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Quoted Micro 6 November 2023
AQUIS STOCK EXCHANGE
Cadence Minerals (KDNC) says that the 36.2%-owned joint venture that owns the Amapa iron ore project in Brazil has signed a memorandum of understanding with Sinoma Tianjin Cement Industry Design, which will provide a final proposal to complete a definitive feasibility study for the project and then submit a fixed price contract to construct the project. It will also attempt to obtain the financing required. Chief executive Kiran Morzaria bought 100,806 shares at 7.4p each.
Adsure Services (LON: ADS) joined the Access segment on 30 October. It did not raise any additional money and was valued at £4.76m at the introduction price of 45p. Fareham-based Adsure Services acquired TIAA in September. It is a specialist business assurance provider that has been operating for two decades. In the year to March 2023, TIAA revenues improved from £8.82m to £9m, while pre-tax profit dipped from £580,000 to £274,000. That is due to higher overheads. TIAA had £1.86m in the bank and net cash of £1.15m. Dividends have been paid by TIAA and the equivalent last year was 1.35p/share.
Substrate Artificial Intelligence (SAI.B) has agreed the acquisition of 70% of BINIT and DELTANOVA for €5.4m and €600,000 respectively, which is payable in shares. They are software development consultancy businesses, and the share issue has to be approved by shareholders.
CBD products supplier Voyager Life (VOY) expects interim revenues to be more than £165,000 and a gross margin of 43%. The manufacturing division is receiving more enquiries. The government has accepted recommendations for standardised cannabinoid testing and there could be a relaxation of the maximum cannabinoid content of products.
Helium Ventures (HEV) had nearly £65,000 in cash at the end of April 2023, plus interests in Blue Star Helium and Trackimo.
Semper Fortis Esports (SEMP) had cash of £160,000 at the end of July 2023. Management is still assessing a potential reverse takeover of GL Membership.
ChallengerX (CXS) generated cash from operations in the quarter to September 2023, although there was an overall outflow of £47,000, leaving £1,000 in the bank. More cash will be required to develop the FlashBet Wheel App.
Wishbone Gold (WSBN) has confirmed the mineralised base metal system at Cottesloe in the Paterson Range, Western Australia. There is copper, zinc, silver, lead and cobalt. This is before the drilling has hit the target mineralisation zone.
KR1 (KR1) holds an allocation of 7.5 million TIA – the digital asset of Celestia – KR1 plans to start staking activities on the Celestia network. At the end of September 2023, NAV was 45.11p/share.
TruSpine Technologies (TSP) says that the FDA 510(k) application for Cervi-LOK has oved to the substantive review stage.
Fuel additives developer SulNOx Group (SNOX) generated second quarter revenues of nearly £54,000, which was lower than the previous year. There was £562,000 in the bank and a further £700,000 has been raised since then.
Ananda Developments (ANA) has signed a MOU with Nottingham Trent University to pursue grant funding for the medicinal cannabis breeding programme. The intention is to develop a formal strategic partnership.
IamFire (FIRE) had cash of £149,000 at the end of April 2023, following a £768,000 cash outflow from operations. Investee company WeShop is making good progress. However, there is material uncertainty as a going concern and more cash is required or bond terms will need to be renegotiated.
NFT technology company Looking Glass Labs (LON: NFTX) had net assets of C$837,000 at the end of July 2023.
Arbuthnot Banking (ARBB) non-exec directors Jayne Almond bought 3,000 shares at an average price of 912.5p each. Shepherd Neame (SHEP) director George Barnes bought 1,000 shares at 735p each. Marula Mining (MARU) chief executive Jason Brewer has exercised 400,000 warrants at 4p each.
BWA Group (BWAP) is raising up to £900,000 at 0.5p/share with one warrant for every two shares exercisable at 0.6p each up until October 2024 and 0.75p after that up until October 2026. The cash will be used for exploration at two heavy mineral sands claim areas.
Mental health treatments developer Mydecine Innovations Group (MYIG) says that it is filing a prospectus supplement so that it can issue 7.36 million shares at 15 cents/share to raise $1.1m.
AIM
Product management software supplier Sopheon (SPE) has received a bid approach from IOps Buyer Inc, which is a subsidiary of Wellspring Worldwide Inc. The two companies have agreed in principle to a 1000p/share bid. Due diligence has been completed and discussions are advanced. Chicago-based Wellspring Worldwide provides software and data systems for managing technology transfer and intellectual property.
Velocys (VLS) is the worst performer today because the conditions for the $15m strategic investment from Carbon Direct have not been met. To receive this cash the sustainable fuel developer needs to raise $40m, including $8m already raised, and management is still trying to secure investors. The $15m cash injection is no longer binding. Velocys needs more cash before the end of the year. There is a significant market opportunity in sustainable aircraft fuel, but Velocys is in a weak position when discussing additional funding.
Carbon ceramic disc brakes developer Surface Transforms (SCE) has reduced revenue guidance for 2023 to £8.6m, having generated £6.3m up until October. The previous forecast for 2023 revenues was £13m. There have been problems ramping up production in the second half and it will not be completed until early next year. A new debt facility is being negotiated to enable an increase in annual capacity to £150m.
