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Brand Comms CEO Alan Green talks Trifast #TRI, Team17 #TM17 & Truspine Technologies #TSP with Justin Waite
Brand Comms CEO Alan Green talks Trifast #TRI, Team17 #TM17 & Truspine Technologies #TSP with Justin Waite
Quoted Micro 27 February 2023
AQUIS STOCK EXCHANGE
National Milk Records (NMRP) increased interim revenues by 5% to £12m, while pre-tax profit improved from £750,000 to £790,000. A tax credit meant that earnings increased by a higher percentage. Net debt is £900,000. The main growth was in the core milk testing services, although genomics revenues rose from £173,000 to £336,000. Price increases will help margins in the second half. Full year pre-tax profit is expected to decline from £2.4m to £1.9m. Managing director Andy Warne is taking leave due to illness and the finance director is assuming operational control.
There are problems with the acquisition of a 19.8% stake in skincare products supplier Lush by Silverwood Brands (SLWD) because Lush is refusing to register the change of ownership of the shares. Silverwood Brands is paying £216.8m for the stake and no reason was given for the refusal to record the transfer of the shares.
Samarkand (SMK) has benefitted from the easing of Covid restrictions in China. Although there was a short-term rise in infections, consumer confidence is improving since Chinese New Year. The Chinese government is keen to boost consumption. Partner brands using the company’s Nomad software platform are planning for growth this year and more premium beauty brands have been added to the platform. Samarkand could be profitable in the next financial year.
Invinity Energy Systems (IES) raised £21.5m at 32p a share with up for £4m more to come from a two-for-19 open offer. Taiwan-based Everbrite Technology is investing £2.5m in the placing. The cash will be used for working capital, which is expected to last until the middle of 2024. At that time the next generation Mistral grid scale vanadium battery will be ready for launch. The company will not need to draw down the $10m convertible loan facility.
In the year to October 2022, Hydro Hotel Eastbourne (HYDP) turnover improved from £2.79m to £4.4m, but pre-tax profit dipped from £457,000 to £445,000 because of the lack of government assistance. Trading remains tough. Cash improved to £1.59m.
Shore has upgraded its forecasts for Arbuthnot Banking Group (ARBB) with 2022 earnings increased by 11%. This reflects the benefits of higher interest rates with deposit rates lagging base rates. The 2022 pre-tax profit forecast is £29.5m and the 2023 forecast has been increased £28.5m to £40m. Estimated tangible NAV is 1194p a share.
Shareholders in Walls & Futures REIT (WAFR) have voted in favour of the resolutions enabling strategic investor Vengrove to raise cash for the company through a share issue. The number of shares in issue will be ten times as many as currently in issue. This will help Walls and Futures REIT scale up. Investments will be made in affordable rental housing, education property, service stations and car parks and community buildings. Pax Homes will be sold to Joseph McTaggart, so the group will no longer be a developer. The company’s name will be changed to Social Infrastructure REIT.
In the six months to November 2022, installation and engineering group Field Systems Designs Holdings (FSD) increased revenues from £2.6m to £6.7m and returned to profit in the period. Cash declined from £3.71m to £3.15m. Water companies are accelerating their spending under the current five-year programme and this provides a positive outlook for the business.
Marula Mining (MARU) has increased its stake in the Kinusi copper project in Tanzania from 49% to 75% for up to $550.000. The initial payment is $150,000 in cash and shares. There is high-grade copper mineralisation at the project.
Guanajuato Silver Company Ltd (GSVR) announced drilling results from the San Ignacio mine. There are some high-grade silver intersections plus gold. A new area of thick mineralisation may have been found. This should lead to a significant increase in resources.
Peterhouse has resigned as corporate adviser to Hot Rocks Investments (HRIP) and terms are being agreed with a replacement.
Harry Hyman increased his stake in Oberon Investments (OBE) from 3.75% to 4.23%.
Pharma C Investments (PCIL) has appointed broker Jeremy Woodgate to its board.
AIM
Cancer treatments developer Redx Pharma (REDX) is merging with Jounce Therapeutics and the AIM company’s shareholders will own 63% of the enlarged group. They will receive 0.2105 of a Jounce share for each Redx share. Jounce will be renamed Redx Inc and retain its Nasdaq listing.
Cleantech Lithium (CTL) plans a listing on the Australian Stock Exchange (ASX). Canaccord Genuity (Australia) and Fox Davies are joint lead managers to the listing, which is expected to happen in the third quarter of 2023. The Chile-focused lithium projects developer has 31% of its shareholders linked to Australia while other potential shareholders are not able to invest in other markets. The AIM quotation will be retained.
Medical disinfection products supplier Tristel (TSTL) is back to past growth rates, helped by price increases. The UK was the fastest growing market. In the six months to December 2022, revenues were 15% ahead at £17.5m and the growth rate was greater if discontinued products are excluded. Pre-tax profit improved from £2.13m to £3.08m. The tax charge is higher, so earnings growth was slower. The interim dividend is maintained at 2.62p a share. Net cash is £8.42m. Progress is being made with the FDA approval for medical device decontamination product DUO ULT. Tristel is spending £3m on FDA approval. To reflect that it has renegotiated the US distribution agreement with Parker Labs.
Engineering business Avingtrans (AVG) increased revenues from £44.5m to £50m in the six months to November 2022 and profit improved. The engineering operations have been hit by supply problems, but there is growth in nuclear and North Sea demand. There is 90% cover for the full year revenues forecast. The medical division is progressing towards the launch of a new imaging product by the end of 2023.
ZOO Digital (ZOO) has signed up a second major Hollywood studio to its cloud-based ZOOstudio ERP service offering subtitling, dubbing and other video services. ZOOstudio will be embedded in the client’s own internal technology platform. Tougher markets in the US mean that film studios and streaming platforms are seeking to grow in international markets, thereby increasing demand for the services offered by ZOO Digital.
Digital services provider Made Tech Group (MTEC) increased interim revenues by 76% to £20.6m, but pre-tax profit fell from £1m to £300,000. Singer still expects full year pre-tax profit to improve from £2.3m to £3.4m. Fewer contractors are being used and margins should rise in the second half. More than £60m of additional bookings have been gained so far in 2022-23.
