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Andrew Hore – Quoted Micro 21 May 2018
NEX EXCHANGE
Newbury Racecourse (NYR) grew 2017 revenues from the nursery, hotel and media operations. There was a 11% increase in raceday attendances, which totalled 196,000 last year, leading to a 1% like-for-like rise in revenues. Overall revenues were 5% higher at £17.8m, while underlying pre-tax profit edged up from £178,000 to £188,000. There was a small cash outflow from operations. Capital investment meant that cash was reduced from £12.9m to £5.2m with more payments to come from the David Wilson Homes deal. A further £5.17m will be spent on upgrading the Pall Mall stand. There are concerns that the cutting of maximum stakes for gaming machines following the recent government announcement could hit bookmaker sponsorship and media rights revenues.
Block Commodities Ltd (BLCC) has a secured a strategic investment from Swarm Fund, which is a decentralised marketplace platform using blockchain. Investors will be able to participate in the FarmCoin asset-backed investment coin via the Swarm platform. FarmCoin is a joint venture between FinComEco and Block Commodities focused on the agriculture sector. There will be up to $45m of FarmCoin tokens issued.
National Milk Records (NMR) is holding a general meeting on 4 June in order to propose a reduction in capital that should put it in a position to have distributable reserves if it wants to pay a dividend.
Pre-IPO investor Primorus Investments (PRIM) had cash of £561,000 at the end of 2017. The NAV was £4.95m. This was after a £3.26m inflow from share issues.
AIM
Watkin Jones (WJG) has found a new chief executive but he will not be able to start until the beginning of 2018. Richard Simpson is joining from student accommodation developer Unite Group. The build to rent operations of Watkin Jones has secured a development arrangement for a site in Reading, which will have 315 apartments.
GAN (GAN) and Webis (WEB) are two companies that could benefit from the legalisation of online sports betting in the US. The Supreme Court of the United States has decided to overturn the Federal prohibition of sports betting. US sports betting could be worth $6bn by 2023. That covers online and onsite gambling. GAN can launch a sports betting service in New Jersey and Pennsylvania in the second half of this year – in time for the NFL season. GAN already has a deal with Betfair in New Jersey and adding sports betting will increase revenues. Webis has a US subsidiary called WatchandWager, which is based in California, a strong potential market for sports betting.
Genedrive (GDR) has agreed to sell its research and pharmacogenomics divisions to a director for up to £1.9m so that it can concentrate on its core Genedrive diagnostics platform. The initial payment is £1.15m with the rest deferred and subject to claims for R and D tax credits.
Lakehouse (LAKE) is acquiring heating and renewables services provider Just Energy Solutions, which fits with the company’s gas compliance businesses in the public sector and expands coverage in the industrial and commercial sectors. There is no upfront cost and payments will be dependent on profitability over two years. Lakehouse has also won a £55m, three year, Warm Homes contract with the Wales government.
Oil and gas demand is recovering at advanced coatings provider Hardide (HDD) but it is still well below previous levels. Other customers are enhancing growth and aerospace business is on the horizon. Interim revenues were 43% higher at £2.16m but the company is still loss-making. That will continue for a couple of years.
Angling Direct (ANG) increased revenues by 44% to £30.2m in the year to January 2018 and this led to an upgrade in forecast revenues for the current year. The fishing tackle retailer grew online sales by 54% but these tend to be lower margin. Pre-tax profit was £900,000 and it is expected to rise to £1.1m this year.
Online women’s fashion retailer Sosander (SOS) says that its full year revenues will be at least £1.34m. Like-for-like sales in the fourth quarter nearly quadrupled and gross margins are improving.
Portmeirion (PMP) has increased revenues by one-fifth in the first four months to 2018, although the second half of the year is always the more significant. Full year profit is still forecast to rise from £8.8m to £9.4m.
Churchill China (CHH) says that trading is ahead of the same period last year. The ceramic products manufacturer continues to have success in Europe and other export markets.
A new patent application has been filed for SkinBiotix by SkinBiotherapeutics (SBTX) and this covers the increasing of filaggrin levels in skin. Filaggrin is required for the formation of the outer layer of skin. Eczema sufferers have a low level of filaggrin.
