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Quoted Micro 31 October 2016
ISDX
Via Developments (VIA1) says the Canal Street project in Manchester should be completed next March, while another Manchester site is attempting to gain enhanced planning permission that would enable 71 apartments to be built. Via expects deposits of 15% of the purchase price of the eight flats in Canal Street before the end of 2016 and this should generate £329,000. The Napier House project in Luton has been granted permitted development for 26 one-bedroom apartments. Additional planning permissions for an extra floor and a change to the facade of the building have been submitted. Via has received firm commitments for £1m of additional 7% debenture stock. This will take the debentures in issue to £4.5m.
Ganapati (GANP), the developer of apps for social media and games, reported an increase in its interim loss from £7.47m to £8.41m following the opening of a London office. Revenues fell from £2.3m to £1.34m. A unrealised foreign exchange loss of £5.71m on Yen borrowings. Management hopes that the Yen bonds in issue will be extended when they come up for repayment. There was £1.5m in the bank at the end of July 2016 but Ganapati wants to raise more money via a share issue to invest in further research and development. .
Ashford Borough Council has granted planning permission for the new Curious Brewery on a 1.6 acre site in the town centre. The Chapel Down Group (CDGP) brewing subsidiary raised money to build the brewery through crowd funding.
Miton Asset Management has increased its stake in rail safety products developer Wheelsure Holdings (WHLP) to 10.2% following the latest share subscription. WB Nominees has increased its stare to 9.2%, while JM Finn Nominees has raised its holding to 8.5%. Chief executive Gerhard Dodl increased his shareholding by 500,000 to 4.215 million shares, giving him 2.4% of Wheelsure.
AIM
Symphony Technology increased its offer for the remaining subsidiaries of Bond International Software (BDI) and the 121p a share bid by Constellation Software Inc has lapsed after gaining total acceptances of 47.4%. Constellation says that it will vote in favour of the disposal to Symphony for £22.8m. The proceeds and the other cash held by Bond will be distributed to shareholders as part of a liquidation process. Between 127p a share and 129.5p a share should be distributed with an initial distribution of at least 126p a share. Constellation originally bid 105p a share and it had acquired the majority of its 29.9% stake in Bond at 75p a share back in 2010.
Cyprotex (CRX) is recommending a bid from German drug discovery firm Evotec AG. The 160p a share cash bid values the contract pharma research services business at £41.7m. The share price has not been at the level of the bid since 2014. Cyprotex believes that it needs a partner to help it grow its operations further and Evotec will help it to grow in Europe.
Sunrise Resources (SRES) has revealed details of the results for the phase 2 drilling at the Bay Street silver project in Nevada. There was no positive news from this drilling and further exploration and drilling is required.
Eastern Europe-focused oil and gas explorer Ascent Resources (AST) has raised £3.5m via a placing at 1p a share and a further £1m via a loan note issue. Some of the cash will be used to repay a £871,510 loan facility from Henderson, which has also deferred the redemption of £8.2m of loan notes to 19 November 2019. The rest of the cash will complete the drilling of two wells and connect them with a refurbished central treatment station. This should enable Ascent to commence gas production by next spring and the gas will be initially be sold to Croatia.
South Africa focused miner Ironveld (IRON) is raising £1.8 at 4.5p a share with some of the cash going towards the development of the 15MW DC smelter for the iron, vanadium and titanium project in the Bushveld complex. The cash should last until next June and the shares come with a warrant to subscribe for another share at 6.75p for 12 months after the shares are issued. The Industrial Development Corporation has approved facilities of R244m for the project and negotiations continue for the remaining debt requirements. The total finance required is R841m. An offtake agreement has been finalised for the high purity iron powder that will be produced over a five year period from the commencement of production. Offtake agreements were already secured for titanium and vanadium.
Workforce optimisation software provider eg solutions (EGS) has won its first direct contract in Asia. The £500,000 contract is with a Singapore-based financial business and 50% of this will be recognised in the year to January 2017. This underpins the current expectations.
There has been further good drilling news concerning the Hot Maden project in Turkey, including some improvements in grade, and Mariana Resources (MARL) expects to report the preliminary economic assessment in late November. This assessment will provide the first guidance about the economics of the project.
Futura Medical (FUM) has raised £12m at 57p a share in order to fund the development of its portfolio of products. This includes the commercialisation of erectile dysfunction treatment MED2002 and trials for pain relief products TPR100 and TIB200. There was £2.9min the bank at the end of June 2016. Henderson will maintain its stake in Futura at just below 20%. The CSD500 condom has received European approvals for an extended shelf life of 18 months for the products manufactured in India. The European supplier has applied for the same shelf life extension.
