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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 27 May 2019

NEX EXCHANGE

Ananda Developments (ANA) is amending its investing strategy and acquiring Tiamat Agriculture, which is applying for a UK controlled drug cannabis cultivation and supply licence.  Anglia Salads and JEPCO will provide cannabis growing expertise. The new investing strategy will include the cultivation of medicinal cannabis. URA Holdings will subscribe £400,000 for shares at 0.45p each.

AfriAg Global (AFRI) has raised £1m at 0.1p a share and the cash will be used to acquire a 2.34% stake in Apollon Formularies Ltd. AfriAg hopes to gain first refusal to acquire the rest of Apollon in a transaction that would value the company at £40m.

Good Energy (GOOD) will redeem the first Good Energy Bond, which was launched in 2013, before the end of June. The outstanding principal is £3.6m and the cash for repayment will come from the disposals of Newton Downs and Brynwhilach solar farms to the local communities. The cash helped to develop nearly 150MW of renewable generation projects.

Wishbone Gold (WSBN) says that gold recoveries in Honduras have been low and it is considering whether to sell to the joint venture partner or take full control of the operations. Gold trading volumes are increasing but the contribution to overheads is modest.

Panther Minerals (PALM) has applied for an exploration licence for the Marrakai gold project in Northern Territory, Australia. Panther has also acquired additional ground surrounding the former Little Bear mine in Ontario, Canada.

Formation Group (FORM) reported a reduced loss in the six months to February 2019. There is £3.05m in cash in the balance sheet.

Angelfish Investments (ANGP) is investing up to £150,000 in convertible loan notes in ASSIF, which is developing a digital product to improve mental health. The first tranche has been drawn down and the rest will be invested when design work is completed. The loan notes are convertible into up to 35% of ASSIF, depending on the milestones achieved prior to conversion.

NQ Minerals (NQMI) has shipped 34,500 tonnes of precious metal pyrite concentrate from the Hellyer gold mine in Tasmania.

Proton Partners International Ltd (PPI) has started offering high energy proton beam therapy in Bomarsund in Northumberland.

Newbury Racecourse (NYR) non-executive director Dominic Burke has nearly doubled his shareholding to 2.8%. Tim Syder increased his stake to 3.1%.

V22 (V22O) will leave NEX at the close of business on 31 May.

AIM  

SafeCharge International (SCH) is recommending a $5.55 (436p) a share cash offer from a subsidiary of fellow payment services provider Nuvei Corporation, valuing the company at £699m. The final dividend of 7.22p a share will be paid. The international payments processor joined AIM five years ago at 162p a share. Nuvei has a strong market position in North America and SafeCharge provides scale in Europe.

Trading in the shares of LXB Retail Properties (LXB) has been suspended following court approval of the dissolution of the company and a return of capital of 1.2p a share. The cancellation of the quotation will happen on 31 May.

Volvere (VLE) has sold its oldest subsidiary Sira Defence and Security for £3m, although management bonuses of £320,000 will be paid out of the proceeds. Sira cost a nominal amount and has contributed cash to the group. This leaves 80%-owned frozen pies maker Shire Foods, which increased its full year pre-tax profit from £635,000 to £854,000. Even stripping out incentive payments relating to the sale of the Impetus business, Shire hardly makes enough profit to cover central overheads.

Lawyer Gateley (GTLY) has confirmed that its full year revenues will be at least £102m and EBITDA at least £19m, an increase of 15%. The growth is a combination of acquisitive and organic. Knights Group (KGH) says that its full year revenues will be not less than £52.4m and underlying pre-tax profit will be ahead of expectations at £9.7m.

Argentina-focused oil and gas producer President Energy (PPC) increased revenues by 160% to $47.2m in 2018 and this enabled it to move into profit. This year pre-tax profit is set to improve from $3.5m to $17.3m as last year’s acquisition makes a more significant contribution and capital investment starts to pay back. Average production is expected to be 3,800 barrels of oil equivalent per day in 2019.

Science Group (SAG) has taken a 9% stake in digital radio technology developer Frontier Smart Technologies (FST) at 12.5p a share. Science offered to acquire the whole company via a cash bid of 30p a share but the proposal met with a negative response from the target’s board and the offer has been withdrawn.

Caledonian Trust (CNN) has renegotiated the conditions of the proposed sale of St Margaret’s House in Edinburgh, which was announced in February 2018. The buyer is still in the process of applying for planning consent and it has three months in which to submit the application, plus 12 months to secure consent. A further three months will be allowed to find a pre-let and Caledonia will vacate the property six months after that. This means that it could be two years before the transaction is completed. The consideration is still £15m, compared with a book value of £8m.