MC Mining (MCM) has received a bid approach. Two companies that own a 64.5% stake in the South African coal miner say they intend to acquire the shares they do not own, and the indicative offer is A$0.2 to A$0.23 for each share. Independent directors are assessing the indicative offer.
Cerillion (CER) has secured a five-year software deal with a European telecoms company. The deal is worth €12.4m and there is potential for selling other software modules. This deal helps to underpin forecasts.
OptiBiotix Health (OPTI) says that restructuring the management has improved account management and the focus of commercial discussions. The microbiome company has improved its online operation. There are ongoing discussions over potential large contracts.
Roebuck Food Group (RFG) is acquiring Motherwell-based food ingredients supplier Moorhead & McGavin for £2.225m in cash and shares. A placing will raise up to £2.5m at 13.5p/share. Moorhead & McGavin supplies cereals, pasta and rise to the catering sector and generated revenues of £7.26m and EBITDA of £377,000 in 2022. Roebuck Food Group sold its cold storage division, and it has been seeking an acquisition to scale up the business.
In October, podcast company Audioboom (BOOM) generated more than one billion advertising impressions in a month for the first time. The removal of old adverts after 90 days and replacing them with a new focused advert is helping advertising impressions to continue to grow. Fourth quarter revenues are still expected to be at least $19m.
Thor Energy (THR) has completed the stage 2 earn-in spending required to acquire a further 29% of the Alford East copper-gold-real earths project in South Australia. This takes the stake to 80%. Thor Energy has issued 9.26 million shares at A$0.027 each, plus 18.5 million warrants exercisable at A$0.03 each, to Spencer Metals as consideration for the stake.
Seaweed-based animal feed producer Ocean Harvest Technology (OHT) has conducted a successful trial in Georgia for its poultry feed. Mortality rates for the poultry with necrotic enteritis with the company’s feed in their diet fell from 49% to 33%. It also enhances weight gain. Necrotic enteritis costs the poultry sector up to $6bn/year.
Technology businesses developer Frontier IP (FIPP) moved into loss last year because of realised and unrealised losses on its portfolio against a large gain in the previous year. The value of the portfolio fell 17% to £33m, although there were net disposals of nearly £5m. There was a £3.25m cash outflow from operations offset by disposals, leaving £4.6m in cash at the end of June 2023.
Neometals (NMT) has decided not to progress with vanadium tailings retreatment project in Finland because of difficulty in financing. The price of vanadium has been falling in recent months. Neometals will concentrate on licensing its vanadium recovery process. There was cash of A$14.2m at the end of the first quarter.
Real Good Food (RGD) says first half revenues were 2% ahead at £16.1m, although volumes fell by 10%. October revenues appear set to be 6% higher. The cake decorations supplier has significantly reduced its loss due to higher margins. A shortage of cash has held back growth, but the company could be profitable for the full year. Talks continue concerning the extension of the loan agreement with Hilco Private Capital. Interim results will be published in December.
Reconstruction Capital II Ltd (RC2) plans to ask shareholder approval for leaving AIM so that costs can be reduced. It is taking longer than expected to sell investments, so the investment company also intends to extend its life. A matched bargain facility will be arranged.
MAIN MARKET
Esken (ESKN) is selling Esken Renewables to Pioneer Balmoral for £77.6m, plus loan reimbursement of £6.9m. The portfolio of renewable assets has been built up by investing small amounts in equity in businesses. The deal requires shareholder approval. Net proceeds will be £78.5m and £70.6m will be used to repay the committed funding. There are plans to sell Southend Airport. Esken will move from the premium list to the standard list.
Mike Whitlow has requisitioned a general meeting at standard list cash shell More Acquisitions (LON: TMOR) to get Nicholas Tulloch and Jeremy Woodgate to the board and remove the existing directors Charles Goodfellow and Roderick McIllree. The board believes it has enough backing to defeat the resolutions.
Andrew Hore
Quoted Micro 30 October 2023
AQUIS STOCK EXCHANGE
Natural language processing company Cykel AI (CYK) joined the Aquis Stock Exchange on Wednesday. It raised £1m at 3p/share and the shares ended the week at 10.25p. There was initially significant buying of the shares, but trading levels dwindled over the week so there was only one sale of 100,000 shares at 10p each on Friday.
Healthcare provider One Health Group (OHGR) generated 12% higher revenues of more than £11m in the first half. There was £3.6m in the bank at the end of September 2023. There is additional surgical capacity, and two new contracts were awarded in the first half. A new surgical hub could open in 2025. The second half is normally stronger.
Valereum (VLRM) says that US funding it secured in August is no longer available. The talks with the Gibraltar Financial Services Commission concerning the purchase of the Gibraltar Stock Exchange are dragging on. Richard Poulden, Jack Sun, Patrick Young and Alan Gravett have resigned from the board. James Formolli, who has links with Gibraltar, has been appointed chairman. Patrick Lyle Young has rejoined the board as chief executive. These changes may make it easier to gain regulatory clearance for the acquisition.
Gunsynd (GUN) investee company Omega Oil and Gas estimates maiden gross 2C contingent resources of 1.73 trillion cubic feet of gas in its area in Queensland’s Taroom Trough. The next phase of exploration includes a horizontal well. The $21m raised in August will finance this next stage of exploration.
