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Andrew Hore – Quoted Micro 10 June 2019
NEX EXCHANGE
Proton Partners International Ltd (PPI) has asked Woodford Investment Management to subscribe for £25m worth of shares at 176p a share. This is part of an agreement with Woodford that was outlined in the prospectus and it comes at a time when the fund manager is coming under pressure for poor performance and it has closed redemptions from one of its funds. The cash will pay off a loan and provide working capital.
NQ Minerals (NQMI) is making a £155,000 investment in Tasmania Energy Metals and the two companies will evaluate whether they should develop an integrated facility for the treatment of metal concentrate. NQ also has an exclusivity period until the end of July during which to decide whether to acquire Tasmania’s assets.
Sativa Investments (SATI) has signed an offtake agreement with a Swiss supplier of cannabis oil. This will be used to manufacture cannabidiol products.
AfriAg Global (AFRI) has invested £300,000 in Apollon Formularies for a 0.71% stake. Apollon plans to open a licenced retail medicinal cannabis dispensary and processing facility in Jamaica by the end of the month.
Newbury Racecourse (NYR) says that it is unlikely to return to paying dividends or return capital to shareholders before 2022 at the earliest. There is uncertainty about future revenue streams from fixed-odds betting terminals and how this could impact UK betting. It could reduce prize money levels. The onsite hotel has increased revenues by 15% so far this year.
Trading in shares of Equatorial Mining (EM.P) has been suspended ahead of publishing accounts. They should be published at the time of the general meeting to gain approval of the acquisition of Rwanda-based miner and explorer Eastinco. A £1.2m fundraising is also planned.
Altona Energy (ANR) has signed a memorandum of understanding with Shaanxi Qianyan Vanadium and Magnesium Mining, which owns a vanadium mine in China. The plan is to forma joint venture where Altona will be the controlling shareholder. Due diligence will take up to six months and there will be a JORC-compliant mineral resource classification report. The estimated reserve is 190,000 tonnes of vanadium.
Formation Group (FRM) has secured a £10m subscription at 7.71p a share through the acquisition of Zandra Holdings, whose asset is £10m in cash. This takes the Kennedy Private Trust stake in Formation to 89.99%. A £10m loan facility ahs also been secured.
The Little Bear mine area has been transferred to Panther Metals (PALM) and the Little Bear vein is a high priority drill target in order to see if the bonanza grade gold mineralisation still exists at depth. Panther has also applied for a licence over the Annaburroo gold project in Northern Territory, Australia.
Walls and Futures REIT (WAFR) has secured a £600,000 secured revolving credit facility and spent £465,000 on a bungalow in Didcot to be redeveloped into a home providing specialist support for four adults.
Valiant Investments (VALP) is raising £263,000 at 1.5p a share and it is changing its name to Eurocann International as an indication of the change in strategy to investment in the medicinal cannabis sector. Jeremy Rose will become chief executive and he has a number of directorships including of Speakeasy Cannabis. Burns Singh Tennent-Bhohi will become a non-executive.
EcoVista (EVTP) had £419,000 in cash at the end of February 2019 and it is seeking further investment. The interim loss declined from £238,000 to £202,000. Net assets were £1.19m at the end of February 2019.
Share trading in Wishbone Gold (WSBN) has been suspended because it has not published its 2018 accounts.
AIM
The smart machines division of Vianet (VNET) is going to be the source of profit growth for the coming years. Profit can be improved by converting the vending machines that came with the Vendman acquisition to Vianet’s contactless technology, as well as winning new business. The smart zones pub dispensing technology division should be able to maintain its contribution with lower UK profit due to pub closures being offset by an improved performance in the US. Pre-tax profit is expected to improve from £2.7m to £2.9m, although earnings per share will be hit by a higher tax charge.
Interim revenues at smart home devices supplier LightwaveRF (LWRF) increased 120% to £2.5m, although there was still a pre-tax loss of £1.35m. New distribution channels are helping to accelerate growth in revenues. The company could move into profit next year
Bad weather in the US has hampered the progress of Somero Enterprises (SOM) and led to forecast downgrades. Demand for concrete levelling equipment is normally stronger in the spring. This year’s earnings have been cut by 12% and next year by 11%. This will also reduce the potential dividend. The forecast 2019 normal dividend plus payout of surplus cash has been cut from 27.8 cents a share to 19.8 cents a share.
Waste-to-energy technology developer EQTEC (EQT) is acquiring a 19.99% stake in North Fork Community Power, a biomass gasification power project in California. EQTEC will supply $2.5m worth of equipment from its Newry site in return for the stake. It also expects to generate €2.2m from selling additional equipment.
Microsaic Systems (MSYS) has signed a distribution agreement for the Microsaic 4500 MID MS detector with CM Corporation for the South Korean market.
A shareholder owning a 17.2% stake in Rurelec (RUR) intends to propose an AGM resolution for the appointment of Gordon Fisher as a director. He is a former boss of a freight forwarding and customs brokerage. The electricity generator reduced its pre-tax loss from £5.8m to £600,000 in 2018, mainly due to lower overheads, exchange gains and a disposal gain. NAV is 4.4p a share, which is more than four times the share price.
Driver (DRV) had already said that its interims would be disappointing and pre-tax profit slumped from £2.11m to £762,000. The Middle East and Asia Pacific were tough markets with lower contributions. The expert witness operations made a reduced contribution. A 0.5p a share interim dividend was announced, and the ex-dividend date is 19 September. The company is also buying back shares in order to put a floor under the share price.
Chemicals-focused shell Wilmcote Holdings (WCH) is in exclusive discussions with Arclin Inc for a potential acquisition. Trading in the shares has been suspended.
Acquisitions consultancy K3 Capital (K3C) has confirmed that trading is in line with previous guidance and EBITDA is at the upper end of the range of £4.5m to £5m. An 80% payout would mean a reduction in dividend from 11.2p a share to 7.2p a share.
Osirium Technologies (OSI) has won a contract with a European telecoms services provider. The three year contract covers cyber security software and services.
MAIN MARKET
A strong first half has continued into the second half trading for automotive information publisher Haynes Publishing (HYNS) and pre-tax profit for the year to May 2019 is expected to exceed expectations by 10%. This suggests pre-tax profit of around £2m. The results will be announced on 12 September.
Caffyns (CFYN) reported a small improvement in underlying pre-tax profit to £1.45m in the year to March 2019. New car sales were 10% lower, which is more than three times the market decline. However, there was growth in used car sales and aftersales revenues.
Positive news from Argo Blockchain (ARB) where results for May were well ahead of the company’s budgets. New cryptomining hardware has started contributing faster than expected and rising cryptocurrency prices have improved mining yields. A further £2.85m is being invested in equipment. There was £685,000 generated in May, based on a bitcoin price of $8,575, while cash operating costs were £280,000. Second quarter figures will be better than expected. If the bitcoin price is maintained, then there will be £2.85m of crypto assets at the end of the second quarter.
BigDish (DISH) has raised £2.1m at 7.2p a share and this should be enough cash for the restaurant platform until 2021. The UK rollout will be accelerated.
Pembridge Resources (PERE) is acquiring the Minto mine from Capstone Mining. Pembridge will pay up to $20m out of future cash flows. Commercial production could recommence before the end of the year. A $10m loan has been secured.
Symphony International Holdings (SIHL) has made an investment in Soothe Healthcare, which manufactures feminine hygiene products under the Paree and Pariz brands.
Andrew Hore
Andrew Hore – Quoted Micro 6 May 2019
NEX EXCHANGE
In 2018, Newbury Racecourse (NYR) increased revenues by 8% to £19.3m. This was despite lower race course attendances because of two abandoned days of racing. Underlying pre-tax profit jumped from £188,000 to £568,000. The NAV was £50.7m at the end of 2018. There was a further £3.25m payment from David Wilson Homes, which helped to finance capital investment.
MetalNRG (MNRG) has entered into heads of terms with AIM-quoted Mkango Resources so that it can earn up to 75% of the Thambi licence in Southern Malawi. The licence allows exploration for uranium, tantalum and niobium. MetalNRG has to spend $500,000 in the first 12 months and then a further $700,000 in the next 12 months. A further $800,000 has to be spent in the third year to earn the full 75%. The Kyrgyz Republic has banned uranium exploration and mining and the farm-in agreement for the Kamushanovskoye uranium deposit has been suspended.