Arian Solver Corporation (ACQ) has extended the exclusivity period for the Notche Buena gold silver tailings project in Mexico until 27 December. Recovery levels have been poor even though gold grades have been commercial so more tests are required. Arian is assessing an advanced silver exploration project in the US.
Share (SHRE) has made another add-on acquisition of customer accounts and the existing business is trading in line with expectations. The purchase of a book of 8,000 customer accounts with £200m under administration should be completed in April 2017. The Share Centre has maintained its market share of a peer group of brokers revenues, excluding interest, at more than 10%. In the third quarter, revenues were 7% ahead, while customer assets have increased by one-third to £3.6bn. Dealing commission and fee income have both grown but interest income fell by more than one-third. Share is still expected to make a small underlying loss this year.
MAIN MARKET
Nasdaq OMX-quoted AB Traction has increased its stake in engineering and environmental consultancy Waterman Group (WTM) to 14.3%. AB Traction went above 3% in April 2013 and has been building up the stake since then. AB Traction (www.traction.se) is an active long-term investor which does not focus on any particular sector. The strategy is to grow NAV.
Andrew Hore
Quoted Micro 5 September 2016
ISDX
Guild Acquisitions (GAQO) has invested £30,000 in NOMAN Ventures Ltd, which is seeking investments in areas such as block chain, artificial intelligence, drones and virtual reality. The cash is being invested in convertible loan notes that will either be convertible at a 40% discount to the share price of the next fundraising of at least £250,000 or after 12 months. Guild plans to ask its shareholders to vote to change its name to Kryptonite 1.
St Marks Homes (SMAP) increased its NAV to 137p a share by the end of June 2016. A Richmond development was completed in March and three sales have been completed since June. Sutton and St Margarets sites will be completed this month, with all of the Sutton residential units already sold and the commercial space under offer. The merger with St Marks Contracts Ltd happened after the period end. Carbury Property Holdings has increased its stake in St Marks to 19.1%.
Via Developments (VIA1) says that it expects to start generating revenues in the final quarter of 2016. Cash raised from debenture issues has been used to buy three development sites – two in Manchester and one in Luton – costing £4.1m and with a development value of £18.3m within 18 months. The marketing of the first development in Manchester has begun. The company says that it is seeing more interest from foreign investors since the EU referendum. Via Developments has issued more ordinary shares but Pyramid Court Investments Ltd, which is owned by John Kahn, still holds 100% of these unquoted shares.
Secured Property Developments (SPD) has agreed to lend £600,000 for development finance to Space Property, which is 29.15% owned by Secure Property Developments director R Shane. This means that shareholders have to agree to the deal. The cash will lent for 12 months at 10.2% a year and it will be secured on a freehold commercial property in York. Secured Property Developments had £760,000 in the bank following the sale of its property asset.
Black Sea Property (BSP) has joined ISDX and 50,000 shares were traded at 0.01p each on the first day of trading (31 August). The former AIM company has a new strategy, which is to build up a portfolio of Bulgarian property assets. This could be residential, commercial or hotel properties, or it could be investments in distressed companies that need to be restructured.
Diversified Oil & Gas (DOIL) has raised a further £715,000, taking the value of bonds in issue to more than £10.6m. That is after buying back £197,000 worth of 8.5% unsecured bonds from a bondholder fund.
Crossword Cybersecurity (CCS) has appointed former chief of the secret intelligence service Sir Richard Dearlove as non-executive chairman.
AIM
EMIS (EMIS) reported flat interim revenues but profit improved. The GP and pharmacy software operations grew their profit but the specialist operations produced disappointing results due to the extra costs for taking on additional contracts. There were cost savings in the first half and the benefits will start to come through in the second half. Full year profit is expected to improve from £36.1m to £39.3m even though revenue forecasts have been shaved.
Facilities management and security services provider Mortice (MORT) grew its revenues by 51% to $133.5m in the year to March 2016 and even if acquisitions are stripped out underlying growth is still 13%. There were initial contributions from the UK and Singapore businesses acquired during the year but they will make a much bigger contribution this year – particularly as the UK facilities management business has won a major contract. India remains the main revenue generator but further acquisitions are likely. There should be a large increase in pre-tax profit in 2016-17 – house broker finnCap forecasts $4.2m.
Surgical instruments developer and supplier Surgical Innovations (SUN) has returned to profit at the operating level and there is still scope to improve gross margin. A small pre-tax profit is expected for the full year as new product launches boost second half sales. A sharp fall in inventories and debtors has helped to cut net debt to around £700,000. The underlying business is back on a firmer footing and management can turn its attention to building up the group via acquisition.
