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Quoted Micro 23 October 2023
AQUIS STOCK EXCHANGE
Healthy snack foods supplier S-Ventures (SVEN) plans to raise at least £2.5m to pay deferred consideration and provide working capital. The fundraising has been announced ahead of time so that more investors can become involved. In the year to September 2023, gross revenues improved from £8.6m to £16.9m, while net debt is £6.8m. The main growth came from an initial contribution by gluten-free products company Juvela and technology platform Market Rocket. S-Ventures was loss making and the level is likely to depend on impairment charges.
Arbuthnot Banking Group (ARBB) continues to benefit from higher interest rates. Customer deposits grew 7% to £3.5bn, while wealth management assets under management increased from £1.38bn to £1.43bn. The new London office at 20 Finsbury Circus has increased space by 45% to 75,000 square feet. This will increase annual costs by £5m and there will be dual costs until October 2024 when the existing office lease expires.
Technology marketing business Inteliqo Ltd (IQO) generated initial revenues of $558,000 in the year to September 2023 and it moved from a loss of $428,000 to a pre-tax profit of $185,000. There is $384,000 in the bank, after a cash inflow of $195,000. Inteliqo should continue to be profitable this year as it builds up sales of smart translation Ipedia earbuds and the Langaroo language app.
Aquis Exchange (AQX) chief executive Alasdair Haynes bought 10,000 shares at 325p each, while non-exec chairman Glenn Collinson acquired 7,500 shares at 326.5p.
Shepherd Neame (SHEP) director George Barnes bought 1,000 shares at 800p each. Premier Miton has taken a 5.05% stake in Global Connectivity (GCON). Oberon Investments (OBE) chief executive Simon McGivern has sold 11.6 million shares and Joanna McGivern sold 650,000 shares at 3.6p each. Chairman Mike Cuthbert bought 140,000 shares at 3.6p each and finance director Galin Ganchev acquired an initial 138,888 shares at 3.6p/share. Simon McGivern still has a 6.78% stake. Shepherd Neame (SHEP) director George Barnes bought 1,000 shares at 800p each. Premier Miton has taken a 5.05% stake in Global Connectivity (GCON). Andrew Offit has increased his stake in AQRU (AQRU) from 4.77% to 11.9%.
Tap Global Group (TAP) has appointed Tennyson Securities as its broker.
AIM
Shoe Zone (SHOE) has sparked another upgrade with its latest trading statement. The shoe retailer’s sales were slightly ahead of expectations and pre-tax profit will be at least £16m, which is 19% higher than forecast. Lower freight rates improved margins. The dividend estimate has been raised from 9p/share to 10.5p/share on the back of the profit growth. Zeus has increased its 2023-24 pre-tax profit forecast from £12.5m to £15.2m. To put this in perspective, one year ago Zeus forecast a 2022-23 pre-tax profit of £8.5m, not much more than 50% of the outcome. It would be wrong to expect similar upgrades this year, but it indicates that forecasts are generally conservative.
Gama Aviation (GMAA) is selling its Jet East business for $131m. Adjusting for debt and transaction costs the net amount is $100m, which is equivalent to 125p/share. That could allow a 55p/share dividend. The rest of the cash can be reinvested in the remaining aviation services businesses. Gama Aviation recently won air ambulance and offshore helicopter contracts.
CoStar Group Inc is bidding 110p/share for On The Market (OTMP), which values the property listings company at £99m. The February 2018 placing price was 165p. CoStar Group Inc says that On The Market provides a good entry point to the UK residential property market. The purchaser owns US-based Homes.com.
Litigation finance provider Manolete Partners (MANO) is benefiting from the UK government removing Covid-era protections against insolvency. In the six months to September 2023, the number of case investments jumped from 83 to 146. Bounce back loan cases separately increased from 83 to 179.
Craven House Capital (CRV) investee companies Garimon and Honeydog – it has 29.9% of each company – are planning to reverse into the Amigo Holdings shell on the Main Market. These are music streaming and digital publishing businesses.
eDrive systems developer Saietta (SED) shares returned from suspension on Thursday afternoon after it published results to the year to March 2023. There were problems with the accounting for the new agreements with Consolidated Metco Inc, which included an upfront payment of €3.3m and an inventory write-down of £2.1m. Revenues from continuing operations more than doubled to £4.8m, but the group loss was higher. Orders are in place to build up revenues. There was cash of £7.2m left at the end of March 2023, but by September this was down to £400,000. More cash will be required to finance the delivery of orders.
Fashion retailer Sosandar (SOS) has decided to reduce promotional and discounting activity on its website and open retail stores. There will be four shops by next spring. This will hold back short-term revenues but could accelerate progress in 2026-27. Singer has cut its full year revenues forecast by 19% to £46.8m. This means that having made a profit last year, this year Sosandar will be back to breakeven, and it will take two years to beat the £1.6m profit made last year.
Revolution Bars Group (RBG) reported full year figures broadly in line with expectations. The Peach Pubs business is trading well with like-for-like sales 14% ahead, but the Revolution bars have been hit be train strikes. Cavendish retained its flat 2023-24 pre-tax loss forecast of £2m, even though trading has been tough.
WH Ireland has produced its updated research for metallurgical coal producer Bens Creek Group (BEN) suggesting a move into profit this year. This year’s pre-tax profit forecast is slashed from £108m to £7.2m, with the following year’s estimate reduced from £96.2m to £33.4m. This is a scenario rather than a proper forecast. A 3.6 cents/share (3p) dividend is possible in 2024-25.
Cirata (CRTA), formerly known as WANdisco, is trading in line with expectations with bookings of $1.7m in the latest quarter. They are expected to be higher in the fourth quarter and the software company’s management is confident that the prospects are genuine. Cash should be at least $16m at the year end and Cirata could be cash breakeven in 2024.
R&Q Insurance Holdings (RQIH) is selling its program management business, and this should generate $300m of net proceeds. This will be used to pay down debt. The group chief executive and finance director will leave with the disposal.
ECR Minerals (ECR) has terminated its option to acquire the Hurricane project, following the changes in the board. Management does not believe the potential of the project warrants the acquisition cost.
Karelian Diamond Resources (KDR) is raising £250,000 at 2.5p/share and the cash will be used for exploration for nickel, copper, platinum group metals in Northern Ireland and diamonds in Finland. Peterhouse has been appointed as broker.
MAIN MARKET
Cadmium-free quantum dots developer Nanoco (NANO) has concluded its litigation with Samsung, and it has funds to move towards commercial production. The net litigation proceeds are $90m. The second tranche will be received next February. There are plans to return £33m-£40m (10p-12p/share) to shareholders after this. Contract terms are under discussion for the first commercial order, and they should conclude by the end of 2023. In the year to July 2023, revenues jumped from £2.5m to £5.6m with the main growth coming from recognising licence fees related to the Samsung litigation.
Apax Partners is bidding 110p/share for Kin & Carta (KCT), which is a 41% increase on the pre-bid share price. The share price has not been this high since March, but the bid is less than 50% of the 2023 high ahead of the February profit warning. The bid values Kin & Carta at £203m.
Online travel agency Hostelworld (HSW) increased full year guidance in its third quarter trading statement. Nine months revenues are 38% ahead at Euro75.2m. The EBITDA guidance range has been raised from Euro16.5m-Euro17m to Euro17.5m-Euro18m, up from Euro1.3m last year.
Property investor Town Centre Securities (TOWN) announced net tangible assets falling by 15% to 284p in the year to June 2023. It outperformed the benchmark property index. The greatest value declines in the portfolio related to car parks and offices. The loan-to-value has declined to 45.8% following disposals. The total dividend for the year is 5p/share.
Kitchenware retailer ProCook Group (PROC) says revenues fell 4% to £26.3m in the first half. This was helped by a good summer performance, but trading has been tougher in September and October.
Andrew Hore
Quoted Micro 17 April 2023
AQUIS STOCK EXCHANGE
PanGenomic Health (NARA) joined the Access segment on 12 April. The shares were already listed on the Canadian Stock Exchange. No new money was raised. The share price has stayed at 4.5p during the week and no trades have been reported. The Canadian share price is C$0.07 and it has fallen from C$0.25 since trading commenced last July. PanGenomic Health has three digital health platforms. NaraApp is a mobile app provides information tailored to an individual and their treatment regimen. Mindleap.com provides holistic mental wellness information and access to professional services. Mujn Diagnostics is a digital therapeutics platform. This is used by professional to access individual information from the Nara App to monitor a patient’s treatment.
After the market closed on Friday Arbuthnot Banking (ARBB) announced a £12m share issue at 925p a share. Chairman and chief executive Henry Angest will invest £6.75m of that money. The cash will be used to grow the loan book.
Goodbody Health (GDBY) is asking shareholders permission for cancelling the Aquis quotation. It has already delisted from the Canadian Stock Exchange. Management wants to reduce costs and complains that the market valuation is below NAV. The quotation on OTC QB will also not be retained.