Circle Property (CRC) has conditionally disposed of Concorde Park in Maidenhead for £12.3m. Somerset House in Birmingham is being sold for £15.2m and Victory House in Northampton is being sold for £2.75m That leaves one property to sell. There is already £32.6m in the bank prior to these disposals. B share issues are planned March and April to return cash to shareholders. The AIM quotation is likely to be cancelled in May.
ECR Minerals (ECR) has published drilling data from the Blue Moon prospect at Bailieston, Victoria with one of the holes at 84.9 metres depth reporting a composite grade of 6.35 metres at 4.56g/t. The rig is moving to the Brewery Lane property at Creswick.
Conroy Gold & Natural Resources (CGNR) made a high-grade gold discovery in a new area of the Longford-Down Massif. Visible gold is present. The grades are between 12.8g/t and 123g/t at the Mines Royal option area in Northern Ireland. Exploration is being carried out with joint venture partner Demir Export.
Snowfall has hit production at the Pakrut gold mine operated by China Nonferrous Gold (CNG). The Tajikistan mine has been hit by avalanches and landslides that have damaged power supply. Operations will be suspended for at least one month.
MAIN MARKET
Roquefort Therapeutics (ROQ) has signed an exclusive licence and royalty agreement with Randox Laboratories for its Midkine antibody portfolio. The ten-year licence excludes Japan and enables Randox to use the Midkine portfolio for medical diagnostics. The two firms will collaborate on potential cancer uses. Roquefort could generate more than £5m over the length of the agreement.
Trifast (TRI) chief executive Mark Belton has resigned after a disappointing trading statement. The fasteners supplier has been hit by Asian destocking. The forecast earnings for 2022-23 have been reduced by 38% to 5.1p a share.
Providence Equity is interested in making a 105p a share offer for Hyve Group (HYVE), which is a small fraction of the flotation share price.
Andrew Hore
Quoted Micro 28 February 2022
AQUIS STOCK EXCHANGE
Good Energy (GOOD) has finalised the sale price of its electricity generation assets. There was deferred consideration of up to £8.1m. The deferred payment has been set at £4.8m, taking the total payment to £21.2m. The rest of the cash was not paid due to a third-party yield assessment and other due diligence.
Samarkand Group (SMK) has signed a three-year agreement with Revolution Beauty Group (REVB) and it will incorporate the cosmetics company’s existing Tmall Global Flagship store via the Nomad technology, which will make it easier to sell in China. Samarkand will be exclusive ecommerce partner for China. Revolution Beauty has bought the assets of US cosmetics brand BH Cosmetics for $3.9m. Badass with Heart (BH) Cosmetics are vegan and cruelty-free.
Hydrogen Utopia International (HUI) says that it has been advised to apply for a loan under a new programme launched by the Poland authorities. The share price has slumped to 7.5p since the flotation at the beginning of the year.
KR1 (KR1) is participating in the HydraDX crowdloan and Polkadot parachain auction. KR1 contributed 350,000 DOT to secure a parachain slot in the ongoing round and these will be held for 96 days before being returned and KR1 will also receive HydraDX tokens. KR1 is already due to receive 45 million HydraDX tokens due to previous backing of a seed funding round. HydraDX is a protocol to enable frictionless liquidity for crypto assets. All assets can be put into one shared liquidity pool.
Cadence Minerals (KDNC) says that its joint venture rare earths project Yangibana in Western Australia has a NPV8 of $1.01bn, which is an 84% increase on the previous estimate. The $20m project to build the core infrastructure has begun. There was a 48.9% take-up of the recent open offer, which raised £745,000.
Forbes Ventures (FOR) is considering re-domiciling from the Cayman Islands to the UK. This could reduce costs. The medium-term focus includes the potential launch of a blockchain-focused venture fund.
Valereum (VLRM) has exercised its option to take its stake in the Gibraltar Stock Exchange from 80% to 90%.
SuperSeed Capital (WWW) managing director Mads Jensen has bought 24.200 shares at 98p each, taking his stake to 82.1%.
AIM
Hargreaves Services (HSP) has secured a deal for the development and sale of two large distribution units, which will be 191,000 square feet and 375,000 square feet respectively, at the 50%-owned Unity site. Detailed planning permissions are required for the sites and that should be obtained by the end of the year. The deal will be fully completed within 12 months of construction. The total revenues should be more than £50m for the joint venture and Hargreaves should have all or most of its 50% distributed to it, depending on the requirements of the joint venture. On top of this, another 4.6 acres at Blindwells is being sold to Ogilvie Homes. There will be 77 homes built and the deal should generate minimum revenues of £3.5m. The contracts are conditional, and they will not have an immediate effect on the figures.
Synairgen (SNG) announced disappointing phase III data for the SPRINTER trial for SNG001 use in hospitalised Covid-19 patients. The headline data for the trial did not meet primary or secondary endpoints. There is still an ACTIV-2 phase III trail being carried out in mild to moderate Covid-19 patients and other studies where SNG001 could be included.
Sylvania Platinum (SLP) plans to spend some of its cash pile on further increases in production. First half production of platinum group metals was 32,376 ounces, down from 36,335 ounces, and full year production should be between 66,000 and 68,000 ounces. Interim revenues fell from $84.9m to $69.1m, while pre-tax profit slumped from $57.4m to $34.9m. The decline in the Rand exchange rate exacerbated cost increases. A dividend of 2.25p a share will be paid. Short-term investment focus is on additional capacity and extending the life of the chrome recovery operations. In the next three years Sylvania will decide whether to construct new plants on the eastern and/or western limbs of the Bushveld complex.
Transense Technologies (TRT) moved into profit in the six months to December 2021 thanks to growing royalty income from iTrack tyre pressure monitors. Interim revenues improved from £895,000 to £1.2m with a loss of £53,000 turned into a pre-tax profit of £82,000. That is before any tax credits. There are more than £23m of tax losses available to offset against corporation tax. There is £1.07m in the bank and that is set to rise to £1.34m in June 2022.