Rose Petroleum (ROSE) has received a £300,000 investment at 1.2p a share and appointed Colin Harrington to the board as executive chairman. Origin Creek Energy has a 14.8% shareholding following the share issue. This replaces the previously announced subscription at a lower share price and Robert Bensh has left the board because of that.

Kibo Energy (KIBO) says that 60%-owned flexible power generation development subsidiary MAST Energy Developments is acquiring Bordersley Power Ltd, which is developing a 5MW gas-fuelled power generation plant and relevant grid connections. The deal is dependent on certain conditions.

Cellcast (CLTV) is owed £453,000 by a Kenyan client of its gaming and lottery consultancy activities, which generated revenues of £395,000 in 2018. The government in Kenya is cracking down on advertising of gambling and it had previously raised taxation rates. Cellcast had £698,000 in the bank at the end of 2018.

Trading in the shares of Dublin-based Amryt Pharma (AMYT) has been suspended ahead of the proposed all share acquisition of the larger Aegerion Pharmaceuticals, which is a subsidiary of Nasdaq-listed Novelion Therapeutics Inc. Amryt plans to raise $60m from a share issue.

MAIN MARKET 

Blockchain Worldwide (BLOC) has made a non-binding offer for Entertainment AI Inc although it is still subject to due diligence on the artificial intelligence and machine learning company. Trading in the shares has been suspended.

LED lighting supplier Luceco (LUCE) says trading continues to improve even though sales to UK professional customers are subdued. The overseas market is stronger. Margins are improving.

Motor finance provider S and U (SUS) says that profit from its core business has improved so far this year. The property bridging lending business has increased its loan book to £22m.

Andrew Hore

Andrew Hore – Quoted Micro 20 May 2019

NEX EXCHANGE

Fuel emulsification technology developer SulNOx Group (www.sulnoxgroup.com) plans to join NEX. SulNOx has developed an emulsification and condition process for hydrocarbon fuels. This process makes the fuel more efficient and thereby reduces fuel usage and emissions. Nouryon AB will manufacture and distribute the company’s products under the Berol brand. SulNOx will do the sales and marketing. The directors are applying for approval of eligibility of the company for EIS relief.

Arbuthnot Banking (ARBB) has obtained a NEX Growth Market quotation. The shares continue to be traded on AIM.

AfriAg Global (AFRI) has agreed to subscribe for four million shares in Apollon at 25p each, although part of the investment requires shareholder approval. This is equivalent to a 2.34% stake. However, AfriAg needs to raise this £1m in order to make the investment. It had £101,000 in the bank at the end of 2018 and NAV was £1.9m. The plan is to obtain an option to acquire the rest of the company. Apollon is a medicinal cannabis company and it has an affiliate in Jamaica that has a licence to cultivate, process and sell hemp and medicinal cannabis. Specific strains of medicinal cannabis have been developed.

KR1 (KR1) is generating staking yield revenues on the Cosmos Network, which launched on 14 March. The yields will be a minimum 5.6% yield and it could be much higher. This type of revenues could be generated by other networks where KR1 has an investment.

Sativa Investments (SATI) had £3.74m of cash at the end of 2018. This will be used to develop operations in the UK and Germany. Last year’s revenues were £260,000.

Tectonic Gold (TTAU) has taken operational control of the Vast Mineral Sands diamond mining contract. Cash generated will finance gold exploration.

High Growth Capital (HASH) has consolidated 20 shares into one new share. Dealings commenced on 16 May.

Primorus Investors (PRIM) increased its NAV from £4.95m to £5.16m at the end of 2018. This has been achieved even though pre-IPO investments have had their flotations delayed by poor market conditions. There was £408,000 in cash in the balance sheet.

Proton Partners International Ltd (PPI) has raised £10m at 176p a share by issuing shares to Woodford as part of the agreement in the flotation prospectus. NQ Minerals (NQMI) has issued 1.37 million shares at 6.5p each to satisfy a payment for the three month extension of maturing debt.

Gowin New Energy (GWIN) has extended the loan agreements with four shareholders so that the repayment dates are all around the beginning of November. The loans total £500,000.

AIM 

Software provider Sanderson (SND) prospered in the first half. Revenues improved by 18% to £17.2m and operating profit was one-third higher at £2.8m. Recurring revenues grew by 18% and they are 55% of total revenues. Sanderson has already secured most of the revenues it requires to make the full year revenues forecast of £35.3m, which is expected to generate pre-tax profit of £5.4m.