Guanajuato Silver Company Ltd (GSVR) announced positive drilling results at the San Ignacio mine Some of the drilling has encountered high grades. There could be a new area of thick mineralisation. This will help to extend the mine life.
Invinity Energy Systems (IES) has been awarded an £11m grant from the UK government under phase 2 of the Longer Duration Storage Demonstration competition. This will deploy a 30MWh vanadium flow battery.
Cannabis supplier Ananda Developments (ANA) says preparations are underway for a medicinal cannabis flower processing facility. The MRX1 cannabidiol medical cannabis oil will be launched commercially in June and it may be used in two randomised controlled trials.
NFT Investment (NFT) has announced a general meeting on 26 May to gain shareholder approval for a proposed tender offer by April 2024. The tender will be for up to 857.1 million shares and the price will be the greater of 3.5p a share or NAV for each share.
Gunsynd (GUN) investee company Omega Oil and Gas (ASX: OMA) says initial results from the Canyon-2 well in Queensland have exceeded expectations. Cadence Minerals (KDNC) investee company Evergreen Lithium joined the ASX on 11 September. Cadence Minerals has a 8.74% stake in Evergreen Lithium and the share price nearly doubled to A$0.57 during the week.
Watchstone Group (WTG) had £11.5m in cash at the end of March 2023. NAV was 29p a share at the end of 2022.
S-Ventures (SVEN) has filed for insolvency of Lizza in Germany. Lizza was losing money when it was acquired last September. The losses are continuing, and sales have dropped. Alternative European distribution partners will need to be found. There will be a Euro1m write-off.
EPE Special Opportunities (EO.P) had an NAV of 309.57p a share at the end of March 2023.
Mark Horrocks has increased his stake in Lift Global Ventures (LFT) from 11% to 12.3%.
AIM
Spectral MD (SMD) is merging with Nasdaq-listed SPAC Rosecliff Acquisition Corp 1. The share price improved to 44p. The deal values Spectral MD at $170m, or 101p a share. In June 2021, the AIM flotation price was 59p. The AIM quotation will be cancelled. There is likely to be a $15m placing. This will provide additional cash to finance the commercialisation of the DeepView woundcare analysis technology. The transaction should complete in the third quarter.
Consumer electronic and electrical appliances retailer Marks Electrical (MRK) has beaten expectations in the fourth quarter and the full year forecast has been upgraded along with those for the following two years. Revenues in the fourth quarter to March 2023 were one-fifth higher at £24.8m and this means that full year revenues are 21% ahead at £97.8m. This has led to a 2022-23 pre-tax profit upgrade from £5.8m to £6.2m, which is still below the £6.4m reported for the previous year. Net cash is £10m.
Footwear retailer Unbound Group (UBG) has received a proposal from Marwyn Investment Management, which wants to inject £10m into the business at a placing price of 10.5p. That is the same level as the potential offer from WoolOvers Group (the offer also includes a contingent value right relating to the proceeds of an insurance claim). The shareholders would get an opportunity to invest at the same price and Unbound says it prefers the new proposal.
Womenswear retailer Sosandar (SOS) reported improving revenues and margins, although pre-tax was lower than expected in March. Full year pre-tax profit is still expected to be £1.6m and it could be more than £3m in 2023-24. More partnerships with other retailers are likely to be secured.
Currency and payment services provider Argentex (AGFX) says nine months revenues were 63% ahead at £41m, although the underlying operating profit fell from £11m to £9m. # Net cash is £26.2m. The final dividend will be 2.25p a share. The year end is being changed from March to December.
Legal services provider Ince (INCE) is appointing Quantuma as administrator after a major creditor will no longer support the business.
It does not appear that there will be anything left for shareholders when the sales of the remaining subsidiaries of MJ Hudson (MJH) are completed.
MAIN MARKET
Property investor Town Centre Securities (TOWN) has sold part of the Whitehall Riverside development in Leeds and reinvested some of the cash to acquire the 50% it does not own in build to rent company Belgravia Living. The disposal raised £13m, compared with a book value of £10m. There was £3.5m spent to acquire the rest of Belgravia Living. Along with the initial investment, the book value of Belgravia Living is £10m and the net annual rental income is £920,000.
First Tin (LON: 1SN) still had £13.8m in the bank at the end of 2022 and this is enough to pursue the development activities at the two main tin projects until the end of 2023. Progress is being made with the definitive feasibility study at Taronga in Australia. A resource statement is expected in the next couple of months. There should be a resource update for Tellerhauser in Germany by July. This project is eligible to move straight to construction and the operational permitting process. This will reduce the development timeframe by up to 18 months.
A CVA has been approved for Mode Global Holdings (MODE) subsidiary Mode Global. The winding down of trading operations is progressing.
Andrew Hore
Quoted Micro 6 December 2021
AQUIS STOCK EXCHANGE
Hydrogen Future Industries (HFI) was set up to make investments in the hydrogen sector. It raised £2.23m at 10p a share. This will finance the investigation of investment opportunities.
Field Systems Design Holdings (FSD) reported a lump in revenues from £19.8m to £9.98m in the year to May 2021, due to Covid-related problems. This meant that the mechanical and electrical design company moved into loss. The AMP7 water sector investment programme did not start as expected. Other projects have also been delayed, but power generation and transport infrastructure business held up better than the water business, which continues to be delayed. Field Systems Design is also being more selective about energy from waste projects. There was £6m in cash at the end of May 2021.
EPE Special Opportunities (ESO) is investing €10m in the €150m offer by new SPAC EPIC Acquisition Corp, which will be listed on Euronext Amsterdam. The target company would be involved in the consumer sector. EPE has published a prospectus for the issue of up to 20 million zero dividend preference shares at 100p each.
Capital for Colleagues (CFCP) has concluded a partial disposal of its investment in TPS Investment, which distributes pipes and valves. There was an initial £200,000 and £121,000 will be received from a share buyback about the company. That leaves a stake in TPS valued at £510,000.
Aquis Stock Exchange-quoted non-fungible tokens (NFTs) investor NFT Investments (NFT) has swapped its £500,000 investment in Kodoku Studios for a 3% stake in Pioneer Media (PNER) valued at £2m and £125,000 in cash. Mike Edwards is a director of NFT and Pioneer. NFT has invested $1m in NFT Studios Ltd in return for a 20% stake.
Watchstone Group (WTG) has filed a claim against KPMG totalling £13.73m plus interest. This relates to the audit of the 2013 accounts of the company, then known as Quindell. These accounts were restated and the FRC fined and reprimanded KPMG.
Quetzal Capital (QTZ) has invested £1.5m in a convertible loan to TAP Global Ltd and it has an option to acquire 100%. TAP Global is a regulated (by the Gibraltar Financial Services Commission) Crypto-Fiat exchange services provider, which plans to provide a bridge between traditional and crypto assets. TAP Global is already generating revenues.
Altona Rare Earths (ANR) has completed the 2021 drilling programme at the Mozambique Monte Muambe project. Chief executive Christian Taylor-Wilkinson bought 66,560 shares at 11.3p each and he owns 6.3% of the company.
South Africa-based social impact company Inqo Investments Ltd (INQO) raised cash from selling land and this has strengthened the balance sheet. Inqo continues to lose money.
Belvedere Leisure (BL03) has taken control of the 160 acre Barnsoul caravan park, which was near to full capacity during the peak season. Development of the park is continuing ahead of a reopening next spring.
Evrima (EVA) has elected to maintain its project level interest of between 8.86% and 9.26% in the Molopo Farms complex. Kavango Resources (KAV) is exercising its option to take a stake of more than 50%.
Dispersion Holdings (DEFI) has launched a new platform called AQRU, which is a platform that enables institutional investors simple access to crypto yields available in DeFi. Recently purchased Accru Finance developed AQRU, which will not be open to UK-based investors until it is approved by the FCA.
Fuel additives supplier SulNOx Group (SNOX) has signed a distribution agreement with LocoSoco Group.
MiLOC Group Ltd (ML.P) has raised £23,000 at 28.5p a share.
Slater Investments has increased its stake in Arbuthnot Banking (ARBB) from 3.05% to 5.15%.
Rogue Baron (SHNJ) managing director Ryan Dolder bought 32,477 shares at 12p each and 58.827 shares at 9.5p each, taking his stake to 10.5%.
Sativa Wellness (SWEL) has appointed Arden as corporate adviser. It hopes that the broker can help to improve the share price.
AIM
Battery technology developer Gelion (GELN) raised £16m at 145p a share when it joined AIM. The share price has soared to 265p. Australia-based Gelion is a zinc-bromide battery storage technology developer. It is also developing battery additives for use in lithium-ion and lithium-sulfur batteries. Gelion Endure zinc-bromide batteries are suited for harsh environments and the non-flow zinc-bromide technology means that they can be smaller than rival lithium-ion and lead-acid technologies and are recyclable. The cash will be used to accelerate development spending.