Vulcan Industries (VULC) has sold 49.9% of Lithium battery storage project developer Forepower Lincoln (250) Ltd for £1.5m, which is payable on the sale of the project or on the fifth anniversary of the agreement. The buyer will loan £500,000 and this will be offset against the consideration when it is due. This will be drawn down as the project progresses.
Ananda Developments (ANA) made an interim loss of £990,000. There was cash of nearly £12,000 at the end of July 2023. Since the end of the period, operations at the cannabis cultivation facility were paused to reduce cash burn.
Cadence Minerals (KDNC) reported a reduction in loss from £5.05m to £1.95m. Net cash was £580,000 at the end of June 2023, while NAV was £19.5m.
Cooks Coffee (COOK) has appointed RSM as administrator to its Triple Two coffee shop franchise business. There are currently eleven stores, which are trading poorly. The Esquires chain is trading well and will not be affected.
SulNOx Group (SNOX) says that fuel savings of more than 5% have been verified for seagoing vessels with a two-stroke engine when fuel conditioner SulNOxEco. This will help to increase interest from shipping companies.
Arbuthnot Banking Group (ARBB) non-exec Jayne Almond has acquired 3,000 shares at 895p each and her husband bought 5,617 shares at 890p each.
AIM
After the market closed on Friday evening, SafeStyle (SFE) said that it intends to appoint administrators to three subsidiaries. Potential buyers of the replacement windows operations have withdrawn their interest and management already revealed it would not be able to raise additional finance. This means there is unlikely to be anything left for shareholders.
Fire Angel Safety Technology (FA.) has agreed a 7.4p/share bid from fire safety products manufacturer Siterwell Electronics, which already owns 17.5%. The share price has not been at that level for six months. The offer values FireAngel Safety Technology at £27.7m.
Mining investment company Starvest (SVE) plans to cancel the AIM quotation and commence a voluntary liquidation. This would involve the distribution of stakes in Greatland Gold (GGP) and Ariana Resources (AAU) to shareholders, while the other stakes will be sold. The share price improved by 77.8% to 8p, valuing Starvest at £4.7m. This is still a discount to the March 2023 NAV of £6.75m, although for one the Ariana Resources share price has fallen since then. Shareholder approval will be sought on 21 November and the AIM cancelation could happen on 29 November.
Northern Bear (NTBR) intends to launch a tender offer to buy up to five million shares (26.7% of share capital) at 62p each. The building services provider will ask for authorisation at a general meeting on 15 November and the tender will be funded by the company’s cash and an additional £1m of debt. This will be earnings enhancing. Some shareholders say they will not tender shares, which means that other shareholders can tender at least 35.6% of their holding. Shares have to be tendered by 22 November. Jeff Baryshnik will retire as chairman after the general meeting. Trading is ahead of the previous year and a trading update will be published in the next few days.
Angling Direct (ANG) improved UK sales and European online sales recovered. The fishing tackle retailer has plans to open its first store in Europe. Interim revenues rose 11% to £43.3m, while pre-tax profit recovered from £1.1m to £1.7m. Like-for-like store sales were 4.9% ahead. Net cash reached £17.6m at the end of July 2023, helped by a reduction in working capital. August and September sales were 14% higher than the same time last year, although the comparative was a weak period. Market share is still growing.
Argentex (AGFX) has appointed Jim Ormonde as interim chief executive. He replaces previous chief executive Harry Adams, who is the second largest shareholder with 12.3%. A strategic review has identified areas of the payments sector to focus on. Jim Ormonde was boss of Cardsave, which was bought by WorldPay, and he has been a consultant to Argentex. Current trading is in line with expectations even though activity levels have been lower.
Security products supplier Thruvision (THRU) has raised £3.2m at 23.5p/share. The money has been invested by Pentland Capital, which has taken a 10% stake, and existing shareholders. The cash will be invested in sales and marketing. Earlier this month, Thruvision revealed that it had not received the expected order from US Customs and Border Protection due to budgetary problems. Forecast revenues for 2023-24 were slashed by two-fifths to £8.1m – £3.5m has been generated in the first half. A full year loss of £3.2m is expected.
Bradda Head Lithium (BHL) interims show a $6.24m cash outflow leaving $1.5m in the bank at the end of August 2023. Since the year end, an updated mineral resource showing contained metal of more than one million tonnes triggered a Lithium Royalty Company payment of $2.5m to Bradda Head Lithium, which was received in October.
Fourth quarter trading at The Mission Group (TMG) has got tougher with clients spending less. This follows a relatively upbeat trading statement at the time of the interims. The cost base was raised in anticipation of additional demand and cost cutting will not be done until next year. Canaccord Genuity slashed its pre-tax profit forecast from £7.9m to £3.1m and net debt is set to rise to £24m, which contravenes debt limits. The interim dividend is cancelled. Interest will be covered just over two times.
Sustainable fuels technology developer Velocys (VLS) has launched its new technology facility in Ohio. Velocys contributed $2m of the $10m capital investment with the rest invested by a subsidiary of The Pagura Company. The equipment will be fully up and running by mid-2024. There should be enough capacity for projected orders stretching out to 2028.