The People’s Operator (TPOP) is increasing its UK subscribers but US numbers have declined so the performance was down in the first quarter of 2018. Churn is declining. Margins are better than expected. Even so, progress is too slow and an alternative strategy is required by the virtual mobile network business and it is considering divesting the US subscribers. That should cut cash burn by one-third.
A bathing water test by Molendotech, which is one of the investee companies of Frontier IP Group (FIPP), is being launched by Halma. This follows the agreement earlier this year.
Altona Energy (ANR) will begin a drilling programme on the Westfield tenement of the Arckaringa coal project during August. There could be 100mt of coal in the tenement. It will take three weeks to drill 15 holes to a depth of 120 metres.
Active Energy Group (AEG) intends to acquire a controlling interest in PowerWood Canada. Which owns forestry assets in Canada. This will secure feedstock for the roll-out of CoalSwitch, the biomass replacement for coal. There are plans to construct a 25 tonne per hour CoalSwitch plant in Alberta.
Servoca (SVCA) wants shareholders to agree to the cancellation of the AIM quotation. Management says that this will save £150,000 a year.
Volex (VLX) is buying Silcotec Europe for €18.1m and raising £36m at 75p a share. Silcotec supplies harnesses and electronic sub-assemblies to the medical, telecoms and computer industries and generated an operating profit of €3.1m.
Audioboom (BOOM) is not going ahead with the reverse takeover of Triton Digital Canada Inc because it could not raise the cash from a placing. A £700,000 break fee in cash (£90,000) and shares is payable. The audio business still requires more cash and that is why trading in the shares is still suspended.
MAIN MARKET
Sportech (SPO) has a strong presence in the US so it is in a good position to benefit from the legalisation of sports betting. It already has 90 licenced operator clients and its own network of off-track betting facilities in Connecticut.
The reasons behind founder Laurence Orbach increasing his stake in books publisher Quarto Group Inc (QRT) to 20.1% have become clear. Orbach was removed from the board in November 2012 but he has joined with 27% shareholder Lion Rock to unseat four non-executive directors at the AGM. Orbach and former finance director Mick Mousley have returned to the board, along with two nominees from Lion Rock. Orbach becomes executive chairman.
Shefa Yamim (SEFA) has completed bulk sampling in zone 1 and this should enable a resource estimate to be calculated.
Standard list shell Papillon Holdings (PPHP) has signed heads of terms for a 50% stake in CarCloud, a car sales-based fintech company. The deal to acquire energy storage systems developer Phestor is off. That follows the abortive takeover of Myclubbetting.
S&U (SUS) says non-prime car finance applications are 10% higher this year, although approval rates have fallen. Net receivables have increased by £48m to £258m.
North Midland Construction (NMD) has made a strong start to the year. There is a secured workload of £310m for this year and this should enable an improved financial performance this year.
World Trade Systems (WTS) wants to diversify its business outside of China. A new Taiwan-based health and fitness subsidiary is being incorporated. Kun Xin International will provide a loan facility of up to £3m to finance the new business. European opportunities are being sought.
Blood diseases treatments developer Hemogenyx Pharma (HEMO) has signed a development agreement with a global pharma company, which will provide Hemogenyx with free technical support and some intellectual property. The pharma company will be granted a research licence for anything jointly developed.
Andrew Hore
Andrew Hore – Quoted Micro 18 December 2017
NEX EXCHANGE
Wine and beer maker Chapel Down Group (CDGP) has raised £18.53m at 50p a share and could raise up to £1.47m more via a one-for-35 open offer at the same share price. The latest acceptance date is 5 January. Chapel Down will invest in an additional 500 acres of vineyard land and more money will be put into marketing. The family interests of Michael Spencer have invested in the fundraising. Nigel Wray has invested a further £500,000 but his stake has fallen to 16.5%, prior to the open offer. This year’s turnover is expected to be at least £11.6m and management expects growth to accelerate after the additional investment. New gin and vodka brands have been launched and the Ashford brewery should be up and running by the end of 2018.