Block Energy (BLOE) has raised £12m at 11p a share. This comes less than one year after Block joined AIM when the oil and gas company was valued at £10.3m at the placing price of 4p. The cash will be invested in the West Rustavi PSA in the Republic of Georgia. Up to four horizontal sidetracks will be drilled in order to scale up existing production, as ell as drilling one new well. There will also be funds for 3D seismic, appraisal of two existing gas discoveries and increase the capacity of production facilities to up to 5,000 barrels per day. This will all be done over the next 12 months.

Investment and new store opening costs have pushed fishing equipment retailer Angling Direct (ANG) into loss. In the year to January 2019, revenues grew from £30.2m to £42m. International sales more than doubled to £4.7m. IT investment is improving efficiency. Angling Direct will continue to lose money this year as the number of stores is set to be increased from 24 to 34. It takes more than a couple of years for a store to start to mature so the benefits of the current investment will take time to show through in profit terms.

Live events agency Aeorema Communications (AEO) says its revenues reached a new high in the second half and full year revenues will be better than expected. New business has been won but it is lower margin than previous contracts so profit will be in line with expectations. There should be a full year dividend. Last year’s dividend was 0.75p a share, which was an increase of 50%.

TruFin (TRU) is launching a tender offer for up to £5m of shares at 92p each. The tender offer closes on 4 June. TruFin recently £44.5m raised from the sale of its stake in Zopa and demerged Distribution Finance Capital (DFCH). There are plans to return a further £5m by the end of 2019.

Churchill China (CHH) is continuing to trade strongly so far this year. The opening of the Rotterdam distribution facility is supporting European growth. Sales of added value products are growing. The integration of the Dudson brand and products is progressing well.

Online retailer MySale (MYSL) has sold the cocosa.co.uk website. This is part of the plan to exit the UK and concentrate on Australia and New Zealand.

Film completion contracts provider FFI Holdings (FFI) says operating profit will be at the lower end of the range of $7.5m to $11.5m previously reported.

Maistro (MAIS) has decided to leave AIM. The company has gone from a hyped-up online business called blur to cash strapped operation that needs to save as much money as possible. Maistro has raised plenty of cash in its time as a quoted company.

Veltyco Group (VLTY) has generated flat revenues from sportsbook and casino marketing business in the year to April 2019. The revenue mix has changed, and lower margin activities have grown in importance. The company is loss-making and more investment will be required.

The recovery at Safestay UK (SFE) appears to be stalling, even though it is growing revenues faster than the market is growing. The problem is that margins are not improving as quickly as expected.

Ten Lifestyle (TENG) increased revenues by 24% to £21.5m but the loss has risen due to greater investment in the business. The lifestyle and travel platform still has £13.2m in the bank. New contracts are being won and existing ones increased in size.

MAIN MARKET 

Blencowe Resources (BRES) has wasted little time in securing a takeover target. It plans to acquire a company which is the owner of the Oram graphite project in Uganda for £2m in shares at 6p each.

nmcn (NMCN), which formerly North Midlands Construction, says first quarter revenues increased by 27% to £94.4m and improved margin meant that profitability increased by 170% to £1.75m. The built environment division moved back into profit and the water division doubled its profit. There is £22m in the bank. The secured workload for the year is £342m.

Packaging manufacturer and distributor Macfarlane Group (MACF) says profit is ahead of last year and in line with expectations. Sales have grown by 7% so far this year and organic growth is 3%. The manufacturing operations have grown fastest.

Highway Capital (HWC) is catching up with its figures having published more than one set this week. The interims to August 2018 show a cash outflow from operations of £9,000. Net liabilities were £614,000.

There was a £949,000 cash outflow from operations at Toople (TOOP) in the six months to March 2019. There is net cash of £546,000.

Flavours supplier Creightons (CRL) says second half sales will be similar to those in the first half. There will be a £350,000 benefit from research and development tax credits.

Argo Blockchain (ARB) has adjourned its general meeting following the resignation of Jonathan Bixby. Mike Edwards become chairman. Another director will be appointed in consultation with First Investments, which requisitioned the general meeting. First Investments is backing the existing business by investing up to $1m as a cryptomining-as-a-service customer.

Andrew Hore

Andrew Hore – Quoted Micro 16 July 2018

NEX EXCHANGE        

Hotel operator Hydro Hotel, Eastbourne (HYDP) reported flat interim revenues of £1.51m in the six months to April 2018, during a period where building repairs were undertaken. Higher overheads and maintenance costs meant that the loss increased from £153,000 to £200,000. There is £635,000 in the bank.