Seeing Machines (SEE) says interim revenues are 19% ahead at A$21.7m. Revenues of A$56.1m, up from A$46.6m, are forecast for the year to June 2022. There are nine vehicle models that have commenced production that are installing the company’s driver monitoring system. Seeing Machines has also deployed a pilot fatigue detection system for Air Ambulance Victoria. This deal could be worth A$1m over a ten-year period.
Avingtrans (AVG) reported a small decline in interim revenues to £45.1m following the ending of lower margin work in the medical imaging business. Improved margins meant that there was little change in the pre-tax profit, which was £3.6m. The interim dividend is 1.6p a share.
Analysts have raised their full year pre-tax profit forecast for Netcall (NET) following the interim figures. Annualised contract value was £19.8m at the end of 2021. The 2021-22 earnings forecast was increased by 6% to 1.7p a share.
Outsourcing services provider iEnergizer Ltd (IBPO) says it will have another record financial year in 2021-22. The forecast yield is 4.9%.
Tristel (TSTL) is exiting non-core activities to focus on its medical device decontamination and surface cleaning products. In the six months to December 2021, revenues from continuing activities fell 7% to £13.6m. That was due to a large one-off order in the corresponding period. There is underlying growth. There is a £2.4m impairment charge for the discontinued activities. Underlying earnings fell 28% to 4.3p a share. The plans for FDA filings for the company’s products are on course.
Ventilation and door components supplier Titon (TON) warns that supply problems and higher costs are hampering sales and margins. Titon is trying to increase prices to cover higher costs. Overall revenues are slightly higher than in the first four months of the previous financial year, but the overseas operations are loss-making. There is still £4.2m in cash on the balance sheet. A new chief executive is being recruited.
Orchard Funding (ORCH) has raised £2.59m after expenses from its bond offer.
MAIN MARKET
Packaging manufacturer and distributor Macfarlane Group (MACF) increased revenues from continuing operations by 26% to £264.5m in 2021. Pre-tax profit is 50% ahead at £18.7m. The labels division was sold at the end of 2021, and it made a loss. Net cash is £2.5m and the pension scheme surplus is £8.3m. The total dividend is one-quarter higher at 3.2p a share. There is continuing inflationary pressure and supply problems.
Maternity wear brand Seraphine Group (BUMP) says that sales grew in the seventeen weeks to the end of January 2022, although February has been tougher. That means revenues will be below expectations, while lower margins mean that there will be little in the way of profit for the full year. The problems include an underestimation of sales tax and duties in newer markets. This is not the first profit warning. Last July, Seraphine floated at 295p, and the share price has fallen to 58.5p.
Seraphim Space Investment Trust (SSIT) has performed strongly since it floated and there is more to come. The original fundraising was at 100p a share and the NAV at the end of 2021 was 104.7p a share. That is before the announcement of the reversal of Italy-based space logistics company D-Orbit into Nasdaq-listed Breeze Holdings Acquisition Corp, which should be completed by the autumn. There was still £70m in the bank at the end of 2021, although more investments have been agreed since then.
Fasteners supplier Trifast (TRI) says that there is consistent year-on-year growth in monthly revenues. Higher cost are being passed on and there are signs that supply chain costs are stabilising.
Alkemy Capital Investments (ALK) plans to enter into a lease at a Teesside chemical engineering park and the land will be used to build a lithium hydroxide processing facility through a new subsidiary called Tees Valley Lithium. The facility is anticipated to produce 24,000 tonnes a year of lithium hydroxide monohydrate for energy storage markets. This is a reverse takeover and trading in the shares has been suspended.
Kanabo Group (KNB) has acquired The GP Service, a telemedicine provider, for £13.5m in shares at 12.65p each. The business provides NHS video and online consultations and can electronically deliver prescriptions. Consultation services are also offered to corporate clients. GP Service will provide a way of marketing Kanabo’s CBD products. Kanabo raised £2.25m at 8p a share.
Cannabis-based drug developer Oxford Cannabinoid Technologies (OCTP) still had £12m in the bank at the end of November 2021. Cost savings worth £130,000 a year have been made so the cash can last longer. Two compounds are expected to enter phase 1 clinical trials in the next 12 months. Two The year end is being changed from May to April.
Andrew Hore
Andrew Hore – Quoted Micro 28 June 2021
AQUIS STOCK EXCHANGE
Good Energy (GOOD) says it is perming better this year than in the same period last year which included the start of the lockdown. Forward buying has improved margins. The smart meter rollout is accelerating.
Dispersion Holdings (DEFI) has invested C$200,000 at 18 cents a share in Defi Yield Technologies Inc. This gives it a 3.5% shareholding in the company that is developing a platform for decentralised financial services.
Altona Rare Earths (ANR) has raised £178,000 at 12p a share, which was a premium to the market price. Altona subsequently acquired up to 70% of the Monte Muambe rare earths project. It will take a 1% stake on signing the deal and increase it to 20% in phase 1 when £40,000 in cash is paid and one million shares are issued. In order to take a 70% stake a total of £240,000 in cash will be paid and three million Altona shares have to be issued. On top of this there are minimum expenditure commitments over three phases of the project.
Rogue Baron (SHNJ) says its bar in Washington DC increased sales by 38% to $225,000 in the three months to May 2021 even though capacity has halved. Trading in the shares has started on OTCQB.
Tectonic Gold (TTAU) is preparing to drill the Specimen Hill project in Queensland. There have been positive results from sampling and the structural modelling of the site has been completed.
Capital for Colleagues (CFCP) had net assets of 64.06p a share at the end of May 2021. It sold his investment in Anthesis Consulting for £1.15m during the period. There was cash of £2.65m at the end of May 2021.
DiscovOre (ORE) is changing its name to Oscillate. and it will focus on the medical psychedelic industry. This includes treatments for drug-resistant depression, anxiety, addiction and post-traumatic stress disorder.
Ananda Developments (ANA) expects to begin construction of a research facility in July. Strains of medicinal cannabis have been selected for research. Liberty Herbal Technologies has received a US patent for its vaping device.
CBD products supplier Sativa Wellness Group Inc (SWEL) has opened its 40th testing clinic for travellers and has introduced blood testing for Covid-19 immune response through some clinics. The clinics will be listed on the NHS Patient Access service.
Valereum Blockchain (VLRM) has raised £1m at 70p a share.