Piling contractor Van Elle (VANL) has Rock and Alluvium for an initial £1.8m and agreed a new five-year trading deal with Galliford Try, which could add more than £10m/year to revenues. This increases the group’s presence in the residential market in Greater London.
MAIN MARKET
BATM Advanced Communications (BVC) investee company ADOR Diagnostics has secured funding of $7.5m and BATM is providing $3.5m of this cash. This is payable in two tranches, one immediately and the other after the achievement of milestones over the next six months.
First Tin (1SN) has published a definitive feasibility study (DFS) update for the Taronga project in Australia. The DFS should be completed in the first quarter of next year. It is already clear that the resource is significantly larger than previously estimated due to additional mineralisation and lower cut-off grade and that means processing capacity will need to be larger. The additional capital investment should improve recovery rates.
Cash shell Mining, Minerals and Metals (MMM) has entered into heads of terms with Georgina Energy, which is exploring for helium, hydrogen and hydrocarbon the Amadeus and Officer Basins in Australia. The transaction to acquire Narnia Mauritius Gas will not go ahead until the renewal of the company’s licences.
Intuitive Investments Group (IIG), which recently moved from AIM to the Specialist Fund Segment, is issuing 1.91 billion shares to acquire Hui10, a Chinese company that owns 33% of Beijing Huishi Dehua IT, which has a digital payment platform for the Chinese lottery and 60% of Lucky World, which has developed a platform that enables China’s lottery shops to access a wider range of consumer goods. The businesses are losing money. Hui10 will not be consolidated in the company’s figures. Investments Group currently has 86.9 million shares currently in issue and, at 11p/share, it is valued at £9.6m. A ten-for-one share consolidation is planned. There is already permission to issue more shares. Chief executive Rob Naylor bought 100,000 shares at 9.5p each.
BSF Enterprise (BSFA) has formed a separate subsidiary called Kerato to develop lab-grown corneas. This company can focus on advancing clinical trials.
Andrew Hore
Quoted Micro 3 April 2023
AQUIS STOCK EXCHANGE
Aquis Stock Exchange owner Aquis Exchange (AQX) reported an increase in revenues from £17.2m to £19.9m in 2022. The pre-tax profit improved from £3.6m to £4.5m. that reflects the operational gearing. All three parts of the business were profitable. In the cash of the Aquis Stock Exchange this was probably the first time it has made a profit in any of its incarnations. This was on the back of a 48% increase in issuer fees because of the 22 new companies joining the market.
Wine maker Chapel Down Group (CDGP) increased underlying pre-tax profit by 22% to £1.7m in 2022. Singer expects this profit level to be maintained in 2023 before more than doubling to £4m by 2026. Net cash is £3.3m. NAV is 38p a share.
Arbuthnot Banking Group (ARBB) reported better than expected 2022 results. Pre-tax profit jumped from £4.6m to £20m and the dividend was raised by 11% to 42p a share. The loan book increased by 11% to £2.2bn. NAV is 1411p a share.
Good Energy (GOOD) 2022 revenues jumped from £146m to £248.7m as energy prices increased, while the energy supplier returned to profit. There was net cash of £19m at the end of 2022. The book value of Zap-Map is £13m. Management is seeking to expand its energy efficiency services operations.
Ananda Developments (ANA) published a medicinal cannabis research round-up. The sublingual spray shows promising results in diabetes type 2 patients. There has also been progress in explaining the mechanisms of action of CBD alleviating bladder pain syndrome. Shareholders voted for the acquisition of MRX Global.
A £289,000 interim cash outflow at Tectonic Gold (TTAU) was partly offset by the £101,000 of proceeds of the sale of shares in Kazera. There was net cash of £46,000 at the end of 2022.
Visum Technologies (VIS) made an interim loss of £457,000 on revenues of £120,000. The first US location for its theme park video technology was opened in November. Debt financing has been secured for rides and attractions. Existing sites in Europa Park and Linnanmaki will reopen in April. The financial position is expected to improve.
Valereum (VLRM) has sold shares in subsidiary Valereum Collections raising £70,500 at 625p a share. Valereum retains a 99.8% stake in the company, which will operate the group’s NFT programme. The Valereum share price dived 23.6% to 5.25p, which is a new low for the year.
KR1 (KR1) has invested $500,000 in Hydra Ventures, which supports and incubates decentralised autonomous organisations, in return for 5,000 HYDRA tokens. This is part of a $10m fundraising.
Capital for Colleagues (CFCP) had net assets of 77.78p a share at the end of February 2023. There are 13 companies in the investment portfolio. Castlefield Investment Partners has reduced its stake from 45.9% to 42.1%.
Invinity Energy Systems (IES) has made a sale of a 1.5MWh energy storage system to STS Group for a solar storage project in Hungary.
ChallengerX (CXS) had £92,000 in cash at the end of 2022, and a £250,000 subscription announced in February has yet to be received. The development of the company’s marketing platform requires more money.
RentGuarantor Holdings (RGG) has entered into an agreement with Vorensys for the use of the RentGuarantor services. Vorensys provides tenant referencing services.
CRUSHMETRIC Group Ltd (CUSH) has issued an unsecured convertible bond with a principal of S$250,000 (£151,000), which has a coupon of 10% and matures in February 2026.