Secured Property Developments (SPD) had a NAV of £554,000 at the end of 2018. There is £584,000 in cash on the balance sheet.
High Growth Capital (HASH) has raised £4.99m after expenses via a placing at 1.75p a share with Mirador FZE, which also has warrants to subscribe for 300 million shares at 2.5p each until the end of 2019. If the High Growth Capital share price closes above 4p for five consecutive days, the warrants have to exercised or they will lapse. Mirador has a 14.2% stake. Mike Power has been appointed as a non-executive director.
Sativa Investments (SATI) has opened the first Goodbody and Blunt centre in Bath. The centre will sell cannabidiol products and have a café area.
V22 (V22O) is asking shareholders to approve the cancellation of the NEX quotation 31 May, after nearly 13 years on the market. The art investor and studio space provider plans to sell assets and distribute the cash to shareholders. A matched bargains quotation via JP Jenkins is planned for six months after leaving NEX.
Trading in Valiant Investments (VALP) shares has been suspended because it has not produced its annual report.
Queros Capital Partners (BFD) has raised £205,000 in the past two weeks from the issue of 8% unsecured bonds 2025.
The shortlist for the NEX share of the year at the Small Cap Awards 2019 has been announced. The companies are National Milk Records (NMR), Sativa Investments (SATI), NQ Minerals (NQMI), Chapel Down (CDGP), DXS International (DXSP) and Walls and Futures REIT (WAFR) ,which is also on the shortlist for impact company of the year.
AIM
Capital equipment manufacturer Mpac Group (MPAC) is acquiring Lambert Automation for an initial £15m. UK-based Lambert provides automation equipment to the medical and healthcare markets. Revenues and profit have been declining, but there was an order intake of £24.5m in 2018 and that should help revenues to recover. Revenues were £17.9m in 2018. There is potential earn out consideration of up to £2.5m. Mpac’s own trading is in line with expectations.
Park Group (PARK) says that trading was better than expected in the second half of its financial year, but there were additional costs and the effects of accounting changes. Edison has reduced its 2018-19 pre-tax profit by 3% to £12.5m. Additional costs next year mean that the profit forecast has been cut from £14.3m to £11.7m.
Tracsis (TRCS) has acquired timetable optimisation software developer Bellvedi for an initial £4m with up to £7.9m more payable over four years depending on performance. Bellvedi made a pre-tax profit of £700,000 on revenues of £1.6m last year. Acquiring the ATTUne software means that less needs to spend on the development of existing Tracsis software. The deal adds 2% to this year’s earnings per share, moving it to 27.3p. Next year’s is enhanced by 7% to 32.3p.
Competitions organiser Best of the Best (BOTB) has published a fourth positive trading update in a year. This prompted finnCap to increase its earnings forecast from 15.4p a share to 18.6p a share. The previous upgrade was in January. The switch to a predominantly online model is paying off. Any upgrades to the forecasts for the year to April 2020 will happen after the 2018-19 figures are published on 20 June.
Allergy Therapeutics (AGY) says that the PQ Grass allergy phase III study will start a year later than expected. It should commence by June 2020. This follows an end of phase II study meeting with the FDA. This means that this year and next year the reported loss will be lower because of deferred spending on the study.
Eight Peaks Group (8PG) plans to cancel its AIM quotation because of limited liquidity. This will save £80,000 a year.
Trading in the shares of property investor Safeland (SAF) will end on 10 May.
MAIN MARKET
Motor dealer Pendragon (PDG) is selling two Jaguar Land Rover dealerships in California. This is expected to generate around £60m of cash, although £6.9m of profit contribution before central costs will be lost. However, Jaguar Land Rover has right of first refusal.
Papillon Holdings (PPHP) has appointed Novum as broker and it has committed to invest £300,000 in convertible loan notes. The planned purchase of a 50% stake in used car market focused fintech company Pace Cloud.
Ross Group (RGP) has reported its 2018 results, but these are before the completion of the Archipelago Aquaculture which happened early in 2019. Revenues fell from £335,000 to £60,000 and a profit of £57,000 was turned into a loss of £250,000. That is partly down to costs relating to the acquisition of Archipelago Aquaculture.
Thalassa (THAL) received acceptances of 18.5% of the share capital in its bid for Local Shopping REIT (LSR) and this offer has lapsed. Thalassa owned or had acceptances of 39.3%.
Standard list shell Bermerle (BERM) went to a 50% premium on the first day of trading. However, the bid/offer spread of 1p/2p means that investors could only sell at the 1p a share placing price. The company is seeking a pharma acquisition. The areas that Bermele is assessing include diabetes, cancer and mental health. It is also looking at personalised medicine.
Standard list shell Auctus Growth (AUCT) had £920,000 in the bank at the end of 2018. Fellow shell daVictus (DVT) had £355,000 in the bank at the end of 2018 and it has agreed to buy the rights to a restaurant concept from Typical Dutch NV for £100,000. The Havana Rolled Cigar Music Café concept has been developed at a site in Aruba. Spinnaker Opportunities (SOP) has also secured a possible acquisition in the form of Kanabo Research, which is a medicinal cannabis oil company. Kanabo is developing over the counter products and has distribution rights to a vaporiser. Spinnaker had £1.04m in the bank at the end of 2018.
Trading in the shares of Tex Holdings (TXH) and Avocet Mining (AVM) has been suspended because they have not published 2018 accounts.
Andrew Hore
Andrew Hore – Quoted Micro 9 July 2018
NEX EXCHANGE
Ananda Developments (ANA) joined NEX on 4 July having raised £930,000 at 0.45p a share. Ananda is the latest medicinal cannabis-focused investment vehicle. The pre-money valuation was £500,000 There are already potential investments being assessed and management has built up relationships with businesses in Israel and Canada. A reverse takeover valued at up to £10m appears most likely.
Medicinal cannabis business investor Sativa Investments (SATI) has acquired PhytoVista Laboratories from a company owned by Sativa boss Geremy Thomas. Sativa is paying £235,000 in cash and £200,000 in shares at 4p a share. PhytoVista operates a laboratory that tests cannabis oils and hemp products. Because of the demand for the shares, the shareholders originally subject to the orderly market arrangements will be allowed to trade in the shares with the consent of Peterhouse.
KR1 (KR1) has made four more investments. The company invested £593,000 in Dfinity network tokens. Dfinity is developing a supercomputer to host the next generation of software and it is expected to offer unlimited capacity. A further £100,000 has been invested in the Flying Carpet Project, which is involved with a communication protocol for devices, such as drones and automated cars. The number of tokens that the cash will represent has not been decided. A 1.25% stake has been acquired in Connext Inc, which is developing a payment hub, for $50,000 and the same amount of money has acquired a 10% stake in Blocksmith. There is a 12-month option to acquire a further 5% of blockchain system development agency Blocksmith for $100,000
Ace Liberty and Stone (ALSP) has increased its dividend by 25% to 1.25p a share. The shares go ex-dividend on 12 July. This will cost £500,000. Property acquisitions have been completed in Oldham and Wigan. The total cost is £6.4m and the rental income is just over £597,000.
Monreal (MORE) has left AIM and joined NEX. Monreal has net cash of £730,000 and the plan is to invest in private technology, media and telecoms businesses.
Tectonic Gold (TTAU) has received a refund of €289,000 (£256,000) from the French tax authorities. This relates to the 2009 tax year and Tectonic hopes to get a €416,000 (£368,500) refund for the 2010 tax year. VSA Capital has been appointed as financial adviser and joint broker.
Ganapati (GANP) is launching blockchain-enabled casino games and plans to issue a utility token, which will be called G eight C, through an initial coin offer. Pre-sales of the tokens should start in the fourth quarter of 2018.
EcoVista (EVTP) has raised £300,000 at 0.035p a share.
There have been previously unreported trades by a broker in Karoo Energy (KEP), All Star Minerals (ASMO), Valiant Investments (VALP) and Clean Invest Africa (CIA).