Ashley House (ASH) has signed a joint venture with Morgan Sindall to develop extra care and supported living housing. This deal sparked a 55% increase in the share price to 14.75p. Morgan Sindall is paying £4m in total for the 50% stake in the joint venture, with £1.5m of this dependent on certain completion factors. It should all be paid by the end of 2018. The Ashley House housing division will complete two existing schemes and then own 50% of the joint venture, which will develop any further schemes. This additional cash will help to accelerate the growth of this part of the business. There is already a pipeline of potential developments. Ashley House will make an interim loss but expects to profitable for the full year.
e-commerce technology provider Netalogue Technologies (NTLP) reduced its interim loss as revenues grew from £317,000 to £479,000. There has been a lower number of larger projects, particularly in the food and drink sector, and Netalogue would have been profitable without the investment in the company’s technical team. A move towards a SaaS-based model could hold back short-term revenues.
AIM-quoted, spread betting business London Capital Group (LCG) has joined the NEX Exchange Growth Market on 15 December. Glio Holdings Ltd owns 78.1% of London Capital.
Early Equity (EEQP) has made two more investments. It has invested £60,000 in TruSpine Technologies Ltd, which plans to join AIM next year. TruSpine has developed the Faci-LOK and Cervi-FAS minimally invasive spine stabilisation devices and the VOSC catheter atherosclerosis treatment product. The plan is to gain FDA authorisation for Faci-LOK next year and then float. TruSpine is valued at £15m. A £35,000 investment in the profitable corporate finance and asset management business Farina Investments (UK) Ltd has been made ahead of a flotation. Early Equity raised £115,000 at 0.6p a share.
Hydro Hotel, Eastbourne (HYDP) has declared an unchanged total dividend of 21p a share for the year to October 2017.
Lombard Capital (LCAP) says that it is progressing towards the issue of an investment bond that will be quoted on a recognised bond market. There was nearly £60,000 in the bank at the end of September 2017.
Coinsilium Group Ltd (COIN) raised £720,000 at 9p a share and this will be used to invest in blockchain companies and expand the company’s own advisory business. Last June, £250,000 was raised at 2.2p a share. Coinsilium has been appointed as an adviser to token generation event of Hdac Technology AG, which is developing payment platforms for connected devices.
Equatorial Mining and Exploration (EM.P) has raised £5,000 at 0.01p a share and issued further shares for convertible loan notes and warrants at the same price. Valiant Investments (VALP) has raised £34,000 at 0.1p a share. Via Developments (VIA1) has issued a further £50,000 of debenture stock.
AIM
Satellites owner Avanti Communications Group (AVN) has revealed a financial restructuring that could put it on a firm footing. Certainly, without this restructuring the outlook would be bleak. The $557m of 2023 loan notes will be converted into two billion shares, while investors in the 2021 loan notes are being asked to accept and extension of the term and lower income. Annual interest charges would still be $36.6m
Best of the Best (BOTB) says that it expects to pay remote gaming duty and this will knock £300,000 from profit this year and £600,000 next year. This year’s pre-tax profit is forecast to decline from £1.5m to £1.4m, with a further fall to £1.2m in 2018-19. Net cash is expected to be £2.6m at the end of April 2018. The company is still claiming £4.5m of VAT so this could provide a cash boost in the future.
Plant Impact (PIM) is suffering continued delays in demand for its Veritas product in Brazil. A new partnership with Albaugh Brazil will commercialise other Plant Impact products in Brazil. This has sparked the decision to consider putting the company up for sale. Cash is running out and a further £7m would need to be raised to keep the company going well into 2019.
Van Elle Holdings (VANL) has defeated the five resolutions proposed by former chairman Michael Ellis at last week’s general meeting.
Recruitment and outsourcing services provider Servoca (SVCA) reported better than expected full year figures. Pre-tax profit improved from £3.5m to £3.9m. Education and healthcare will be the main growth areas.
Evgen Pharma (EVG) is collaborating with King’s College London to examine the use of SFX-01 as a therapy against ischaemic stroke. Multiple doses will be assessed and this will take nine months. This could lead to a clinical trial that might be funded by a charity organisation associated with King’s College.
