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Quoted Micro 23 October 2017
NEX EXCHANGE
Supported housing developer Walls and Futures REIT (WAFR) has improved its net asset value by 4.4% to 94p a share in the six months to September 2017. Interim figures should be published within a fortnight.
African Potash Ltd (AFPO) has decided not to acquire investment company Onshore Energy Ltd and concentrate on its fertiliser business instead. Progress has been delayed but fertiliser trading has started in Zambia and a 21% stake was acquired in Advanced Agricultural Holdings, which is focused on South Africa. There were no revenues in the year to June 2017, although there was trading income of $9,000, and the loss was $2.27m. There was £11,000 in the bank at the end of June 2017. African Agronomix is earning a stake in the company’s potash interests. Trading will recommence in the shares on 23 October.
Black Sea Property (BSP) has €7m of debt, in the form of a mortgage, from UniCredit Bulbank. This will be used to complete the planned acquisition of the office building in Sofia. The loan lasts for three years from completion of the documentation.
Via Developments (VIA1) has completed the purchase of the development site in Latimer Road, Luton.
AIM
Belvoir Lettings (BLV) has approached The Property Franchising Group (TPFG) about a merger between the letting agents but the reaction has been negative. Belvoir believes that the market is consolidating and it makes sense for two of the major players to come together. The indicative offer is 0.715 of a Belvoir share and 52.2p a share in cash for each TPFG, although the amount of cash could be varied. This values each TPFG share at 130.5p.
eServGlobal Ltd (ESG) is raising £24m at 9p a share with existing retail investors given the chance to clawback £3.4m of the shares. Cash is required to be injected into the HomeSend joint venture so that the 35% stake can be maintained. There will also be costs to rationalising the core business in order to help move it into profit.
Overseas growth dominated the Tristel (TSTL) where full year revenues were one-fifth higher, or 7% excluding the acquisition of the Australian distributor. Tristel has already warned that regulatory approval has been delayed in the US but it can still continue to grow its infection control sales. Animal health and contamination control revenues fell but margins improved. House broker finnCap forecasts an improvement in profit from £4m to £4.4m this year.
Secure payments and contact centre technology provider Eckoh (ECK) continues to add contracts in the US while UK revenues are steady. Seven US contracts worth $5.1m have been won. Eckoh has moved into a net cash position of £1.7m. Interim figures will be reported on 22 November.
Telecoms software supplier Artilium (ARTA) has formed an alliance with NYSE-listed Pareteum Corporation, which involves the sharing of distribution, products and technology. The focus will be Latin America and Asia. A share exchange will mean that Pareteum will own 8.8% of Artilium, which will own 19.9% of Pareteum. Artilium is opening a new office in Germany.
Cloud-based communications software provider Cloudcall Group (CALL) is raising £5.7m at 143.5p a share and the cash will help to finance further growth. Cloudcall wants to take advantage of its partnerships with Microsoft Dynamics and Bullhorn and attract new partners.
Proteome Sciences (PRM) says that its deal pipeline is improving but the adoption of its proteomic services has been slower than hoped. This year the loss will be reduced but it will be higher than previously expected. Proteome has gained Good Clinical Laboratory Practice accreditation which will enable it to take on larger clinical projects.
Sula Iron and Gold (SULA) is evaluating the best way to develop the Ferensola gold asset as well as seeking to bring other assets into the group. There could be a joint venture or farm out at Ferensola and Sula intends to solicit interests from potential partners.
Hornby (HRN) is ending the discounting of its stock but it will still hit the figures for this financial year. New chief executive Lyndon Davies continues to review the business strategy and more will be revealed with the interim figures. The interim chairman is leaving the board.
BP Marsh (BPM) has increased its NAV from 273p a share to 304p a share in the six months to July 2017. Disposals brought in significant amounts of cash and this is being reinvested. One of the main focuses of the investment is the North American market.
Infinity Energy S.A. (INFT) is in talks to acquire Transgas Ltd from its own chief executive and its family. Transgas owns petroleum exploration licences in south west England. Infinity will issue shares for the purchase if it is agreed and it intends to change domicile from Luxembourg to Guernsey.
Molecular diagnostics firm Genedrive (GDR) has signed a distribution agreement with Sysmex Europe for the supply of the Genedrive hepatitis C (HCV) ID kit, which is designed to be used in a decentralised environment and produce results within 90 minutes. This is the first commercial partner and Sysmex will be responsible for marketing and distribution in the EMEA region. The initial focus will be African companies.
RNA therapeutics technology developer Silence Therapeutics (SLN) is claiming money in the High Court for income it believes it is owed on products sold by Alnylam. The High Court has to determine whether Silence is entitled to supplementary protection certificates, which can give up to five years of exclusivity after a patent expires
Seeing Machines (SEE) believes that it could treble its revenues this year to between A$38m to $A43m and revenues could double again next year. However, cash is in short supply so investment has been curtailed. New investment is being sought. Interest is building in the automotive sector for the FOVIO driver monitoring technology.
Jim Meredith has become executive chairman of Augean (AUG), following the resignation of Stewart Davies as chief executive, and Christopher Mills and Roger McDowell, who stepped down in June 2015, have joined the board as non-executives. Augean continues to have problems with the HMRC regarding its landfill tax assessment and profit will be lower this year and in 2018. A further £1.7m is being cut from annual overheads.
Futura Medical (FUM) has received positive market research from fellow AIM company Cello (CLL) for its MED2002 gel for erectile dysfunction. More than three-fifths of physicians canvassed in the US thought that MED2002 was better than existing treatments. The equivalent figures in Germany and France were 60% and 54% respectively.
Concepta (CPT) has signed up two distributors in China for its MyLotus fertility product. This takes the number of distributors to three and more will be signed up in the coming months. The product is being evaluated for use after a woman has got pregnant.
Sunrise Resources (SRES) has discovered a new deposit at the CS Pozzolan-Perlite project in Nevada. There have also been positive drilling results in the existing deposit areas.
Omega Diagnostics Group (ODX) has signed a three year agreement to supply food intolerance product FoodPrint to a US laboratory testing services provider.
Thor Mining (THR) is moving to a phase of progressing the commercialisation of its exploration interests. There has been a resource upgraded at Pilot Mountain and there will soon be a resource estimate at Kapunda. The options for progressing with the development of the Pilot Mountain and Molyhil projects are being considered. A placing will raise £565,000 at 0.8p a share. There is a warrant with each share which enables the holder to subscribe for a new share at 1.2p.
Strategic Minerals (SML) has entered into a binding term sheet to acquire the owner of the Leigh Creek copper mine project, which is the northern Flinders Ranges in South Australia. It will cost A$1.8m to restart production at the mine. Strategic has to inject A$1m into the holding company, pay A$250,000 in cash and A$750,000 in shares to the current owner and agree a royalty agreement with them which will be capped at A$3.65m. The Cobre magnetite ore operation in New Mexico had a record quarter to September 2017. Revenues were $2.04m, which was more than the first six months of 2017 and for 2016 as a whole. Annual sales should exceed $5m and this provides cash flow for other projects. Strategic had $1.63m in the bank at the end of September 2017. Shareholders have agreed to a new option programme for management.
MAIN MARKET
Sportech (SPO) has put itself up for sale, although the strategic review continues. There have already been four preliminary proposals but no detailed discussions have commenced.
InnovaDerma (IDP) has been criticised by the Advertising Standards Authority for some of its online advertising for Skinny Tan. Trading is in line with expectations.