Virgata Services has extended its offer for Walls & Futures REIT (WAFR).
Tim and Charlotte Syder have increased their stake in Newbury Racecourse (NYR) from 4.5% to 8.7% and they appear to have been bought from Andy and Judith Stewart.
AIM
Printed circuit technology developer and supplier Trackwise Designs (TWD) has disappointed the market due to electric vehicle contract delays. Interim revenues more than doubled from £2.91m to £6.07m thanks to the initial contribution from Stevenage Circuits. A pre-tax profit of £200,000 in 2019 was turned into a loss of £400,000. There is currently net cash of £2.87m. The new factory should open later in the year.
Demand for Accoya wood continues to be strong, but Accsys Technologies (AXS) will not be able to increase production capacity until a new reactor is installed in the Netherlands later in the year to March 2022. In 2020-21, Accsys moved into profit and cash generation improved. A decision is awaited about how Accsys will make progress with the Hull Tricoya plant, where the contractor has resigned. Cash was raised in May to finance the US joint venture, but more cash may be required.
First Property (FPO) had to reduce the valuations of its owned Polish properties last year and that hit net assets. Management says that some of that valuation reduction should be reversed following a restructuring of the finance lease on one of the properties. NAV fell 22% to 42.8p a share at the end of March 2021 and it could improve to 48.8p next March. Loan to value is 45.3%. There is no final dividend.
In 2020, Dekel Agri-Vision (DKL) reported revenues of €22.5m and a reduced loss. The palm oil supplier will benefit from the higher palm oil price this year, enabling it to move into profit. The cashew plant will also make a contribution.
Musical instruments retailer Gear4Music (G4M) performed strongly last year, and revenues improved from £120.3m to £157.5m, while pre-tax profit jumped from £3.1m to £14.6m. This year will be tough, though. Pre-tax profit is forecast to fall back to £7.5m even though current trading is better than expected. The company has started buying existing brands. Premier is a drums brand and Eden is a bass amp supplier. Further acquisitions are likely.
Packaging manufacturer Robinson (RBN) says that revenues in the first five months of 2021 are 17% ahead of the same time last year. This is mainly due to an initial contribution from the Schela acquisition and passing on raw material costs – volumes are 1% ahead.
Jade Road Investments (JADE) had a net asset value of 67p a share at the end of 2020. There was an improved valuation of quarry company Future Metal Holdings. The three-year mining licence has been renewed and an independent assessment of the business will be published later this year.
Tristel (TSTL) has gained approval for foam-based surface disinfectant Jet from the EPA in the US. This will enable approvals to be sought with individual states. Tristel Duo, the disinfectant for ultrasound devices, has been approved in Canada and South Korea.
Vector Capital (VCAP) has raised £1.5m at 47p a share and this will be used for marketing and increasing the loan book. The cash raised at the end of 2020 has been deployed.
Location Sciences (LSAI) has given 12 months notice to its chief executive and finance director. They are continuing to work in the business.
MAIN MARKET
Nottinghamshire-based construction and infrastructure services provider NMCN (NMCN) has secured a highly dilutive rescue fundraising after falling into financial difficulties The company continues to lose money and the terms reflect the dire financial position. A £14m subscription is proposed, with a up to £5m more to come from an open offer. There is also a £10m convertible bridging loan – convertible at 20p a share and with fees and interest it equates to 62.4 million shares. Svella, which is run by former Stobart boss Andrew Tinkler, will subscribe for up to £7.4m of the subscription shares and provide the loan.
Fasteners supplier Trifast (TRI) reported slightly better than expected 2020-21 figures. Industrial activity is recovering. This year pre-tax profit is expected to improve from £11m to £12.9m.
Tirupati Graphite (TGR) has increased sales of its graphite products CarboflameX and GrafEN 45545 with trial and sample orders received. Land has been secured for a dedicated product development facility.
Cizzle Biotechnology (CIZ) has signed a deal to develop a companion diagnostic with St George Street Capital for certain of its potential autoimmune treatment assets that it has licensed. This deal takes Cizzle into a new area, but lung cancer remains the focus.
Zegona Communications (ZEG) is paying an interim divided of 2.6p a share. That is based on the dividend from Euskaltel and does not reflect the proceeds from the telecoms company’s takeover.
Andrew Hore
Andrew Hore – Quoted Micro 22 June 2020
AQUIS STOCK EXCHANGE
Cancer treatment developer Incanthera (INC) had cash of £392,000 at the end of March 2020, following its fundraising when it joined the Aquis Stock Exchange. The company has a call option on more than £350,000 of additional cash. That should fund this year’s requirements and make the company’s cash last until next summer. The initial focus is topical cream Sol, which prevents sun damage turning into skin cancer.
European Lithium (EUR) has obtained initial funding from the EU-backed Greenpeg programme to support lithium sourced from Europe. The cash goes towards to the Wolfsburg lithium project in Austria.
Cadence Minerals (KDNC) says that the Yangibana rare earths joint venture has commenced drilling at the project. The plan is to increase the existing 21.25Mt JORC resource. The drilling will continue until October. The Amapa iron ore project, where Cadence will own a 20% stake, is set to start shipping its stockpile early in the third quarter of this year.
Angelfish Investments (ANGP) intends to change its investment strategy to one focused on healthcare.
TechFinancials (TECH) had cash of $672,000 at the end of 2019. However, write-offs mean that net assets have fallen to $309,000. Management is uncertain about the future of the Footies ticketing technology operation.
Altona Resources (ANR) had net liabilities of £353,000 at the end of 2019. There is a bank overdraft of £100,000.
Globe Capital Ltd (GCAP) is currently being supported by one of its shareholders Toddbrook Investments and the company’s loan note provider. Net assets were turned into net liabilities of £88,000 at the end of 2019.
AIM
Digital payments and fraud prevention services provider Boku (BOKU) is buying rival Fortumo Holdings for an enterprise value of $41m. Boku has raised £20.1m at 85p a share to finance the acquisition. In 2019, Fortumo made EBITDA of $2.3m on revenues of $7.2m. Fortumo is focused on smaller businesses than Boku.