Bond International Software (BDI) says that it has received a bid approach from ESW Capital but no figure has been put on the potential offer. The Bond board has advised shareholders not to accept the Constellation Software bid of 105p a share. The offer document has been sent to shareholders.
MAIN MARKET
Investment in new products is starting to pay off for BATM (BVC) but the real benefits are unlikely to show through until next year’s figures. BATM reduced its interim loss and it is on course to move back into profit this year. Revenues declined in the first half because of reducing sales of legacy products, particularly in the networking sector, but newer products will boost second half revenues. The diagnostics business grew its revenues and it has secured a partner in China. A pre-tax profit of $2.7m is forecast for 2016 and that profit should double in 2017 as the newer products build up sales.
Cathay International Holdings (CTI) has investments in China-based healthcare businesses and a hotel. Revenues dipped slightly to $61.1m but higher gross margins meant that the company swung from loss to profit in the six months to June 2016. The main improvement came from 50.5%-owned Lansen. Trading would have been even stronger but for the decline in the RMB.
Gulf Keystone Petroleum (GKP) has launched an open offer to raise £19.1m at 0.8314p a share as part of its restructuring. The open offer closes on 15 September.
Quoted Micro 23 March 2016
ISDX
Trading in the bonds of Carduus Housing (CHPB/CHP2) has been suspended pending clarification of its financial position. It is noticeable that the suspension announcement is the first not to include managing director Brian Gilmour as the contact name. Instead fellow director Drew Oswald is named at the end of the release. Carduus joined ISDX on 30 September 2015 when £3.5m of 6.5% unsecured bonds were admitted to trading. It has subsequently raised £3.5m from the issue of 6.25% unsecured bonds. The strategy is to invest in affordable housing, with initial investments in Scotland.
Other bond issuers continue to raise cash. Diversified Gas & Oil (DOIL) has raised a further £630,000 from 8.5% unsecured bonds, taking the total to £5.8m. Via Developments (VIA1) has raised an additional £80,000, making a total of £2.64m from eleven placings of 7% debenture stock since joining ISDX. Residential property acquisitions have been made in Manchester and Luton.
Hydro Hotel, Eastbourne (HYDP) has appointed Jonathan Owen as its new general manager. He starts on 16 May. The shares owned by the estate of Richard Cecil James have been equally distributed to Elizabeth Foster and Patricia Gray, who own 10.1% and 9.3% of the company respectively. There were also 200 shares traded at 800p each on 15 March. At 775p (750p/800p) a share, which values Hydro at £4.7m.
Titiana Internet Ventures (TITP) has failed to secure a renewable energy sector deal and it does not have the cash to maintain its ISDX quotation so shareholders are being asked to vote to terminate this quotation. At 2.5p (2p/3p) a share, Titania is valued at £44,000.
AIM
Robotic process software supplier Blue Prism (PRSM) has joined AIM. The business is loss-making but it is profitable in Europe and the costs of building up a base in the US have pushed the group into loss. The software enables automation of manual, rules-based admin processes and it has been available since 2008 and subsequently developed further with customers. Blue Prism raised £10m at 78p a share, while £11.1m was raised by existing shareholders. The share price ended the first day of trading at 110.5p.
Specialist IFA Frenkel Topping (FEN) has gained FCA approval to deal with retail clients and this is the final requirement for the new strategy. This involves taking on the fund management role for assets under management – £666m at the end of 2015. Frenkel has been opening additional offices in order to broaden its coverage of the country and this held back profit last year. Pre-tax profit dipped from £1.57m to £1.42m in 2015. There should be some recovery this year but the real benefits of the strategy should be more obvious in 2017 when profit is expected to be £3.28m. Meanwhile, the dividend has been increased by 25% to 0.8875p a share and there should be further growth in dividends in the coming years.
SIPPs administrator Curtis Banks (CBP) reported an improvement in pre-tax profit from £3.1m to £4m in 2015 as it won new business and got the full benefit from recent acquisitions. Curtis Banks will become the second largest SIPP provider following the acquisition of Suffolk Life from Legal & General for £45m. The enlarged group will have 65,000 SIPPs with assets of £18bn under administration. The deal is still waiting for regulatory approval. There are opportunities for further bolt-on deals.
MAIN MARKET
Standard list shell Opera Investments (OPRA) is still trying to secure the reverse takeover of SoloPower Systems Inc (http://solopower.com/company/) that was originally announced last July. Financing the acquisition of the thin film solar technology developer has proved difficult and the structure of the deal is being changed. SoloPower will raise finance prior to a reversal into Opera, which is required to happen by 15 May or it will not go ahead. There was £1.08m in the bank at the end of June 2015. Opera has already incurred £400,000 of costs relating to the deal but Hudson, the backer of SoloPower, will reimburse £200,000 of these costs by the end of the month.