Range Resources Ltd (RRL) returned to AIM following the reverse takeover of producing oil and gas assets in Trinidad from Trinity Exploration and Production (TRIN).
Defence equipment and services supplier Cohort (CHRT) had a weak first half but it expects to more than make up for that in the second half. There was a mixed performance with some parts of the business finding trading conditions difficult. The order book is worth £132m. Full year pre-tax profit is forecast to improve from £14.5m to £15.4m.
Savannah Resources (SAV) says that it has discovered high-grades and large intercepts in the latest drilling at the Mina do Barroso lithium project. A maiden mineral resource estimated could be announced before the year end with potential for upgrades from further drilling.
Daniel Stewart expects China New Energy (CNEL) to report a jump in pre-tax profit from £400,000 to £2.6m in 2017. The shares are trading on less than four times fully-taxed 2017 prospective earnings. The company constructs bioenergy plants that convert feedstock into ethanol. The most recently reported order book was worth £28.7m with the orders due to be fulfilled in 2017 and 2018. Demand from China is strong and there is also international business.
Coal bed methane projects developer Tlou Energy Ltd (TLOU) has secured a listing on the Botswana Stock Exchange and trading commenced on 13 December. Tlou raised £2.4m at 11p a share.
Synairgen (SNG) has secured a £5m cash injection from a deal with Pharmaxis, which will take over the development of LOXL2 in fibrotic diseases. Synairgen will also receive 17% of any partnering revenues. This compares with £3m invested by Synairgen in LOXL2. The cash will enable Synairgen to fund the phase IIa study for SNG001 for COPD. The trial should be complete by the end of 2018.
New management has turned around the performance of contract disputes and expert witness services provider Driver (DRV) and it moved back into profit last year. Cost savings have been made and the focus is on profitable business rather than just growing revenues. Cash collection is improving with net debt down to £200,000 and there is likely to be net cash of £2m in one year’s time. This year’s revenues are likely to be flat at around £60m but pre-tax profit should improve from £2.5m to £2.7m.
One month after its previous trading statement IDOX (IDOX) says that an internal audit has found that it should not recognise all the revenues that it originally intended to. This will knock £3m off profit for 2016-17. The software company reported its full year figures in December but the attest full year figures have been delayed until February. Chief executive Andrew Riley is away ill and former boss Richard Kellett-Clarke has taken over on a temporary basis.
Abzena (ABZ) reported interims in line with expectations. Growth came from the chemistry and manufacturing businesses. This is a period of capital investment as various parts of the company move to new facilities. The ADC master services agreement with a US biotech will yield at least $5m in services revenues over the next 12 months. This deal is shared between chemistry and manufacturing divisions.
Surface coatings provider Hardide (HDD) is starting to improve its gross margin as demand improves. There is even some signs of improved demand from the oil and gas sector. Even so, Hardide remains loss-making but it still has not gained any orders from Airbus. It raised £2.5m for capital investment earlier this year. A new reactor will be installed in the US in this financial year and another next year.
MAIN MARKET
Titon Holdings (TON) continues to benefit from strong demand for its window ventilation components in South Korea. The majority of profit comes from South Korea and that is where all the growth came from last year as the contributions from the UK and North America fell. In the year to September 2017, revenues were one-fifth ahead at £28m, while pre-tax profit improved from £2.14m to £2.49m. The dividend growth of 20% to 4.2p a share is ahead of earnings per share growth. A pre-tax profit of £2.81m is forecast for this year.
Avation (AVAP) has secured an initial $100m revolving facility to finance the acquisition of aircraft.
Sealand Capital Galaxy Ltd (SCGL) has secured an agreement with AIM-quoted MySQUAR (MYSQ) for the distribution of its games on MySQUAR’s platform and MySQUAR’s games on the Huawei InTouch platform. This is initially a two year deal.
Standard list shell Stranger Holdings (STHP) says that it expects to complete the acquisition of biogas and renewable energy business Alchemy Utilities. A five-year £20m bond is being raised.