AfriAg Global (AFRI) has raised £300,000 at 0.1p a share in order to finance its new investing strategy of investing in medicinal cannabis businesses.

Panther Metals (PALM) has signed an option agreement to acquire gold exploration properties in Ontario. The total potential consideration is C$133,000 (£77,000) in cash and the issue of 19.15 million shares at 0.3p each, locked-in for six weeks. A non-refundable payment of C$30,000, one-half cash and one-half shares, has been paid. Due diligence needs to be completed within eight weeks.

NQ Minerals (NQMI) has entered into two marketing and off-take agreements, combined with a $10m secured prepayment facility with Traxys Europe. The off-take agreements relate to all lead and zinc concentrates from the Hellyer project in Tasmania in the first five years of production.

Pelican House Mining (PHM) had nearly £49,000 in the bank at the end of June 2018. The former Hellenic Capital acquired a 15% stake in Might Oak Explorations last month.

Melissa Sturgess and Michael Langoulant have been appointed as directors of Imperial Minerals (IMPP) and James Hamilton and Russell Hardwick have resigned.

Wheelsure Holdings (WHLP) has received approval for the Tracksure locking device from the Italian State Railway.

Clean Invest Africa (CIA) plans to buy out the other shareholders in CoalTech LLC. Due diligence has commenced prior to making an offer for the 97.5% of CoalTech not owned by the clean technology investment company. The initial investment was $500,000.

AIM     

Frontier IP (FIPP) investee company Pulsiv Solar has won a UK government grant worth £130,00, which will be put towards a £289,000 project to compete the development of its solar micro-inverter by next April. Frontier IP owns 18.9% of the University of Plymouth spin-out.

Kestrel Partners continues to build up its stake in broadcast software provider Pebble Beach Systems (PEB) and it has taken it from 16.6% to 17.4%. Continuing operations moved back into operating profit in 2017, even though revenues fell from £10.9m to £10.3, but the £500,000 was not enough to cover interest charges and rationalisation costs. Net debt was still £10.3m after getting some proceeds from the sale of the Vislink hardware business. The revolving credit facility is £15m.

Medical imaging technology developer Polarean Imaging (POLX) has raised £800,000 at 16p a share, following last month’s investor symposium. This provides additional cash to support phase III clinical trials in the US and invest in further development.

Veltyco (VLTY) has decided not to go ahead with the potential acquisition of sportsbook operator Ruleo Alpenland.

Telit Communications (TCM) has agreed to sell its automotive division to TUS International for $105m and the deal should be completed by the end of 2018. In 2017, this business made a $10.1m contribution to EBITDA before group overheads. This deal will more than wipe out the current net debt of $25m. The focus will be the Internet of Things operations.

Online women’s fashion retailer Sosandar (SOS) continues to build up its sales. The reported interim revenues were £1.35m. Like-for-like interim revenues grew by 268%. The company remains loss-making but the gross margin improved from 37.8% to 49.4%. There was £4.6m in the bank at the end of March 2018 and this will help to finance further increase in the product range as well as continued losses. There is a database of more than 54,000 customers and 11,407 of those were repeat customers in the period.

Duke Royalty Ltd (DUKE) is raising £44m at 44p a share to fund the pipeline of royalty financing opportunities. There are already four new potential royalty partners requiring £27.5m. These include healthcare, foods and media businesses. Within 12 months, Duke expects to increase its dividend yield. Last December Duke raised £20m at 40p a share.

Itaconix (ITX) is raising £3.4m at 2p a share, which was a 70% discount to the suspension price. Trading in the shares will start again on Monday 16 July. The speciality polymers designer will have enough cash for 12 months, assuming shareholders vote in favour of the share issue. Revenues have been building up slowly and last year they nearly doubled to £553,000. The loss was £11.9m.

One year after it joined AIM, superyacht painting and maintenance services provider GYG (GYG) says that first half trading was weaker than expected. There were delays in refits and fewer new build projects were won. First half revenues of around €25.1m are lower than the two previous first half outcomes. It appears that the interim loss will be more than €1m. There are €12.1m of orders expected to be completed in the second half with a further €25m of “high probability prospects”. The 2017 revenues were €62.6m.

Marlowe (MRL) is raising £20m at 475p a share in order to finance further acquisitions in the critical asset management services sector.