SuperSeed Capital (WWW) boss Mads Jensen bought 3,000 shares at an average price of 83p each.
Shares in Asimilar (ASLR) fell ahead of the trading suspension on 3 April due to the accounts not being published in time.
AIM
Scottish gold producer Scotgold Resources (SGZ) has been hit by falling ore grades at the Cononish gold mine. The average gold grade in January was 5.65g/t. compared with an estimated grade of 7.35g/t. A different part of the mine is being developed and the production process is being changed. Shore has its forecasts under review because of concerns about the financial position of the company.
Daisy Group is making an agreed bid for ECSC (ECSC), which values the cyber security services provider at £5.4m. The bid is 54.02p for each share in cash. ECSC joined AIM at the end of 2016, when it raised £5m at 167p a share.
Cameroon-focused oil and gas company Bowleven (BLVN) had $2.45m in cash and investments at the end of 2022 and it is considering its options for raising more money. Bowleven will need cash to invest in the Etinde project, although there will not be progress there until Perenco completes the purchase of New Age’s operating interest. Bowleven’s interest in Etinde is estimated to be worth more than $150m.
Footwear retailer Unbound Group (UBG) has received a 10.5p a share potential offer from WoolOvers Group. There would also be a contingent value right that would give shareholders the proceeds of any insurance claim related to business interruptions due to Covid lockdowns. Unbound management says it would be likely to accept this offer. The recent fundraising was at 15p.
Building and architecture software supplier Eleco (ELCO) reported 2022 results that were the first 12 months of an 18-month period where the switch to a focus on SaaS is holding back revenues, which dipped 3% to £26.6m. Pre-tax profit was better than expected at £3.6m and net cash was £12.5m. The final dividend is 0.5p a share with a special dividend of 0.58p a share on top. This year’s pre-tax profit is expected to be £3.8m.
Sustainable fuels developer Velocys (VLS) has risen on the back of the latest UK government consultation paper on sustainable aviation fuel, which identifies the Fischer Tropsch process as part of the main technology. This can be supplied by Velocys, which has active projects in the UK and US.
Video games developer tinyBuild (TBLD) is investing in new games, so there has been a reduction in net cash. However, the strong back catalogue means that the business is resilient and not dependent on one game becoming a hit.
MAIN MARKET
Used car finance and property bridging loans provider S&U (SUS) reported full year results in line with expectations. In the year to January 2023, underlying pre-tax profit dipped from £47m to £41.4m, after higher bad debt provisions of £13.9m. Even so, the provision is still relatively low. Used car prices continue to rise, but at a lower rate than early last year. Net debt was £192.4m at the end of January 2023, compared with committed facilities of £210m. The dividend was raised to 133p a share.
Standard list shell Marwyn Acquisition Company II (MAC2) has appointed former Curtis Banks Group chief executive Will Self as the chief executive – pensions division. This year, AIM-quoted Curtis Banks was acquired for 350p a share in cash by Nucleus Financial Platforms, which valued the SIPP administrator at £242m. Will Self will lead the search for suitable financial services acquisitions. The strategy has been further refined to include themes including changing population demographics, intergenerational wealth transfer, social and family support and concentration of wealth.
Andrew Hore
Andrew Hore Quoted Micro 22 July 2019
NEX EXCHANGE
Arbuthnot Banking (ARBB) improved its underlying pre-tax profit from £2.7m to £3.4m in the first half of 2019. The interim dividend has been raised from 15p a share to 16p a share. The recent residential mortgage portfolio acquisition was after the end of June. The strategy is to diversify the business and asset-based lending and specialist finance are being built up. Savings platform Arbuthnot Direct has recently been launched. The core private banking operations of Arbuthnot Latham are still growing, though. The shareholding in Secure Trust Bank has been sold down to below 10%, which means it is no longer consolidated. The change from associate led to a write down and NAV declined to £13.21 a share.
VI Mining (VIM) has so far paid $9.1m in cash to the vendors of the Minaspampa and Rosario projects in Peru. There is still $42.2m outstanding 18 months after the acquisition agreement was signed. Majority shareholder Sumner Group Holdings is raising money from a security token offering, which could be completed in the autumn. Some of the proceeds will be used to replace existing facilities and help to pay outstanding acquisition considering, pending renegotiation of the deal. Chief executive David Sumner has provided a $10m term loan, plus a £39m facility of which $3m has been drawn down. There is $1.2m outstanding on the Tassili Jewellery LLC loan facility.
AfriAg Global (AFRI) has completed its acquisition of a 2.325% stake in cannabis company Apollon Formularies. The Jamaican subsidiary has produced its first licensed medical cannabis oils for commercial sale on the island.
MetalNRG (MNRG) has published a prospectus for its move to a standard listing on 23 July. It has raised £193,000 at 0.3p a share.
Clean Invest Africa (CIA) says that its CoalTech subsidiary has signed a joint venture agreement with Creon Capital covering Russia and nearby countries. CoalTech is negotiating with other potential partners to set up operations in Europe, Indonesia and the US.
Tectonic Gold (TTAU) says its mining subsidiary has received approval for the R and D tax incentive scheme in Australia for 2018-19. A claim is being prepared.