Highlands Natural Resources (HNR) has paid $32,000 to acquire 100% of 26 unpatented mining claims in Grand County, Utah. Highlands had been assessing oil and gas well logs and thinks there might be a potential uranium discovery in the area. Permits will have to be obtained and then exploration can start a few months later. The seller is Ticaboo Minerals which will have the right to a production royalty of 2% of the gross value of minerals produced from the mining claims. The principal focus of Highlands is still the oil and gas sector.
ANDREW HOREpr
Quoted Micro 6 March 2016
ISDX
Brewer Shepherd Neame (SHEP) reported a lower brewing profit but this was made up for by a higher contribution from managed pubs in the six months to December 2015. However, the National Living Wage and other costs will increase by £1.1m in the next financial year and management is cautious about the prospects for consumer spending. Revenues were flat at £73.7m but underlying pre-tax profit improved from £4.73m to £5.07m, helped by lower interest costs. There was also a property disposal profit of £3.6m. Net debt was reduced to £61.4m thanks to disposal proceeds.
Electrical and control systems supplier Field Systems Design Holdings (FSD) had a much stronger six months to November 2015 thanks to additional work from the energy from waste incineration sector. Longer-term, demand from the water sector should build up. There was a jump in revenues from £5.51m to £8.31m, while pre-tax profit improved from £11,000 to £91,000. There was £1.1m in the bank at the end of November 2015. At 15.5p (14p/17p) a share, Field is valued at £900,000.
Energy efficiency products supplier Sandal (SAND) moved back into profit in the six months to November 2015. Overall revenues were flat at £1.66m, although there were much higher sales of Energenie products, while a loss of £129,000 was turned into a profit of £7,000 thanks to lower overheads. Sandal has completed its investment in the Energie MiHome range with ongoing investment focused on linking up with Hive and other smart devices for the home. There was £398,000 in the bank at the end of November 2015.
Leni Gas Cuba Ltd (CUBA) has made two new investments in Cuban businesses. The first is a 49% stake in entertainment consultancy Cuba Professionals Inc for an investment of €180,000 over nine months. A short-term working capital facility of €200,000 will also be prfinance ovided. This cash will go towards a larger office in Havana and recruiting additional staff. The other investment is a 15.8% stake in Australian company MEO Australia Ltd, which is focused on Cuban oil exploration. The £730,000 investment will be used to finance exploration in onshore block 9 in Cuba, where another one of the company’s investments, Petro Australis has and interest. Non-executive director Darren Smith has bought 250,000 shares at 0.8p each. That takes his stake to 4 million shares. Smith did not buy any shares in the subscription at 5p a share when the company joined ISDX. The share price has fallen back to 0.9p (0.8p/1p).
Via Developments (VIA1) has raised a total of £2.5m from ten placings of 7% debenture stock since joining ISDX. Two residential property acquisitions have been made in Manchester and Luton.
Ganapati (GANP) is still attempting to obtain a licence from the Gaming Commission and there have been further delays so the company will require additional cash. Ganapati also needs to further develop its BUZZPOP app and this means that there will be no revenues from the app until 2017. There will be a write-down of intangible assets as a consequence. The share price was unchanged at 60p (50p/70p).
Doriemus (DOR) plans to leave AIM and move to ISDX. This follows the decision to buy a further 60.56% of Greenland Oil & Gas. This means that a reverse takeover will not be completed by 14 March and the AIM quotation will be cancelled. The oil and gas-focused investment company should start trading on ISDX on 15 March.
Cyber security technology commercialisation company Crossword Cybersecurity (CCS) is linking up with the University of Surrey in order to explore opportunities for commercially exploiting technology for advanced information hiding. The university has developed a way of encoding information into the normal ebb and flow of computer systems. A patent has been filed for this research and the plan is to develop a platform that can use the technology.
AIM
Shell company 3Legs Resources (3LEG) has announced details of the reverse takeover of SalvaRx and plans to raise £1.95m at 35.5p a share – post a 100:1 share consolidation. SalvaRx is an immunotherapy business and it owns 60.5% of iOx, which is developing under lice compounds for cancer immunotherapy. The cash raised will help to finance the first human clinical trials, which are being sponsored by Oxford University, for iOx’s lead compound based on invariant natural killer T cells. SalvaRx has invested £510,000 in iOx and is committed to put in a further £1.33m. 3Legs had already acquired 11.1% of SalvaRx, at a cost of £215,000, last September. The rest of the shares will be swapped for 3Legs shares valuing them at £8.8m. New chairman Jim Mellon and his associates will end up with 73% of 3Legs, whose name will be changed to SalvaRx Group.