Tristel (TSTL) says that its full year pre-tax profit should be at least in line with the £4.4m forecast, up 8%. Higher investment in gaining US approvals for disinfection products has held back profit growth, but it is expected to accelerate in 2018-19 when a pre-tax profit of £5.2m is forecast.

ReNeuron (RENE) has signed a three-month exclusivity agreement with a major pharma company to potentially out-licence the global rights, excluding China, of its hRPC retinal stem cell technology platform. A non-refundable payment of $2.5m will be received with a further $2.5m due if the deal goes ahead. There was £34.7m in the bank at the end of March 2018 and this should last well into 2020 even though there will be significant spending on trials, including the phase III trial of the CTX cell treatment for stroke disability.

Xpediator (XPD) has acquired Import Services Ltd, which operates a logistics and warehousing business at the Port of Southampton, for up to £12m. The business, which made a 2017 profit of £1.7m, fits well with Xpediator’s existing business in the port and has a good management team that can help the enlarged operations to grow. It should be earnings enhancing in the first full year. A placing raised £7m at 70p a share.

Fifteen-month figures from healthcare services provider Totally (TLY) include five months from the Vocare acquisition but that was still enough to generate revenues of £42.5m. A full 12 months of Vocare should increase revenues to £85m but Totally would still be loss-making. There is further restructuring and integration required. Cost savings should help Totally move into profit in 2019-20. Net cash was £10.2m at the end of March 2018.

Collagen Solutions (COS) improved its revenues in the second half, compared with the first half, but full year revenues were still 6% lower at £3.83m. There is still £5.02m in the bank. There was growth in EMEA. The eight year clinical study for cartilage repair product ChondroMimetic was successful.

Full year figures from managed communications services provider AdEPT Telecom (ADT) were better than expected. Managed services were more than two-thirds of revenues, which were 35% ahead at £46.4m. Underlying pre-tax profit was one-third higher at £7.7m. Net debt was £17.6m at the end of March 2018.

Strategic Minerals (SML) generated sales of $696,000 from the Cobre magnetite operations in the three months to June 2018, but the suspension of a major contract will hit the current quarter. There was $2.09m in the bank at the end of June 2018 and a payment of $375,000 has subsequently been received.

ECR Minerals (ECR) has raised £650,000 at 0.7p a share and that provides enough cash until the third quarter of 2019. The development programme at the Blue Moon target in Victoria, Australia will be accelerated.

An international mining company has agreed to subscribe $250,000 for shares in Orosur Mining Inc (OMI) and that will help to finance further exploration at the Anza project in Colombia. The subscription is at 5.2p a share, double the market price at the time of the agreement.

Fishing tackle retailer Fishing Republic (FISH) expects interim revenues to decline from £4.1m to £3.4m following the closure of five underperforming stores. Like-for-like store sales were 22% lower and online sales also fell. Inventory levels have fallen.

Clear Leisure (CLP) has started operations at its crypto currencies mining data centre in Serbia.

Battery technology and advanced materials developer Ilika (ILK) has raised £4m at 20p a share and an open offer could raise up to £1m more. The cash will finance the costs of developing battery technology for the automotive market. There was £2.8m in the bank at the end of April 2018.

N4 Pharma (N4P) reported disappointing results from the pharmacokinetic data for the clinical trial for reformulated sildenafil, which is better known as Viagra. The plan is to improve the speed at which the drug takes effect but the formulation has not meet the targets set.

Ariana Resources (AAU) says that the Kiziltepe mine produced 7,171 ounces of gold in the second quarter of 2019 and it is still on course to produce 20,000 ounces of gold for the whole year.

Trading remains tough at replacement windows supplier Safestyle UK (SFE) although order intake has firmed in recent weeks. This follows the loss of staff to a competitor that is being sued by Safestyle. It will take until next year to rebuild the team. Thee will be a loss this year even before £6m of restructuring costs. This will use up the cash in the bank.

Next Fifteen Communications (NFC) is paying an initial £2.2m for Technical Associates Group, which is a technical content and digital marketing business. This deal increases the group’s exposure to the industrial engineering sector.

MAIN MARKET    

More director changes at Quarto Group Inc (QRT) with Andy Cumming appointed as senior independent non-executive chairman. Major shareholder Laurence Orbach has stepped down as executive chairman and will become a non-executive director. Chief operating officer Ken Fund has joined the board.

Nicholas Lyth has resigned from the board of Sealand Capital Galaxy Ltd (SCGL) having been a director for 17 months.