Share trading has recommenced in Ganapati (GANP) after it published results for the year to January 2019. There was a cash outflow from operations of £23.8m. Since January, two new games have been generated each month.
AIM
Focusrite (TUNE) has acquired Germany-based studio monitor loudspeakers supplier Pro Audio for £16.2m in cash and it will still have £12m left in the bank. Pro Audio supplies ADAM branded products and made a pre-tax profit of €1m. This is an earnings enhancing acquisition. The businesses will operate separately but work together to develop cross-selling benefits.
Swallowfield (SWL) is selling its manufacturing business to the much larger US manufacturer Knowlton Development Corporation for £35m in order to concentrate on its portfolio of personal care and beauty brands. This should leave net cash of £23m in Swallowfield and this will be used to acquire more brands. The company is changing its name to Brand Architekts Group.
Lawyer Gateley (GTLY) grew all its main operations. Acquisitions helped revenues to increase by one-fifth to £103.5m in the year to April 2019, but there was still organic growth of 9.5%. Pre-tax profit improved from £15.4m to £18.1m. The dividend was raised from 7p a share to 8p a share. Corporate business grew more modestly than other parts of the business, but this was impressive given market conditions for corporate deals. A profit of £21m is forecast for this year.
Victoria (VCP) has raised €330m via an issue of 5.25% senior secured notes 2024. This offer was three times subscribed. The floorcoverings manufacturer is using the money to refinance existing debt and will have £80m of cash after the issue.
Packaging machinery supplier Mpac Group (MPAC) is trading significantly ahead of expectations. Equity Development has increased its 2019 operating profit forecast from £4.6m to £5.5m.
Adamas Finance Asia (ADAM) has completed a co-investment agreement with a Hong Kong-based family office for the investment in Japanese resort business Infinity Capital Group. The family office will pay Adamas $1m of the $2m already drawn by Infinity and the other $2m will be provided 50/50 by the two parties. The facility has a coupon of 17.5% per annum. This deal provides cash to invest in other opportunities. Adamas took advantage of a dip in the share price to buy back £30,400worth of shares at 38p each.
Velocys (VLS) has raised £7m at 3p a share on the back of news that Shell and British Airways will co-fund the development of the Immingham biorefinery project. The cash will be used for further technology development and to progress the Mississippi biorefinery project.
Block Energy (BLOE) has completed the increase from a 71.5% to 100% of its working interest in the West Rustavi field in Georgia. The cash and shares payment means tha Georgia Oil and Gas has increased its stake in Block to 7.7%. Miton has cut its stake from 9.17% to 4.73%.
Mortice (MORT) has decided to cancel its AIM quotation and is offering shareholders the chance to sell their shares for 12p each. A lack of liquidity and a weak share price making it difficult to finance acquisitions are the main reasons for leaving AIM.
Albert Technologies Ltd (ALB) also wants to leave AIM, but it is not offering an exit for shareholders. It believes it can attract investors, but they would prefer to invest in an unquoted company.
Science Group (SAG) has been buying more shares in Frontier Smart Technologies (FST) at the bid price of 35p each and it has built up a 39.9% stake. It also has 3.1% acceptances for its bid.
Mirada (MIRA) has integrated Netflix into its set-top box platform and this will make its technology even more attractive to broadcasters.
Bangladesh has brought in a law that all listed companies have to pay at least 30% of post-tax profit, or an extra 10% tax charge will be levied. Beximco Pharmaceuticals (BXP) is assessing the legislation and will consider how best to manage cash.
Novacyt (NCYT) has sold its loss-making clinical labs business for £400,000 and it will concentrate on diagnostics businesses Primerdesign and Lab21. The first instalment of £100,000 has been paid and £100,000 more is due in September, but the rest will be paid in three equal instalments on the first, second and third anniversaries of the deal.
MAIN MARKET
Spinnaker Opportunities (SOP) has received a commitment to invest up to £1.4m from a single investor conditional on the deal to acquire medicinal cannabis company Kanabo Research. The investment will be for a maximum of 4.99% of the enlarged share capital, although if there is any of the £1.4m left it could be invested in a convertible loan note. The investment underpins the expected acquisition-related fundraising and a fee of 10% of the investment is payable.
General meeting resolutions to wind-up Avocet Mining (AVM) were withdrawn at its general meeting. This comes after discussions with shareholders. There is a few weeks cash left in the business and any potential transaction would have to come with finance to cover the costs of an acquisition process.
Dukemount Capital (DKE) has commenced construction of 17 specially developed apartments and retail space on its West Derby property.
OTHER MARKETS
Fashion On Screen has listed on the Vienna Stock Exchange, which has European Growth Market status by the HMRC. This means that there is no stamp duty. The company had previously considered a listing on the Nasdaq First North market in Copenhagen. Fashion On Screen has raised more than £3m prior to its listing. A film based on the kidnapping of racing driver Juan Fangio in Cuba in 1958 could start before the end of the year (for more about the background to the story listen to https://www.bbc.co.uk/programmes/p055fjfx).