International pensions administrator STM (STM) has made a good start to 2020, but profit is still set to decline this year, although that is partly due to the lack of one-off income. The current share price reflects this with the prospective multiple of eight, but that could fall to less than five in 2021.
Trans-Siberian Gold (TSG) has increased the JORC compliant mineral resource estimate at the Asacha gold mine to 452,000 ounces of gold at an average grade of 14.7g/t and 1.33 million ounces of silver at an average grade of 44g/t. Three-quarters of this is in the measured and indicated category. The mine life should extend to 2027. More drilling is planned in the east zone. A final dividend of $0.023 a share is proposed, and the shares go ex-dividend on 9 July.
Best of the Best (BOTB) has received tentative bid approaches and management is exploring strategic options. This follows the announcement of the competitions organiser’s full year figures. A 3p a share final dividend and 20p a share special dividend were announced.
Feedback (FDBK) is raising up to £5.59m via a placing and open offer at 1p a share in order to invest in the development and marketing of its Bleepa medical imaging communications platform. This could double the number of shares in issue. A one-for-ten open offer will raise up to £540,000 depending on the take-up. Stanford Capital was the bookrunner.
VR Education (VRE) reported a 43% increase in 2019 revenues and the loss was reduced. COVID-19 has increased interest in virtual reality-based conferences and this has probably pushed VR Education much further ahead than it would have been. The benefits of this will show though in the next couple of years as revenues grow faster than previously expected. The cash injection from HTC means that VR Education has plenty of cash for its requirements.
Omega Diagnostics (ODX) is raising up to £11m at 40p a share in order to finance further COVID-19 testing opportunities and to increase production capacity.
Inspiration Healthcare (IHC) is acquiring SLE, which makes ventilators for neonatal intensive care, for £18m in cash and shares. A £16.5m placing at 65p a share and an open offer raising up to £500,000 at the same share price will fund the cash element of the acquisition price.
Urban Exposure (UEX) says that Randeesh and Danjit Sandhu have resigned and will receive settlement payments, while Ravi Thakar has been made redundant. They can also sell their shares. This is because of the decision to stop taking new property loan business. NAV is estimated at 84p a share at the end of 2019. An orderly wind down should produce 70p-83p a share. A loan book sale is not currently attractive. There should be quarterly cash distributions as cash comes into the company.
Information management services provider IDOX (IDOX) made a strong recovery in the first half. Revenues were 13% ahead at £35.1m, while there was a small pre-tax profit from continuing operations. More than 90% of full year revenues have been contracted. Net debt fell from £26.4m to £14.3m over the six months to April 2020.
MAIN MARKET
Fasteners supplier Trifast (TRI) has raised 315m at 120.5p a share. An initial £5m will be invested in projects to enhance growth and the rest will provide additional working capital. Trading in the year to March 2020 was in line with forecasts adjusted for COVID-19 effects. There have been improving activity levels since May.
Seafox International has lodged a second requisition for a general meeting at Gulf Marine Services (GMS) and it has been accepted. Seafox proposes Hassan Heikal and Hesham Helbouny as directors.
Contango Holdings (CGO) has completed the acquisition of a 70% stake in the Lubu coalfield project and been readmitted to the standard list.
Spinnaker Opportunities (SOP) is still waiting for the listing requirements relating to its acquisition of Kanabo Research. There is still uncertainty over listing regulations for cannabis-related companies. The acquisition was announced 16 months ago.
LED lighting supplier Dialight (DIA) says it is experiencing improving but volatile demand. The order book is better than expected and overdue deliveries are being made. Crucial component stocks are being built up. Net debt was 317.3m at the end of May 2020.
Andrew Hore
Andrew Hore – Quoted Micro 27 April 2020
AQUIS STOCK EXCHANGE
Cannabis products-focused company Sativa (SATI) has received a bid approach from StillCana Inc, which has built two high volume CBD extraction facilities in Europe. StillCana is Europe’s largest producer of CBD distillate and isolate. StillCana plans to offer 0.33651 of one share for each Sativa share. Sativa shareholders would own 65% of the enlarged business. If StillCana does not go through with the bid it may be required to pay Sativa £1m as a break fee. Trading in Sativa shares has been suspended. Peterhouse has been appointed as corporate adviser.
In the six months to December 2019, there was a £224,000 cash outflow at Imperial X (IMPP) as it assessed the way forward. The new investing strategy is focused on acquiring royalties in the oil and gas sector. There was £179,000 in the bank at the end of 2019. Imperial X has subsequently raised £27,700 at 2.5p a share.
Primorus Investments (PRIM) had net assets of £4.76m at the end of 2019. One of the successes has been the investment in Greatland Gold (GGP) and TruSpine Technologies is moving towards a flotation.
Cadence Minerals (KDNC) owns 16% of AIM-quoted European Metal Holdings (EMH) whose shareholders have approved the £25.8m investment for a 51% stake in the holder of the Cinovec licences in the Czech Republic.
NQ Minerals (NQMI) says that the resource at the Barnes Hill nickel project to 25Mt at 0.6% nickel and 0.05% cobalt on a 0.25% nickel cut-off grade.
Arbuthnot Banking (ARBB) n on-executive director Nigel Boardman has acquired an initial 5,020 shares in two amounts (1,500 shares at 960p each and 3,520 shares at 1010p each).
Altona Energy (ANR) has extended the closing date of its open offer until 12 May and it may consider a further extension if the market uncertainty continues.
AIM
Cyber security services provider Shearwater (SWG) has raised £3.75m at 240p a share. Directors David Williams and Phil Higgins are each investing £125,000. A new £4m, 3-year bank facility has been negotiated. In the year to March 2020, Shearwater generated revenues of £33m and underlying EBITDA was £3.2m. There has been a move towards higher margin business. Management believes that COVID-19 will provide opportunities to expand the business. There are acquisition opportunities with revenues of between £2m and £20m.
Musical instruments retailer Gear4Music (G4M) has confirmed that profit for 2019-20 was better than expected and gross margins improved from 22.8% to 25.9%.
Last year was tough for transport and logistics firm Xpediator (XPD) and this year won’t be easy, but it has a good base and the new Southampton warehouse will come on stream early in 2021. In 2019, revenues grew but lower freight forwarding margins and higher overheads hit pre-tax profit and it fell to £5.2m. Xpediator should still be profitable in 2020 and the second quarter tends to be a weaker period. A scrip dividend of 1.05p a share has been declared.