Skillcast Group (SKL) provides content and software to companies for their training and compliance requirements. Skillcast has joined AIM to raise further cash to invest in cloud technology and training content. It raised £3.5m in a placing at 37p a share and the share price ended the week at 43p. Revenues are generated from professional services and SaaS subscriptions and the main growth comes from the latter. There were annual recurring revenues of £5.06m at the end of June 2021. Clients include Schroders and GKN. The shares are tightly held.
A trading statement from franchised lettings and estate agency Belvoir Group (BLV) led to a 3% upgrade in forecast 2021 earnings to 20.3p a share.
IPTV technology developer Mirada (MIRA) grew interim revenues by 10% to $6m thanks to increasing installations for izzi Telecom. Mirada has buit up a 5% global share of the Android TV market. The increasing use of resellers in different regions of the world should help Mirada to grow more quickly than it could relying on direct sales. There was a recent partnership agreement with North America-focused Shift 2 Stream.
Vector Capital (VCAP) says 2021 revenues and pre-tax profit will be better than expected.
Interim revenues of Coral Products (CRU) were 58% ahead at £7.1m and pre-tax profit improved from £494,000 to £698,000. The interim dividend is 0.5p a share. Plastic lotion pumps supplier Global One-Pak was hit by the ill-health of its boss and problems importing from China, but trading is improving.
Human capital services provider Mind Gym (MIND) increased its interim revenues by two-thirds to £24.1m and it returned to profit. Revenues are back to the levels in the first half of 2019, although the profit is much lower. Digital revenues account for 81% of the latest revenues.
Online fashion retailer Sosandar (SOS) nearly trebled its interim revenues, helped by maintaining high stock levels following the fundraising earlier this year. Strong trading, both from the company’s website and through third parties, continues to be strong. October was a record month and November was even better. The full year revenues forecast has been raised by 11% to £27.1m. Sosandar could move into profit next year.
Cenkos has upgraded its free cash flow forecast for Duke Royalty (DUKE) following the latest interims. It is expected to be 2.3p a share, which will cover the forecast dividend of 2.2p a share. There is a record deal pipeline
Lekoil Nigeria is offering to acquire the 60% of Lekoil Ltd (LEK) that it does not own for double the suspension price of 0.95p or for a share exchange.
MAIN MARKET
Guernsey-registered technology shell Hambro Perks Acquisition Company Ltd (HPA1) raised £140m through a placing at 1000p per unit (one public share and 0.5 of one public warrant). The price went to premium and fell back to 1000p. An attractive market, innovative product or service, scalability and strong management will be required in any target. The target business would be valued at £800m or more. The Hambro Perks Ltd advisory business has expertise in investing in early-stage technology businesses and could have potential targets in its funds.
Town Centre Properties (TOWN) maintained its underlying NAV at 284p a share. Net debt was reduced to £145.6m and LTV is 51.3% at the end of June 2021. The full loss was significantly reduced, although there was cash generated from operations. The final dividend is 1.75p a share, taking the total for the year to 3.5p a share, down from 5p a share.
Telecoms services provider Toople (TOOP) is raising £380,000 at 0.045p a share. The previous placing was at 0.11p a share during October 2020.
Rebel shareholders in beverages supplier East Imperial (EISB) have withdrawn their general meeting requisition following the appointment of Alistair McGeorge as chairman and Colin Henry as a non-exec. Rabindra Lal Soni has resigned as chairman.
Andrew Hore
Andrew Hore – Quoted Micro 26 July 2021
AQUIS STOCK EXCHANGE
Ecotricity has launched a 340p a share cash bid for Good Energy (GOOD). Ecotricity believes the combined group would be better placed to compete in the energy supply business. The Good Energy board rejects the bid.
Arbuthnot Banking (ARBB) reported a bounce back in interim pre-tax profit from £200,000 to £3m. the main profit improvement was at Arbuthnot Latham. NAV was 1292p a share at the end of June 2021. Assets under management reached £1.22bn. A second interim dividend of 16p a share was announced, and it will be paid on 24 September.
NQ Minerals (NQMI) says its Hellyer gold mine generated revenues of A$19.8m in the second quarter, while net income was A$5.7m. The major capital investment in the mine cost A$16.4m and was finished during the quarter. NQ Minerals is still seeking to move to a full listing on the London Stock Market.
Sativa Wellness Inc (SWEL) generated record revenues in the first half of 2021, and it is generating cash from operations. CBD products supplier Goodbody Botanicals is profitable. There have been 47 clinics opened to offer Covid-19 testing.
Apollon Formularies (APOL) says that medicinal cannabis formulations developed by its subsidiary have been able to kill prostrate cancer cells.
Watchstone Group (WTG) management recommends that shareholders reject the mandatory 34p a share bid.
Ervin Kovac has resigned as director of Freyherr International (FRYR) and the shares remain suspended as the company’s financial position remains uncertain. Trading was suspended more than nine months ago.
Harry Hyman has taken a 3.08% stake in Oberon Investments (OBE).
Newbury Racecourse (NYR) is moving from the Access segment to the Apex segment.
AIM
Digital payments business Boku (BOKU) increased interim revenues by 37% to $34m – organic growth was 21%. Investment is increasing in order to take advantage of growth prospects, but cash is also increasing.
Trading is improving at employee benefits services and insurance products provider Personal Group (PGH) and interim revenues were 12% ahead at £34m even though weak insurance sales last year mean that premium income fell. SaaS-based revenues increasing by 50% – helped by the partnership with Sage. Sales of consumer electronics products through PG Let’s Connect has improved by one-fifth.
Insolvency levels remain relatively low, but Begbies Traynor (BEG) still grew strongly last year. In the year to April 2021, underlying pre-tax profit improved from £9.2m to £11.5m – a combination of organic and acquisitive growth. There is more to come this year from recent acquisitions.
Lawyer Gateley (GTLY) managed to increase its pre-tax profit from £18.1m to £19.3m despite the tough trading conditions in the year to April 2021. The property and corporate finance divisions did particularly well last year. This kept utilisation levels high. A final dividend of 5p a share was announced. Gateley is paying £815,000 for Tozer Gallagher, which is a quantity surveyor and construction consultant.
Online womenswear retailer Sosandar (SOS) increased its full year revenues by 35% to £12.2m. It remains loss-making and that is likely to continue this year even though revenues continue to grow rapidly. First quarter revenues jumped by 256% to £5.7m, although the comparatives were weak. Active customers increased by 23% compared with the previous quarter. Singer forecasts double full year revenues to £24.4m.
Parcel and freight delivery company DX (DX.) is still growing its freight business faster than expected and analysts have upgraded their forecasts for 2020-21 and the current year. The additional business is also more profitable than in the past. DX Express revenues are flat due to lower office mail delivery revenues.
Judges Scientific (JDG) had a much better order book at the end of June 2021. It was 49% higher than June last year. Organic sales growth was 5% compared with full year forecasts of 1.5%.
Open Orphan (ORPH) spin out Poolbeg Pharma (POLB) has started trading on AIM. The shares are trading at 10.875p, which is equivalent to 3.63p a share to Open Orphan shareholders. The Open Orphan shareholders cannot sell yet.
Vela Technologies (VELA) has invested £750,000 in Northcoders Group, which joins AIM on 27 July. Manchester -based Northcoders provides software coding training.
International payments business Cornerstone FS (CSFS) is pursuing potential acquisitions, but it has not secured any since it floated earlier this year. The mix of business remains consistent, although more of it is direct which improves margins, and trading has almost returned to pre-pandemic levels.
MAIN MARKET
New shell Acceler8 Ventures (AC8) has soared from its placing price of 100p to 215p on limited volumes. After expenses, the cash in the company is equivalent to 60p a share. The sector of the potential target has been kept vague.
Sivota (SIV) is a shell that wants to acquire Israel-based technology businesses. The company has just under 78p a share of cash. The share price has risen from the placing price of 100p to 112.5p.
NMCN (NMCN) is making progress with the refinancing and related documentation. The 2020 accounts are expected to show a pre-tax loss of much more than the £24m previously indicated.
Aquaculture technology developer OTAQ (OTAQ) increased full year revenues by 18% to £4.05m, while the underlying loss was reduced from £1.05m to £726,000. Restrictions have held back the progress of the business.
Town Centre Securities (TOWN) has collected 88% of the billed rent of £4.9m for the quarter to June 2021 with a further 8% that was agreed to be deferred.
Andrew Hore
Andrew Hore – Quoted Micro 15 March 2021
AQUIS STOCK EXCHANGE
Rogue Baron (SHNJ) joined the Aquis Stock Exchange on Friday. The company is a spirits brand developer, and its focus is the Shinju Japanese whisky brand and specialist tequila Copa Imperial Tequila. The idea is to build these and other niche brands to the point where larger drinks companies will want to acquire the brand. There was £755,000 raised at 7p a share. The share price ended the first day of trading at 8p (7p/9p).
Gunsynd (GUN) has already more than trebled the value of its investment In Rogue Baron, which was worth more than £1.8m, including accrued convertible interest, at the time of flotation. Gunsynd holds a 28.5% stake. Chris Akers has increased his stake in Gunsynd from 5.36% to 6.19%.