AIM
Film and video localisation services provider Zoo Digital (ZOO) continues to gain momentum. Content owners can sell programmes in additional territories because using Zoo’s services means that it is economic when it was not in the past. That means that the addressable market is even bigger because it includes back catalogue that would not have been localised previously. In the year to March 2018, revenues rose from $16.5m to $26.8m and Zoo moved into profit. That pre-tax profit is expected to more than treble to $1.8m this year.
eve Sleep (EVE) is growing but not at the rate that was hoped for and the chief executive and founder has stepped down. That was inevitable considering the ridiculously high valuation put on the company when it floated and how it has not justified that level of optimism. The mattress supplier grew sales by 61% in the first half when the market had expected more than doubled sales. A new distribution agreement with beds retailer Dreams should help supplement growth in the second half. Even so, eve Sleep is not expected to make a profit until 2020.
Sinclair Pharma (SPH) has received a bid approach from Huadong Medicine and discussions are at an early stage. Both companies supply aesthetic products. Sinclair says first half revenues outside of the US grew by 18% and overall sales improved from £20.1m to £21.3m. US sales fell from £2.5m to £800,000 following the split from the company’s former partner. The direct sales operation in the US is beginning to generate revenues. Net debt was £14.8m at the end of June 2018.
Integumen (SKIN) is not proceeding with the reverse takeover of biomaterials company Cellulac but it hopes to acquire a minority stake. The 2017 accounts have still not been published.
Digital imaging technology developer Kromek (KMK) increased its revenues by nearly one-third to £11.8m in the year to March 2018 and the loss was down from £3.79m to £2.34m. There is £7.7m in the bank and that should be enough to enable Kromek to reach a cash generative situation. The medical business is growing particularly well, while nuclear detection has good prospects for medium-term growth.
Telematics firm Quartix (QTX) reported first half revenues grew by nearly 10% and flat profit. Insurance business is declining because of competitive pricing so all the growth is coming from overseas fleet business. Full year earnings per share are likely to be flat. The forecast dividend of 13.5p a share would not be covered by earnings of 12.8p a share.
Defence equipment and services supplier Cohort (CHRT) managed to improve its pre-tax profit from £14.5m to £15.5m even though the defence market was tough. Management believes that the order book has fallen due to delays to projects. The dividend was raised from 7.1p a share to 8.2p a share.
Technology business investor Mercia Technologies (MERC) reported flat NAV of 40.7p a share but it has a number of investments that could mature over the next couple of years and their valuations could be upgraded. Mercia nearly covered its expenses with its revenues. There is still £52.9m of cash that can be invested.
Waste to energy plants developer Powerhouse Energy (PHE) has raised £694,000 at 0.5p a share. Powerhouse had £750,000 in the bank at the end of 2017 but there are still significant cash outflows.
Direct carrier billing company Boku Inc (BOKU) appears on course to make a £2.7m pre-tax profit this year. Boku processed $1.5bn worth of transactions in the first half and revenues should be nearly $17m. There was $30m in the bank at the end of June 2018.
Churchill China (CHH) says that first half trading is stronger than expected on the back of growing sales in Europe. The interims will be published on 30 August.
EQTEC (EQT) has secured $3.2m (£2.4m) in new loan facilities from Cuart Investments Fund and associates. This will be drawn down in two instalments. Origen Capital put together the lenders and it is subscribing £1.15m at 0.6p a share. Existing lenders have agreed to capitalise £693,000 of interest. This means that the previous loan facility has ended.
MAIN MARKET
Shefa Yamim (SEFA) has made a high grade spinel discovery. The northern Israel-focused gemstone explorer has found nine different gemstone minerals.
Software company Gresham Technologies (GHT) is paying up to €8.5m for B2 Group, which will add €1.4m in revenues and should be earnings enhancing in its first full financial year. The customer base includes banks, insurers and asset managers. Gresham expects its own first half revenues to be 5% lower due to a weak performance in Australia. Net cash was £6.8m at the end of June 2018.
Electronic Data Processing (EDP) has recommended a bid from a company owned by Kerridge Commercial Systems. The cash offer is 91p a share and values the enterprise resource planning software provider at £11.9m.
Andrew Hore
Andrew Hore – Quoted Micro 7 May 2018
NEX EXCHANGE
Forbes Ventures (FOR) has sold its stake in KCR Residential REIT (KCR) for £145,000. The remaining investment is in challenger bank Civilised Investments Ltd. Nigel Quinton, who has run two building societies, has been appointed as finance director of Forbes. Igor Zjali has become a non-executive director. The investment strategy covers disruptive technology in the property and fintech sectors.
KR1 (KR1) has been raising cash from partially disposing of token holdings. Cash has been generated from sales of tokens issued by six projects and this will be available for re-investment. KR1 has already acquired 30,587 tokens in the Waves project at $6.41 each.
Angelfish Investments (ANGP) says that there has been a further delay in its investee company Rapid Nutrition’s plans to gain a quotation in London. Rapid, which is already quoted on the SIX Swiss Exchange, has developed a nutraceutical product range. One of the terms of a £150,000 loan to Rapid was that it should be admitted to the London market by the end of February, but this date was extended to the end of April and has been extended again to the end of July. The principal and interest, up until the end of February, will convert into Rapid shares. Interest has been payable in cash since the end of February.
EPE Special Opportunities (ESO) reported a 35.6% decrease in NAV to 234.4p a share at the end of January 2018. That was mainly down to the poor performance of fully listed LED lighting company Luceco (LUCE) after sales growth did not turn into higher profit. EPE is considering exercising the option to redeem up to 50% of the outstanding unsecured loan notes. Redeeming £4m of loan notes would save £300,000 in interest. There is £28m in the bank.
Middle East-focused investment company Indigo Holdings (INGO) has lost €165,300 on an Iran-based car ride-sharing app. This will be mainly offset by a book gain of around €160,000 on its investment in Sheypoor following another fundraising round.
NQ Minerals (NQMI) has started to refurbish the Hellyer flotation plant in Tasmania. The mill should be commissioned in the third quarter of 2018.
First Sentinel (FSBN) has invested in AIM-quoted Amur Minerals and unquoted Titan FM Ltd in April. An investment of $250,000 has been made in the form of a contribution to a $10m loan facility made available to Amur. Titan FM is an acquisition vehicle in the facilities management sector with a focus on areas covered by strict regulation. The £50,000 pre-IPO investment helped to finance the first acquisition of a provider of air conditioning and refrigeration services. Two more acquisitions are planned this year as is a quotation on NEX. The latest tranche of First Sentinel bonds has raised a further £1m.
Valiant Investments (VALP) reported a flat full year loss of £216,000 and this would have been higher if there had not been a swing from a £3,000 loss on listed investment movements to a £25,000 gain. Valiant has invested some of its cash in five AIM-quoted, dividend paying companies. Valiant had a NAV of £197,000.
Sandal (SAND) has appointed David Munting as finance director and Richard Green as a non-executive.
AIM
Minds + Machines (MMX) swung from loss to profit in 2017 and it is acquiring four top level domains. Minds + Machines is paying $10m in cash and $31m in shares in two tranches for the membership interests of Florida-based ICM Registry, which owns .xxx, .sex, .adult and .porn. In 2017, revenues were $7.27m (78% recurring) and net income was $3.5m. The recurring nature of the revenues and the reduced dependence on China should help the group to start paying dividends in the next couple of years. Multinational brands buy related domain names with these suffixes so that nobody else can. This helps to boost recurring revenues. Not all of the other purchasers are sex-related, either. The main uncertainty concerns whether the group will get a lower rating because of the association with sex-related businesses.
Sanderson Group (SND) says that its interim results are slightly ahead of expectations and the positive momentum is continuing. The enterprise software supplier’s operating profit has increased from £1.55m to £2m. Two-thirds of the improvement has come from recent acquisition Anisa and the rest is organic.
DX (Group) (DX.) has raised £4.76m at 8.5p a share, which is much higher than the indicated minimum price of 7.41p that is being used to capitalise the company’s loan notes. These additional shares will heavily dilute existing shareholders. The cash will be used to restructure the parcel delivery networks, open new depots and finance IT investment.
Wynnstay Group (WYN) is acquiring eight country stores previously operated by Countrywide Farmers, which has gone into administration. Five of the stores take Wynnstay into Devon and Cornwall. The stores have annual sales of £16.4m.