Property investor Palace Capital (PLA) has bought an office block in Milton Keynes, near to the railway station, for £7.2m. The near-fully let building generates net income of £550,000 a year. This deal will immediately enhance earnings per share and there is potential to increase rents in the short-term.
Sutton Harbour (SUH) has renewed and extended its bank facilities. A new £25m, three year facility with RNS will replace the £22.5m facility due to expire in October. Finance costs are not expected to change significantly. The enlarged facility plus the rolling £550,000 asset lease financing facility will provide more headroom for Sutton Harbour to push ahead with property developments and invest in the harbour infrastructure.
NWF (NWF) has boosted its agricultural business through the acquisition of ruminant feed manufacturer Jim Peet, which supplies 500,000 tonnes a year to cattle and sheep farmers in northern England and south west Scotland, where NWF wants to grow its exposure. There are two factories near Carlisle and Wigton and they fit well geographically with NWF’s existing facilities.
Advanced ultrasound training simulators developer Medaphor (MED) says that its US subsidiary has signed a long-term agreement with the American Board of Obstetrics and Gynecology (ABOG) for the use of its ScanTrainer as the simulator for its obstetrics and gynecology certification exams. ABOG undertakes 2,000 examinations each year. This provides additional confirmation of the usefulness of the technology.
MAIN MARKET
Investment company Athelney Trust (ATY) increased its net asset value by 7.5% to 245p a share last year. The final dividend is being increased by 18% to 7.9p a share on the back of this growth. During the year, Athelney acquired new stakes in two REITs, Safestyle UK, Samuel Heath and Low & Bonar amongst others, while also adding to existing holdings including Begbies Traynor, Juridica Investments and Quarto Group. The disposal of stakes in GLI Finance and Plus500 appears to have been well timed, while Catlin and Nationwide Accident Repair were taken over. There was a dip in the NAV to 235.8p a share by the end of January but that is not surprising given the weak stockmarket. Athelney says that it would not be surprised to see small caps outperforming larger companies again. The original investors in Athelney back in 1994 have enjoyed an annual return of 15.8% net of basic rate tax on their original investment.
Global Resources Investment Trust (GRIT) is changing its strategy to become a more direct investor in resources businesses. This is because it is in default for its 9% convertible loan notes. Prime Star Energy FZE is subscribing £3.9m at 2p a share and RDP Fund Management £1.5m at the same price. There is also an open offer raising up to £300,000 at 2p a share. However, the final proposals are still not agreed and the board is in discussions with the main parties. The company name will be changed to Global Resources International.
Education software and services provider Tribal Group (TRB) is selling its Synergy children;s services management information systems business to Servelec for £20.25m in cash. The business generated EBITDA of £2.3m in 2015. The disposal cash will be used to reduce the requirement for funds in the previously announced rights issue. The plan is to raise up to £21m and the terms will be announced later this month when the 2015 figures are announced. Ian Bowles took over as chief executive on 1 March. There had been plans to move back to AIM but no mention was made of this.
ANDREW HORE
Quoted Micro 25 January 2016
ISDX
Goldcrest Resources (GCRP) has secured the acquisition of Taoudeni Resources, which owns the Asheba gold project that is situated at the southern end of the Ashanti gold belt in Ghana. Goldcrest’s non-executive chairman Gavin Burnell is also a shareholder in Taoudeni, which has a non-JORC compliant resource of 176,000 ounces at 1.8g/t. Goldcrest has already conditionally acquired the nearby Akoko gold project, which has a JORC resource of 92,800 ounces at 1.9g/t. The company will seek to generate a JORC-based resource for the combined project. Goldcrest will issue 599.2 million shares for the initial consideration with deferred consideration of 617.7 million and 102.3 million warrants exercisable at 0.05p a share and lasting ten years. ISDX-quoted Hot Rocks Investments will receive 193.5 million of the initial consideration shares, taking its stake to 14.6%, plus 43.2 million of the warrants and is due to receive 320.8 million of the deferred consideration shares. AIM-quoted Sunrise Resources receives 116.6 million shares and 9.8 million warrants. Niall Tomlinson and Dr Ryan Long will join the Goldcrest board. At 0.06p (0.05p/0.07p) a share, Goldcrest is currently valued at £900,000.
A newly formed subsidiary of FT8 (GFT) has taken a 40% stake in BIPS Technologies in exchange for rights to use technology developed by FT8 to make payments and disbursements of employee benefits for healthcare providers and insurers and in this case specifically for the voluntary benefits market in the US. FT8 has also agreed to cover banking fees associated with the administration of a Supplemental Insurance Funds Transfer Program. BIPS will hold the contractual rights to this fund which will service the clients of Homeland HealthCare Inc. A minimum employee enrolment of 75,000 is projected by the end of 2016 and it is projected that it could reach a minimum of 350,000 by the end of 2018. Gross revenue per employee signed up should be just over $1/month. FT8 will not have to provide any additional finance for BIPS. At 0.65p (0.6p/0.7p) a share, FT8 is valued at £4.8m.
