 at 0.25p a share to provide working capital so that it can execute its plans. Further shares are being issued to Pelamis Investments Ltd for the conversion of a £70,000 convertible loan note at 0.25p a share and from issuing 48.52 million shares at the same price to settle £121,000 of liabilities. Goldcrest plans to seek further gold projects. Peterhouse has been appointed as corporate adviser and broker.
NQ Minerals (NQMI) has secured funding of A$4m and raised £400,000 at 8p a share. The loan is secured on the assets of a subsidiary and has an annual interest charge of 12%, payable quarterly. There is a fee of A$35,000. Greg Lane, who has experience in mine development, has joined the board. He has four million options exercisable at 7p a share.
AIM
This year will be an important one for battery technology developer Ilika (IKA). There are discussions with potential licensees for solid state battery technology and there should be deals during 2017. Stereax M250 batteries are being assessed by a number of potential customers. In the six months to October 2016, revenues improved from £254,000 to £329,000 but the operating loss edged up to £2.2m. Full year revenues should grow from £600,000 to £2.5m, which is partly underpinned by recent grant wins. Losses are expected to continue for the time being. The balance sheet is strong and there should be £6.7m in cash at the end of April thanks to cash raised late in 2016.
Packaging supplier Robinson (RBN) says that trading is still tough but it has gained planning permission on part of its surplus property portfolio. The outline planning permission covers 23 acres on two sites. House broker finnCap believes that this could double the value of the land from £5m to £10m – equivalent to 60p a share. The disappointing trading and investment in sales and marketing has led to a 12.5% downgrade in the 2016 pre-tax profit forecast to £2m, and the 2017 forecast has been cut to £2.1m.
Somero Enterprises Inc (SOM) has sparked another forecast upgrade with its latest trading statement. A strong finish to the year means that the earnings per share for 2016 have been upgraded from 22.7 cents to 24.4 cents. There was good demand for newer products and larger concrete levelling machines. Net cash is expected to be $18.7m and the dividend payout ration has been increased from 30% to 40% of net adjusted income. There is even potential for a special dividend.
Cloud-based telecom services provider Cloudcall (CALL) increased its full year revenues by 50% to £4.9m with a large chunk of this growth coming from existing customers. Around 400 customers were added each month last year. There is cash of £3.2m. The expected 2016 loss of £3.5m is similar to the year before but it is expected to be reduced in 2017. Around 85% of revenues are recurring or repeating.
Focusrite (TUNE) says trading continues to be strong and cash is building up. Foreign exchange movements have been favourable. Timothy Carroll has taken over as chief executive.
Tertiary Minerals (TYM) is evaluating acquisitions so that it can generate revenues and profit earlier than would be the case with its current fluorspar interests. Legal changes in Sweden and poor market conditions for fluorspar has delayed progress with the existing assets.
Caledonia Mining Corporation (CMCL) says that its Blanket mine beat production expectations for 2016. There was an 18% increase in fourth quarter gold production (year-on-year) and 2016 gold production was 18% higher at 50,351 ounces. Caledonia owns 49% of Blanket mine. In 2017, production of 60,000 ounces is expected and the mine cost is estimated to be lower than in 2016 at $600-$630/ounce. Investment in infrastructure are improving production but there is a lot more to come and annual production of 80,000 ounces of gold is anticipated in 2021.
Evgen Pharma (EVG) has received a positive interim safety review from the Data Safety Monitoring Board for the use of SFX-01 to treat subarachnoid haemorrhage. This means that the phase II trial will proceed and results should be available in the first half of 2018. So far, 26 patients have enrolled out of a total of 90 people.
Pensions services provider Mattioli Woods (MTW) says that revenues are growing faster than expected. Profit growth has been held back by investment in the business but finnCap has raised its earnings per share estimate from 30.5p to 32.5p. The interim figures are due to be published on 7 February.
Edenville Energy (EDL) has started trial mining at its Rukwa coal project in Tanzania and commercial mining should begin by the end of the first quarter of 2017. The trail mining is generating revenues.
The old guard continues to depart from 1Spatial (SPA) with the latest being Marcus Yeoman.
MAIN MARKET
Canadian oil and gas explorer and producer Zenith Energy Ltd (ZEN) joined the standard list on 11 January. The company, which operates onshore oil and gas fields in Azerbaijan, Argentina and Italy, is already listed on the TSX Venture Exchange. Zenith also produces electricity in Italy. AIM-quoted and NEX-quoted Gunsynd (GUN) has invested £524,000 in Zenith.
Andrew Hore
Quoted Micro 25 July 2016
ISDX
Guild Acquisitions (GAQO) is raising £100,000 at 0.03p a share in order to finance a technology-based investment strategy. The money was not received for a previous £40,000 placing. The focus is likely to be on blockchain-related investments and the new board believes that there will be plenty of opportunities. George Mcdonaugh, Jeremy Woodgate and Rupert Williams are joining the board, while Charles Goodfellow is leaving and enabling Peterhouse to become corporate adviser. Mcdonaugh has experience in the technology sector and will be an executive director. He bought 20 million shares in the placing. Williams and Woodgate,who acquired 10 million shares in the placing, are also directors of broker Smaller Company Capital Ltd (www.ec-capital.co.uk) and used to run another broker, Ocean Equities.