Berkeley Energia (BKY) has announced plans to move to the standard list and the Spanish Stock Exchanges in Madrid, Barcelona, Valencia and Bilbao. The admissions should happen by the end of May. No money will be raised because the cash injected by the Oman sovereign wealth fund covers the upfront capital costs of developing the Salamanca project in Spain.
A combination of lower costs and higher iodine prices meant that Iofina (IOF) reduced its underlying loss from $5.4m to $3.4m in 2017. There was also a $5.3m impairment charge. There was a cash inflow before working capital movements. The new IO#7 plant started up in February and there could be another plant in the next year. Iofina is on course to be profitable in 2019.
Sinclair Pharma (SPH) has secured a €23m loan facility. This will replace bank debt and help to finance the aesthetics company’s new strategy in the US following the decision to terminate the Silhouette InstaLift distribution agreement with Thermi when reorder rates were disappointing. Negotiations are ongoing with potential distribution partners in the US. There was growth in other markets, including Brazil, and the 2017 loss was lower.
Pelatro (PTRO) provides precision marketing services to telecoms companies that helps them to retain subscribers and generate more income from each of them. Maiden results for Pelatro show a jump in underlying profit to $1.8m but the trade receivables are the most significant number in the accounts. Despite the profit there was a small cash outflow after tax payments. That is because trade receivables were $1.78m and $756,000 of that figure is for more than 121 days. That is because the company used extended payment terms to help to attract a customer. There is $3.1m in the bank so Pelatro has the cash to finance additional working capital for that and future deals. It is best to keep an eye on the trade receivables.
Rose Petroleum (ROSE) has raised £1m at 3.25p a share. The cash will be used to finance progress with the Paradox project towards being drill-ready. There are also other partnership and investment opportunities in the region.
Gloo Networks (GLOO) cannot find a suitable acquisition and it is winding itself up. Shareholders should receive at least 47p a share. The original placing price was 120p, so three-fifths of the cash has gone in less than three years without doing a deal.
Braime (TF and JH) (BMTO) reported a jump in pre-tax profit from £1.3m to £2.2m in 2017. The total dividend has been increased from 9.3p a share to 10.2p a share. Pressings profit was flat and the improvement came from the materials handling division.
Safestyle UK (SFE) says Steve Bermingham will retire as chief executive at the end of this year and he is being replaced by Mike Gallacher, who until recently ran First Milk, the farmer-owned milk business, which he restructured.
Trading in Green and Smart Holdings (GSH) shares was suspended because it did not publish its 2016-17 accounts by the end of March. The audit was expected to be completed by the end of April, but it is still going on and the accounts are not expected before June. Discussions continue with a potential investor.
MAIN MARKET
Stem cell services provider WideCells Group (WDC) is running out of cash and has not been able to publish its 2017 accounts so trading in the shares has been suspended. Directors have loaned the company a further £115,000, on top of a previous £100,000. At the end of June 2017, there was cash of £869,000 and debt of £634,000. That was before any of the director loans. It appears that management has taken too long to sort out the funding it requires and the potential share issue, if it is arranged, could be significantly dilutive.
Nanoco (NANO) has launched Nanoco 2D Materials Ltd in order to develop nanomaterials. The University of Manchester has invested £400,000 via a convertible.
Symphony International Holdings (SIHL) is paying an ordinary and special dividend of 12 cents in total. That will cost $71.5m. The Asian healthcare and hospitality businesses investor has sold investments and realised gains have helped to fund the payment.
St Ives (SIV) has completely exited book printing with the sale of Clays for £20m. The pension liabilities will stay with St Ives and it will contribute £2.5m to the pension fund. Net debt was £42.2m on 2 February 2018.
Trading in Sealand Capital (SCGL) shares has been suspended because it could not publish its 2017 accounts by the end of April.
Small Cap Awards (14 June, Montcalm Hotel, Marble Arch, London) Nominees
IPO of the Year
Alpha FX Group
Appscatter Group
Boku
Keystone Law Group PLC
K3 Capital Group
Rainbow Rare Earths Ltd
Ramsdens Holdings
Xpediator
Company of the Year
Bilby
Bioventix
Faron Pharmaceuticals
Frontier Developments
LoopUp Group
Nostra Terra Oil and Gas Company
TMT Investments
Water Intelligence
Wey Education
ZOO Digital Group
NEX Exchange Company of the Year
Chapel Down
Crossword CyberSecurity
Field Systems Designs
KR1
National Milk Records
Sandal
Daniel Thwaites
Walls & Futures
Executive Director of the Year
Zillah Byng-Thorne (CEO) and Penny Ladkin-Brand (CFO) – Future plc
Dr. Stuart Green, CEO – Zoo Digital Group PLC
Chris Gurry, Group Managing Director – CML MicroSystems PLC
Tom Ilube, CEO – Crossword Cybersecurity PLC
Dr Markku Jalkanen, CEO – Faron Pharmaceuticals
Bobby Kalar, CEO – Yu Group PLC
Dr. James Millen, CEO – Physiomics PLC
Ian Simm, CEO – Impax Asset Management Group PLC
Frazer Thompson, CEO – Chapel Down Group PLC
Andrew Wass, CEO – Gear4Music Holdings PLC
Impact Company of the Year Sponsored by Impact Investment Network
Ashley House
HaloSource
Walls & Future
Fintech Company of the Year
FairFX Group
FreeAgent Holdings
Proactis Holdings
ULS Technology
Transaction of the Year
Proactis Holdings PLC – Acquisition of Perfect Commerce
Work Group PLC / Gordon Dadds Group PLC – Reverse takeover
Atlantis Resources Limited – Uksmouth power stations deal (SUSPENDED)
Frontier IP Group PLC – Transactions FairFX Group PLC – Acquisition of CardOne
7digital Group PLC – Acquisition of 24-7
Impax Asset Management Group PLC – Acquisition of Pax World Management LLC
Analyst of the Year
Vadim Alexandre, Head of Research – Northland Capital Partners
Kevin Ashton, TMT Analyst – Cantor Fitzgerald
Eric Burns, Deputy Head of Institutional Research – WH Ireland Limited
David Johnson, Research Director – Allenby Capital Limited
Rob Sanders, Head of Growth Companies Research – Stockdale Securities Limited
Simon Strong, Head of Research Growth Companies – Cenkos Securities PLC
Journalist of the Year
Smit Berry – Small Company Sharewatch
Joanne Hart – Midas
Jamie Nimmo – Mail on Sunday
Paul Scott – Stockopedia
Mark Shapland – Evening Standard
Merryn Somerset Webb – Financial Times
Simon Thompson – Investors Chronicle
Fund Manager of the Year
Daniel Nickols – Old Mutual UK Smaller Companies
James Thorne – Threadneedle UK Smaller Companies
Nick Williamson – Old Mutual UK Smaller Companies
James Zimmerman – Jupiter UK Smaller Companies
Microcap Fund Manager of the Year
Guy Feld – Cannaccord (Hargreave Hale Limited)
David Horner – Chelverton Small Companies Dividend Trust PLC
Judith MacKenzie – Downing LLP
Katie Potts – Herald Investment Management
Gervais Williams – Miton Group PLC
Lifetime Achievement Award To be announced on the evening
Special Services to Small Caps To be announced on the evening.
Andrew Hore
Andrew Hore – Quoted Micro 19 March 2018
NEX EXCHANGE
Formation Group (FRM) has been repaid its £5m loan for a development in Wembley and it retains a 40% share of the profit of the development. This cash has been used to invest in acquired a 3.44% stake in Proton Partners International, which has an operational proton beam therapy centre in South Wales with two more sites planned. A treatment unit in Abu Dhabi is expected to be launched in 2019.
Capital for Colleagues (CFCP) has loaned £600,000 to TG Engineering, which supplies steel and aluminium components to the aerospace and scientific sectors. The Dorset-based company will be 35%-owned by Capital for Colleagues and 20%-owned by the employee share ownership trust. The rest of the shares will be owned by the original founders and management.
IMC Exploration (IMCP) intends to focus on its main projects in Ireland. The interim loss was reduced from £99,000 to £75,000. There was net debt of £35,000 at the end of 2017.