Andrew Hore
Quoted Micro 17 July 2017
NEX EXCHANGE
Renewable electricity supplier Good Energy (GOOD) says rival Ecotricity, which owns 25.3% of Good Energy, has requisitioned a general meeting to get two directors, Dale Vince and Simon Crowfoot, on the board. Ecotricity founder Dale Vince believes that because of the significant stake he deserves representation on the board but Good Energy argues that it would not be in its interest to have a rival on the board with access to group information. Vince has been critical of contracts between Good Energy and chief executive Juliet Davenport’s husband. Ecotricity also owns Forest Green Rovers which was promoted to League Two at the end of last season. Annual revenues £126.5m, including £1m from football club. In the year to April 2016, revenues were £126.5m, including £1m from the football club. In 2016, Good Energy generated revenues of £90.4m. Both companies are profitable. Ecotricity had net debt of £97m at the end of April 2016, while Good Energy had net debt of £55m at the end of 2016. Gary Peagram (former Good Energy finance director between 2010 and 2014) was appointed as Ecotricity finance director on 6 April 2017 but he left on 6 July.
MetalNRG (MNRG) has acquired 18.18% of US Cobalt and an option to purchase the rest. The main interest is the Columbia Pass high grade cobalt exploration and development project in Nevada. The initial stake will cost $200,000 (£118,000) and the option cost $50,000 (£30,000) in shares at 1.5p each. If it takes up the option, MetalNRG will pay £724,000 in shares at 1.5p a share. The vendors will also receive 40 million warrants exercisable at prices up to 10p a share. MetalNRG has also set up an Australian cobalt subsidiary. MetalNRG chief executive Paul Johnson has bought 300,000 shares at 1.5p each, taking his family’s stake to 11%.
Hydro Hotel, Eastbourne (HYDP) is starting to benefit from its new general manager’s strategic programme. Interim revenues grew from £1.33m to £1.52m but the loss increased because of repair costs. The second half generates all the profit.
Milamber Ventures (MLVP) has launched the Milamber Education Technology Fund in partnership with Innvotec. This is a hybrid EIS and SEIS fund. Milamber will help to identify potential education technology investments and Innvotec will raise funds and manage the fund.
Global Halal verification e-marketplace operator DagangHalal (DGHL) says it is taking longer than expected to penetrate markets. Management is considering widening the scope of the business. This could mean the acquisition of producers of Halal products.
Bulgaria-focused property company Black Sea Property (BSP) has gained the official approvals to acquire the UniCredit building and the purchase should be completed by the end of September. A deposit of €1.04m has been paid out of the total purchase price of €10.5m and Black Sea Property is raising the rest of the cash. If the cash is not raised then the deposit will be forfeited. Phoenix Capital Management is taking over from AG Asset Management as investment adviser but the same team will be handling the task. Phoenix owns Mamferay Holdings, which owns 28.65% of Black Sea Property and has lent it £100,000 in the form of a convertible which has to be repaid by 31 July.
AIM
Nostra Terra Oil & Gas (NTOG) has withdrawn its general meeting requisition at Magnolia Petroleum (MAGP) after it became clear that it had no chance of winning any of the votes.
Chisbridge Ltd has received acceptances totalling 49.6% for its 42p a share cash offer for InterQuest Group (ITQ) and the bid has been extended until 31 July. This means that independent shareholders owning 6.92% of the company have accepted the bid, which is up from just short of 3% previously.
First half trading at Pennant International (PEN) was strong and the order book was more than £42m at the end of June 2017. The order book stretches out into 2020 and there is a pipeline of other potential orders. Full year pre-tax profit is forecast to increase from £2.2m to £2.4m. There is a possibility of a return to paying dividends but that might have to wait until next year.
In the year to March 2017, AdEPT Telecom (ADT) reported a 19% increase in revenues to £34.4m, while underlying pre-tax profit improved from £5.5m to £6.9m. Net debt was £15.5m at the end of March 2017, following spending on acquisitions. The total dividend also rose by 19% to 7.75p a share. The growth in managed services is helping margins to improve. A profit of £7.4m is forecast for this year.
Premier Technical Services Group (PTSG) has increased its revolving credit facility from £10m to £12m and doubled the overdraft facility to £8m. This will provide additional working capital and funds for acquisitions following the recent purchase of Brooke Edge Industrial Chimneys Ltd for £14m.
Savannah Resources (SAV) has raised £1.3m at 5.25p a share and there is one warrant for every two shares issued exercisable at 6p. Two directors have subscribed for £500,000 worth of shares, including chief executive David Archer, and Al Marjan Ltd has subscribed £520,000 to take its stake to 29.3%. The money will be used on the lithium project in Portugal, the Mutamba heavy mineral sands project in Mozambique and the copper project in Oman.
The sale by Stanley Gibbons (SGI) of part of its interiors division to Millicent has been delayed. The buyer has not obtained the £2.25m initial payment because of a change in financial backers. Millicent has until the end of July to complete the acquisition.
Arian Silver Corp (AGQ) has raised £600,000 a 0.5p a unit, which is one share and one warrant exercisable at 0.6p. The cash will be spent on exploration of the three lithium projects where Arian has an option.
Botswana Diamonds (BOD) has discovered a group 2 kimberlite pipe on the Ontevreden licence held by Vutomi joint venture. A 1.5 hectares to 2.5 hectares area is thought to contain high levels of garnet. Drilling will help to better understand of the kimberlite and to find out if it is diamondiferous. A refined grade estimate has been published for the Frischgewaagt project in South Africa. This estimate has a range of 64cpht to 110cpht. The dyke system covers 7.5 kilometres.
Interim revenues will grow by two-fifths at cloud-based software provider Cloudcall Group (CALL) and recurring revenues will be 61% higher. The second quarter was the strongest quarter ever for new orders. Annualised revenues are £7m.
Camper & Nicholsons Marina Investments Ltd (CNMI) is raising £3.3m via a one-for-four open offer at 8p a share, a premium of 33% over the market price. The NAV was €0.154 a share at the end of 2016.
DX (Group) (DX.) has announced that its chief executive and finance director are leaving. The business is being reorganised into two divisions. Revenues are expected to be £292m in the year to June 2017. Net debt was £19.1m.
Sphere Medical (SPHR) is in discussions with potential investors in a share issue. A shortage of sensors has hampered first half sales of blood monitor Proxima 4.
Ramsdens Holdings (RFX) admits that there has been unauthorised access to its IT system but there should be minimal disruption to the pawnbroking business. Trading continues to be strong.
House broker Northland has increased its profit forecasts for online gaming marketing services provider Veltyco Group (VLTY) following its interim trading update. The 2017 pre-tax profit forecast has been upgraded from €4.62m to €5.82m, up from €1.74m in 2016. The 2018 profit forecast is €7.63m.
Rich Pro Investments Ltd has launched a 2.1p a share cash bid for ASA Resource Group (ASA) but the mining company has yet to recommend the offer. The bid values ASA at £35.5m. Rich Pro argues that the high level of creditors and other uncertainties makes its bid attractive.
Angling Direct (ANG) raised £9m at 64p a share when it joined AIM. The group has 15 stores and the retailer wants to be a consolidator in the fishing tackle market.
Venture Life Group (VLG) says that interim revenues will be 28% higher at £7.8m and like-for-like growth was 18%. New product listings will help further growth in the second half.
An interim trading statement by ClearStar Inc (CLSU) suggests that it should be able to meet expectations this year. The employee background checks provider says that the improving employment levels in the US and international growth are helping growth, as is the demand for medical testing. Interim revenues are expected to increase by 12% to $8.9m. A full year loss is still expected.
Sunrise Resources (SRES) is starting drilling at its CS pozzolan-perlite project and it should take around one week to complete. Eleven trenches have been excavated and ten of them contain pozzolan and/or perlite. Sample results will be available in fewer than ten weeks.
Housebuilding infrastructure services provider Nexus Infrastructure (NEXS) has joined AIM. Although £35m was raised by existing shareholders via a placing at 185p a share, the company, which was valued at £70.5m, is not raising any new money. There is already cash in the bank. The share price ended the first week at 188p. In the year to September 2016, revenues grew from £130.9m to £135.7m. That growth appears modest but a change in the mix of business helped underlying pre-tax profit improve from £9.4m to £11m. However, the latest interim profit was lower because of delays to contracts for earthworks business Tamdown. At the end of May 2017, the group order book was worth £187m.