MiLOC Group Ltd (ML.P) is raising $650,000 (£482,000) from a convertible bond issued to Murray Investment Fund Company. The maturity date is 19 January 2018 and there is no interest charge in the first 12 months, followed by an annualised interest rate of 6%. The conversion price will be four-fifths of the share price at which MiLOC or a new holding company floats on the standard list. There is a 3% redemption premium if the loan is not converted into shares.
Food and logistics supplier AfriAg (AFRI) plans to change its name to AfriAg Global in order to reflect a more international focus. Nearly 1.5 million kg of perishable goods was air freighted globally in the first half of 2016., a 60% increase on the first half of 2015.
AIM
Lettings firm Belvoir Lettings (BLV) says that four of its existing franchisees have acquired businesses that will add £850,000 a year to network revenues and this should lead to additional annual management services fees for Belvoir of £102,000. Belvoir has provided funding of £353,000 to help finance the acquisitions and this will add £32,000 to interest income. The deals include the acquisition of a business in Bournemouth which formed the basis of a new franchise. These purchases follow the acquisition of Northwood, the largest remaining independent lettings franchise, as part of the company’s multi-brand strategy. Belvoir is paying up to £22m for Northwood, which has 86 franchised outlets, taking the group total to more than 300 outlets and 54,000 managed properties. Northwood is different from the other group franchises because it offers a guaranteed rent scheme for landlords.
Safestay (SSTY) says that the strong trading performance of its Elephant & Castle hostel has led to an increase in its valuation from £12.2m to £16m.
Renewable energy supplier Good Energy (GOOD) has increased its customer meter points by more than one-third in the first half of 2016 and brand awareness is at new highs. The figure is dominated by FiT customers where growth is likely to slow. Customer meter points were 36% higher at 239,750, with the fastest growth coming in gas where customers were 54% higher. A 5MW solar farm in Dorset increased generating capacity to 52MW with 5MW due to be added in the second half. A new billing system should be installed by the end of this year. A generating site sale will add at least £430,000 to first half profit. The interims will be published on 13 September.
Radiation detection and x-ray technology developer Kromek (KMK) has an impressive order book having taken in $30m of orders in the year to April 2016. These orders are for more than one year but it covers most of the expected 2016-17 revenues of £8.9m. Kromek is expected to continue to lose money for the next two years but the loss will decline. Met cash was £3.86m at the end of April 2016 and this cash is expected to last for at least two years.
Interactive TV content technology developer Mirada (MIRA) is set to have a much improved performance in the year to March 2017. Mirada lost £829,000 in 2015-16 but management expects the company to start generating cash later in the current financial year. The integration of Mirada’s technology for the Televisa cable networks in Latin America means that revenues will be generated every time that a viewer signs up to the service. Mirada continues to invest in R&D. House broker Allenby believes Mirada could make a profit of £1m in 2017-18.
Somero Enterprises Inc (SOM) says that its full year figures will be better than expected and this has led finnCap to upgrade its 2016 earnings forecast by 7.5%, which leaves the shares trading on a single figure prospective multiple.
IS Solutions has changed its name to D4T4 Solutions (D4T4). This reflects the company’s focus on data and data analysis. In the year to March 2016, revenues of £18.6m were boosted by licence sales and projects. There was net cash of £3.4m at the end of March 2016 and the dividend was increased from 0.56p a share to 2p a share. This year, pre-tax profit is expected to rise from £3.5m to £4m, although some of the earnings growth will be held back by a higher tax charge.
Judges Capital (JDG) has warned that its 2016 figures will be lower than expected. The scientific instruments manufacturer had already warned at its AGM that the year had started sluggishly. Order intake was 3.4% lower in the first half of 2016 and the order book is shorter. Orders have started to pick up and the foreign exchange moves could be beneficial for Judges. House broker Shore has cut its 2016 earnings forecast from 122.3p a share to 100p a share. The business is highly cash generative and the dividend is still expected to grow by 10% to 27.5p a share.
MAIN MARKET
DRS Data & Research Services (DRS) says that it has received a bid approach from AQA Education, an independent education charity. The offer is likely to be in cash. DRS provides data capture technology and services for elections and education. DRS, which has been listed for more than two decades, had been considering a switch to AIM following a requisitioned resolution from founder Malcolm Brighton.
Natural flavourings supplier Treatt (TET) says that the disputed earn-out for the acquisition of Earthoil has been set at £971,000. That is less than was asked for but Treatt is still disappointed. This leaves an addition £414,000 to be paid by Treatt. There are outstanding claims totalling £694,000 where judgement is expected next year.
ANDREW HORE