China-focused healthcare investor Cathay International Holdings (CTI) says that the first half sales and profit will be lower than expected but it hopes to make up the shortfall in the second half. Healthcare subsidiary Lansen has appointed a new chief executive and there have been operational changes, while regulation changes also continue to hit sales in the first quarter. The company’s hotel operations are trading ahead of expectations. The interim will be published in late August.

Andrew Hore

Andrew Hore -Quoted Micro 2 July 2018

NEX EXCHANGE   

Medicinal cannabis business investor Sativa Investments (SATI) has raised £500,000 from Miton Investment Management at 4p a share. Demand for the shares remains strong. Executive director Mark Blower has sold one million shares at 4p a share, having exercised options for the same number at 0.5p each, and Non-executive Noel Lyons has sold 500,000 at 4.25p each, having exercised 500,000 options at 0.5p each. Sativa joined NEX on 29 March after raising £1.1m at 1p a share. The share price had already reached 3.125p by the end of the first week. Sativa has founded the Sativa Foundation to fund academic research into medicinal cannabis.

AfriAg Global (AFRI) intends to change its investing policy so that it includes medicinal cannabis opportunities. A medical advisory board will be appointed and they will carry out due diligence on the opportunities. AfriAg (Pty) Ltd previously had the right to take a 60% stake in House of Hemp but this deal was terminated when the South African government delayed setting up the legal framework for medicinal cannabis.

High Growth Capital (HASH) joined NEX on 25 June and it plans to become a UK, Canada and Australia-focused medicinal cannabis products index tracker and investor. This will be achieved by giving direct exposure to medicinal cannabis-related companies. The strategy is to acquire up to 10% of an individual company or £150,000 in value, depending on which is the lower amount.

Tectonic Gold (TTAU), which was quoted on AIM as Stratmin until August 2017, also joined NEX on 25 June. Tectonic has gold exploration interests in Queensland, Australia. Tectonic raised £530,000 at 2p a share and then issued another 30.8 million shares to the one of the shareholders in the exploration assets that have been acquired and to advisers.

Capital for Colleagues (CFCP) had a NAV of 41.73p a share at the end of May 2018. There are 18 investments in unquoted employee-owned businesses valued at £5.82m. The most recent was a £600,000 loan to Poole-based aerospace components manufacturer TG Engineering.

Clean Invest Africa (CIA) still had £501,000 in cash at the end of March 2018, following its maiden £372,000 investment in CoalTech, which is involved in cleaning up the waste from coal mining. The technology that has been developed enables coal fines that have little or no worth to be converted into pellets, using a binding technique, to make them a commercial product.

There was a £93,000 cash outflow from the operating activities of investment company Startup Giants (SUG) in the year to January 2018. There was £686,000 in cash and £40,000 worth of investments on the balance sheet. There are plans to add up to 25 more investments.

VI Mining (VIM) says that the seller of the Ximenita de Casma project has cancelled the option over the three mining concessions and it has also exercised its charge over the company that owns the processing plant. VI Mining had held back payment of consideration because of claims for breach of warranty. Legal proceedings will be initiated.

AIM    

Legal firms consolidator Gordon Dadds (GOR) grew revenues by one-quarter to £31.2m last year even though there were minimal contributions from some of the legal firms it acquired. Pre-tax profit was 23% higher at £2.96m. This is a highly cash generative business. The dividend of 4p a share reflects that the company was not quoted for a full 12 months.

IMImobile (IMO) continues to grow organically as well as by acquisition. Full year revenues were 46% higher at £111.4m and that includes organic growth of 7%. Pre-tax profit improved from £9m to £10.1m. The communications connections technology provider has 85% recurring revenues. The main markets are growing well but progress was held back in South Africa by the political situation and since this has been sorted out that market has returned to growth.

Following a cautious AGM statement by Dillistone (DSG), WH Ireland has trimmed its forecasts and that means that the recruitment software provider is expected to breakeven this year, while the 2019 pre-tax profit has been cut from £540,000 to £200,000. Software revenues have been hit by the loss of a major client and the GatedTalent product is taking longer to build up revenues.

SaaS-based app distribution platform developer appScatter (APPS) has revised the terms for its acquisition of Priori Data. The company is still paying £13.5m in cash and shares for data analysis business but more will be funded by shares. This means that only £1.6m has to be raised in a placing at 70p a share.

Transport group Eddie Stobart (ESL) is acquiring The Pallet Network Group for £52.8m, which will be partly financed by a £30m placing at 140p a share. The network comprises 106 regional transport companies and three central hubs.