Andrew Hore
Ian Pollard – Ashtead (AHT) to exceed expectations
Ashtead Group AHT is to increase its interim dividend by 16% and will also over the next 18 months, commence a share buy back programme of up to £1bn. The second quarter results showed growth exceeding that achieved in the first quarter and it is expected that full year results will now exceed expectations. For the half year to the 31st October rental revenue rose by 20%, profit before tax by 23% and earnings per share by 22%’
Balfour Beatty BBY reports that its performance to date is in line but still insists on ignoring the fact that the ludicrous and oft used name of its quality programme “Build to Last” just acts as a constant reminder of the horrors of the not too distant past.
Driver Group DRV saw a significant improvement on all fronts in the year to the 30th September with like for like revenue rising by 15%. Last years loss of £0.4m has been turned into a profit before tax of £2.5m and net borrowings slumped from £9.9m to £0.2m and are continuing to fall further.
Zytronic ZYT The year to the 30th September saw a significant improvement in trading profit which rose from £4.3m to £5.4m, with basic earnings per share up by 29%. The final dividend is to be increased by 39% making a total rise of 32% for the full year. A sound base has now been created, says the company, for further dividend increases in the future.
Joules Group JOUL updates that it has performed well in the half year to the 26th November, with group revenue rising by 18.2% in constant currency. Further expansion has been delivered across channels and products, reflecting the growing appeal of its brands as well as a growing customer base which now exceeds more than 1 million active customers.
Servoca plc SVCA A strong financial performance across all five of its business areas during the year to the 30th September saw revenue rise by 15.9% and adjusted profit before tax and EBITDA up by 11.4% and and 12.8% respectively. The final dividend is increased to 0.4p, a rise of14.3p
Waterfront villas & houses for sale in Greece http://www.hiddengreece.net
Quoted Micro 4 July 2016
ISDX
Employee-owned businesses funder Capital for Colleagues (CFCP) has invested £500,000 in Anthesis Consulting, a sustainability services consultancy with operations in Europe, North America and Asia. The investment includes £350,000 of shares, which is part of a £1.3m share issue, giving Capital for Colleagues a 3% stake with employees owning 80%. The other £150,000 is in the form of a loan repayable in five years. Anthesis will use the cash to make international acquisitions. Capital for Colleagues had an NAV of 53.66p a share at the end of May.
Ganapati (GANP) says that it failed to achieve its revenue forecasts in the year to January 2016 because of increasing competition. Revenues were £3.45m, while the loss was £7.82m after a £4.56m write down of intangible assets. Ganapati develops software for social media and consumer games but it has decided to move into offering online gambling software. The company continues to try to gain a licence from the UK Gambling Commission but there are issues that need to be sorted out and there is no guarantee that the application will be successful.
Equatorial Mining & Exploration (EM.P) continues to seek additional funding but it is confident enough to spend money on further surveying of its exploration licences in Nigeria. The interim figures will be published in September.
Blockchain technology investor Coinsilium (COIN) has appointed Mrs Pier Thomas as finance director. She has been awarded options over 2 million shares at a cost of 10p a share – a premium of 156% to the market price at the time of appointment. The options last until 28 June 2019.
Investment company Globe Capital Ltd (GCAP) has refocused its investment policy on the retail and menswear sectors. A 25% stake has been acquired in Sterling Craig, an online retailer of men’s fashion. The investment cost £12,500. The company was incorporated on 11 December 2015 and Sterling Craig’s only director is Terry Burnett. Earlier this year £100,500 was raised and Globe intends to raise more cash in the near future to fund additional investments. There was £19,000 in the bank at the end of March 2016.
A director has acquired a £400,000 convertible loan to Gowin New Energy Group Ltd (GWIN). Chen Chih Lung paid face vale for the loan which is convertible at 0.2p a share.
Energy efficient products supplier Sandal (SAND) has cancelled 130,000 shares that were issued at the time of its flotation because the buyer did not come up with the cash.
AIM
Omega Diagnostics (ODX) says that its Allersys diagnostic instrument is nearing commercial launch with 41 allergens available. The current operations put in a mixed performance in the year to March 2016. Food intolerance sales grew and helped group revenues improve from £12.1m to £12.7m. Pre-tax profit dipped from £1.4m to £1.3m and there is likely to be a further fall to £800,000 this year as the cost base is increased for product launches. Management believes that it has enough cash in the bank for its requirements but it will have to choose what opportunities it focuses on.