Health monitoring equipment supplier LiDCO (LID) had a strong start to its new financial year thanks to strong demand from the NHS. Since January 195 monitors have been sold, which is nearly as many as last year. The pre-tax loss is expected to continue to reduce and LiDCO has started to generate cash from operations.
Foreign exchange provider Equals (EQLS) increased first quarter revenues by one-third to £8.3m. The majority of this was business to business revenues. There was a sharp decline in travel money business in March.
Dragon Capital Group is offering a purchase facility to minority shareholders in Dragon-Ukrainian Properties and Development (DUPD) as part of the plan to cancel the AIM quotation. The purchase price is 10p a share. Shareholder approval for the departure from AIM will be sought at the general meeting in Kiev on 6 May.
DBAY Advisers is building up a stake in Wynnstay Group (WYN) and it has reach ed 6.47%. It is taking advantage of the decline in the share price, although it has rebounded strongly in the past few weeks. Investec has sold most of its stake. Trading has been subdued in the current financial year.
Dawn Ward and Tracy Lewis have resigned from the board of Staffline (STAF) and the company is seeking replacements. Henry Spain Investment Services has increased its stake in Staffline to 13.6%.
Mark Greenwood has taken his stake in Richland Resources (RLD) to 29.1%.
MAIN MARKET
LED light fittings and wiring accessories supplier Luceco (LUCE) reported 2019 figures in line with expectations. Revenues were %5 ahead at £172.1m and improved margins meant that pre-tax profit jumped from £6.3m to £15.8m. Revenues and profit are expected to fall back this year due to COVID-19 with the major hit coming in the second quarter after modest supply issues in the first quarter. Cash outflow should be limited to £500,000 a month while lockdowns are in force in Europe. There are bank facilities available to the group. Looking further ahead, Luceco is involved in a growth market and there should be acquisition opportunities.
J Smart Contractors (SMJ) reported a decline in interim pre-tax profit from £1.12m to £265,000. Net cash was £13.7m at the end of January 2020. An unchanged interim dividend of 0.95p a share has been announced.
Cathay International Holdings (CTI) has launched a 16.7456-for-one open offer at 1.5p each, plus a subscription to at the same share price. This could raise up to £105m. This will reduce borrowings and provide cash to put into investee companies.
BATM (BVC) has received a $31m order for 1,000 critical care ventilators. One-quarter of the cash has been paid upfront and the rest will be paid when the ventilators are delivered later this year.
A trading statement by fasteners supplier Trifast (TRI) sparked a 6% 2019-20 profit downgrade to £17.2m by finnCap.
Motor dealer Lookers (LOOK) says that sales and margins have fallen so far this year. Operating costs have been reduced. Sales of former sites are helping to reduce net debt, which is £65m. The fraud investigation has led to a £4m non-cash charge and there could be further write-downs.
Andrew Hore
Andrew Hore – Quoted Micro 17 February 2020
NEX EXCHANGE
NEX and AIM-quoted Arbuthnot Banking Group (ARBB) says that there has been an increase in the level of confidence in its markets since the General Election. That was too late to have much effect on the 2019 results, but full year pre-tax profit will be at the upper end of expectations. Last year, customer loan balances rose by 31% and deposits by 22%.
Sativa Group (SATI) says that it welcomes the guidance from the Food Standards Agency on the safe use of CBD products and the timetable for novel food authorisation. Management points out that Sativa’s products do not include THC. Sativa expects to report 2019 gross profit slightly higher than expectations on lower than marginally lower than expected. Goodbody Wellness has piloted three retail stores, but they did not perform as well as expected. PhytoVista Laboratories has completed more than 3,000 tests on cannabis-based products. That includes Sativa’s own products and a new sports range is near launch. Medicinal cannabis-based development is focused on veterinary treatments.
EPE Special Opportunities (ESO) has increased its NAV by 55% to 317.2p a share following a strong performance by Whittard of Chelsea and a recovery in the share price of fully listed Luceco. Pharmacy2U continues to grow strongly. Last year, 2.3% of the shares in issue were bought back by the company. New investments are being sought for available funds.
Ethical housing investor Walls and Futures REIT (WAFR) increased its NAV by 15% to 106p a share in the year to January 2020. Chief executive Joseph McTaggart bought 1,991 shares at 61.75p each.
Hellyer gold mine operator NQ Minerals (NQMI) has raised a further £210,000 at 7p a share.
Investment company Primorus Investments (PRIM) has benefitted from the sharp share price rise in Greatland Gold (GGP) and the stake is worth two-fifths of the company’s market value. The current profit is £1.25m. Investee company TruSpine is on course to float in London this year. The spine stabilisation devices developer has gained a new cornerstone investor. Primorus is debt free.
Trading in the shares of Altona Energy (ANR) has been suspended because it has not published its annual report for the year to June 2019. Cash needs to be raised to keep the company going and management says that shareholders will be invited to participate in a fundraising. The company says it expects to publish the report in the next two weeks and blames the delay on a change of auditor and a new accounting treatment for its exploration licences. Final terms for the acquisition of the previously announced new petroleum exploration licence application are being negotiated.
SG Recruitment Ltd (SGRL) majority shareholder and chief executive David Sumner has also taken on the role as chairman after the resignation of Alan Kitchin and Katie Hiess from the board.
AIM
Brickability (BRCK) has acquired McCann Roofing Products for £2.75m. Essex-based McCann imports roofing and building products from Europe and generated a 2019 pre-tax profit of £700,000 on revenues of £8.2m. This deal adds additional suppliers to the group and should be immediately earnings enhancing.
Nostra Terra Oil and Gas (NTOG) has convened the requisitioned general meeting on 3 March. Eridge Capital wants to remove Matt Lofgran and Ewen Ainsworth from the board and replace them with Andrew Morrison. Eridge was previously known as former AIM company New World Oil and Gas. Nostra Terra’s subsidiary has loans that have a key man clause which stipulate that Lofgran has to be president of the subsidiary unless it give consent or there will be a default.