Block Commodities (BLOC) has agreed to acquire a 21% stake South African fertiliser and plant products wholesaler VIPA Holdings. Block is paying £150,000 for new shares and acquiring £610,000 worth of existing shares in return for 748.5 million Block shares. VIPA is loss-making following the withdrawal of a major international trading partner. The ongoing focus will be fertiliser and the investment in Advanced Agricultural Holdings will be unwound with the 221.6 million shares issued as initial consideration returned to the company.
Primorus Investments (PRIM) has invested £500,000, at £22 a share, in Engage Technology Partners. This follows an initial subscription of £400,000 at £15 a share. Primorus owns 3.6% of Engage, which builds SaaS-based employee workflow software.
Hellenic Capital (HECP) had £272 in the bank at the end of 2017, but since then £179,000 has been raised at 0.5p a share. There was £120,000 generated from operations in 2017 but that was due to a £143,000 increase in creditors. An investment property in Leeds is in the books at £204,000, while the NAV was £58,000 at the end of 2017. The property is being sold for £235,000 and a £5,000 non-refundable deposit has been paid.
Globe Capital Ltd (GCAP) has raised £500,000 via subscription at 0.75p a share. The cash will finance a new office in Dubai. Valiant Investments (VALP) has raised £51,000 at 0.15p a share. The 84.7%-owned Flamethrower has acquired National-Preservation.com, which focuses on British railway heritage, and has nearly 10,000 registered users. Equatorial Mining and Exploration (EM.P) has raised £40,000 from an issue of 5% unsecured irredeemable convertible loan notes and a further £10,000 could come from the exercise of warrants. Via Developments (VIA1) has raised a further £590,000 from a debenture issue, taking the total raised to nearly £6m. The accounting reference date is being changed from March to September.
In 2017, Walls and Futures REIT (WAFR) achieved a total return on its portfolio of 11.5%, ahead of its benchmark total return of 7%.
DHAIS (DHAP) is leaving NEX on 18 April, nearly ten years after joining the market. The business is being streamlined and the focus is organic growth of the hearing aid operations. Shareholders owning 78.9% of DHAIS agree to the withdrawal so the company does not have to hold a general meeting.
AIM
Diurnal Group (DNL) is raising up to £11m at 190p a share in order to finance the launch of the Alkindi hormonal disease treatment for children in Europe and complete the development of Chronocourt in Europe and start a phase III study in the US. IP Group is converting its loan into shares.
Shares in VR Education (VRE) immediately went to a premium when trading commenced. It raised £6m at 10p a share and the share price ended the week at 12.25p. More than two million shares were traded during the week.
1Spatial (SPA) has sold Enables IT back to the founder for £1, while retaining a 19.9% stake. 1Spatial has also injected £150,000 into the business and loaned a further £85,000. The group will be able to focus on its geospatial data operations, which are performing better than expected. 1Spatial is on course to approach breakeven in the year to January 2019.
Marshall Motor Holdings (MMH) is outperforming new and used car markets, although like-for-like sales are still lower. Profit is expected to decline this year but Marshall should be able to continue its progressive dividend policy. There is a significant capex programme but the sale of the leasing business means that net debt is £2.2m.
Pennant International Group (PEN) already has nearly all of the £20.5m revenues forecast for 2018 covered by orders. Pre-tax profit is forecast to improve from £2.1m to £3.5m.
Amryt (AMYT) says that sales of Lojuxta were higher than expected last year. The figure was €11.9m, against the forecast €10.5m. There is still €20.5m in the bank.
Futura Medical (FUM) announced positive pharmacokinetic results for higher doses of the MED2002 erectile dysfunction treatment. This will enable US phase III trials to start later this year. There is £8.36m in cash plus tax credits due.
TechFinancials Inc (TECH) says that Cedex Holdings, where it could acquire a majority interest, has launched its token pre-sale event. One Ethereum (equivalent to £437) will equal 900 CEDEX coins. The blockchain-based online diamonds exchange says that there is strong pre-sale demand.
Genedrive (GDR) has started to sell its Genedrive HCV ID kit in the EMEA region. Sales in Asia Pacific should start in the next few weeks.
Consumer security software provider Kape Technologies (KAPE) improved its pre-tax profit from $4.8m to $6.7m. There is net cash of $69.5m. A 2018 profit of $8.3m is forecast.
Trevor Brown gas cut his stake in Feedback (FDBK) from 11.5% to 9.75%. Lindsay Melvin has taken on the role of finance director.
MAIN MARKET
Advanced foams supplier Zotefoams (ZTF) continues to benefit from investment in capacity and there is more to come. There was growth from all divisions and a good spread of revenues from different sectors. In 2017, revenues were 22% higher at £70.2m, while underlying earnings per share were 14% ahead at 16.6p. The dividend is 3% higher at 5.93p a share. The partnership with Nike to develop footwear technology and supply materials is yet to make a significant contribution.
BATM Advanced Communications (BVC) returned to profit last year and both its telecoms and biomedical divisions have good growth prospects. There is $24m in cash in the bank.
Sportech (SPO) has ended its formal sales process because no suitable offers were received. Trading has been poor and there will be asset write-offs in the 2017 figures. Andrew Gaughan has been appointed as chief executive.
Flying Brands Ltd (FBDU) has acquired Imaging Biometrics for $68,134 in cash and 11 million shares at 4p each, plus $75,000 to cover debt obligations. The final 6.2 million of these shares will be paid by the end of September 2018. The Wisconsin-based company has been managing the CE marking and FDA clearance process for Flying Brands’ StoneChecker visualisation software, as well as commercialising perfusion software IB Neuro, which provides additional information about tumours.
World Trade Systems (WTS) has submitted its application to the International Stock Exchange.
Hemogenyx Pharma (HEMO) announced a collaboration that will generate $250,000 for the blood stem cell-based treatments developer. The partner is a US-based leader in the field of blood cancer treatment and the deal involves the development of a type of humanised mice.
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
Quoted Micro 7 August 2017
NEX EXCHANGE
Valiant Investments (VALP) has raised a further £52,500 at 0.1p a share and its 84.7%-owned subsidiary Flamethrower has acquired FootballTipsFC.com for £40,000. Subscriptions generate £50,000 a year in revenues for the website which provides football betting tips.
Asia Wealth Group Holdings (AWLP) reported a lower loss in the year to February 2017. Revenues improved from $1.2m to $1.53m, while the loss reduced from $150,000 to $110,000. The main business, Meyer Asset Management, made an improved contribution. The auditor has highlighted that no impairment assessment has been made on the investment in Ray Alliance. There is still $869,000 in the bank, following the acquisition of an investment property for $388,000. Management is assessing acquisitions in the fintech sector.
Block Energy (BLOK) has acquired a producing oil field in Georgia. The 90% working interest in the Satskhenisi production sharing agreement will be acquired for 70 million shares (14.35% of Block), which will be owned by Iksander . The field is near the Norio field where Block already has an interest. The permit runs until 2025 with a potential five year extension. Operating costs are up to $25/barrel and the current production from three wells is 10 barrels a day. The sale price is Brent minus $9/barrel. Block will retain 75% of revenues until more than $10m of capital costs are recovered. The purchase includes $500,000 worth of equipment, which can be used in other fields where Block has an interest.
Via Developments (VIA1) has raised a further £100,000 from a placing of 7% debenture stock 2020. Via has completed the Canal Street development in Manchester and the realised gross development value is £2.28m.
Hellenic Capital (HECP) has acquired an office premises in Leeds for £200,000. This was after the latest interims to June 2017. This is part of the new investing strategy. Net assets fell from £81,000 to £59,000 at the end of June 2017, including cash of £28,000.
Capital for Colleagues (CFCP) has invested an additional £150,000 in portfolio company Computer Application Services. Capital for Colleagues initially invested £150,000 in the Edinburgh-based software company at the beginning of 2016 and the latest investment will double the number of A shares it owns to 300,000.