Abzena (ABZA) has secured another licensing deal for its ThioBridge antibody drug conjugate linker technology with a Taiwan pharma company. The value of the deal could be up to £128m in development and commercial milestones.
House broker finnCap has upgraded its 2016-17 forecast for Mortice Ltd (MORT) after a positive trading statement by the security and facilities management services provider. The pre-tax profit forecast has been raised from $5m to $5.3m. Trading in the first quarter of the current financial year shows a 12% increase in revenues even though currencies have moved against Mortice and there were similar increases for each part of the group. Like-for-like growth was 5%.
MAIN MARKET
Standard list shell Rockpool Acquisitions (ROC) floated on 12 July and the share price ended the week at 10.5p. Rockpool is raising £1.085m at 10p a share, having previously issued 1.875 million shares at 8p each.
Fandango Holdings (FHP) also joined the standard list on 12 July. The shell raised £840,000 at 1p a share and is seeking to acquire a company valued at between £1m and £20m. The share price ended the week at 1.25p (1p/1.5p).
PV Crystalox Solar (PVCS) is closing its silicon ingot block manufacturing facility in the UK in the third quarter. The blocks will be sourced from an external supplier. The judgement relating to a customer which failed to buy the amount of wafers it was supposed to is expected by the end of September.
Andrew Hore
Quoted Micro 8 May 2017
NEX EXCHANGE
Mechan Controls (MECP) is selling its main subsidiary to its technical director and intends to sell its other business and return cash to shareholders. The core business is being sold for up to £2m, with a minimum of £1.64m, including £1.24m initially, payable. The final £360,000 is dependent on the buyers selling the 142,300 shares they own in Mechan Controls. This leaves the group with Nirvana Engineering, which made a pre-tax profit of £352,000 last year. The company is changing its name to Mandicon.
Wine maker Chapel Down Group (CDGP) is putting a brave face on the frosts at the end of April. These were the worst frosts in April for two decades. There was a patchy impact with some vineyards impacted and some not. The company says that it mitigates risk by sourcing fruit from a wider area. The potential crop will become clearer in June. A further 129 acres of vineyard will be planted in the rest of this year.
Bulgaria property investment company Black Sea Property (BSP) is still negotiating a loan from UniCredit Bulbank to finance the acquisition of the UniCredit Building. Black Sea Property is paying €10.52m for the building – a deposit of €1.04m has been paid – and €7.6m of this will come from a loan. Once this loan is secured then a share issue can be undertaken. It appears that the deal may not be completed in May as originally envisaged. Unicredit can remain in the building for six months after completion and does not have to pay rent. The deposit will be forfeited if the deal does not go ahead. Black Sea Property has extended the repayment date of £100,000 of the unsecured loan facility from Phoenix Capital to the end of July. Discussions continue about the assignment to Phoenix of the investment advisory agreement from AG Asset Management. Anthony Gardner-Hillman is stepping down from the board and a replacement should be appointed in the near future.
Ace Liberty and Stone (ALSP) has acquired the Grosvenor Casino site in George Street, Manchester for £4m. The annual rental is £300,000. Ace has also bought the company that owns Willow House in Aldershot for £1.05m.
Angelfish Investments (ANGP) says that the loan of £497,500 has been repaid with interest by 4 Navitas. The talks about a joint venture have ended and Angelfish is trying to recover professional fees and expenses. This means that Angelfish has £1.1m in the bank and a loan to One Media Enterprises of $425,500 and it is seeking pre-IPO investments. It should be remembered that Angelfish has £2.3m of preference shares in issue.
Early stage investor Primorus Investments (PRIM) says that cloud-based food service business Fresho has announced that annualised revenues through its platform is nearly A$100m. The platform connects wholesalers and suppliers to restaurants, hotels, independent supermarkets, hospitals, pubs and other retailers. Additional automation will help to boost margins. Primorus, which is also quoted on AIM, invested £175,000 in Fresho in September 2016. Another round of funding is expected early next year. That will provide an opportunity to revalue the existing investment.
Etaireia Investments (ETIP) is buying two office buildings at Whitehouse Office Park in Peterlee, County Durham, with 113 out of the 125 year lease left unexpired. The purchase price of £1.125m will be paid through a combination of 600 million shares at 0.1p a share, giving Taxspecialefx (Peterlee) LLP a 24.3% stake, and cash payment of £525,000 deferred for 12 months. Completion is expected within three months. The annual rental income is £99,500. The seller is entitled to 75% of rental income until the deferred payment is made.
Adnams (ADB) non-executive director Guy Heald has sold 310 B shares at £114 each, raising £35,340. He retains 15.9% of the B shares.
All Star Minerals (ASMO) has raised £40,500 at 0.075p a share. Equatorial Mining & Exploration (EM.P) has raised £14,000 via the exercising of warrants at 0.01p each and it has also issued 110 million irredeemable 0.01p convertible loan notes.
AIM
The new management team has spent 2016 restructuring Quantum Pharma (QP.). One part of the business has been closed and another may be divested. The focus is niche pharmaceuticals and specials. In the year to January 2017, pre-tax profit dropped from £10.1m £6.2m. There will be a recovery in profit this year but it will take another year for profit to get back to £10m.
Podcasts supplier Audioboom (BOOM) has increased its revenues from £192,000 to £1.31m although it continues to lose money. There is already more than £3m of recognised or pre-booked advertising for 2017. Audioboom has built up its user base and it has started to generate revenues on the back of that. The acquisition of advertising technology firm SONR should help to further target advertising. Audioboom will make a further loss this year and, even after raising around £5m, the net cash is expected to be less than £1m at the end of 2017.
Management spent a significant amount of time last year sorting out the operations that Inspiration Healthcare (IHC) inherited when it reversed into the AIM-quoted business. This meant that underlying profit was flat at £1.1m. Demand for pre-natal care equipment and services is rising. There is scope for further organic growth and for acquisitions.
Pennant International Group (PEN) says that Lockheed Martin has increased the size of a contract from £200,000 to £2.2m, with potential for me. The total order book is worth more than £35m.
A concept study for the CS pozzolan-perlite project has persuaded Sunrise Resources (SRES) to focus on the project. It is thought that the 100%-owned project should have low caped and operating expenses thanks to surface mining and simple production processes. The pozzolan mined can be used as a greener alternative to Portland cement. There are no defined resources yet.
Onshore oil and gas explorer Egdon Resources (EDR) has submitted a new planning application for the Wressle field development. This follows the rejection of the previous planning application by North Lincolnshire Council. Egdon is also appealing the original decision.
Verona Pharma (VRP) raised $80m at the time of its flotation on Nasdaq. The shares were issued at 132p each and the ADSs issued in the US at $13.50 each – one ADS represents eight shares. The ADSs are trading on the Nasdaq Global Market. Last month, respiratory disease treatment developer has received authorisation from the FDA to proceed with a clinical trial for RPL554.
Manufacturer of professional audio equipment Focusrite (TUNE) produced good interim figures thanks to strong sales in North America. Interim revenues were 24% higher at £32m with pre-tax profit 89% ahead at £4.6m. Net cash is £9.4m and the interim dividend was raised by 15% to 0.75p a share. . Edison has upgraded its 2016-17 pre-tax profit forecast from £8m to £8.5m.
The Article 6 Marital Trust has become the largest shareholder in FIH Group (FIH), with 28.9%, following the sale of shares by Blackfish Capital Alpha Fund and former bidder Staunton Holdings at 300p each. Edmund Rowland has stepped down as chairman.
PowerHouse Energy (PHE) has moved its ultra high temperature gasification waste to energy G3-UHt unit to the Thornton Science Park, operated by the University of Cheshire. This will enable further development and opportunities for demonstrating the technology.