Action Hotels (AHCG) has agreed a possible cash offer of 24p a share from its major shareholder. Due diligence is being undertaken.  After the company was floated by Sanlam Securities at 64p a share in December 2013, there have been four changes of nominated adviser and broker.

EQTEC (EQT) is on course to raise £2m in cash to pay off the unpopular financing package it previously secured. That deal has hit the share price but EQTEC is making progress with potential projects for its gasification technology. At least one project should reach the construction stage before the end of year to June 2019. That could either be a project in the UK or a 12MWe power plant in Vietnam, which could utilise equipment that was going to be used on the project in Newry, which is no longer going ahead. This will mean that milestone payments will be received throughout the construction.

Omega Diagnostics (ODX) has sold its infectious diseases assets to Novacyt (NCYT) although it is retaining the Visitect CD4 test. The disposal will raise up to £2.175m and these assets generated a profit before overheads of £300,000 in the past financial year. The book value was £600,000. Omega will provide manufacturing and storage services for 12 months. The cash will be invested in the Visitect CD4 test, Allersys and realising the value of the food intolerance business.

TechFinancials Inc (TECH) reported a 37% reduction in revenues in 2017 to $13.4m with software licensing revenues more than halving. Overheads were reduced but pre-tax profit still slumped from $4.05m to $116,000, although that was partly due to a $1.5m asset impairment charge. There was $3.5m in the bank.

Windar Photonics (WPHO) has signed a global distribution agreement with Vestas Wind Systems, which will sell the two beam light detection and ranging LiDAR system as a retro-fit product. The deal could provide access to around 14% of global installed capacity. This should help Windar to move into profit this year and make a significant profit in 2019.

CEPS (CEPS) has raised £1.33m at 35p a share and this will finance the repayment of a £1m loan plus interest. Sunline Direct Mail, which is 80%-owned, has been placed in administration and CEPS is unlikely to receive anything. Group trading is also slightly below expectations.

MAIN MARKET    

Standard list shell Chesterfield Resources (CHF) has agreed to acquire Cyprus-registered HKP Exploration Ltd, which has seven prospecting permits covering three project areas on the island. The focus is copper and gold. At least £1.1m will be spent on exploration and drilling. A placing and subscription at 7.5p a share will raise £2m and each share comes with a warrant exercisable at 15p each. HKP is being acquired for 6.67 million shares at the same price. The original placing price last August was 5p a share.

Highland Natural Resources (HNR) has applied to acquire leases over 46,000 acres in Arizona, which management believes could produce commercial volumes of carbon dioxide.

Andrew Hore

Andrew Hore: Quoted Micro 4th June 2018

 NEX EXCHANGE

Stratmin Global Resources which was quoted AIM until August 2017, is expected to join NEX on 6 June.  Stratmin lost the AIM quotation because it failed to complete a reverse takeover, partly due to the fact that it was waiting for a promised investment. Stratmin is still in the process of completing the acquisition of Australian gold explorer Signature Gold, which would be paid for by the issue of 450 million shares at 2p each. After the deal, the company will change its name to Tectonic Gold.

Ananda Investments is the latest cannabis-focused investment vehicle to be joining NEX. The pre-money valuation is £500,000 and the minimum fundraising is £750,000. Ananda is willing to raise up to £4m. There are already potential investments being assessed. A reverse takeover valued at up to £10m appears most likely.

AfriAg Global (AFRI) says that 40%-owned AfriAg (Pty) Ltd increased its net profit from £104,000 to £179,000. This was equity accounted by AfriAg Global and the £72,000, up from £42,000, contribution helped offset the operating loss from the agricultural logistics group’s operations. The overall loss increased from £9,000 to £38,000. AfriAg (Pty) Ltd had the right to take a 60% stake in House of Hemp but this deal was terminated when the South African government delayed setting up the legal framework for medicinal cannabis. Focus has turned to other countries.

KR1 (KR1) generated gains of £4.3m on its trading in digital coins and tokens during 2017. There was also a total unrealised gain of £10.8m on these investments and a £1.18m foreign exchange gain. The total pre-tax profit was £14.5m, with a tax charge of £2.87m. That tax charge is included in trade creditors due within one year of £4.21m. There is cash in the bank, but total current assets were £3.5m. A creditor has subsequently been paid with £79,000 of shares, issued at 10p each. The KR1 share price has more than quadrupled over the past year and there is regular daily trading in the shares.