Drug discovery platform developer e-Therapeutics (ETX) has overhauled its board and raised £1.6m at 3p a share. Former Silence Therapeutics boss Ali Mortazavi becomes executive chairman. Ian Ross is stepping down to concentrate his role at Silence Therapeutics. Chief executive Ray Barlow and finance director Steve Medlicott are also leaving. An additional independent non-executive director will be appointed.
Gemfields Group Ltd (GEM) joined AIM last Friday. The share price ended the day at 11.7p.
Bidstack (BIDS) expects to have generated £150,000 from programmatic advertising for video games. That is much lower than previously hoped because it is taking much longer to get advertising agencies to take in-game advertising seriously. There was cash of £3.14m at the end of 2019 following a loss of £5.3m. There was £6m in the bank at the end of June 2019. First half revenues will still be small.
Knights Group Holdings (KGH) has acquired Nottingham law firm Fraser Brown Solicitors for up to £8.28m in cash and shares. This follows the purchase of Croftons Solicitors, which is based in Manchester, for up to £2.8m. A new revolving credit facility of £40m has been agreed and it lasts until June 2023.
Octopus Investments has cut its stake in Staffware (STAF) from 13.2% to 0.53%. Gresham House Asset Management increased its stake from 6.7% to 10.6%.
Filta Holdings (FLTA) says it should make an EBITDA of £3.2m in 2019. Cost savings and investment software will help the fryer management services provider to produce a much better performance in 2020.
Keystone Law (KEYS) has traded in line with expectations. Pre-tax profit is forecast to increase from £5.1m to £5.7m.
Hormonal disease treatments developer Diurnal (DNL) says that the FDA has accepted the new drug application for Akindi Sprinkle as a treatment for infants and children. Approval could be gained by the autumn and it will be the only licenced treatment specifically for children. There was cash of £4.6m at the end of 2019.
MAIN MARKET
Automotive information publisher Haynes Publishing (HYNS) is recommending a 700p a share bid from Infopro Digital, valuing the company at £114.5m. The two companies fit well together and will have greater scale.
Finance provider S and U (SUS) says that its figures for the year to January 2020 will be in line with expectations and trading has been getting better in the past few weeks. The used car market has held up well even though the new car market is week. This is why second hand car finance provider Advance should produce another record performance in 2020-21. Property bridging finance provider Aspen has made the progress hoped because of delays in repayments and the loan book is lower than expected, but it is still a young business. A 2019-20 pre-tax profit of £35.5m is expected to increase to £39m this year. The latest total dividend will be raised by around 5% to 124p a share.
JLEN Environmental Assets (JLEN) is raising cash from the placing of up to 49.7 million shares. This will fund a pipeline of investments. The bookbuild will close on 26 February.
Ultimate Products (UPGS) says that sales growth is easing this year with first half revenues 3% ahead at £67.7m. There is also uncertainty about the supply of products from China. Even so, Shore is maintaining its full year pre-tax forecast of £8.77m, a small increase on last year. That could change.
Zenith Energy (ZEN) is widening the geographic scope of its activities by negotiating to acquire an oil production licence in West Africa. Zenith has raised £135,000 through a share issue at 1.5p a share. It has also entered into an equity sharing agreement with a consortium of institutional investors. The nominal amount raised is £810,000, but the ultimate amount will depend on the share price when each tranche is paid over the next 12 months. The benchmark price is NOK0.2231/share, equivalent to around 1.85p. The share price is 1.43p, so the first instalment is likely to be below the notional level if there is no share price recovery.
BATM Communications (BVC) has gained a $1.3m order from a Middle East-based poultry firm for its agri-waste treatment system.
Fasteners supplier Trifast (TRI) says market conditions are more challenging and there has been a slow start to the fourth quarter, which is normally the strongest. Margins have fallen and profit will be at the lower end of the range of forecasts. The Coronavirus has led to the extended closure of Chinese sites, but this is a small percentage of production.
Cathay International Holdings (CTI) says that production at its plants is on hold or preparing to gradual resume production because of the effects of the Coronavirus. The hotel business has been hit by a sharp reduction in occupancy rates.
Avation (AVAP) has made firm orders for two ATR 72-600 aircraft that will be leased to US-Bangla, the largest private airline in Bangladesh.
Predator Oil and Gas (PRD) is raising £3.56m at 4p a share. This will finance the drilling of the Moulouya well in Morocco and provide cash for further investment in Trinidad.
Andrew Hore
Andrew Hore Quoted Micro 25 November 2019
NEX EXCHANGE
National Milk Records (NMRP) says that revenues in the quarter to September 2019 fell to £5.25m. They were £5.54m in the previous quarter and £6.08m last year, although that was boosted by one-off projects. A cyber-attack hit business, but systems have been restored. Canaccord Genuity has been appointed as corporate adviser.
Western Selection (WESP) has acquired nearly 3.64 million shares in the Bilby (BILB) placing. That has more than doubled the number of shares owned by Western Selection and it owns 10.8% of Bilby, up from 6.66%.
Belvedere Leisure Resorts (www.belvedereleisureresortsplc.com) is expected to gain a quotation for £10m of its 6.25% secured bonds on 29 November. The company is a subsidiary of Belvedere Leisure Park, which owns a site in Dumfries & Galloway with planning permission for a lodge park resort of 444 holiday lodges. The park will be built by Landal GreenParks.
Formerly AIM-quoted SAPO (www.sapoinvest.com), which was known as South African Property Opportunities, plans to join the NEX Growth Market on 2 December. The plan is to use the Isle of Man-based company as a shell to invest in the UK rural broadband market, although Labour plans for the broadband market could affect this strategy. Executive chairman Michael Meyer will own 40.55% of SAPO and three shareholders will own 84.8%.
Bracken Trading (BRAC) has decided to withdrawal is preference shares from NEX trading on 18 December. Trading had started on 9 September. There have not been any trades.
Altona Energy (ANR) is acquiring a petroleum exploration licence application within the Arckaringa Basin in South Australia. This is close to the company’s existing exploration licences. There could be potential for a gasification project. Management has decided not to invest in the potential vanadium investment.