LED lighting products developer Photonstar LED (PSL) has taken advantage of a sharp share price recovery to raise £465,000 at 1.25p. The cash will be used to roll-out new product ranges.
Sanderson Group (SND) says that interim figures are in line with expectations. The retail and manufacturing software provider increased interim revenues from £9.86m to £10.9m – just under 50% is recurring revenues. Digital retail revenues were one-fifth higher. Net cash was £4.51m at the end of March 2017. Full year pre-tax profit is expected to rise from £3.44m to £3.72m. The interims will be published on 24 May.
Strategic Minerals (SML) is acquiring its joint venture partner’s stake in Central Australia Rare Earths for £522,500. Larger amounts of funding will be required to explore the resource than originally thought. Cash generated from Cobre in New Mexico will be used to finance this investment.
Digital audio technology developer Frontier Smart Technologies (FST) says that its first half revenues is significantly ahead of last year and full year EBITDA is set to be well ahead of expectations with margins higher than anticipated. Analogue radio has been switched off in Norway and there is strong demand for digital radio across Europe. Smart audio contracts have been won and there will be a better indication of progress in the second half.
Gas producer Ascent Resources (AST) has re-entered the second well at the Petisovci gas field in Slovenia. The well is being prepared for production, which should take four weeks. There has been a further objection to the Integrated Pollution Prevention and Control permit, which it requires to build a gas processing plant so more gas can be produced.
DP Poland (DPP) says that system sales grew by 21% in the first quarter of 2017. There have been eight stores added this year and a new commissary is under construction.
Accident prone Redcentric (RCN) appears to be sorting itself out but it is not out of the woods yet. Net debt is estimated at £39.5m at the end of March 2017 and the bank appears to support the company. Waivers have been received for covenant breaches and there were large exceptional charges. The underlying pre-tax profit is forecast to rise from £6.3m to £9.1m.
MAIN MARKET
Personal care products supplier InnovaDerma (IDP) has acquired the owner of the IP for Prolong, the only FDA-approved medical device for the treatment of premature ejaculation, a market valued at more than $1bn a year. This is part of a strategy to build up a life sciences division. Prolong is a non-prescription, vibrating medical device that is used in training in order to increase time between arousal and ejaculation. The device could cost between £250 and £300. InnovaDerma is paying £1m in shares, issued at a 25% discount to the market price minus the settlement of current liabilities at the current share price – estimated at £323,600. On top of this, a royalty of £11 per unit sold will be paid until the patent runs out in 2031 and if Prolong generates an operating margin of 20% in any year a bonus of £150,000 is payable. Prolong will be launched in North America in the second half of 2017 and Europe and Australia next year. InnovaDerma also announced that its self-tanning Skinny Tan products will be available on the ASOS website.
Opera Investments (OPRA) is going ahead with its acquisition of Kibo Gold from AIM-quoted Kibo Mining (KIBO) for £3.66m in shares at 6p each and moving from the standard list to AIM. The acquisition has the Imweru and Lubando gold projects in Tanzania. Opera is also raising £1.5m at 6p a share – it already had £486,000 in the bank. The Imweru project could be producing 50,000 ounces of gold a year within two years. Opera is changing its name to Katoro Gold.
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
Quoted Micro 13 March 2017
NEX EXCHANGE
Blockchain technology investment company Coinsilium Group Ltd (COIN) has raised £188,000 at 1p a share with the cash coming from directors and existing shareholders. The valuations of Factom and SatoshiPay have increased since the beginning of the year. Potential new commercial opportunities are being reviewed. Coinsilium is also raising its own profile so that investors’ are aware of the potential investment.
Middle East-focused investment vehicle Indigo Holdings (INGO) has announced its second investment, which is in Net Tejarat Ahoura, which operates an Iranian online classifieds marketplace. A stake of 1.09% was assigned to Indigo by Turquoise Group, which owns 32.1% of Indigo, in return for assuming the commitment to provide an interest free loan of €376,000 (£320,000). Related parties own 14.1% of Net Tejarat. There was net cash of £818,000 at the time of flotation and Indigo previously spent €176,800 (£150,000) on a 5% stake in Iranian car ride sharing app Carvanro.
Technology incubator Milamber Ventures (MLVP) has entered discussions with Barney Battles and he has suspended his general meeting requisition. The one million shares issued to acquire League of Angels has been cancelled because the transaction was not completed. Milamber has added six portfolio companies taking the total companies that it works with to 25. Milamber is providing funding support to all six as well as strategic advice and/or business planning to some. Milamber has raised just over £9,000 from an issue of shares to its executive chairman Andrew Hasoon at 12.5p a share.
MetalNRG (MNRG) has appointed Paul Johnson as chief executive. He was already on the board as a non-executive director and he is also a non-executive of Thor Mining (THR). The management is keen to attract more trading in the shares by taking advantage of the potential opportunities in the resources sector.
Property investment company Ace Liberty & Stone (ALSP) plans to consolidate 25 existing shares into one new share so it is no longer perceived as a penny share. The shareholder meeting will be held on 31 March. Kryptonite1 (KR1) is also consolidating its shares. Nineteen shares will be consolidated into one new shares with the shareholder meeting being held on 3 April.
Western Selection (WESP) has sold 130,000 shares in AIM-quoted toiletries and cosmetics supplier Swallowfield (SWL) for 320p each. Western Selection still owns 1.5 million shares in Swallowfield, where the share price has doubled over the past nine months. The recent interims showed a quadrupling of underlying operating profit of £2.54m and a more than doubled interim dividend from 0.8p a share to 1.7p a share – the shares go ex-dividend on 4 May.
AIM
Plant Impact (PIM) continues to increase its Veritas sales to soybean farmers in Brazil and Paraguay and Bolivia are the next markets it is trying to break into. Another treatment, Fortalis, is being launched in Argentina and the US. In the six months to January 2017, revenues increased from £4.22m to £4.91m, helped by currency movements, with Brazil still dominating sales. Higher sales and marketing and R&D costs meant that there was a loss of £333,000, compared with a pre-tax profit of £541,000. There is £6.03m in the bank which is enough to cover cash outflows for the next year or so.
Strategic Minerals (SML) says that drilling will start by the end of March at the 50%-owned Redmoor tin/tungsten project in Cornwall. The first phase of drilling is 13 holes and the second is 10 holes with potential for six more. This drilling programme is fully funded. On top of this, significant cobalt mineralisation has been identified at Hanns Camp in Western Australia. The company has raised £50,000 via the exercise of warrants at 0.6p a share by Cornhill Capital. There was $1.2m in the bank at the end of 2016 but this was before the £844,000 payment to take the 50% stake in Redmoor.
Remote meetings technology provider LoopUp (LOOP) sharply reduced its loss in 2016 and the cash raised in last year’s flotation should reduce interest costs which were the reason there was a loss in 2016. There was a swing from an operating loss of £353,000 to a £398,000 operating profit in 2016. There is net cash of £2.24m, against net debt of £7.3m at the end of 2015. There was cash generated from operations of £3.29m but that was not enough to cover capital expenditure, which was predominantly capitalised product development investment. There are £12.6m of accumulated tax losses.
Advanced materials developer Versarien (VRS) raised £1.5m at 15p a share via PrimaryBid, having initially tried to raise £1m. All the applications were satisfied. Henderson and Miton each subscribed for 1.33 million shares. The cash will be used to scale up graphene manufacturing facilities and finance the marketing of the Nanene brand.
The People’s Operator (TPOP) is raising a further £1.58m at 8p a share and every two shares will have a warrant attached that is exercisable at 15p a share. The recent fundraisings were at 5p a share. The mobile virtual network operator has confirmed that 2016 revenues were £3.6m and there has been strong growth in US revenues in the first two months of this year. Management has negotiated much better terms with its network providers in the UK and US.