Sativa Wellness (SWEL) has taken more than £1.1m of bookings for its Covid-19 testing clinic business. This has been achieved by the Bath clinic and a further clinic has opened, plus 13 in-pharmacy and two mobile clinics. There could be 30 clinics by the end of April, ready for the easing of lockdown.
KR1 (KR1) has invested $200,000 into Automata Network’s seed funding round.
IamFire (FIRE) made a loss of £162,000 in the six months to October 2020. During the period, investments were made in WeShop and Bio2pure.
Upper Thames Holdings (UPPT) has net liabilities of £83,000 at the end of 2020 and since then £516,000 has been raised. The board will seek approval to change the company’s name to Valereum Blockchain.
Quetzal Capital (WENP) is raising £3m at 4p a share and issuing enough warrants exercisable at 8p to raise a further £3m. This will help to fund a reverse takeover or investment. NQ Minerals (NQMI) has raised a further £255,000 at 7p a share. Bluebell Investment and Consulting has invested £25,000 in Wheelsure Holdings (WHLP) at 13.5p a share, which represents a 4.9% stake. Altona Rare Earths (ANR) has raised a total of £800,000 at 6.5p a share from placings.
Western Selection (WESP) has increased its stake in Bilby (BILB) by 698,737 shares at an average share price of 35.11p each. This takes the stake to 12.2%.
All Star Minerals (ASMO) has appointed SP Angel as broker.
AIM
AMTE Power (AMTE) raised more than initially expected in the flotation and this should provide the cash required for investment in the battery cells development business. AMTE raised £11.3m at 175p a share. The share price jumped to 233.5p on the first day of dealings. The battery cells nearing commercialisation are aimed at the high-performance vehicles, oil and gas equipment and energy storage markets. There are currently 16 potential clients that products are being developed for.
Engineer Avingtrans (LON: AVG) is raising £35m from the sale of the Peter Brotherhood business that came with the £52.7m acquisition of Hayward Tyler in September 2017. Peter Brotherhood was estimated to be worth £9.3m of that cost. Borrowings will be paid off. Net cash is expected to be £22m at the end of May 2021.
Kape Technologies (KAPE) is acquiring Webselenese for $149.1m. This provides the group with a consumer platform for privacy and security content, which will generate information and data on consumer trends. In 2020, the acquired business generated revenues of $64.5m and EBITDA of $30.7m. In 2021, Kape is expected to increase earnings from 15.8p a share to 25.4p a share.
Billing and customer relationship management software provider Cerillion (CER) has won a Middle East contract worth £5m over five years. The implementation will take up to 18 months.
Getech (GTC) is raising up to £6.25m via a placing and open offer at 22p a share. The cash will be invested in developing hydrogen products and services.
Online merchandising technology provider Attraqt (ATQT) improved its full year revenues by 8% to £21m, helped by an initial contribution from AI firm Aleph. The loss was reduced from £4.4m to £2.6m. Annualised recurring revenues were £21.1m at the end of 2020. A £500,000 loss is forecast for 2021 before a move into profit in 2022.
Cloud-based PCI payment services provider PCI Pal (PCIP) is gaining momentum in the US. In the six months to December 2020, revenues rose by 56% to £3.2m. More of these revenues are coming via channel partners. Total annual contract revenues were 59% ahead at £8.3m. There should be enough cash in the bank to get the company to the point where it is generating cash.
Shoe Zone (SHOE) says that it does not expect to pay a dividend until at least 2025. The footwear retailer expects to continue to lose money this year. The stores are closed at the moment.ch
Online women’s fashion retailer Sosandar (SOS) has agreed to sell a specialist collection of its products through Marks and Spencer (MKS). This follows deals with Next and John Lewis.
Coral Products (CRU) is repaying its £1.6m property mortgage out of the proceeds of its recent disposal. The £2.5m valuation of the Haydock site is expected to be increased in the next accounts. Coral has also repaid £500,000 of its CBIL loan with the other £433,333 likely to be paid before the year-end.
Business restructuring company Begbies Traynor (BEG) is acquiring of David Rubin & Partners for up to £25m. This takes the group’s market share to 12%. There is an initial £12m payable and the rest depends on performance over five years. Begbies raised £22m at 105.5p a share to help finance the deal, which should be immediately earnings enhancing.
Arden has upgraded its Dekel Agri-Vision (DKL) forecasts due to higher crude palm oil and palm kernel oil prices. This means that Arden expects Dekel to be profitable in 2021.
MAIN MARKET
Avation (AVAP) is raising £7.5m at 110p a share and this provides additional cash at a difficult time for the airline industry. NAV was previously 174p a share. Avation could continue to lose money for the next two years Net debt will still be more than $1bn.
Challenger Acquisitions (CHAL) is entering into a deal to acquire Cindrigo Energy, which owns Cindrigo Ltd, the company where a previous offer lapsed. The business is a developer of renewable energy projects using Swedish expertise in waste-to-energy and biomass. The shareholders of the target company will own 96.5% of the enlarged business.
Kanabo (KNB) has signed a production and supply agreement with PharmaCann Polska for cartridges containing Kanabo’s medicinal cannabis formulations. The initial production capacity is up to 36,000 cartridges. FastForward Innovations (FFWD) has sold its stake in Kanabo for a profit of £140,000. FastForward has also sold its Cellular Goods (CBX) for a £54,000 gain.
Argo Blockchain (ARB) has raised £26.8m at 200p a share and this cash will fund the purchase of a further stake in Pluto Digital Assets. The £7.3m investment in Pluto will maintain the Argo stake at 25%. AIM-quoted Pires Investments (PIRI) owns 6.4% of Pluto.
The Financial Reporting Council has started an investigation into the audit of motor dealer Lookers (LOOK) by Deloitte for 2017 and 2018.
Wheaton Precious Metals (WPM) is increasing its first quarterly dividend by 30% to 13 cents a share. The strategy is to pay 30% of average cash generated by operating activities in the previous four quarters.
Pharmaceuticals developer Nuformix (NFX) is raising £1.565m at 2p a share. This cash will finance preclinical studies for the NXP002 inhaled formulation for lung disease and further research and development of formulations. Nuformix is waiting to see whether Oxilio will option the NXP001 cancer treatment. This option expires on 24 March.
Andrew Hore
Andrew Hore – Quoted Micro 18 January 2021
AQUIS STOCK EXCHANGE
British Honey (BHC) generated revenues of £1.5m in the nine months to December 2020 with more sales online. There was £2.4m in the bank.
Rutherford Health (RUTH) has agreed to provide cancer treatment to NHS Trusts and clinical commissioning groups in England. The initial agreement is for two years.
A subsidiary of Noble Group has sent a letter of intent to Eastinco Mining and Exploration (EM.P) saying it wasn’t to purchase a significant portion of tantalum and tine production from Musasa in Rwanda. There will be immediate payment on agreement of the grade. There has been a further cash injection of £150,000.
Tectonic Gold (TTAU) has discovered further gold mineralisation at Specimen Hill in Queensland. There is a 100% success rate with holes drilled. A drilling programme has started at Mt Cassidy and once completed drilling will recommence at Specimen Hill at the sites that are prospective for copper.
NQ Minerals (NQMI) says that the Hellyer mine in Australia produced 38,319 tonnes of lead concentrate, up 53%, and 19,019 tonnes of zinc concentrate, up 22%, in 2020. There was 5,452 ounces of gold and 1.1 million ounces of silver produced. Gross revenues were A$63.3m and net income was A$22.7m.
Preliminary sampling at one of the Cameroon licences owned by BWA Group (BWAP) has identified mineralisation. The Dehane project has elevated titanium, zircon and aluminium multi-element associations. More cash is required to fund further exploration.
Gunsynd (GUN) says that Peterhouse has been appointed as corporate adviser to Rogue Baron ahead of a proposed flotation on Aquis in the first quarter. Rogue Baron is a spirits company and Gunsynd has a £500,000 convertible repayable at the end of March. The Gunsynd NAV increased from £2.36m to £2.47m at the end of July 2020. There was £838,000 in the bank.
Vulcan Industries (VULC) has raised £100,000 at 4.5p a share. SulNOx Group (SNOX) has raised £50,100 at 41.75p a share. Further cash will be required. Altona Energy (ANR) has raised a further £42,000 at 6.5p a share. MiLOC Group (ML.P) has raised £237,000 at 28.5p a share and started litigation against a distributor.
Walls and Futures REIT (WAFR) boos Joe McTaggart has bought 30,409 shares at 49p each.
AIM
Toilet tissue manufacturer Accrol (ACRL) reported strong interims even before a contribution from the recently acquired LTC. In the six months to October 2020, revenues slipped from £64.5m to £62.3m but that reflects panic buying in the last two months of the previous year that reduced this year’s figure. A contribution from LTC should increase full year revenues from £135m to £154m and pre-tax profit could nearly double to £9.2m. Accrol intends to pay a final dividend of 0.5p a share.