Blockchain technology companies investor Coinsilium Group (COIN) has invested an additional $50,000 in data management blockchain company Factom Inc. This takes the total invested to $200,000, which equates to 2% of the diluted share capital of Factom. The Coinsilium share price has recovered to 8p (6.5p/9.5p).
Ecovista (EVTP) is raising a further £252,000 at 0.06p a share. The current share price is 0.075p (0.07p/0.08p). Ecovista is also seeking shareholder approval at its AGM so that any breach of the directors duties caused by previously issuing more shares than they were allowed to will be waived.
Trading in the bonds of recruitment company Positive Healthcare (DOC) has been suspended because £1.75m of the £2m that the company claimed it had raised has not been received. The bond register needs to be rectified and then Positive Healthcare can try to issue more bonds.
Via Developments (VIA1) has raised an additional £206,000 (£204,000 after expenses) from a further issue of 7% debenture stock 2020. This takes the debentures in issue to £1.76m. Via joined ISDX on 5 November having issued £530,000 7% debenture stock 2020. The Manchester-based residential property development funder wants to raise up to £3.5m.
AIM
Empyrean Energy (EME) is selling its 3% interest in the Sugarloaf AMI development in Texas to Carrier Energy Partners II for $61.5m and this should enable a cash distribution to shareholders. If oil prices average more than $55/barrel this year then more could be payable – up to a maximum of $10m. Empyrean expects to pay $3.6m in tax plus $5.2m for outstanding bills owed to the Sugarloaf operator Marathon Oil and it will repay its debt facility of $21.6m. This will leave Empyrean with a 58.1% working interest in the Eagle Pool development project in California, a 7.5% working interest in two producing wells in Sugarloaf block A and a 10% working interest in Riverbend project in Texas. New opportunities will be sought.
Colin Porter is stepping down as chief executive of STM Group (STM) in order to take up a position in the US. He has a 12 month notice period so there is plenty of time to find a replacement. This led to a sharp drop in the share price even though it was confirmed that trading is in line with expectations for a 2015 profit of £2.7m. Alan Kentish will become interim chief executive.
Energy storage technology developer RedT Energy (RED) is raising £3.5m at 6.75p a share – a huge discount to the market price. The share price was just over 10.5p a share a few days before the placing was announced but it fell to 8.38p a share after the announcement – although that is still relatively high compared to the share price in the past three years. House broker finnCap has edged down its target price from 14.5p to 14p. RedT has received an initial $2m from the sale of its US biogas interests so it will have a cash pile to finance the commercialisation of its battery technology.
Big data services provider Fusionex International (FXI) reported revenue growth of 33% to RM70m last year. In the year to September 2015, pre-tax profit rose from RM19.5 to RM24.9m, while earnings per share were 28% higher at RM0.58 (9.4p). There has been criticism of cash generation levels and this led to a slump in the share price. Fusionex says that since September RM23.4m (£3.8m) of the year-end receivables of RM28.5m (£4.6m) has been collected.
Nasstar (NASA) says trading is in line with expectations following a strong second half, helped by the acquisition of VESK. The cloud-based services supplier has renewed the contract with its largest client – there had been some client losses earlier in the year. Net debt of £5.3m at the end of 2015 is slightly lower than expected.
Worldview Capital Management says that it is considering a cash offer for Petroceltic International (PCI). Worldview already owns 29.6% of the Irish oil and gas company, which launched a strategic review before Christmas. Advances have been received for some of Petroceltic’s remaining assets. Petroceltic has received a further waiver of repayments under its senior debt facility until 29 January so that it can continue with its strategic review. The debt facility amounted to $217.8m before Christmas.
Portfolio analytics software supplier StatPro (SOG) has paid an initial $10m for Investor Analytics, a US business that provides cloud-based risk analytics for hedge funds and asset managers. Up to $6m more could be payable depending on winning new contracts. The business has annualised recurring revenues of $4.85m (£3.3m) – out of total revenues of $5m – and should be earnings enhancing in 2016 following integration and annual cost savings of £700,000 – at a cost of up to £1m.