Ecovista (EVTP) has raised £350,000 at 0.035p a share. This takes the stake owned by Hubwise to 12.45% and Elite CAM Balanced Discretionary Fund to 9.34%
AIM
Asset management performance software provider StatPro (SOG) reported a 23% rise in interim revenues to £21.6m, while underlying earnings per share improved from 1.1p to 1.8p. The interim dividend is unchanged at 0.85p a share. There was an initial two month contribution from the UBS Delta business and the annualised recurring revenues are running at £53.2m, which is before the latest three year contract in Australia. The acquired technology will be integrated with StatPro Revolution.
Telecoms infrastructure equipment supplier Filtronic (FTC) reported a jump in full year revenues from £13.6m to £35.4m thanks to a large order for antennas. There was a swing from a £7m loss to a £2.2m profit. The balance sheet is strong with net cash of £2.6m. Future investment in 5G telecoms infrastructure augurs well for Filtronic. Hargreave Hale has increased its stake from £6.16% to 11.3%.
Real Good Food (RGD) says that its forecast for the year to March 2017 was wrong because two anticipated claims have not materialised and it had incorrectly capitalised certain costs. This will knock £2m off expected profit. This revelation comes a few weeks after Downing invested £2.75m at 35p a share and the share price has subsequently slumped to 20.75p. Payments to Pieter Totte and Peter Salter over a three year period were not separately disclosed. Salter has left the Real Good Food board but Totte continues to survive as executive chairman.
Fairpoint Group (FRP) says it intends to appoint an administrator because of the cost of the lease on its head office costing £1m a year for four years. The IVA and related businesses are still being sold.
AdEPT Telecom (ADT) has acquired IT services provider Atomwide, which provides services to schools and local authorities, for an initial £12m. This adds 4% to this year’s earnings and 9% to next year’s. It was partly funded by £7.3m convertible loan from Business Growth Fund, which is convertible at 393p a share.
GetBusy (GETB) joined AIM last week and the share price rose to 34.5p. Cloud-based document management software provider GetBusy was spun out of ASX-listed software company Reckon and raised £3m from a rights issue. The two existing software products, SmartVault and Virtual Cabinet, generated revenues of £8m in 2016 – 82% of which is recurring – up from £6.8m the previous year. Accounting firms generate the majority of revenues and GetBusy is trying to expand in other sectors. Next generation software SCIM is being developed in order to make it easier for businesses to interact with customers and become more organised and productive.
Botswana Diamonds (BOD) has raised £543,000 at 1.25p a share and warrants have been exercised at 0.85p a share raising a further £265,000. The cash will finance exploration in Botswana and to assess an inferred resource for Frischgewaagt.
Ascent Resources (AST) has installed the infrastructure at the Petisovci project in Slovenia to enable the gas to be exported.
TechFinancials Inc (TECH) says that 51%-owned DragonFinancials is paying a dividend of $2m and TechFinancials will receive £1.02m. The payment date is 20 August.
Kestrel Partners has slashed its stake in home improvement products supplier entu (UK) (ENTU) from 21.1% to 7.33%. This investment appears a rare mistake for Kestrel which has a good record of building up stakes in technology businesses. Kestrel was still building up its entu stake in the first quarter of this year. The entu share price is around its all-time low so Kestrel will have made a significant loss on this investment. Meanwhile, entu is trying to secure a refinancing but this is likely to mean that the existing shareholders will be left with little in terms of value. The group continues to lose money.
Thor Mining (THR) is acquiring an interest in Kapunda copper deposit in South Australia. Thor is investing up to A$1.8m in convertible loan notes in a company earning a 75% stake in Kapunda. The initial investment is A$200,000. Conversion of the loan notes could give Thor up to 60% of this company. Due diligence on the US lithium assets has gone well and additional mineralisation has been identified. Director Paul Johnson acquired 500,000 Thor shares at 085p each.
A disposal deal for the interiors division of Stanley Gibbons (SGI) has fallen through because the buyer could not come up with the money. There is a termination fee payable and Stanley Gibbons believes that there are other buyers.
MayAir Group (MAYA) has won a $13.6m order to supply filtration and clean room equipment to a Chinese LCD panel manufacturer and most of the revenue will be recognised in 2017.
Empyrean Energy (EME) has raised £1m at 8.5p a share. Drilling has commenced on the Dempsey 1-15 onshore well in California.
Billington Holdings (BILN) says that its structural steel business has won two contracts worth £14m. One is for a London university and the other is for a distribution warehouse in south west England and some of the work will carry over into 2018.
MAIN MARKET
Diesel engines and parts supplier Associated British Engineering (ABSE) reported a higher loss in 2016-17 and there was also a sharp drop in NAV. The weak oil and gas market continues to hold back the group and revenues fell from £1.77m to £1.04m. The loss increased from £621,000 to £962,000, after a large increase in pension costs. The total cash outflow was just over £1mm similar to the previous year. Cash and financial assets total £968,000. There is a 2.3% stake in AIM-quoted SalvaRx. The initial stake was taken when the company was 3legs Resources. The NAV fell from 73p a share to 50p a share. This is despite a decrease in the pension deficit from £1.93m to £1.38m. There are £3.1m of trading losses and £8.5m of capital losses available but there is no deferred tax asset in the balance sheet.
Andrew Hore
Quoted Micro 12 June 2017
NEX EXCHANGE
Brewer and pubs operator Daniel Thwaites (THW) says that net debt has increased from £34.1m to £47.6m at the end of March 2017 because of investment in the brewery and pubs plus acquisitions. The benefits of this investment is starting to show through. Full year revenues from continuing operations were slightly lower at £84.4m, while operating profit improved from £11.5m to £12.1m. The total dividend is unchanged at 4.46p a share.
Churchill Mining (GHL) has switched from AIM to NEX although trading in the shares remains suspended. Churchill’s main focus is the international arbitration claim against the Indonesian government.
Good Energy (GOOD) received applications for more than £10m of the corporate bonds on offer. The energy supplier has closed the online offer but postal applications close on 12 June – assuming the maximum application level of £20m has not been reached before this.
Coinsilium Group Ltd (COIN) has invested £56,000 in Singapore-based Indorse Pte Ltd, which is developing Indorse, a blockchain-powered professional social network. Coinsilium will also receive a number of Indorse digital tokens in the next few months.
China CDM Exchange Centre Ltd (CCEP) reported a decline in full year revenues from £1m to £898,000. Pre-tax profit fell by two-thirds to just over £2,000. There is £2.3m in the bank and the NAV was £52.1m at the end of 2016. The company is investing in blockchain technology as part of its growth strategy.
Asia Wealth Group Holdings Ltd (AWLP) says that the 45,000 shares it owns in Ray Alliance Financial Advisers have been transferred to the other two Ray Alliance shareholders without any authorisation. Asia Wealth paid $318,000 for the shares back in 2012. Asia Wealth has demanded that the shares are transferred back.
Valiant Investments (VALP) has raised £45,000 at 0.1p a share. The cash will provide working capital and provide the ability to invest more in apps business Flamethrower.
AIM
DX Group (DX.) has renegotiated the terms of the merger with Menzies Distribution which involves the payment of £40m in cash and shares equivalent to 65% of the enlarged share capital – this includes a 5% stake that will be held by the John Menzies pension fund. DX will still have to take on 17% of the pension fund. Cost savings of £10m a year are expected and a dividend is promised. Rebel shareholder Gatemore is backing the revised transaction. Things are still not running smoothly, though. The City of London police is investigating an allegation concerning DX.
MP Evans (MPE) harvested 180,000 tonnes of oil palm fruit bunches in the first five months of 2017, which is one-quarter higher than in the same period of 2016. This is due to a mixture of improving weather conditions and maturing plants. In the same period, palm oil production increased from 37,900 tonnes to 60.100 tonnes. The average selling price has increased by $51/tonne to $606/tonne, while palm kernel prices moved from $414/tonne to $503/tonne. There could be some downward pressure on prices in the second half.
Somero Enterprises Inc (SOM) has announced a special dividend of 13.3 cents a share on top of the normal dividend. This will cost $7.5m and leave the construction equipment company with much more than $10m in the bank even before allowing for cash generated so far this year. Shareholders on the register on 28 July will receive the dividend. Trading in Europe has been strong and the only disappointment has been North America where business has been delayed.