Immupharma (IMM) has raised £4.1m at 52p a share having initially asked for £3m. The drug discovery company has brought new institutions to its shareholder list. Immupharma is negotiating with potential partners for lupus treatment Lupuzor, which is in a phase III trial and the cash will strengthen the balance sheet as well as providing investment in other treatments.
Palm oil waste products-based biogas power generation plants operator Green & Smart Holdings (GSH) says that its figures for the year to September 2016 were in line with expectations but there have been delays in new plants. House broker SP Angel had expected half of forecast 2016-17 gross profit to come from electricity generated by these four projects.
The sale of the broadcast equipment division of Pebble Beach Systems (PEB), formerly Vislink, to xG Technology Inc is not going smoothly. Instead of paying the next part of the deferred consideration xG has taken on responsibility to pay $1.6m of trade creditors. This leaves $4.9m owed but xG says that this payment will be dependent on Pebble’s performance of its contractual obligations. Until outstanding liabilities are clarified xG says that it will not pay any more deferred consideration. The buyer claims that “numerous breaches of contract” have occurred. It is difficult to say whether this is just a negotiating ploy.
Ascent Resources (AST) expects to start untreated hydrated gas production from Pg-10 in the Petisovci gas project in Slovenia in early April. This will provide initial revenues prior to the sale of gas to Croatia later in the summer. Ascent has decided not to lease a dehydration plant and instead it will refurbish the existing plant on the site.
Thor Mining (THR) has reported positive drilling news at the Pilot Mountain tungsten project in Nevada and plans a third drill hole. The second drill hole has intersected 51 metres of mineralisation. The drill hole sample assays should be analysed by the end of April. The third hole is 25 metres to the east of the second hole. Paul Johnson (see MetalNRG) has acquired 500,000 shares at 1.13p each, taking his stake above 2%.
Sunrise Resources (SRES) has raised £250,000 at 0.1p a share. The cash will be used to finance projects in Nevada.
MAIN MARKET
Shares in Ocelot Partners Ltd (OLOT) commence trading on the standard list on 13 March. The cash shell has raised $417.7m at $10 a share. The proposed acquisition is expected to be involved with the European technology, media or telecoms sectors. Management has been involved with other standard list shells, including Nomad Holdings, which acquired frozen foods businesses including Findus.
BATM (BVC) has weathered a difficult 2016 and is in good shape to improve its performance in 2017. A delayed contract hit the network and cyber division but this should be delivered this year. Strong diagnostics activity offset the weaker waste treatment business, enabling the bio-medical division to report flat revenues. finnCap expects the 2016 loss of $3.3m to be turned into a pre-tax profit of $1.5m this year. There was net cash of $23m at the end of 2016, although around £580,000 has been spent on acquiring Israel-based Zer Laboratories.
Bio-decontamination services provider Bioquell (BQE) reported flat revenues of £26.5m and the underlying pre-tax profit improved from £900,000 to £1.6m. There was a £1.5m charge for board restructuring and write-down of intangible assets. The full benefits of last year’s restructuring will come through in 2017. Having returned £40.8m to shareholders, net cash was £8.8m at the end of 2016.
Oil and gas explorer Aminex (AEX) says that the Ntorya-2 well has been successfully tested and it has confirmed that the area should contain a significant amount of gas but there are production difficulties to overcome. Aminex owns 75% of the Mtwara licence in southern Tanzania. Once a full analysis of technical data is complete Aminex will apply for a 25-year development licence over the area. Joint broker Shore Capital says that it is likely to increase its NAV estimate of 3.9p a share on the back of the news.
Electronic Data Processing (EDP) says the original potential bidder has withdrawn but a different bidder has started talks with the board. There was £6.56m in the bank at the end of February 2017 and EDP will consider returning some cash to shareholders if there is no bid. This could depend on the level of distributable reserves, which could be hit by the next pension scheme revaluation.
Andrew Hore
Quoted Micro 20 February 2017
NEX EXCHANGE
Forbes Ventures (FOR) has taken a 0.84% stake in potential challenger bank Civilised Investments in return for £200,000 in cash. The cash investment was raised through a placing of shares at 0.5p each with Gravity Investments, which owns 62.1% of Forbes. A further six million shares were issued at the same price to settle fees. Civilised is applying for a UK banking licence in June 2016. The strategy is not to have branches but local bankers will provide loans and business banking products by attracting personal savings.
Kryptonite1 (KR1) has invested £99,905 for 25,811 tokens in Melonport AG, which is building its own blockchain protocol for digital asset management built on the Ethereum platform. Melonport raised $2.5m in 14 minutes.
NQ Minerals (NQMI) has raised £128,750 at 0.8p a share. For working capital. Daniel Stewart has been appointed as corporate adviser.
FT8 (GFT) has failed to secure the agreed monthly payments from Billyst Holdings and this means that trading in the shares of FT8 has been suspended because of the company’s uncertain financial position.
AIM
Floorcoverings manufacturer Victoria (VCP) has moved into Continental Europe through the acquisition of Avalon and GrassInc for an initial £9.7m in cash with deferred and contingent payments of up to £12m over four years. This is an important part of the overall strategy for the group and it also takes Victoria into the artificial grass market. The deal should be immediately earnings-enhancing with the two businesses making a 2016 operating profit of £3.6m.
Construction dispute resolution services provider Driver Group (DRV) has raised £8m at 40p a share – a 15% discount to the market price – in order to reduce borrowings and grow the business. There is also a one-for-26p open offer at 40p a share that could raise up to £500,000 – closing on 8 March. Driver has negotiated new banking facilities of £8m, down from £12m, and this expires in 2020. Net debt was £9.9m at the end of September 2016. Driver made a loss in the year to September 2016 but it moved back into profit in the second half. In the past year, Driver has reduced annualised overheads by £1.3m, cut underperforming fee earners, improved cash collection and implemented more rigorous bidding controls. Driver plans to scale down the project management operations and the main businesses should be sold by the end of this financial year. South America and eastern Europe have been identified as growth areas. New non-executive director John Horgan has been appointed as a replacement for David Webster.
Fuel cell technology developer AFC Energy (AFC) has raised £6m, £5.5m net of expenses, at 10p a share – a 40% discount to the market price. Up to £2m more could be raised from a one-for-15 open offer at the same share price – closing on 2 March. The cash will be used to deliver commitments on the joint development agreement with De Nora, additional testing and a scoping study with Peel Environmental for potential projects. Jim Gibson has been appointed as chief operating officer.
Middlesbrough-based pawnbroker Ramsdens Holdings (RFX) joined AIM on 15 February. The placing will raise £15.6m at 86p a share, valuing the company at £26.5m. The share price ended the week at 95.5p.
Tracsis (TRCS) disappointed the market with a warning that delays in contracts means that this year will be even more second-half weighted and there is still uncertainty whether certain software contracts will complete in this financial year. The transportation optimisation software and services provider still believes it can achieve this year’s forecast profit but the market was not as sure. The share price fell by nearly one-third following the trading statement and Downing is one investor that has added to its stake having previously taken profits. Interim revenues will grow from £13.1m to £15.5m but pre-tax profit will only be slightly higher than last year’s figure of £2.9m. The full year outcome could depend on the rail franchise bid timetable.
Higher LED sales helped Holders Technology (HDT) to increase overall revenues by 2% to £11.4m but the LED business is still losing money and a German business has been closed. The underlying loss increased from £141,000 to £195,000, prior to restructuring costs of £183,000. An increases in trade creditors meant that cash improved to £781,000. A final dividend of 0.25p a share is proposed. There are signs of an improvement in demand for printed circuit board materials and new smart lighting products should boost the LED business.
Vela Technologies (VELA) has raised £550,000 from a bond issue via the UK Bond Network. This should enable Vela to complete the additional investment of £150,000 in Portr, the airline passenger facilitation and baggage transport service, taking its stake to 4.27%.