Andrew Hore
Andrew Hore – Quoted Micro 22 January 2018
NEX EXCHANGE
Capital for Colleagues (CFCP) reported a decline in full year revenues from £560,000 to £372,000 and there was no repeat of the realised gains on investments in the previous year. There was an increase in unrealised gains from £71,000 to £317,000. However, there was a £1.32m investment impairment. This meant that a profit of £158,000 was turned into a loss of £1.17m. There is £1.28m in the bank. The employee-owned businesses investor is focusing on managing its portfolio and the advisory business spun off into a joint venture. The NAV is 42.7p a share.
First Sentinel (FSEN) has invested the £1.4m it raised when it joined NEX last year. These investments include fellow NEX-quoted company NQ Minerals, where First Sentinel boss Brian Stockbridge is chairman, AIM-quoted UK Oil and Gas Investments and AIM-quoted Premier African Minerals. There is a £65,000 loan to unquoted tea cafés operator Yumchaa, where Stockbridge is 50% shareholder. The loan has an interest rate of 12% and lasts until October.
Block Energy (BLOK) has further delayed the planned move to AIM. The oil and gas company has a new expected admission date of end-February. Trading remains suspended on NEX.
AIM
Mark Watkin Jones intends to step down as chief executive of student and private rental accommodation developer Watkin Jones (WJG) but he will stay until a successor is identified. In the year to September 2017, revenues were 13% higher at £301.9m and underlying operating profit rose by a similar percentage to £42.7m. The dividend was 6.6p a share, equivalent to a 10% increase if Watkin Jones had been quoted for all the previous year. Investor demand for student accommodation and private rental residential property remains strong.
Van Elle (VNL) has an outstanding debt of £1.6m from failed facilities management and construction company Carillion. finnCap has also assumed lower second half profit of £1.3m relating to expected business from Carillion. The specialist piling contractor has a poor record since floating and this does not help.
Engineering and IT recruitment company Gattaca (GATC) says that most of Carillion’s debt to the company is insured with around £100,000 uninsured. Premier Technical Services (PTSG) says that it has £800,000 of annual revenues with Carillion with £300,000 still owed. Elsewhere, business is in line with expectations. Bilby (BILB) says that it does not think that the contract with CarillionAmey will be impacted.
Sinclair Pharma (SPH) directors have been buying shares on the back of the news that it has received regulatory approval of Ellanse pre-mixed bioresorbable collagen stimulating fillers in Brazil, one of the most important global markets. Ellanse will be soft launched immediately and the full launch is a matter of weeks away. Other Sinclair dermatological products are selling well in Brazil.
K3 Capital (K3C) reported interim figures that were better than forecast. This led to a £1m increase in forecast full year revenues but the pre-tax profit forecast is maintained at £5.4m because of additional costs required to accelerate the growth of the business. The business broker and corporate finance adviser announced an interim dividend of 2.85p a share and a total dividend of 8.2p a share is forecast for the full year.
Full year trading at Midwich (MIDW) was better than expected with revenues 28% ahead at £470m, helped by acquisitions performing ahead of expectations. The audio visual equipment distributor has also improved gross margin. The 2017 results will be published on 13 March.
Utilitywise (UTW) has changed its accounting policy relating to initial revenue recognition of new contracts.
LiDCO (LID) has signed up a new Japanese distributor. Merit Medical has a three year exclusive agreement and there is potential to significantly increase last year’s sales of £117,000. The LiDCOunity version 2 monitor has been approved in Japan.
African Battery Metals (ABM) is the new name for Sula Iron and Gold. Prior to the name change, £1.75m was raised and the Riverfort facility terminated with an associated buy back of shares. ABM is paying $100,000 ($50,000 is still outstanding) for a 70% stake in cobalt licences in the Democratic Republic of Congo. The other shareholder will retain its 30% stake up until a decision is made to mine, so ABM will pay the exploration costs.
Orosur Mining Inc (OMI) produced 7,052 ounces of gold at an average cash operating cost of $867/ounce in the second quarter and plans to produce at least 30,000 ounces in the financial year. Although the South America-focused gold producer and explorer generated $2.16m in cash in the second quarter, there was a $251,000 loss in the period because the all in sustaining cost was higher than the gold price received. Asset Chile has forfeited the 16% stake it earned in Anillo because it did not move into phase 2 of the project.
Shareholders have approved share buybacks by China New Energy Ltd (CNEL) until the end of 2019. Up to one-fifth of the shares can be acquired for less than 2p a share. The bioenergy technology developer and operator increased revenues from £8.85m to £24.7m in 2017 and the order book is worth £13.7m. The company was profitable last year and anticipates it will be in 2018.
Data software company WANdisco (WAND) says bookings increased 45% to $22.5m in 2017 with two-thirds generated by WANdisco Fusion software. There was cash of $27.4m at the end of 2017, with $4m from a new growth capital facility.
Thor Mining (THR) has had its stake in US Lithium diluted to 20.8% due to a A$240,000 fundraising at A$0.12 a share, which is four times the Thor acquisition price. US Lithium plans an ASX-listing.
Veltyco Group (VLTY) is acquiring a 51% stake in Varkasso, which has exclusive rights to use the crypto wallet technology platform 8Crypt, for £265,000 in cash and shares. Veltyco will incorporate the 8Crypt crypto wallet in all the gaming platforms it is involved with.