Online fashion retailer Sosandar (SOS) reported a 6% increase in revenues to December 2020, following a £1.6m reduction in marketing spend – mainly in December. This includes growing sales via John Lewis and Next. The loss was more than halved. Net cash was £3.9m at the end of 2020.
Kromek (KMK) reported a 14% decline in interim revenues to £4.58m, which was a resilient performance considering the disruption in the period. Kromek has moved into a net debt position but management is confident that it has enough funds for its requirements. The second half should be stronger. The long-term outlook for MRI, imaging and radiation detection products remains positive.
Battery technology developer Ilika (IKA) is on course for Stereax battery production to be scaled up by the beginning of 2022 and more significant revenues will flow through from then on. The total investment is £4m. The pilot line is running at full capacity so there is unlikely to be growth in short-term revenues. There is also the longer-term potential for Goliath batteries for electric vehicles. There should be £9m in the bank at the end of April 2021.
Voucher products supplier Appreciate (APP) had a strong third quarter and free cash reached £33.5m. The focus on digital products is paying off.
Law firm Gateley (GTLY) grew earnings by 7% in the first half, but full year earnings are expected to decline from 12.5p a share to 9.1p a share. There could be scope for an upgrade if utilisation levels remain high.
Ariana Resources (AAU) says that the 50%-owned Kiziltepe mine produced 18,645 ounces of gold in 2020. The processing plant capacity is being quadrupled.
Filtronic (FTC) has won a contract with more than £1m with a UK defence customer. Filtronic will design and supply battlefield communications hardware.
In 2020, Dekel Agri-Vision (DKL) increased palm oil production by 24% to 4,824MT and the average price obtained was ahead by a similar percentage. The price has started 2021 at a much higher level and even if the price does not stay as high Dekel should be able to at least move nearer to profit in 2021.
Franchise Brands (FRAN) will report 2020 figures ahead of consensus. The business has been strongly cash generative and the consumer-facing franchises did better in the second half. Metro Rod was classed as an essential service and trading recovered after an initial slump. Allenby forecasts 2020 earnings of 4.3p a share and this could improve to 4.8p a share in 2021.
Environmental and life sciences company Deepverge (DVRG) generated revenues of £4.4m in 2020 before any contribution from the recently acquired Modern Water. This year’s revenues should more than double, although the business should still lose money. There are large projects that are being bid for that could contribute to this year.
SourceBio International (SBI) has signed a deal with a high street retailer to provide lab testing services. This will start with a limited number of stores and could then be broadened. Demand for Covid testing is likely to continue to be high for many months.
MAIN MARKET
BATM Advanced Communication (BVC) has secured an option deal to sell its NGSoft communications technology services business to Aztek Technologies for $33m in cash. This is around ten times operating profit. The cash can be reinvested into the other activities.
Telecoms business Toople (TOOP) increased revenues from £2.45m to £3.44m and gross profit from £479,000 to £1.1m in the year to September 2020. The purchase of DMSL helped to grow revenues. Admin expenses were slightly higher at £2.44m. The underlying pre-tax loss edged up from £1.24m to £1.31m. That excludes a £1.1m provision for bad debts and restructuring costs. Directors pay increased from £278,000 to £312,239 last year. Net debt was nearly £1m at the end of September 2020. Debt in the form of a loan note is repayable at the end of 2022. The cash outflow from operating activities reduced from £2m to £1.6m.
InnovaDerma (IDP) reported a one-fifth decline in interim revenues. The personal care products supplier was hit by the closure of high street shops in the UK. International sales improved. The new chief executive is still assessing the business and will report plans and impairment charges in the coming weeks. A non-executive director is loaning the company £500,000 until 13 July.
Andrew Hore
Andrew Hore – Quoted Micro 7 December 2020
AQUIS STOCK EXCHANGE
Newbury Racecourse (NYR) has completed the sale of 1.2 acres of land on the northern perimeter of the racecourse for £1.5m. That is equal to book value.
NQ Minerals (NQMI) is able to draw down from its recently arranged $55m loan facility between its subsidiary Hellyer Gold Mines with ING. The cash is being used to pay off previous debt.
Wheelsure Holdings (WHLP) improved revenues from £178,000 to £235,000 in the year to August 2020, but there remain potential delays to sales. That is particularly true of Transport for London because of its financial problems. The loss was slightly reduced from £224,000 to £203,000. Wheelsure has moved from net liabilities to net assets of £7,000.
Four new directors have been appointed to the board of SulNOx (SNOX) following a general meeting and they have replaced the previous directors. Radu Florescu had previously been a director of the company. Shareholders have also given them permission to issue shares.
Trading has recommenced in Altona Energy (ANR) shares after £138,000 was raised at 6.5p a share. Further cash will be required in the next four months. Indications have been received from investors that a move to AIM or the standard list could enable Altona to raise £1m. Due diligence is being completed on the two rare earth acquisition targets in Malawi and Uganda. Christian Taylor-Wilkinson has been appointed chief executive.
Quetzal Capital (WENP) made a pre-tax profit of £276,000 in the year to June 2020. That was due to creditors accepting 7.5p in each £1 they were owed. Business opportunities are being assessed.
Wishbone Gold (WSBN) has applied for a new exploration licence in northern Queensland, which is 15km north west of the Ravenswood gold mine.
IOV Labs Ltd is investing £330,000 in Coinsilium Group (COIN) at 3p a share. One warrant will be issued for each two shares and the exercise price is 4.5p a share. IOV can appoint a director to the board, having increased its stake to 13.9%. Coinsilium says that it has enough cash until January 2022.
BWA (BWAP) reported an interim loss of £2.91m, which reduced net assets to £2.43m. The Cameroon business has marked out two licence areas and the first sampling has been undertaken with the lab results expected. BWA had written off its stake in the Prego prepaid debit card business, but there is a potential takeover by a Canadian listed company.
Belvedere Leisure (BELV) has issued £872,000 of 6.25% secured bonds, September 2025. This takes the number in issue to £979,000.
AIM
Floorcoverings manufacturer Victoria (VCP) produced better than expected interims. Peel Hunt increased its full year pre-tax profit forecast from £9.4m to £28.7m, while earnings are set to improve from 5.6p a share to 17.4p a share. There should be further significant recovery next year, but by then further acquisitions will have been made so the group will be different.
Springfield Properties (SPR) has gained planning approval for its first private rental development in Scotland. It is for 75 family homes at the company’s Bertha Park Village. Springfield will build the homes under a fixed cost contract and hand them to the PRS provider. This provides additional, predictable cash flow.
Online fashion retailer Sosandar (SOS) increased interim revenues by 52% to £4.3m even though marketing spending was reduced. Conversion rates are improving. Sales through John Lewis and Next started in August. The loss was reduced from £2.79m to £1.1m. Marketing has been stepped up and there has been further growth in revenues during the autumn. There was still £4m in the bank at the end of November 2020.
Digital TV software Mirada (MIRA) reported a 5% reduction in interim revenues to $5.5m due to Covid-19 related delays. Allenby forecasts a decline in full year revenues from $13.2m to $11.5m and the loss is expected to increase from $1.42m to $3.26m. Net debt could rise to $8.45m by the end of March 2021. Next year, the loss should be lower and Mirada should be cash generative so net debt would reduce by March 2022.
AssetCo (ASTO) has launched a tender offer for 6.53 million shares at 411p each. That will return £26.9m to shareholders. Following payment from former auditor Grant Thornton, AssetCo should have cash of around £55m.
Tavistock Investments (TAVI) has postponed a general meeting designed to pass a new long-term incentive plan for executive directors Brian Raven and Oliver Cooke. There has been unfavourable feedback from shareholders.
The Property Franchise Group (TPFG) has made a bid approach to fellow residential lettings business Hunters Property (HUNT).
Nucleus Financial (NUC) has received a bid approach from IntegraFin Holdings (IHP) and the offer is likely to be in cash. Aquiline Capital and Allfunds (UK) are also considering offers. Sanlam UK owns 52% of Nucleus.
DBAY Advisers has acquired shares in Telit Communications (TCM) at 194.8p each, so any potential bid will have to be at least at this price.
Invinity Energy Systems (IES) is raising £20.5m via a placing at 175p a share and up to £2m more could be raised through a one-for-64 open offer. The cash will help to scale up production of its vanadium flow batteries.
Pires Investments (PIRI) is subscribing for a 15% stake in decentralised finance company DeTech Studio and it will also be issued four million YOP tokens. YOP is the decentralised finance platform that DeTech is developing. The plan is to make it easier for non-experts to use. The yop token will facilitate engagement with smart contracts on the Ethereum network.
MAIN MARKET
Tirupati Graphite has launched its fundraising ahead of a standard listing on 11 December. It is raising £6m at 45p a share, which would capitalise the company at £33.6m. The cash will be invested in mining and processing of graphite.
Marwyn has launched three new shells on the standard list. Marwyn Acquisition Co I Ltd (MAC1), Marwyn Acquisition Co II Ltd (MAC2) and Marwyn Acquisition Co III Ltd (MAC3) are all seeking acquisition targets in media, technology and healthcare that can take advantage of digitalisation. Directors of past Marwyn shells are investors in the new shells. Each company has issued 700,000 shares at 100p each.