Tissue Regenix (TRX) says that DermaPure, which is used to treat wounds due to diabetes, has generated more than $1m in sales and it is available for reimbursement in 31 states of the US. Tissue Regenix has recruited 20 people for the OrthoPure XM clinical trial designed to gain a CE mark in Europe. OrthoPure XM is designed to repair damaged menisci, which is a condition that could lead to the onset of osteo-arthritis. The patients will be monitored for six months as part of the final information required for the CE mark submission later this year. Consort Medical boss Jonathan Glenn has been appointed a non-executive and Tissue Regenix will benefit from his medical devices expertise.
Condor Gold (CNR) has ended the strategic review it announced last September and it is no longer deemed to be in an offer period. The share price slumped by two-thirds over the period which meant that Condor was valued at $5/resource ounce so a realistic bid is unlikely at the moment. The average NPV of the La India project in Nicaragua is $196m. There are 1,544,000 ounces of inferred and indicated contained gold resources in total. Average annual gold production of 165,000 ounces is anticipated for the first five years and cash costs of production should be less than $700/ounce.
MAIN MARKET
Investment company Highway Capital (HWC) has appointed the chief executive of the Bucharest Stock Exchange as its new chairman. Ludwik Sobolewski was previously the boss of the Warsaw Stock Exchange. This follows the appointment of Dariusz Zych and Jacek Ślotała as directors in November. This suggests an eastern European focus to investments. Dominic Wheatley has stepped down as chairman but remains on the board. The other director, Maciej Szytko, has loaned £120,000 to Highway on top of a previous £30,000 loan. The loan lasts five years, from July 2015, and is convertible at 10p a share. Szytko already has a 29.99% shareholding. At the time of the loan the share price was 16p, while the current share price is 14.5p. Highway moved from a premium listing to the more lightly regulated standard listing in 2013.
Cash shell Falcon Acquisitions Ltd (FAL) has gone to a 70% premium following its flotation on the standard list on 18 January. An initial placing raised £1.6m at 10p, which capitalised the company at £2.04m, and the shares ended the week at 17p. This is based on just over one million shares traded during the week. There is a secondary fundraising that may raise up to £2m at a share price to be set between 10p and 30p. There was already £265,000 in the bank before the flotation so there is cash of £1.65m after costs of £220,000, compared with a market value of £3.47m. The focus is acquiring businesses involved in online, mobile and video broadcasting. Any target is likely to be worth up to £30m.
ANDREW HORE
Quoted Micro 9 November 2015
ISDX
Leni Gas Cuba Ltd (CUBA) joined ISDX on 2 November and its shares went to a sharp discount to the 5p a share offer price. The share price ended the week at 1.875p (1.5p/2/25p), which values Leni Gas Cuba at £9.3m, which is still more than double the pro forma net asset value of the company. There have been 2.3 million shares traded at prices ranging from 1.25p to 2.5p. Most of the cash that has been raised by the company was at 2p a share but the majority of shares in issue at the end of July 2015 were issued at 0.01p a share. Leni Gas Cuba has set up a joint venture trading company with Cuba-focused Groombridge Trading Corporation, which is a Canadian company with approvals to trade in Cuba.
Chapel Down (CDGP) brewing subsidiary Curious Brew has raised £790.500 in its crowdfunding offer via Seedrs.com. This is more than double the level a fortnight ago. The minimum investment is £1m and the maximum is £3.65m and the offer closes in 112 days. Meanwhile, the wine maker has reported its second largest harvest, following last year’s record harvest. Chapel Down is holding a general meeting to get permission to issue a new type of share. The growth shares will be issued to management and will only have value if the Chapel Down share price exceeds 33.6p. The management will each receive £2,000 of ordinary shares in returning for giving up redundancy and other employment rights. There will be a total of just over 18.1 million growth shares. If the share price reaches 60p then the board says that the growth shares would have a value equivalent to 14% of the market capitalisation of Chapel Down, which is £32.8m at 32.5p (31p/34p) a share.
Capital for Colleagues (CFCP) is investing £200,000 in Cotswold Valves Ltd, a Stroud-based supplier of specialist valves for the process industries. This will give the employee owned businesses investor a 49% stake in Cotswold Valves, while the cash has been used to provide the company’s employee ownership trust with the funds to acquire the other 51% from the retiring owner. Capital for Colleagues has also made a further loan of £75,000 to The Homebuilding Centre.
Via Developments (VIA1) joined ISDX on 5 November having issued £530,000 7% debenture stock 2020. The Manchester-based residential property development funder is raising up to £3.5m.