Newmont Mining has decided not to become involved in the Greatland Gold (GGP)-owned Ernest Giles gold project in Australia. It appears that the project was not in the right place or large enough for Newmont to go ahead with, although it took its time to make a final decision. Greatland benefits from the work conducted by Newmont, which has identified a large gold anomaly. Targeted exploration will be undertaken at Ernest Giles in the first quarter of 2018.
Kodal Minerals (KOD) says that the authorities have approved its exploration licences for the Bougouni lithium project in southern Mali. Triumvirat Mining Company will have a 10% economic interest in the licences, which are for an initial three year life. There has been positive drilling news concerning the Ngoualana and Sogola-Baoule prospects.
Electrical accessories supplier Volex (VLX) moved from the Main Market to AIM on 19 January.
Waste gasification technology business EQTEC (EQT) has partially repaid a five-year, £1.1m loan facility with an annual interest rate of 15%. The remaining balance of £621,000 is repayable in July 2020. The £2m of convertible secured loan note with Altair Group Investment Ltd has been extended until July 2020 and the interest rate doubled to 15%.
Renewable fuels technology developer Velocys (VLS) has raised £14m via a placing at 10p a share and hopes to raise up to £4.4m through an open offer at the same price. Last year, there was a £1.16m share issue at 45p a share. The cash will be used to finance initial development of the Mississippi biorefinery and fund the UK waste-to-renewable jet fuel project which has been around for many years.
Generic drugs supplier Beximco Pharmaceuticals (BXP) expects to complete the £18.2m acquisition of a 85.2% stake in Nuvista Pharma by the end of February.
Gama Aviation (GMAA) says last year’s trading was in line with expectations. The business aviation services provider has incurred $1m of costs relating to legal proceedings and there will be a similar amount to come. There will be around $2.5m of restructuring costs and write-downs. Net debt fell from $19m to $13m.
Although Blancco Technology Group (BLTG) says that first half sales declined this is due to the fact that certain contracts were not repeated in the latest period. The data erasure software business is expected to report continuing full year revenues 6% higher at £28.5m. However, higher overheads mean that there will be little profit.
Cyber security software supplier Crossrider (CROS) says that 2017 trading was in line with expectations and revenues improved 16% to $65.8m, while underlying EBITDA was 29% ahead at $8.3m. Profitability from the core activities more than doubled. There was $69.4m in the bank at the end of 2017.
Legend Gold Corp shareholders have agreed to the arrangement for Altus Strategies (ALS) to acquire the entity that owns the Legend gold projects in Mali in return for 41.1 million Altus shares. The mining projects investor is also applying for a dual listing on the TSX-V. Legend shareholders will be issued three Altus shares for each Legend share that they own, giving them 27.6% of Altus.
Toys supplier Character Group (CCT) says it has exited Christmas with “virtually no excess stocks”. International sales were poor but domestic sales grew. Pokemon products will be launched during the summer.
Caledonia Mining Corporation (CMCL) reported higher than guided annual production at the Blanket gold mine. The prediction was 54,000-56,000 ounces but the outcome was 56,135 ounces.
Sustainable pallets manufacturer RM2 International SA (RM2) had unrestricted cash of $4.1m at the end of 2017, but that could fall to $2m by the end of January. That means that there should be enough cash until the third week in February. Management continues to seek additional finance. There are plenty of potential customers but little in the way of orders.
Tiziana Life Sciences (TILS) has raised a further £150,000 at 150p. This is on top of the £150,000, £275,000 and £200,000 raised at the same price during November and December. There is a warrant with each new share and they are exercisable at 160p a share, although the most recent warrants last until January 2024. The cash is being invested in the phase IIa clinical trial for the Milciclib cancer treatment.
Remote tracking and monitoring products developer Starcom (STAR) says that last year’s turnover improved from $5.1m to $5.5m and lower operating costs mean that it will move from loss to breakeven. Strong orders mean that revenues and margins should improve this year.
Condor Gold (CNR) has obtained a TSX listing.
MAIN MARKET
Path Investments (PATH) is cancelling its standard listing even before finalising its acquisition of a 50% participating interest in the Alfeld-Elze licence and gas field in Germany. The plan is to cancel the standard listing on 19 February and raise money and apply for an AIM quotation in the first quarter of 2018. Path has previously been on AIM in a different guise but if the deal does not go ahead the plan would be to maintain the standard listing.
World Trade Systems (WTS) plans a transaction involving the sale of its assets to a new company that will float on the Channel Islands-based The International Stock Exchange. WTS shareholders will be distributed shares in the new company that will be used to acquire the assets.
Loss-making telecoms firm Toople (TOOP) did not publish a full set of figures on RNS. That is always a giveaway. It did announce that the operating loss declined by 23% to £1.31m in the year to September 2017. Cash flow is much more important for a colander company like Toople.
Technology investment company Sure Ventures (SURE) has joined the Specialist Fund Segment of the Main Market, having raised £3.31m at 100p a share. The main focus is augmented reality, fintech and the Internet of Things.
Challenger Acquisitions Ltd (CHAL) has invested $300,000 in a new giant observation wheel for Dallas, Texas. Challenger also has the opportunity to operate the wheel.
Andrew Hore