Standard list shell Mining Minerals (MMM) is in discussions with a potential strategic investor.
Andrew Hore
Andrew Hore – Quoted Micro 24 August 2020
AQUIS STOCK EXCHANGE
Medical device developer TruSpine Technologies (TSP) ended the week at 34.5p (32p/37p). TruSpine has raised £1.4m at 36p a share with a commitment for a further £250,000. This should provide enough cash until Cervi-Lok, which is one of the three spinal stabilisation devices being developed, starts to generate sales.
Coinsilium Group Ltd (COIN) says that its joint venture with IOV Labs has signed a deal with RedFOX Labs to build fast scaling internet business on the RSK blockchain. Coinsilium has also secured an adviser role to Indorse for a forthcoming initiative to revive the token economics of its IND token through a decentralised finance model. The value of Coinsilium’s cryptocurrency holdings is $575,000, with further tokens worth $105,000 set to vest over the next 12 months.
KR1 (KR1) has started to generate revenues from staking activities on the Polkadot network, which is KR1’s largest investment. So far, 530.67 DOT have been generated and this has raised $194,802.
Cadence Minerals (KDNC) is raising £1.25m at 12p a share. This will provide working capital and help to pay back loan notes, which are currently valued at £1.7m.
Wishbone Gold (WSBN) is raising £400,000 at 2p a share. Gold exploration is commencing at the Wishbone II project in Queensland. Exploration will also restart at the White Mountains project.
Gunsynd (GUN) owns 4.97 million shares in nickel project developer Sunshine Minerals, which is being acquired by Malachite Resources. Gunsynd will receive 1.26 million shares in Malachite with further deferred consideration of 1.64 million shares.
NQ Minerals (NQMI) has released positive news from surface stockpiles at the Beaconsfield gold mine. The average grade is 3.2g/tonne in 80,000 tonnes of surveyed stockpiles.
World High Life (LIFE) is increasing production capacity by 400%. The new Love Hemp facility will produce 43,000 units of CBD oils, capsules and cosmetics each day. July sales were 57% higher than in June with much higher online sales.
Belvedere Leisure (BELV) has agreed a new strategy with Landal GreenParks UK, which involves delivering lodges for domestic tourism and staycations. The company is in negotiations to acquire the Barncrosh site in Scotland and the company is seeking other sites. Belvedere Leisure Park has been placed in administration and will no longer guarantee the company bonds.
Ian Harebottle and Richard Lloyd have been appointed as directors of All Star Minerals (ASMO).
Capital for Colleagues (CFCP) chief executive Alistair Currie bought 86,419 shares at 25p each and 13,581 at 29.5p each. He has a 3.28% stake.
AIM
Online fashion retailer Sosandar (SOS) doubled its revenues last year. In the year to March 2020, revenues jumped from £4.44m to £9.03m, while the loss more than doubled from £3.55m to £7.81m. First quarter revenues were 54% higher and the lower marketing costs helped to reduce operating costs by 71%. July revenues were 57% higher than the same time last year. Gross margins have improved. There was still £4.4m in cash at the end of June 2020.
Marshall Motor Holdings (MMH) lost £8.9m in the first half of 2020. That is not surprising given that the car showrooms were shut for ten weeks. A small loss is expected for the full year, although this will depend on September demand. Vertu Motors (VTU) says that it lost £5.2m in the March to June period, but made a pre-tax profit of £7.4m in July. Used vehicle sales made a record gross profit last month with volume growth of 13.7%.
Ceramic products manufacturer Churchill China (CHH) managed to make a small profit before exceptional items. Revenues slumped from £31.9m to £18.9m with a strong start to the year offset by COVID-19 in the second quarter. The majority of sales were of hospitality products. Cash improved to £16.3m thanks to the fact that there was no final dividend last year. A potential interim dividend will be reviewed in December when the fourth quarter trading is clearer.
Elypsis Solutions has sold a 3.4% stake in Adamas Finance Asia (ADAM) to Heirloom Investment Management, leaving it with 53.6%. The Adamas share buyback programme is still active. NAV was 75p a share at the end of June 2020, compared to a share price of 26.5p.
Oil and gas producer Hurricane Energy (HUR) admits that it is likely to materially downgrade the resource estimate for the Lancaster early production system and the West of Shetland portfolio of assets. Production is expected to decline from the current 17,000 barrels of oil per day.
Synthetic heavy fuel developer Quadrise Fuels International (QFI) will receive $150,000 for equipment and support supplied to Greenfield Energy for a commercial trial, which will be completed by the end of the year.
Renalytix AI (RENX) has announced a collaboration with AstraZeneca for the use of the KidneyIntelX technology in other chronic diseases.
EKF Diagnostics (EKF) has made a $5m investment in Trellus Health in return for a 31% stake. Trellus has licenced a platform for the management of inflammatory bowel disease.
Cyber security services provider Shearwater Group (SWG) says positive momentum is continuing. An underlying EBITDA is being made due to higher margin products and efficiencies. There is £4.1m in the bank.
MAIN MARKET
Motor dealer Lookers (LOOK) still has not published its 2019 accounts. Further work is required on the corporate leasing division and vehicle financing arrangements. Net debt was £13.5m at the end of June 2020, helped by delayed government payments. There was a significant first half loss in 2020.
OKYO Pharma (OKYO) is seeking a Nasdaq listing. It has raised £1.44m through additional convertible loan notes to finance clinical development.
BATM (BVC) is on course to increase full year underlying pre-tax profit from $5.2m to $8.8m on a revenues one-third higher. There was cash of $44.3m at the end of June 2020. A resumption of dividend payments is promised at the end of the year. The bio-medical division increased interim revenues by two-thirds to $50m and improved its gross margin. Demand for COVID-19 diagnostic kits remains strong. The networking division improved interim revenues by 3% to $27.4m.
LED lighting and wiring accessories supplier Luceco (LUCE) has upgraded its 2020 underlying operating profit guidance from £18m to at least £23m, helped by improved gross margins. Adjusted earnings per share are expected to be at least 11p a share. The interims will be published on 8 September.
Challenger Acquisitions (CHAL) has entered into a letter of intent to acquire Cindrigo and Cindrigo Energy, which are involved in waste-to-energy and biomass energy projects.
Metal Tiger (MTR) wants to obtain an Australian Stock Exchange listing before the end of the year.
Andrew Hore
Andrew Hore Quoted Micro 2 December 2019
NEX EXCHANGE
Coinsilium (COIN) has signed a memorandum of understanding with Devmons to set up a joint venture using Coinsilium’s existing Gibraltar subsidiary TerraStream. The company will offer blockchain software and systems development. Devmons supplies the technology development expertise. More details will be published when the agreement is signed, and it is hoped that operations will commence in the first quarter of 2020. The new venture should not need significant funds, due to advanced payments being requested when any contract is won.
Gunsynd (GUN) has entered an agreement to sell its stake in Oyster Oil and Gas to Sajawin Pty Ltd. There will be a payment of £20,000 after the signing of the term sheet and a further £240,000 to be paid in two tranches, the second of which will be payable 60 days after completion. Sajawin still has to complete due diligence and raise at least A$1.5m when it reverses into an ASX shell. Gunsynd will subscribe for A$200,000 of shares. The deal can be terminated if the conditions are not met by the end of April. Production sharing contracts for four blocks in Djibouti are not included in the transaction. George Garnett has resigned as a non- executive director of Gunsynd.
Sativa Group (SATI) is exploring the possibility of an AIM quotation. It has appointed Cenkos Securities as adviser. Management hopes that the move could happen early next year. The first batch of seedlings is being prepared for a move to the cultivation room with the first extract of medicinal cannabis set to be delivered to King’s College London before the end of 2019. That will be used in research on inflammation and respiratory conditions. Crops take 12 weeks to grow.
NQ Minerals (NQMI) says that production at the Hellyer gold mine in Tasmania is ahead of expectations, but there is room for improvement in 2020. NQ has made an additional investment of £150,000 in Tasmania Energy Metals in the form of a three-year convertible loan. NQ has an option to acquire the exploration licences and minerals processing facility that is being developed. The Barnes Hill nickel project mineral resource estimate has increased to 14.3 million tonnes grading 0.725 nickel and 0.05% cobalt.
Southern Africa-based social impact company Inqo Investments Ltd (INQO) increased its interim revenues but also made a higher loss. The Kazuko Lodge was hampered by the water shortage in the Cape Town area, but the weak Rand is boosting demand for holidays from Americans. There was an increase in honey produced by Bee Sweet Honey in Zambia. Cash in the bank improved from R12.3m to R21.2m. following a further cash injection by existing shareholders. The NAV was R179m at the end of August 2019.
AfriAg Global (AFRI) has completed the sale of its African operations. The share consolidation was completed on 29 November.
Dana Group International Investments Ltd (DANA) says that its NAV fell from $51.9m to $7.03m in the 12 months to June 2019. There was a small profit for the year and the decline in NAV came from write-downs. Trading has ended in London Capital Group Holdings and Queros Capital Partners 8% bonds 2025.