Collagen Solutions (COS) is raising up to £8m from a placing and one-for-five open offer at 5p a share and this will be topped up with a £4m bond issue to Norgine Ventures, which has a coupon of 10% and 6.77 million warrants exercisable at 5.911p each. The cash will finance the expansion of the medical collagen business, commercial medical device products and launch ChondroMimetic, which is a collagen-based implant to treat small cartilage and bone defects, later this year.
Online gaming business generator Veltyco Group (VLTY) says that its 2016 figures will be significantly better than expected. An EBITDA of more than €2m, up from the initial forecast of €1.4m, on revenues of more than €5.7m, ahead of a forecast of €4.9m, is anticipated.
Evgen Pharma (EVG) has signed a services agreement with APTrans, a Cheshire-based consortium of drug developers that can provide technical expertise, for the development of SFX-01. A US patent has been granted covering the manufacturing process for SFX-01. The patent lasts until 2033. Further patents are expected to be awarded around the world.
Ascent Resources (AST) raised £3m at 1.85p a share in its latest fundraising via PrimaryBid.com. The cash will be spent on developing the Petisovci gas project in Slovenia.
Self-storage operator Lok’nStore (LOK) says that self-storage sales were 3.9% higher, thanks to higher occupancy, and document storage sales 8.8% ahead in the first half. There is a pipeline of two owned and two managed stores, which will add 14% to capacity. NAV is expected to be 404p a share at the end of July 2017.
PowerHouse Energy Group (PHE) has raised £2.5m at 0.8p a share on the back of last week’s deal with Peel. Hillgrove will receive £2m as part-payment for its loan with £1.4m converted into shares at 0.5p each. A G3-UHt waste to energy unit is being shipped from Australia and should reach the UK in March.
Allergy Therapeutics (AGY) is starting a phase I clinical study for safety and tolerability of Acarovac MPL as a house dust mite allergy vaccine. The trial will be in Spain, covering 32 patients and lasting one year. The global market could be worth $1.5bn a year.
Patient monitoring equipment developer LiDCO Group (LID) says that its 2016-17 revenues will be slightly lower than forecast but it will make a small profit. The loss of a US customer held back growth with revenues 8% ahead at £8.2m, although revenues from group products were 14% higher this was partly offset by lower sales of third party products.
EP Minerals has terminated its lease over the County Line Diatomite project, so Sunrise Resources (SRES) will need to find an alternative method of commercialising the potential project.
Keras Resources (KRS) says that there is a JORC-based inferred mineral resource of 36,000 ounces of gold at a grade of 6.1g/t for the Copenhagen deposit. This means that the Warrawoona gold project has a JORC mineral resource of 410,000 ounces of gold at a grade of 2.2g/t. The focus will be the higher grade Copenhagen deposit, which has more potential.
Mariana Resources (MARL) has completed three of seven planned drill holes at the Ergama project in Turkey and two of these have found large but low grade deposits.
Executive chairman John Hawkins has been given the push by Pebble Beach Systems (PEB) as part of the closure of the group’s head office following the disposal of the Vislink broadcast equipment business. Hawkins received £260,000 a year as chief executive and £100,000 a year as chairman and his contract stipulates 12 months notice. John Varney becomes non-executive chairman. The bank apparently remains supportive and the 2016 figures will be published on 31 March.
Cloud-based telecoms software supplier CloudCall Group (CALL) says that customer relationship management software provider and corporate partner Bullhorn is deploying CloudCall’s software with its US staff. This will provide a reference for potential US customers of a combined software package. Full year figures will be published on 28 March and these will be in line with expectations.
MAIN MARKET
Simian Global (SMG) has signed a non-binding letter of intent to buy BVI-incorporated media and advertising business GVC Holdings Ltd. Standard list shell Simian Global floated on 10 January when it raised £769,500 at 15p a share. This valued the company, which was seeking a technology, media and telecoms sector acquisition, at £935,000. Trading in the shares was suspended at 17.5p.
Avation (AVAP) is trading at a discount of around one-fifth to its NAV of 249p a share at the end of 2016. In the six months to December 2016, the aircraft leasing company’s revenues were 43% ahead at $45.1m and pre-tax profit 50% higher at $8.4m. Bid discussions for 22 ATR 72 aircraft continue but management wants a significant premium to the NAV.
PRE-IPO / OTHER TRADING FACILITIES
Former AIM-quoted Clinical Computing, which is currently traded on Britdaq,has initiated a strategic review and this could lead to the sale of the healthcare IT company. In the year to March 2016, revenues fell from £1.67m to £1.5m but a loss of £204,000 was turned into a profit of £23,000. There is £825,000 in the bank and net assets of £654,000, which is more than its market capitalisation on Britdaq.
Andrew Hore
Quoted Micro 30 January 2017
NEX / ISDX
There was a sharp improvement in operating profit from £120,006 to £213,657 at Hydro Hotel, Eastbourne (HYDP) in the year to October 2016. Revenues improved from £3.13m to £3.21m, while gross margin jumped from 9.9% to 13.6%. Pre-tax profit rose from £133,576 to £224,352. Improved marketing has helped to boost trade but the hotel will be hit by increases in the national living wage. Further refurbishment is panned at the hotel. Strong cash generation has increased the cash position from £651,000 to £1.39m. The second interim dividend is being raised from 12p a share to 14p a share, taking the total to 21p a share, up from 18p a share.
Rail track technology supplier Wheelsure Holdings (WHLP) reported an increased loss in the year to August 2016 because of higher admin expenses. Pre-tax loss moved from £228,000 to £262,000. Revenues increased by 21% to £290,000 even though London Underground orders have been delayed by budget restrictions. Orders have been received since the year end. Wheelsure has issued shares at 1p in lieu of £14,000 of commission owed to the company’s Italian agent, which has generated the first order for track equipment incorporating Tracksure.
Ashley House (ASH) remained profitable in the six months to October 2016 even though trading conditions were tough and there remains uncertainty about government funding for supported housing. It does appear likely though that there will be increasing demand for extra care housing schemes. Interim revenues were flat at £10.7m and the gross margin was much lower. The underlying pre-tax profit was halved to £200,000. Full year profit is still forecast to rise from £1.2m to £1.5m but this depends on three schemes reaching financial close by April.
Building projects manager and developer Formation Group (FRM) maintained its pre-tax profit at £2.2m in the year to August 2016, even though the recognised profit share from the development at Norwich House in Streatham fell from £2.42m to £1.42m. Group revenues were one-quarter higher at £29.4m helped by sales of apartments at Iverson Road, London N6. There was also a £1.02m post-tax write back relating to past properties. NAV increased from £7.6m to £10.4m. Since the year end, cash has been received from disposal proceeds, which will reduce net debt from £3m.
Mechan Controls (MECP) has appointed administrators from Leonard Curtis to its subsidiary PJO Industrial, following a deterioration in its prospects. PJO supplies mining and pipe laying equipment. Mining demand has been weak. PJO was hit by a bad debt in 2015 and lost £206,000, while net liabilities were £514,000.
Forbes Ventures (FOR) has raised £530,000 from Gravity Investment Group at 0.3p a share. Gravity has a 60.8% shareholding in Forbes. The bulk of the cash will be invested in £500,000 worth of 12%, two-year convertible loan notes in residential care provider Primus Care, where Gravity director Chris Bateman is on the board. The conversion price will be 80% of the fair market value of an ordinary share.
There was further fundraising activity last week. NQ Minerals (NQMI) has raised £125,000 at 7p a share in order to finance working capital. Energy efficiency products supplier Sandal (SAND) has raised £52,000 at 28p a share. Milamber Ventures (MLVP) executive chairman Andy Hasoon has invested a further £16,300 in the technology investment company at 13.55p a share. Property investor Etaireia (ETIP) has generated £10,000 from the issue of shares at 0.09p each.