Best of the Best (BOTB) is also paying a special dividend out of its cash pile. Full year revenues grew 7% to £10.8m, while pre-tax profit improved from £1.1m to £1.5m. A normal dividend of 1.4p a share will be paid plus an additional 6.5p a share as a special dividend. There are also plans for the competitions organiser to increase marketing spending.
Waste to energy systems developer PowerHouse Energy Group (PHE) has secured a collaboration agreement with a UK partner that will provide two tranches of funding for the demonstration unit and five systems. The total funding will be up to £500,000.
DP Poland (DPP) has raised £5.25m at 43p a share. The cash will help finance 15 new Domino Pizza stores in Poland this year and finance loans for sub-franchise store openings in 2019.
Trading in Savannah Petroleum (SAVP) shares has been suspended following an exclusive agreement to buy the oil and gas assets of a west Africa-focused company. The structure of the transaction has been agreed in outline and it will involve debt, shares and cash. Due diligence has been going on since January. The shares will remain suspended until a document is published for the reverse takeover.
Nostra Terra Oil & Gas (NTOG) says that the general meeting requisition at US-focused oil and gas company Magnolia Petroleum (MAGP) is by former chief executive and founder Steven Snead using the shares that Nostra Terra has agreed to purchase. The proposals include the removal of chief executive Rita Whittington and the appointment the Magnolia board of Ewen Ainsworth, chairman of Nostra Terra, and Donald Phillips.
Vianet Group (VNET) has restructured its business into two divisions: smart zones and smart machines. Smart zones is based on the fluid measurement and telemetry business with pubs. The US business is moving towards breakeven. The smart machines division is focused on vending machines and there is a significant addressable market. There was a dip in underlying pre-tax profit form £2.8m to £2.6m last year, with a small improvement forecast for this year. The dividend is set to continue to be unchanged at 5.7p a share.
LiDCO (LID) has received 510k clearance from the FDA for the LiDCO Unity version 2. This will enable LiDCO to offer a high usage programme for a fixed annual licence fee. The head of US operations is already in place and ready to push ahead with the strategy. LiDCO is expected to move into profit in the year to January 2019.
Shareholders are trying to requisition a general meeting at Irish gold explorer Conroy Gold and Natural Resources (CGNR) in order to remove six directors. Seamus FitzPatrick, James Jones, Dr Sorca Conroy, Louis Maguire, Michael Power and David Wathen are the directors that the requistioners wants removed and replace them with Patrick O’Sullivan, Paul Johnson and Gervaise Heddle. The three directors not affected by the requisition are Professor Richard Conroy, Maureen Jones and Professor Garth Earls.
Disruptive Capital has made a bid approach to Stanley Gibbons (SGI).
MAIN MARKET
Telecoms services provider Toople (TOOP) raised £1.41m, before expenses of £150,000, and five million shares were issued to directors’ in lieu of a portion of the fees that they are owned. The subscription and offer are still open. On the day of the announcement, the share price fell 1.13p to 2.13p. There was a cash outflow of £552,000 in the six months to March 2017.
Rainbow Rare Earths (RBW) has discovered several unrecorded veins at Gasagwe, which suggests that there is plenty of upside in the mineralisation resources at the Gakara rare earth project in Burundi. Mine construction is on course to deliver rare earth concentrate before the end of 2017.
WideCells Group (WDC) says that it is authorised to sell its CellPlan financial product that helps people to afford stem cells treatment. There are plans to start selling CellPlan to Biovault stem cell storage customers.
Cathay International Holdings (CTI) says that its 50.56%-owned subsidiary Lansen Pharmaceutical plans to pay a special dividend.
Andrew Hore
Quoted Micro 15 May 2017
NEX EXCHANGE
Newbury Racecourse (NYR) increased its revenues by 4% to £16.9m in 2016. Underlying trading profit was 8% ahead at £740,000 but there was also a £19.4m gain on the sale of land for housebuilding partly offset by £3.45m impairment charge. The NAV was £44.4m, which is around double the company’s market value. Net cash is £5.4m. The redevelopment of the racecourse continues with the latest phase due to be completed next year.
Good Energy Group (GOOD) has launched a corporate bond. It wants to raise £10m but could raise the subscription level to £20m. Existing bond holders can roll over some or all of their investment into the new bonds. The bonds have a coupon of 4.75% or 5% for customers.
Via Developments (VIA1) has sold all 26 apartments in Napier House in Luton. Deposits of £394,000 and £52,000 of non-refundable reservations have been received. The project should be completed in the first quarter of 2018.
AfriAg Global (AFRI) continues to seek acquisitions in the agricultural logistics sector. In 2016, revenues grew from £1.98m to £3.04m and the loss fell from £96,000 to £9,000. Directors’ fees were reduced from £108,000 to £19,000. The 40%-owned AfriAg (Pty) increased its revenues by 91% to £11.7m but its reported profit dipped from £359,000 to £104,000.
Walls & Futures REIT (WAFR) has completed its first supported housing sector investment. It has bought a grade two listed building in Stroud for £475,000. There will be further investment in improving the property over the next four months. The property will then be let on a 25 year lease to a UK care provider with rents adjusted each year by inflation.
Capital for Colleagues (CFCP) has invested a further £100,000 in space software and hardware developer Bright Ascension. The initial investment was £150,000 and Capital for Colleagues holds 250,000 A shares. The cash will be used for product development and building up the company’s sales infrastructure.
Anna Halpern-Lande, a cleantech sector expert, has joined the board of Milamber Ventures (MLVP). Two new partners have been appointed. Executive chairman Andy Hasoon has converted £50,000 of his director loan into 312,500 shares at 16p each. Two other individuals have taken shares for fees.
Coinsilium Group Ltd (COIN) has invested $75,000 (£60,000) in Coin-Dash, which is developing a social trading platform for cryptocurrency investors. Coinsilium also has an entitlement to an undisclosed number of Coindash crypto tokens.
MiLOC Group Ltd (ML.P) has raised £276,000 at 28.5p a share from four investors. NQ Minerals (NQMI) has raised a further £230,000 for working capital. Valiant Investments (VALP) has raised £22,000 at 0.1p a share, while 84.7%-owned apps developer Flamethrower has paid $25,000 for advertising revenues generating Minecraft Command website.
AIM
TyraTech Inc (TYR/TYRU) is splitting itself into two businesses so that they can each raise finance to accelerate growth. The separation should be complete by the end of the year. TyraTech used up $2.2m of cash in 2016 leaving it with $1.8m, thanks to cash management in the second half. Allenby expects cash to fall to $700,000 by the end of 2017 but in reality management would hope to have raised money for the two businesses before that time. Marketing spending is required to grow the human health business while further product development investment is required by the animal health business.
Musical instruments retailer Gear4Music (G4M) is increasing its market share in Europe. In the year to February 2017, revenues grew from £35.5m to £56.1m and pre-tax profit jumped from £600,000 to £2.7m. A new head office has been acquired for £5.3m and a German distribution centre is being opened.
Cosmetics supplier Warpaint London (W7L) has done particularly well since it joined AIM and its figures were better than expected leading to an upgrade for this year. In 2016, Warpaint made a pre-tax profit of £6.7m on revenues of £27m. A 2017 profit of £7.6m is forecast. Growth is coming from the UK and internationally with US revenues starting to build up.
RedstoneConnect (REDS) has raised £6.5m at 1.5p a share and £1.4m of this will be spent on systems integrator acquiring Anders + Kern. This will help the group to sell its OneSpace smart buildings software. A one-for-100 share consolidation is planned.
Motor dealer Vertu Motors (VTU) improved its full year pre-tax profit from £26m to £29.8m and its NAV is 62.3p a share. The share price is trading at a discount to NAV of one-fifth. Aftersales revenues continue to grow and used vehicle sales were strong. The new car market has declined but trading in March and April is in line with expectations.
Cambria Automotive (CAMB) has also performed well even though new and used vehicle volumes declined. Acquisitions helped its revenues to grow by 11% while its pre-tax profit was more than one-fifth higher at £5.6m. The full year profit forecast has been edged up to £11.2m.
The proposed energy price cap has hampered Flowgroup (FLOW) in its attempt to sell its energy business. It is still in talks but appears more likely to require to raise an additional £20m. This would be highly dilutive because it would be at 1.5p a share plus convertible securities. Losses will continue for the next couple of years and Flow is reducing its exposure to the microCHP business.