Surgical Innovations (SUN) says that sales are growing and it is manufacturing more of the equipment sold. Interim revenues should be at least 10% ahead, suggesting they will be around £2.9m. Growth is coming from the US. That is helping to improve gross margins to more than 25% – they were 8.4% in the first half of 2015 but they had reached 47.3% at the interim stage in 2014. New product ranges will be launched in the second half. At the same time inventory levels are likely to reduce by £500,000 in the first half. Net debt was £2.26m at the end of 2015 and this will reduce further.
Servoca (SVCA) is paying up to £3.1m for Classic Education in a deal that should be earnings enhancing. The initial payment for the Gravesend-based education recruitment business is £1.2m and Servoca believes that the sustainable level of pre-tax profit is more than £400,000. In the year to September 2016, pre-tax profit is forecast to improve from £3m to £3.5m.
Fishing Republic (FISH) has raised an additional £3.75m at more than double the share price at which it floated just over one year ago. Fishing Republic floated at 15p a share and subsequently raised more cash at 16p a share but the latest fundraising was at 35p a share. The cash will help to expand the retail chain and fund further development of the online operation. The share issue does initially dilute earnings but this should change when the cash is invested. The subscribers to the share issue include former Tesco boss Sir Terry Leahy and associates, who will have a combined stake of 15.9% in the company.
Corporation tax software provider Tax Computer Systems is reversing into Eco City Vehicles (ECV) in a deal that places an enterprise value of £73m on the transaction. A placing will raise £45m at 67p a share – after a 50-for-one share consolidation – and MXC Capital is subscribing £8.7m for 20% of the enlarged group, which will be renamed Tax Systems. There are plans for international expansion and a broadening of the product range.
DJI Holdings (DJI) is raising £29m at 95p a share in order to pursue new revenue opportunities. DJI has struck a deal with Xinhuatong, which provides content to the Xinhua News App owned by China’s national news agency, and this provides exposure to mobile. DJI sees itself as an internet technology provider having originally positioned itself as a developer of online lottery products. The share price has strengthened in the past three months but it has only just gone back above the July 2014 flotation price of 100p a share.
Mariana Resources (MARL) should have an updated mineral resource estimate for its 30%-owned Hot Maden gold copper project in Turkey. The current estimate is 3 million ounces of gold equivalent at a grade of 11.2g/t. The preliminary economic assessment should be completed before the end of the year.
Constellation Software has launched its 105p a share bid for recruitment software provider Bond International Software (BDI) but the target’s board has not recommended the bid. The deal vales Bond at £44.2m and Constellation already has a 29.6% stake and 100% of the convertible non-voting shares. In 2015, Bond reported a loss of £2m on revenues of £39.7m, while net assets were £34m. Bank debt has subsequently been repaid from the proceeds of the Strictly Education disposal. The other parts of the business are also up for sale.
Medical devices company Tissue Regenix (TRX) has secured a deal with a national US group purchasing organisation for hospitals and physician offices for the supply of wound care product DermaPure, the company‘s first commercial product. The three year contract covers 43 states.
Nostra Terra Oil & Gas (NTOG) is selling its 20% stake in assets operated by Ward Petroleum in the Chisholm Trail prospect in Oklahoma for $2.1m. The book value was $1.7m. These assets generated the majority of 2015 group revenues of £594,000. The cash can be used to acquire other oil and gas assets.
MAIN MARKET
Trading in shares of shell company Flying Brands Ltd (FBDU) has been suspended ahead of the potential purchase of medical technology business Stone Checker Software. The deal is still dependent on due diligence. The share price had halved to 3.25p since the beginning of June.
Global Resources Investment Trust (GRIT) is hoping to raise up to £2.5m through a subscription and open offer at 5p a share. RDP Fund Management is subscribing for £2m worth of shares while the terms and dates for the open offer have yet to be announced. The cash will be used to reduce gearing.
ANDREW HORE