AIM
Sustainable wood products supplier Accsys Technologies (AXS) is raising €46.3m in order to fund the completion of the Tricoya plant in Hull and the fourth Accoya reactor in Arnhem. It will also finance the evaluation of an Accoya plant in the US. The cash will be raised at €1.05 a share via a placing and a one-for-seven open offer. The Hull plant could be operational in the second half of 2020.
STM Group (STM) warns that the rebranding of its UK pensions business has been delayed as it awaits regulatory approval to operate as a Master Trust for auto-enrolment. New pension applications have been lower than expected. The 2019 underlying pre-tax profit is forecast at £2.5m. Next year’s indemnity insurance payment will cost an additional £500,000.
Wilmcote Holdings (WCH) is raising up to £6.5m via a 31.199996 for one open offer at 1p a share in order to replenish its coffers while it seeks a suitable acquisition in the chemicals and other sectors. There was £7.5m in cash at the end of June 2019. Wilmcote will look at smaller acquisitions than in the past.
Online fashion retailer Sosandar (SOS) increased interim revenues by 53% to £2.82m with growth accelerating in the second quarter to September 2019. October revenues were more than £1m. Sosandar is still loss-making, but it could move into profit in 2020-21. The customer database has been significantly increased.
Parcel delivery firm DX (DX.) says its recovery continues to be on track. It expects to return to profit this year.
Cyber security services provider Shearwater Group (SWG) generated organic revenue growth of 11% in the first half. Overall revenues grew 262% to £16.3m. New managed service contracts provide revenue visibility. There was £1.68m in the bank at the end of September 2019.
A £5m fundraising at 0.15p a share will help Union Jack Oil (UJO) to finance the drilling of two appraisal wells at West Newton, where it has a 16.665% interest. There will also be a side-track well drilled at Biscathorpe.
There will be a second half shortfall in revenues at Malvern International (MLVN) with little improvement on the same period last year. Delays in approving overseas students, plus poor trading in London and Malaysia. WH Ireland has withdrawn forecasts. Cutting out Malaysian losses could enable Malvern to make a profit in 2020.
CAP-XX (CPX) is acquiring supercapacitor manufacturing assets from Murata, which a licensee of CAP-XX IP. This will boost manufacturing capacity and should improve profit. CAP-XX has raised £2.75m and an open offer could raise up to £750,000 more.
Live data systems company WANdisco (WAND) is raising $16.5m at 425p a share, which was a premium of 23% to the previous closing price. This will provide additional working capital. An existing customer has extended its relationship with WANdisco and the contract is worth $500,000.
MAIN MARKET
Interim figures from Associated British Engineering (ASBE) show improved revenues and a lower loss. That is mainly down to a better performance by British Polar Engines. The business has been rationalised and surplus space will generate revenues in the fourth quarter. The pension deficit remains a concern.
Flavourings supplier Treatt (TET) reported flat full year revenues of £112.7m, but a 5% improvement in underlying pre-tax profit to £13.3m. There was a 10% decline in citrus revenues, which was made up for by growth elsewhere. The dividend was raised from 5.1p a share to 5.5p a share. There will be increased US capacity next year.
Nuformix (NFX) is raising £1.25m at 7p a share in order to provide funds while it negotiates deals in Asia and North America for NXP002, which is focused on the treatment for human idiopathic pulmonary fibrosis. There will also be additional money spent on two other treatment programmes.
Highway Capital (HWC) had net liabilities of £908,000 at the end of August 2019. It continues to seek a suitable acquisition.
Blake Holdings is making a mandatory cash offer for Hardy Oil and Gas (HDY) having taken its stake to 42.27%. The 5p a share offer values Hardy at £3.7m.
Andrew Hore
Andrew Hore – Quoted Micro 26 November 2018
NEX EXCHANGE
Blockchain venture builder Coinsilium Group Ltd (COIN) says that RIF Labs is acquiring RSK Labs, where Coinsilium owns 65,000 series Seed-1 preferred shares. The cost of the investment was $83,750. The acquisition is a share for token swap and Coinsilium will end up with 1.95 million RIF tokens, which is the equivalent of 139.4 bitcoins, currently valued at $773,000. However, an initial 12.5% of the consideration will be released six months after the deal is completed and then 2.5% each month for 42 months.
NQ Minerals (NQMI) has entered into an additional marketing and off-take agreement with Traxys Europe. The deal covers the production from the Hellyer project in Tasmania for the first five years. This includes a facility for prepayment.
Tectonic Gold (TTAU) says that its Australian subsidiary has received a A$590,000 tax rebate from the Australian government. A 43.5% rebate is due on qualifying technical expenditure and so far more than A$2m has been received. Spending continues.
Gowin New Energy Group Ltd (GWIN) chief executive Chen Chih-Lung is lending £40,000 to the company for 12 months at an annual interest rate of 2%.
AIM
Music and audio equipment supplier Focusrite (TUNE) is continuing to grow internationally although Asia is growing at the fastest rate. Full year revenues grew by 14% to £75.1m, while pre-tax profit improved from £9.51m to £11.3m. The dividend is 22% higher at 3.3p a share. There is £22.8m of cash in the bank and this could be used for add-on acquisitions. Tariffs on Chinese exports are being used as a way of testing out price rises for the US market. Forecast profit growth is modest but there is potential for outperformance.
Tristel (TSTL) is buying its distributor in Benelux and France and this will enhance earnings. The maximum payment for Ecomed will be €6.8m (£6m) with €5m paid up front. The deal also provides an additional warehouse in Europe. A full year contribution in 2019-20 will increase pre-tax profit by £700,000 to £6.5m.
Sustainable timber supplier Accsys Technologies (AXS) has increased its capacity for Accoya production by 50% and this will help production in the second half. Demand for Accoya is strong and sales increased from €28.3m to €31.1m in the six months to September 2018. The development of the Tricoya plant in Hull is progressing. Construction could be completed in the middle of 2019 and it will breakeven at 40% of capacity. Tricoya, which is used in MDF-type panels, is currently produced from Accoya and this plant will free up Accoya production for other customers. Numis forecasts a rise in full year revenues from €60.9m to €73.1m and a decline in loss to €5.1m. Net debt is expected to be €46m at the end of March 2019 and it will continue to rise because of the capital investment programmes. If partners can be secured in the USA and Asia then this could provide a significant boost to the company.
Initial drilling results at the Havieron licence area in Western Australia provided good news for Greatland Gold (GGP) with two wide zones of gold and copper mineralisation intersected. This significantly extends the known mineralisation.
Immunodiagnostic System Holdings (IDH) is up to its old tricks. The interim figures were published at 5.04pm on Friday 23 November. To be fair this is 14 minutes earlier than the half year trading statement so maybe the company is improving. Here’s hoping. Interim revenues were flat at £18.5m but the company fell into loss. There was £27.8m of cash in the bank (net cash of £26.5m) at the end of September 2018. Maybe some of this should be spent on an alarm clock so management can get up in the morning to release its results.
Chris Jagusz has stood down as chief executive of Redcentric (RCN) as revenue growth has been hard to come by. The latest interims have sparked downgrades for 2018-19 with revenues cut by 5% to £94.2m.
SIMEC AtlantisEnergy (SAE) has singed a joint venture with AD Normandie Developpement and this will enable the commencement of tidal energy projects between France and Alderney. A capacity of 3,000MW is being targeted and there is potential for EU grants.
Innovation software provider Imaginatik (IMTK) has achieved annualised cost savings of £1.2m, but the strategic review held back revenues and new orders in the first half. The cash outflow declined. Trading levels are picking up.
There are no competition concerns about the Ebiquity (EBQ) disposal of its advertising intelligence business to Neilsen Media Research. The business has been underperforming because of the uncertainty and this will enable the deal to go ahead. Ebiquity says that 2018 operating profit will be lower than expected.
Positive news about the Wressle oil project, where the planning officer for North Lincolnshire has recommended approval. The original application was refused two years ago. Operator Egdon Resources (EDR) owns a 30% interest in Wressle, Europa Oil and Gas (EOG) has a 30% interest and Union Jack Oil (UJO) has a 27.5% interest. Humber Oil and Gas owns the other 12.5%.
Integumen (SKIN) has raised £355,000 from a placing at 0.44p a share. This cash will support the development and commercialisation of Labskin. Integumen is paying €40,000 and six million shares to former chief executive Declan Service.
Sutton Harbour (SUH) returned to profit in the six months to September 2018, although the corresponding period had a hefty asset write-down, and it is raising cash for pre-construction funding. An open offer of 77-for-786 at 29p a share will raise up to £3m and close on 6 December. Planning approvals have been received for the Sugar Quay and Harbour Arch Quay schemes in Plymouth.
Electronic and battery products supplier Solid State (SOLI) is starting to improve its performance, although there may still be a decline in full year profit. In the six months to September 2018, revenues were 5% ahead at £23.6m and pre-tax profit improved from £1.55m to £1.66m. The interim dividend was 5% higher at 4.2p a share. The order book was worth £29.6m at the end of September 2018.