United Cacao (UCL) has raised further concerns about former chairman Dennis Melka. This involves a number of loans which were not previously disclosed. It also turns out that the small farmer programme has planted 70 hectares and not 194 hectares as said in the interim figures. The Peru-based cacao plantation operator has extended the exclusivity agreement with existing investors, in order to try to secure the long-term financial viability of the business, to 31 March. Cash is being raised from bond issues at large discounts. Just over $515,000 has been raised from the issue of $3.45m of nominal value bonds with a 7% coupon. One of the company’s directors will invest a further $40,000 at 18 cents per $1 bond.
AIM
Scientific instruments manufacturer Judges Scientific (JDG) had a strong end to 2016 and order intake grew organically by 3% during the year. This was too late to benefit the 2016 figures where slow orders and manufacturing problems had led to disappointment and pre-tax profit is expected to fall to £7.1m. Earnings per share will fall by nearly one-quarter to 82.8p a share. That is line with previously downgraded expectations. The year has started with an order book lasting 13.9 weeks and there are positive foreign exchange movements that will help in the recovery. A 2017 pre-tax profit of £8.6m and earnings per share of 102p are forecast, which is still below the level in 2015.
Imaging and radiation detection products developer Kromek Group (KMK) is raising up to £21m via a placing and one-for-30 open offer at 20p a share. Net cash was £2.3m at the end of October 2016 and the additional cash will provide a significant cushion for the company. Kromek is still a couple of years away from making a pre-tax profit but the cash outflow should decline.
Taptica Ltd (TAP) has issued a positive trading statement and this has led to a forecast upgrade for 2016. Earnings per share have been upgraded by 12% to 29.3 cents, which is 150% higher than the forecast was one year ago. Increasing mobile marketing spend by customers means that there should continue to be significant growth.
Beximco Pharmaceuticals (BXP) has formed a joint venture with BioCare Manufacturing in Malaysia. Beximco will own 30% of the joint venture and will provide technical support. The initial product is a metered dose inhaler. Beximco reported a 14% local currency increase in interim revenues but in sterling they rose from £58m to £79.7m, while the growth rate in pre-tax profit was slightly higher with the sterling equivalent rising from £8.2m to £11.6m. The first product is being sold in the US and approvals have been gained for two other products.
Walker Greenbank (WGB) has received a further £1m insurance payment relating to flooding at Standfast & Barracks at the end of 2015. This takes the total insurance payments for the Lancaster fabric printing factory to £14.3m and there could be more to come. The Milton Keynes warehouse has been restocked. Octopus has increased its stake to 13.1%.
Ultrasound training simulators developer MedaPhor (MED) says it still had cash of £1.4m, net of the litigation settlement, which has been formalised with SonoSim Inc. In 2016, revenues grew by 50% to £3.3m, partly thanks to an initial contribution of £850,000 from the acquisition of Inventive Medical. The loss has increased from £1.5m to £2.5m, after settlement costs.
ImmuPharma (IMM) has recruited the 200 patients it requires for its phase III trial for the Lupuzor potential treatment for Lupus. By the end of January, more than 80% of the patients will have been treated for three months. Patients have to be monitored for 12 months so the full trial will not be completed until the first quarter of 2018. So far, there have been no indications that the drug is not safe.
Headway Investment Partners has increased its offer for Ludgate Environmental (LEF) from 16p a share to 16.3p a share, which compares with the latest NAV of 21.7p a share. The bid, though, provides cash up front rather than having to wait for the portfolio to be sold off.
Ascent Resources (AST) has started a well test at Pg-10 at the Petisovci project in Slovenia and an announcement about the results of the test should be published later this week. Henderson took advantage of a share price rise to sell one-fifth of their stake taking it to just below 10% but then almost doubled the number of shares it owns by converting £1m of convertible loan notes into 100 million shares. There are still £8.14m of convertibles in issue.
Ramblers Metals & Mining (RMM) expects to achieve the milling of 1,250 metric tonnes a day by the middle of 2017. Saleable copper of between 5,100 and 5,800 tonnes is forecast to be produced in 2017, along with 4,400 to 5,100 ounces of gold. In 2016, there was 4,174 tonnes of copper and 6,132 ounces of gold produced.
Keras Resources (KRS) has raised £600,000 at 0.35p a share in order to finance exploration at the Klondyke gold project in Australia. Some of the cash will be used to repay a £265,000 loan.
A concept study for the development of the CS natural pozzolan project in Nevada should be completed by the end of the first quarter of 2017. Sunrise Resources (SRES) should have information about the potential timeline for commercial production for the pozzolan, which is more environmentally friendly alternative to Portland cement.
MAIN MARKET
East Africa-focused Rainbow Rare Earths has raised $8m at 10p a share ahead of its standard listing. Demand for the shares was strong. This cash will be invested in the Gakara rare earths project in Burundi. Rainbow requires $2.23m to enable it to commence production in nine months. The main rare earths will be neodymium and praseodymium, which are used in generators, electric vehicles and wind turbines. Rainbow has secured a ten year offtake agreement with thyssenkrupp Raw Materials, which covers the sale of 5,000 tpa of concentrate. Petra Diamonds founder Adonis Pouroulis is chairman of Rainbow, which could move into profit in the year to June 2018.
Andrew Hore
Sunrise Resources Plc (SRES) – Holding in Tertiary Minerals (TYM)
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TR-1: NOTIFICATION OF MAJOR INTEREST IN SHARESi
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1. Identity of the issuer or the underlying issuer |
Sunrise Resources plc |
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2 Reason for the notification (please tick the appropriate box or boxes): |
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An acquisition or disposal of voting rights |
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An acquisition or disposal of qualifying financial instruments which may result in the acquisition of shares already issued to which voting rights are attached |
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An acquisition or disposal of instruments with similar economic effect to qualifying financial instruments |
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An event changing the breakdown of voting rights |
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Other (please specify): |
Issue of 11,887,558 new ordinary shares to Tertiary Minerals plc |
ü |
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3. Full name of person(s) subject to the |
Tertiary Minerals plc |
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4. Full name of shareholder(s) |
As above |
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5. Date of the transaction and date on |
15 November 2016 |
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6. Date on which issuer notified: |
16 November 2016 |
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7. Threshold(s) that is/are crossed or |
10% |
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8. Notified details: |
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A: Voting rights attached to shares viii, ix |
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Class/type of
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Situation previous |
Resulting situation after the triggering transaction |
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Number |
Number |
Number |
Number of voting |
% of voting rights x |
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Direct |
Direct xi |
Indirect xii |
Direct |
Indirect |
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GB00B075Z681 |
102,234,999 |
102,234,999 |
114,122,557 |
114,122,557 |
N/A |
10.08% |
N/A |
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Ordinary Shares |
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B: Qualifying Financial Instruments |
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Resulting situation after the triggering transaction |
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Type of financial |
Expiration |
Exercise/ |
Number of voting |
% of voting |
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C: Financial Instruments with similar economic effect to Qualifying Financial Instruments xv, xvi |
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Resulting situation after the triggering transaction |
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Type of financial |
Exercise price |
Expiration date xvii |
Exercise/ |
Number of voting rights instrument refers to |
% of voting rights xix, xx |
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Nominal |
Delta |
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Total (A+B+C) |
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Number of voting rights |
Percentage of voting rights |
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114,122,557 |
10.08% |
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9. Chain of controlled undertakings through which the voting rights and/or the |
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Proxy Voting: |
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10. Name of the proxy holder: |
N/A |
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11. Number of voting rights proxy holder will cease to hold: |
N/A |
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12. Date on which proxy holder will cease to hold voting rights: |
N/A |
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14. Contact name: |
Judith Hayes |
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15. Contact telephone number: |
01625 838679 |
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Quoted Micro 31 October 2016
ISDX
Via Developments (VIA1) says the Canal Street project in Manchester should be completed next March, while another Manchester site is attempting to gain enhanced planning permission that would enable 71 apartments to be built. Via expects deposits of 15% of the purchase price of the eight flats in Canal Street before the end of 2016 and this should generate £329,000. The Napier House project in Luton has been granted permitted development for 26 one-bedroom apartments. Additional planning permissions for an extra floor and a change to the facade of the building have been submitted. Via has received firm commitments for £1m of additional 7% debenture stock. This will take the debentures in issue to £4.5m.