Western Selection (WSE) has acquired 600,000 shares in AIM-quoted Northbridge Industrial Services (NBI), taking its stake to 13.6%. Western Selection director David Marshall is a non- executive director of the electrical testing and oil equipment rental business and along with chief executive Eric Hook and chairman Peter Harris a total of 4.6% of the share capital was acquired. Investec halved its stake to 3.74%. Although the share price has recovered since these purchases, it is still well below the peak of just over 600p less than 15 months ago. The share price was more than 300p six months ago. Northbridge depends on demand from the oil and gas sector and it has slumped into loss this year. Reduced need for capital investment and working capital means that net debt could be halved to £9m in the two years to the end of 2016 despite reported losses and the expected final dividend of 1p a share. Banking covenants are being renegotiated. At 91p a share, Northbridge is trading at a discount to its net tangible assets of around one-quarter.
AIM
Transportation software and services supplier Tracsis (TRCS) has reported another set of better than expected full year results. The underlying profit for the year to July 2015 improved from £5m to £5.8m. The total dividend was increased from 0.8p a share to 1p a share. As expected, the revenues from remote condition monitoring equipment fell sharply due to ordering patterns. This was made up for by a full year contribution from software company Datasys and organic growth. There was net cash of £13.3m at the end of July 2015, with just over £2m of this spent on two subsequent acquisitions. SEP provides event parking and management services and fits into the traffic and data division. Mobile analytics provider Citi Logik, where Tracsis acquired a 29% stake, analyses the interaction of people and transport via the Vodafone network. WH Ireland forecasts a 2015-16 profit of £6.2m but history shows that the final outcome should be better than that, particularly if the remote condition monitoring orders pick up faster than forecast. The shares are trading on 24 times prospective earnings.
Document storage services provider Restore (RST) is paying £55.7m for Wincanton’s records management business and this will consolidate the AIM company’s number two position in the sector. The purchase will be financed by a £34m placing at 260p a share and new debt facilities, which total £80m. Wincanton Records Management has operations in the UK and Ireland and the occupancy level of its premises is 71%. In the year to March 2015, the business made a pre-central charges operating profit of £4.9m on revenues of £22.4m. Last year, Restore’s document management division made an operating profit of £11.5m on revenues of £37.4m.
Alliance Pharma (APH) has agreed compensation of £6.7m in settlement of its claims against Sanofi following the suspension of manufacturing of bladder cancer treatment ImmuCyst in the middle of 2012. Alliance hopes to recommence selling ImmuCyst in the UK before the end of this year but there could be supply constraints. Net debt was £26.5m at the end of June 2015.
Premature ejaculation treatment developer Plethora Solutions (PLE) has agreed in principal to an all share bid from Hong Kong listed Regent Pacific. Regent is offering 15.7076 shares for each Plethora share, which on 3 November valued Plethora at £102.9m or 12.5p a share. Regent already owns 29.9% of Plethora and it will be able to provide the finance to help commercialise the PSD502 premature ejaculation treatment.
NWF (NWF) has boosted its fuels division through the acquisition of Staffordshire Fuels, which will increase its annual fuels volume by 8%. The business was established in 1996 and sells 32 million litres a year under the Jet brand.
EKF Diagnostics (EKF), which recently ended talks with potential bidders, says that it will not have to pay any earn out for molecular diagnostics business Selah Genomics. EKF paid an initial $32m (£19.2m) when the return of the shares in escrow is taken into account. The total cost was going to be up to $70.6m (£42.3m).
Magnolia Petroleum (MAGP) says that Continental Resources is drilling 10 wells on the Woodford formation in Oklahoma. Magnolia has a 0.525% working interest in each of these wells. Five will be drilled in November and the rest next March. Gas is being targeted. Magnolia has proven reserves independently valued at $21m and these reserves are still profitable at the current oil price. Magnolia’s share of the production of the wells it is interested in is running at 309 barrels of oil equivalent per day.
MAIN MARKET
CIC Gold Group Ltd (CICG) has announced the potential acquisition of Gobi Minerals Ltd for £5.6m in shares at 2p each but it depends on a share issue raising sufficient cash for the deal to go ahead. Trading in the shares was suspended at 1.4p a share. Due diligence still needs to be completed on the acquisition. Gobi owns 100% of the mineral title to the Tsagaan Suvarga gold and copper prospect in the South Gobi region of Mongolia. There is no proven resource in this mineral interest so the valuation appears high but it is hard to judge without further information. HE Barsbold Ulambayar will be appointed as chief operating officer.
Commercial aircraft leasing company Avation (AVAP) is acquiring an eight year old Boeing 737 operated by a major Chinese airline. The remaining leases term is 5.5 years. This is the first Boeing aircraft acquired by Avation and it takes the number of aircraft owned to 34. .
Electronics designer and distributor Acal (ACL) has acquired magnetic components Flux AS for £3.7m. Flux will broaden the product range and provide an additional customer base. Next year’s profit forecast has been edged up slightly to 18.6p a share.