Tectonic Gold (TTAU) says that its subsidiary has received a tax refund of $279,275. Drilling at Specimen Hill shows gold bearing mineralisation in all holes. There are targets for follow-up drilling.
BWA Group (BWAP) has not received £80,000 of the £100,000 subscription funds for convertible loan notes issued when Kings of the North Corp was acquired. Alternative funding is being secured. Vilhjamur Thor Vilhjalmsson, chief executive of 23.75% shareholder SX, has resigned as a director of BWA and been replaced by Mark Billings.
Block Commodities (BLCC) has appointed Ian Tordoff as chief executive. He has experience in the healthcare sector and has been involved in assessing the potential cannabis-based compounds.
DXS International (DXSP) chief executive David Immelman’s wife acquired one million shares at 10p each from Ron Rhodes during September. That takes David Immelman’s interests to 13.3%.
The ten-for-one share consolidation has been approved by World High Life (LIFE) shareholders. Dealings in the new share started on 20 November.
AIM
A competing bid approach led Hanover Acquisition to increase its bid for Brady (BRY) from 10p a share to 18p a share, which values the risk management and commodity software company at £15m. Hanover has bought shares owned by Kestrel and Coltrane Master Fund and these stakes have taken its shareholding to 46.1%, so the bid is mandatory.
Feedback (FDBK) has secured its first pilot study for its Bleepa communications platform that can be used to securely access medical grade images via mobiles and PCs. The Pennine Acute Hospitals NHS Trust will use Bleepa for respiratory requests. Bleepa will be the main focus for Feedback and it offers the potential for significant recurring revenues. Less money will be spent on TexRAD.
Keeping up with tradition Immunodiagnostic Systems Holdings (IDH) released its interims at 4.35pm on Friday. This was the same time as the previous trading statement and earlier than the previous interims which were released at 5.04pm on a Friday. Revenues remain flat and there was a pre-tax loss. Cash was £28.1m at the end of September 2019.
Nick Develin is stepping up from chief operating officer of Naked Wine (WINE) to takeover from Rowan Gormley as chief executive. The company has sold its other operations and is purely an online wine retailer. UK trading ahs been weak, but the US is going well.
Kape (KAPE) is almost doubling its earnings per share by acquiring Private Internet Access, which expands the range of security software the group can offer. The acquisition will cost up to $95.5m in cash and shares, plus debt. Kape will have net debt following the acquisition, but this should be paid down over the next two years.
Litigation finance provider Manolete Partners (MANO) is building up its business having raised cash when it floated at the end of last year. Interim revenues rose by 15% to £7.5m, but most of those revenues were unrealised gains. That meant that there was a cash outflow in the period. This is due to the higher number (and higher value) of cases being taken on and many of these will be completed and generate cash in the second half. Manolete focuses on insolvency cases and this means that they tend to be settled much quicker than ones handled by Burford Capital.
Having failed to secure the financing for its proposed acquisition, Stirling Industries (STRL) is cancelling its AIM quotation and management plans to place the company in liquidation.
First Property (FPO) increased like-for-like interim revenues by 10% to £8.1m. The spare space at CH8 in Warsaw is being filled. The interim dividend has been edged up to 0.46p a share. The underlying NAV is 50.7p a share.
Nostra Terra Oil and Gas (NTOG) has sorted out its interest in Egypt at no cash cost. The stake is being transferred to the operator. The deal is expected to be completed by the end of 2019, although it can be terminated if it is not.
Social video company Brave Bison (BBSN) expects to make a full year loss on reduced revenues of £16m. That is worse than expected. Changing Facebook policies have made trading difficult. Management is trying to reduce the dependence on Facebook. There was £3.8m in the bank at the end of October 2019. Costs are being reduced. Robin Miller will step down as chairman at the end of 2019. CIP Merchant Capital (CIP) recently increased its stake in Brave Bison to 11.7%.
Digital TV software developer Mirada (MIRA) increased underlying revenues by 11% to $5.74m, but it is still losing money. However, contracts are being won with potential for more over the next few months. Net debt has fallen to $3.53m following the sale of Mirada Connect for £2.12m ($2.72m).
City of London Group (CIN) says that its subsidiary Recognise Financial Services has applied to become a bank. The plan is to offer financial services to smaller companies and savings products. The company hopes to be authorised later in 2020, but that may prove optimistic. City of London Group will have to raise cash to finance the development of the bank.
Shareholders took up 10.9% of the open offer shares in Xeros Technology Group (XSG) and this raised £217,000.
A general meeting requisition has been lodged with Plutus PowerGen (PPG) and the intention is to remove all the current directors. They would be replaced with Nicholas Lee, David Horner and Dr Nigel Burton.
Mporium (MPM) has appointed an administrator and the business has been sold to management. There is unlikely to be anything for shareholders.
MAIN MARKET
Semiconductors supplier CML Microsystems (CML) reported a decline in revenues and profit in the six months to September 2019. The storage products revenues fell by nearly one-quarter, while there was a 4% decline in communications revenues. However, an overall improvement on the first half is expected in the second half. Interim pre-tax profit fell from £2.4m to £900,000. A full year pre-tax profit of £2.6m, down from £3m is forecast.
Macfarlane Group (MACF) has increased revenues by 4% in the four months to October 2019. The packaging supplier has reduced overheads to offset price deflation. Full year performance is expected to be better than last year.
Fasteners supplier Trifast (TRI) has increased market share, but that has only partly offset the tough underlying markets. Interim revenues were 2% lower at £103.1m, while underlying pre-tax profit was 8.5% down at £10.6m.
Rainbow Rare Earths (RBW) has acquired ten mining claims in northern Zimbabwe and they cover carbonatite type bodies. The properties were previously explored for phosphates.
Kin + Carta (KCT) has made its first digital transformation acquisition in the form of Colorado-based Spire. The initial payment is $14.8m with a further performance-based payment next February and another after that. The company has raised £13.6m at 89p a share.
Specialist Fund Market-quoted Marwyn Value Investors Ltd (MVI) is returning £5.31m to realisation shareholders. That includes £5.28m from the takeover of BCA Marketplace and a small amount of liquidation proceeds from Gloo Networks. There will be a pro rata redemption of realisation shares. The shares will go ex-redemption on 6 December.
Andrew Hore