Ganapati (GANP), the developer of apps for social media and games, reported an increase in its interim loss from £7.47m to £8.41m following the opening of a London office. Revenues fell from £2.3m to £1.34m. A unrealised foreign exchange loss of £5.71m on Yen borrowings. Management hopes that the Yen bonds in issue will be extended when they come up for repayment. There was £1.5m in the bank at the end of July 2016 but Ganapati wants to raise more money via a share issue to invest in further research and development. .
Ashford Borough Council has granted planning permission for the new Curious Brewery on a 1.6 acre site in the town centre. The Chapel Down Group (CDGP) brewing subsidiary raised money to build the brewery through crowd funding.
Miton Asset Management has increased its stake in rail safety products developer Wheelsure Holdings (WHLP) to 10.2% following the latest share subscription. WB Nominees has increased its stare to 9.2%, while JM Finn Nominees has raised its holding to 8.5%. Chief executive Gerhard Dodl increased his shareholding by 500,000 to 4.215 million shares, giving him 2.4% of Wheelsure.
AIM
Symphony Technology increased its offer for the remaining subsidiaries of Bond International Software (BDI) and the 121p a share bid by Constellation Software Inc has lapsed after gaining total acceptances of 47.4%. Constellation says that it will vote in favour of the disposal to Symphony for £22.8m. The proceeds and the other cash held by Bond will be distributed to shareholders as part of a liquidation process. Between 127p a share and 129.5p a share should be distributed with an initial distribution of at least 126p a share. Constellation originally bid 105p a share and it had acquired the majority of its 29.9% stake in Bond at 75p a share back in 2010.
Cyprotex (CRX) is recommending a bid from German drug discovery firm Evotec AG. The 160p a share cash bid values the contract pharma research services business at £41.7m. The share price has not been at the level of the bid since 2014. Cyprotex believes that it needs a partner to help it grow its operations further and Evotec will help it to grow in Europe.
Sunrise Resources (SRES) has revealed details of the results for the phase 2 drilling at the Bay Street silver project in Nevada. There was no positive news from this drilling and further exploration and drilling is required.
Eastern Europe-focused oil and gas explorer Ascent Resources (AST) has raised £3.5m via a placing at 1p a share and a further £1m via a loan note issue. Some of the cash will be used to repay a £871,510 loan facility from Henderson, which has also deferred the redemption of £8.2m of loan notes to 19 November 2019. The rest of the cash will complete the drilling of two wells and connect them with a refurbished central treatment station. This should enable Ascent to commence gas production by next spring and the gas will be initially be sold to Croatia.
South Africa focused miner Ironveld (IRON) is raising £1.8 at 4.5p a share with some of the cash going towards the development of the 15MW DC smelter for the iron, vanadium and titanium project in the Bushveld complex. The cash should last until next June and the shares come with a warrant to subscribe for another share at 6.75p for 12 months after the shares are issued. The Industrial Development Corporation has approved facilities of R244m for the project and negotiations continue for the remaining debt requirements. The total finance required is R841m. An offtake agreement has been finalised for the high purity iron powder that will be produced over a five year period from the commencement of production. Offtake agreements were already secured for titanium and vanadium.
Workforce optimisation software provider eg solutions (EGS) has won its first direct contract in Asia. The £500,000 contract is with a Singapore-based financial business and 50% of this will be recognised in the year to January 2017. This underpins the current expectations.
There has been further good drilling news concerning the Hot Maden project in Turkey, including some improvements in grade, and Mariana Resources (MARL) expects to report the preliminary economic assessment in late November. This assessment will provide the first guidance about the economics of the project.
Futura Medical (FUM) has raised £12m at 57p a share in order to fund the development of its portfolio of products. This includes the commercialisation of erectile dysfunction treatment MED2002 and trials for pain relief products TPR100 and TIB200. There was £2.9min the bank at the end of June 2016. Henderson will maintain its stake in Futura at just below 20%. The CSD500 condom has received European approvals for an extended shelf life of 18 months for the products manufactured in India. The European supplier has applied for the same shelf life extension.
Arian Solver Corporation (ACQ) has extended the exclusivity period for the Notche Buena gold silver tailings project in Mexico until 27 December. Recovery levels have been poor even though gold grades have been commercial so more tests are required. Arian is assessing an advanced silver exploration project in the US.
Share (SHRE) has made another add-on acquisition of customer accounts and the existing business is trading in line with expectations. The purchase of a book of 8,000 customer accounts with £200m under administration should be completed in April 2017. The Share Centre has maintained its market share of a peer group of brokers revenues, excluding interest, at more than 10%. In the third quarter, revenues were 7% ahead, while customer assets have increased by one-third to £3.6bn. Dealing commission and fee income have both grown but interest income fell by more than one-third. Share is still expected to make a small underlying loss this year.
MAIN MARKET
Nasdaq OMX-quoted AB Traction has increased its stake in engineering and environmental consultancy Waterman Group (WTM) to 14.3%. AB Traction went above 3% in April 2013 and has been building up the stake since then. AB Traction (www.traction.se) is an active long-term investor which does not focus on any particular sector. The strategy is to grow NAV.
Andrew Hore
Tertiary Minerals (TYM) – Issue of Shares by Sunrise Resources (SRES).
Tertiary Minerals (TYM), building a strategic position in the fluorspar sector, is pleased to announce that on 7 March 2016 the Board of Sunrise Resources (SRES) resolved to issue 49,298,406 new ordinary shares of 0.1p each of Sunrise to Tertiary in settlement of management fees of £86,272.21 due to the Company for the six month period ended 31 December 2015.
Since the formation of Sunrise, Tertiary has provided, and continues to provide, Sunrise with office facilities and company and project management services at cost. This cost sharing arrangement works to the benefit of both companies and enables them to be run with reduced overheads.
Following the issue of the New Shares, Tertiary will hold 102,234,999 ordinary shares of Sunrise, representing an interest of approximately 13.70% of the enlarged issued capital of Sunrise.
Application will be made for the New Shares to be admitted to trading on AIM. Admission is expected to occur on 14 March 2016.
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Enquiries
Tertiary Minerals plc Patrick Cheetham, Executive Chairman Richard Clemmey, Managing Director |
+44 (0)1625 838 679 |
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SP Angel Corporate Finance LLP Nominated Adviser & Joint Broker Ewan Leggat / Tercel Moore
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+44 (0)20 3470 0470 |
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Beaufort Securities Ltd Joint Broker Jon Belliss / Elliot Hance
Brand Communications Alan Green |
+44 (0)20 7382 8300
+44 (0)7976 431 608 |
Notes to Editors
Tertiary Minerals plc (TYM) is an AIM-quoted mineral exploration and development company building a significant strategic position in the fluorspar sector. Fluorspar is an essential raw material in the chemical, steel and aluminium industries. Tertiary controls two significant Scandinavian projects (Storuman in Sweden and Lassedalen in Norway) and a large deposit of strategic significance in Nevada USA (MB Project).
CAUTIONARY NOTICE
The news release may contain certain statements and expressions of belief, expectation or opinion which are forward looking statements, and which relate, inter alia, to the Company’s proposed strategy, plans and objectives or to the expectations or intentions of the Company’s directors. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the control of the Company that could cause the actual performance or achievements of the Company to be materially different from such forward-looking statements. Accordingly, you should not rely on any forward-looking statements and save as required by the AIM Rules for Companies or by law, the Company does not accept any obligation to disseminate any updates or revisions to such forward-looking statements.