Arian Silver Corporation (AGQ) has completed initial sampling at its Mexican Salar project and this confirms the presence of lithium. Further tests are required to fully assess the mineralisation.
Savannah Resources (SAV) has lodged the Environmental Impact Assessment for the Mahab 4 copper mine development, having already done this for the Maqail South deposit. Savannah owns 65% of the company that has the licence for the block that includes Mahab 4. The approval process is expected to take three months. An economic study should be completed by July.
Active Energy (AEG) is reducing its exposure to Ukraine and dividing its operations into Advanced Biomass Solutions, which will own the CoalSwitch technology, and Timberlands International for the timber asset management operations. Supplying woodchip from Ukraine to Turkish fibreboard manufacturers is the main revenue generator but exposure to Ukraine has held back the share price. The company’s former chief operating officer may make an offer for the Ukrainian operations.
Draganfly Investments (DRG) has raised £500,000 at 0.5p a share. Pelamis Investments Ltd owns 11.26%.
MAIN MARKET
Waterman Group (WTM) has recommended a 140p a share bid from CTI Technology, which has already acquired 30%. This means that the £43m bid is mandatory. CTI is one of the largest consulting engineers in Japan.
A strong performance in South Korea has fuelled a strong performance from window components manufacturer Titon (TON). In the six months to March 2017, revenues were 29% higher at £14m, while pre-tax profit was 61% higher at £1.18m. The dividend was increased by 20% to 1.5p a share. Net cash is £2.71m.
Storage and wireless semiconductors developer CML Microsystems (CML) says full year trading was ahead of expectations. Revenues grew by one-fifth to £27.6m – organic growth is estimated to be 16%. Pre-tax profit was £4.2m – 5% higher than forecast. There was £12.4m in the bank t the end of the financial year.
World Trade Systems (WTS) has appointed John Hoskinson as a non-executive director. He has experience of mining, energy, property and services sectors. Clio Lee has stepped down from the board. Trading in WTS shares continues to be suspended.
UNQUOTED
Richard Griffiths and Blake Holdings have acquired 11.2% of former AIM-quoted investment company Sarossa for £519,500 (1p a share). This takes the concert party’s stake to 51.9% so it has to make a mandatory bid at 1p a share but that is well below the most recent asset value. At the end of 2016, the NAV was £11.3m or 2.4p a share. That included £3.73m of cash.
Andrew Hore
Quoted Micro 17 April 2017
NEX EXCHANGE
Capital for Colleagues (CFCP) is raising £2.02m via a one-for-two open offer to existing shareholders at 42p a share and there are already commitments for 57% of this investment. The closing date is 27 April. The NAV was 43.5p a share at the end of February, which was hit by a write-off of a major investment. There are new investors will to take up shares worth £819,000 of they are not taken up in the open offer, or if there are not enough shares available additional shares will be issued.
Coinsilium Group Ltd (COIN) is joining forces with Oraclise to develop a smart contract system that can be used for the next generation of blockchain applications. The system will manage token issuance. There are already funds that trade in these tokens, which can be swapped for ownership rights in assets. Specific markets have been identified. The full details will be announced on Thursday.
Goldcrest Resources (GCRP) is acquiring a 100% interest in the Norio onshore production sharing agreement and has an option for a farm-in agreement to acquire 70% of Block VIII, which includes the East Khavtiskhevi onshore field. These assets are in Georgia and the current production at Norio is 25 barrels of oil per day. There are plans to increase production at Norio to 250 barrels of oil per day, which will enable Goldcrest to start generating cash during this year. Goldcrest has paid $380,000 and will issue $300,000 of shares at 0.5p each for 38% of Norio and then has the option to pay $620,000 plus $250,000 for the other 62%. Money will be raised by selling the existing gold exploration assets in Ghana.
Gunsynd (GUN) has received £3,000 in cash and 300,000 shares in Integumen in final consideration for the original skin treatment assets that Gunsynd, then known as Evocutis, sold in 2015.
Valiant Investments (VALP) has raised £47,750 at 0.1p a share.
AIM
Carpets manufacturer Victoria (VCP) says trading is ahead of expectations for the year to 1 April 2017. The performance has been helped by the integration of acquisitions in the UK and Australia. The new chief executive arrived too late in the financial year to have an impact.
MayAir Group (MAYA) improved full year revenues by 3% to $65.6m but pre-tax profit slumped from $7.5m to $5.9m because of a delayed contract. This contract has been completed and there should be a partial recovery in profit this year. The air filtration equipment supplier is on course to open its new facility.
D4T4 Solutions (D4T4) says that its earnings will be slightly ahead of expectations as higher margin software sales more than made up for lower project revenues. The 2016-17 pre-tax profit forecast has been edged up to £4.1m. There was £5.1m in the bank at the end of March 2017. There is still uncertainty about potential demand from a Japanese customer.
Arian Silver Corp (AGQ) has signed an option to acquire three lithium exploration projects in Mexico for up to $200,000 payable over 12 months.
Strategic Minerals (SML) has secured a deal to supply 400,000 tons of magnetite a year at a market based price over several years – depending on Strategic continuing to have access to the Cobre magnetite stockpile. This should double annual sales with a maintained margin.
More good news from software provider Cerillion (CER). Interim revenues have grown from £6.9m to £7.5m and EBITDA moved ahead from £1.1m to £1.5m. The interim figures will be announced in the middle of June.
Full year contributions from all its hostels meant that 2016 revenues generated by Safestay (SSTY) rose from £4m to £7.4m but it remained loss-making. NAV is 58p a share and the company is trading at a small discount to this figure. There has been a subsequent £12.6m sale and leaseback of the Elephant & Castle and Edinburgh hostels and a new £18.4m, five year secured debt facility provided by HSBC. This will reduce the cost of borrowings.
First Property Group (FPO) had funds under management of £475m at the end of March 2017, up from £353m a year earlier. Profit is expected to be in line with expectations before the recently announced sale of a property in Romania. The full year figures will be published on 8 June.
EMIS Group (EMIS) has appointed Andy Thorburn as its new chief executive. In the past four years, Thorburn has been chief operating officer of Caribbean-focused communications group Digicel. Prior to this has worked for a number of software companies and BT.
Dolphin Fund has decided not to proceed with a bid for FIH Group (FIH) because of the uncertainty caused by the attitude of the Falkland Islands government. Dolphin cannot make a bid for six months unless there is a rival bid announced.
Hague and London Oil (HNL) plans to acquire the Netherlands-based assets of Tullow Oil for an initial €9.75m with the potential to pay a further €20m. There are capital spending requirements for these assets which are generating revenues. Operating spending is estimated to be $21/barrel in 2017. The finance for the deal is being negotiated.
Gas and electrical services provider Bilby (BILB) is beginning to win work from the framework contracts it has been appointed to and this will boost the 2017-18 financial year. Northland has been appointed nominated adviser and broker.
Franchised property services provider Hunters Property (HUNT) grew its pre-tax profit from £1.42m to £1.85m in 2016. The dividend was increased from 1.5p a share to 1.9p a share. The subsequent acquisition of Besley Hill takes the group into south west England and the number of outlets has risen past 200. House broker Dowgate Capital forecasts a 2017 underlying pre-tax profit of £1.91m earnings per share may be slightly lower.
A reduction in admin expenses helped APC Technology (APC) to return to profit in the first half. Revenues declined from £9.5m to £8.3m but this was due to a large Morrison contract in the corresponding period. The core electronic components distribution business grew revenues by one-fifth. The underlying pre-tax profit was £200,000.
The second largest shareholder in Hornby (HRN) is requisitioning a general meeting to remove Roger Canham as chairman and from the board and replace him with Ian Anton.
MAIN MARKET
WideCells (WDC) has raised an additional £649,000 at 12p a share in order to accelerate the growth of its three divisions and develop a client relationship management system. Last July’s placing raised £2m at 11p a share. The CellPlan stem cell insurance product is selling better than expected. The stem cell storage facility will be operational in the second quarter and the company has applied for a research licence. The additional funds will help to finance additional appointments for its WideAcademy education and training business.
Andrew Hore