TomCo Energy (TOM) has appointed Turner Pope to replace SVS as broker and trading in the shares has recommenced.
SEC (SECG) is acquiring France-based public and corporate affairs business CLAI. An initial 10% stake, but with 50.1% of voting rights, will cost €490,000 in cash. A further stake of 40.01% will be acquired in the second half of 2020 and another 10% in the second half of 2023. The shareholders can ask SEC to buy the remaining shares between 30 July 2025 and 30 November 2025. The final payments are based on an earnout although the maximum will be €8.8m. In 2017, CLAI made a pre-tax profit of €551,000 on revenues of €4.49m. The acquisition could be earnings enhancing. CLAI will continue to be run by existing management.
Majestic Wine (WINE) is finding the UK market tough and margins are coming under pressure. Peel Hunt has reduced its 2018-19 pre-tax profit forecast by £2m to £12.8m, partly due to increased investment in Naked.
Kestrel has increased its stake in Pebble Beach Systems (PEB) to 22.2%.
Another disappointing trading statement from Fire Angel Safety (FA.) has led to a 2018 profit downgrade. Stock problems and delays to orders have hit the smoke alarms supplier. Scottish legislation due to be passed next year should provide a boost to demand. Fire Angel will be loss-making in 2018 but should make a small second half profit.
Legal services firm Knights Group (KGH) says that interim figures will be in line with expectations with double digit organic revenue growth. The interims will be announced on 15 January.
Maritime identification systems developer SRT Marine (SRT) had already flagged its 9% increase in interim revenues to £3.2m and increased underlying loss of £1.3m. There was little contribution from the GeoVS analytics system. There are expected to be significant deliveries in the second half, but timing cannot be guaranteed. A full year profit of around £3m is expected if the deliveries do take place. SRT is no longer considering investing in its own satellite constellation for this business.
FIH Group (FIH) reported flat interim profit, although there was a sharp improvement in contribution by the Momart art and museum logistics business. There was a decline in the performance of the Gosport ferry and Falkland Islands activities.
Lawyer Gateley (GTLY) says interim revenues will be one-fifth higher at £46.4m with around 50% of this organic growth. Full year revenues should be at least £102m. EBITDA margins should be maintained suggesting full year EBITDA of more than £19m. That is slightly higher than previous consensus.
Argentina-focused oil and gas producer and explorer President Energy (PPC) says the first Puesto Flores development well is producing at 600 bopd, having peaked at 1,000 bopd. This is as much as was anticipated from all three development wells. The results from the second development well appear positive and testing is about to commence. finnCap believes that the first well could have a post-tax NPV of $20m.
Pallett developer and manufacturer RM2 International (RM2) is raising £13m at 105p a share, following a 200-for-one share consolidation. This replaces the second tranche of a previously announced placing which would have happened at 1p a share (200p a share equivalent) but RM2 did not meet the performance requirements to spark the other placing. All but one of the investors set to buy shares previously will subscribe to the new placing. The cash will be used to fit track and trace devices to existing pallets, produce new pallets and cover admin costs. The cash will last until next April.
finnCap has sharply downgraded its pre-tax profit forecasts for telecoms services provider Maintel Holdings (MAI) due to project delays. The 2018 figure has been cut from £12.9m to £9.8m and the 2019 figure from £16.1m to £12.7m. The 2018 dividend is still expected to be 34.5p a share, although the cover will fall to 1.6 times. There is a move towards recurring revenues which will have a longer-term benefit for Maintel.
Restaurants operator Tasty (TAST) has revised its £7m term loan facility, which will be extended until March 2022. Quarterly repayments will be reduced from July 2019, by which time the amount draw down will be reduced by £1.1m. Net debt is currently £4.3m.
The NAV of value-focused investment vehicle Gresham House Strategic (GHS) has held up well considering the stockmarket decline. It grew to 1264p a share at the end of September 2018 and it was still 1243.2p a share on 16 November. The stake in IMImobile (IMO) has been reduced but it remains a strong performer. Cloud communications software supplier IMImobile improved its interim revenues by one-quarter and organic growth was 15%. The growth came from the European and American operations. Established customers are buying more services from the company and acquisitions are supplementing growth. Liontrust has increased its IMImobile stake to 21.4% but Kestrel has cut its to below 3%.
Payment protection software provider PCI-PAL (PCIP) is paying former boss William Catchpole his contracted entitlements plus £100,100 in settlement of his claims. The board unanimously asked Catchpole to leave in October. The final loan note repayment of £250,000 has been received from the buyer of the contact centre business.
Digital and media recruiter Nakama Group (NAK) reported flat interim net fees of £2.7m, but it managed to return to profit thanks to reduced costs. Further cost cutting is underway. There was a £558,00 cash inflow from operations and net debt was £488,000.
Antennas developer MTI Wireless Edge (LSE: MWE) has completed its merger with Israel-quoted majority shareholder MTI Computers and the initial benefits will show through in the second half. The interim figures show organic growth in revenues of 2%, but that growth should accelerate in the second half. Water management technology provider Mottech is winning new business and there are good prospects for the other divisions. The NAV is 17.8p a share and the full year dividend could be 1.25p a share.
Two directors have invested nearly £230,000 in shares in Condor Gold (CNR) at 22pa share. Non-executive Jim Mellon took his stake to 7%, while executive chairman Mark Child has reached 6%. Condor has been granted an important environmental permit for the development of a processing plant at its La India project in Nicaragua. SRK Consultants is preparing an updated mineral resource.
Juridica Investments Ltd (JIL) plans to leave AIM as part of the process of winding-up the company. The quotation will be cancelled on 21 December after liquidators from KPMG Channel Islands are appointed. Management fees will be reduced.
Online women’s fashion retailer Sosandar (SOS) continues to build up its sales, having been trading for two years, and they reached £1.84m in the six months to September 2018. The loss was nearly £2m. Returns were 52% but that was put down to a high level of dress sales in the period and it can be more difficult to get the right fit. The benefits of the move to the Magento 2 ecommerce platform and the investment in the website are showing through in the second half. October was a record month. A placing raised £3m after the balance sheet date so pro forma cash is £5.56m.
600 Group (SIXH) has rationalised its UK business and sorted out its pension problems. Interim revenues were slightly ahead but underlying margins improved from 5.1% to 6%. The machine tools and laser marking equipment supplier is expected to improve its full year pre-tax profit from $3.05m to $3.9m.
Motor dealer Cambria Automobiles (CAMB) has performed well considering the dip in the new car market. Used vehicles and aftersales offset some of the decline. There was a 2% decline in revenues to £630m and underlying pre-tax profit fell by 13% to £9.8m. The capital investment programme for new sites has peaked and the benefits of that investment are still to come.
Veltyco Group (VLTY) is still finding it difficult to collect the money it is owed. This means that its cash is running low and this will impact its ability to promote its own brands.
Graphene materials supplier Directa Plus (DCTA) is confident that it will achieve 2018 revenues of €2.3m and this figure could double in 2019. Growth is coming from textiles, environmental and elastomers customers.
Ubisense Group (UBI) is selling RTLS SmartSpace for up to £35m, which is around two-thirds of the software company’s current market value. The group had cash of £6.8m in the middle of November 2018. Funds managed by Investcorp Technology Partners will pay an initial £30m. Liabilities of £3.1m and a loan of £1.75m will have to be paid out of the proceeds. The company’s name will be changed to IQGeo and it will focus on the myWorld product, which helps telecom companies to integrate their technology ecosystem. The myWorld business generated interim revenues of £5.7m but £3.2m was geospatial services from third party products. Some of the cash will be distributed to shareholders.
The decline in annual pre-tax profit at Stride Gaming (STR) from £18.9m to £14.8m was no surprise given the impact of regulation and tax. The online bingo and gaming company is likely to report a further fall in profit this year. A special dividend of 8p a share has been announced and in future 50% of net earnings will be paid in dividends.
MAIN MARKET
Packaging and labels supplier Macfarlane Group (MACF) continues to grow revenues organically, supplemented by recent acquisitions. Organic growth has been 5% and overall growth is 13%. The fourth quarter is important, though. Full year pre-tax profit is forecast to improve by 47% to £13.6m and earnings per share by one-third to 7p. Acquisition payments should be offset by cash generated in the second half.
S and U (SUS) has increased its investment in Aspen Bridging from £20m to £30m. Aspen has been trading for less than two years and is already in profit.
Creightons (CRL) increased its interim profit by 44% to £1.38m on revenues one-third ahead at £22.3m. The main growth in sales has come from retailer own brands, while Creightons own brands raised their sales by 11%.
David Brown has sold his 4.55% stake in Associated British Engineering (ASBE).
Sealand Capital (SCGL) has formed a new subsidiary called ePurse (HK) Ltd, which is generating commissions from WeChat Pay activities in Hong Kong. Licences have been obtained in the UK and Dubai.
Andrew Hore