Workspace provider and art collector V22 (V22) reported a 2017 pre-tax profit of £175,000, down from £1.01m the previous year. The profit included a gain on the sale of an option to acquire one of the company’s buildings. The NAV is £1.34m, equivalent to 4.26p a share. That increases to 8.68p a share if the company’s art collection is revalued. The shares are trading at 2.95p (2.7p/3.2p).

Housebuilder St Mark Homes (SMAP) reported a reduction in pre-tax profit from £652,000 to £384,000 in 2017. There was a reduction in revenues from £1.34m to £120,000 and the share of operating profit from a joint venture was more than halved. There was cash in the bank of £514,000 at the end of 2017. St Mark has raised £3.47m from a 6% bond. This cash will be invested in new projects. The NAV is 134p a share, compared with a share price of 95p (90p/100p).

Peru-based gold and silver producer VI Mining (VIM) reported a tripled loss of $6.33m for 2017. No revenues were generated and the NAV was $2.56m. That was before VIM acquired two projects for $51.3m and raised £5.35m at 500p a share.

Georgia-focused oil and gas company Block Energy withdrew from NEX on 23 March and it is set to join AIM on 11 June. It will be valued at £10.3m at 4p a share.

MetalNRG (MNRG) has identified an acquisition that could provide the opportunity to move to the standard list.

Iran-focused investment company Indigo Holdings (INGO) is reviewing its strategic options. Hamish Harris and Nicholas Harwood are stepping down from the board.

First Sentinel (FSBN) generated initial revenues of £156,000 but, even excluding admission expenses of £65,000, it lost £117,000 in the 15 months to December 2017. The NAV of the small company adviser and investor was £1.26m at the end of the year. Since then, a further £1.5m has been raised via a convertible bond.

Formation Group (FRM) fell back into loss in the six months to February 2018. Revenues fell by 15% to £17.2m and there was s wing from a pre-tax profit of £15,000 to a loss of £277,000. The loss was greater than the second half loss last year. The NAV is £9.95m, including £3.2m in cash.

Secured Property Developments (SPD) has received repayment of the loan it made to a developer of a retail scheme in York. This cash will be used to finance any property deals that management feel are good value, thanks to more realistic pricing.

Trading in the shares of DagangHalal (DGHL) and Equatorial Mining and Exploration (EM.P) have been suspended. DagangHal has failed to publish its 2017 accounts. Equatorial is in negotiations with South African mining company ARQ Minerals, which intends to invest £50,000 for 500 million shares. This has led to a delay in the publication of accounts.

Walls and Futures REIT (WAFR) has appointed Allenby to replace City and Merchant as its corporate adviser.

AIM   

Nexus Infrastructure (NEXS) had already warned that its TriConnex utility connections business was suffering from delays and even so interim figures showed a 4% rise in revenues to £62.9m and a 15% increase in pre-tax profit to £3.4m. The interim dividend was raised by 5% to 2.2p a share. Delays to the commencement of projects continue but the group order book has increased to more than £234m.

RedstoneConnect (REDS) is selling its systems integration and managed services businesses for £21.6m, so that it can concentrate on its software for smart buildings. The cash raised will pay off existing debt. Last year, the software division had revenues of £5.3m and made an operating profit of £1.4m.

Maritime monitoring equipment supplier SRT Marine Systems (SRT) has raised £3m at 25p a share and it is swapping £1.15m of short term loan notes for new three year loan notes. The cash will finance systems projects and product development. SRT is working on projects worth £30.5m.

A positive AGM statement from Parity (PTY) confirms that the trading of the consultancy and staffing divisions is going well. Parity should be cash positive by the end of the year and there is a strong pipeline of potential business.

Fishing tackle retailer Fishing Republic (FISH) increased revenues by 58% to £9.15m, but it slumped into loss. Trading was weaker than expected, particularly in the fourth quarter, and gross margin fell sharply even before stock write-offs. Fishing Republic has relaunched its website and the review of operations is ongoing. Five stores have been closed, reducing the total number to 14.

Share (SHRE) increased its revenues by one-fifth in the first quarter as the services provided for Computershare make a contribution in the full quarter. Broker commissions increased by 27% on the back of a 5% increase in trading volumes. First quarter market share dipped from 3.66% to 3.54%. An upgrade to the website has been completed.

Itaconix (ITX) is restructuring its UK operations in order to focus on core products. The main focus will be the US polymer operations. The annual fixed cost base will fall to less than £3.5m in 2019.

IDOX (IDOX) has appointed David Meaden as chief executive. He has experience of the public sector and software development. The information management software and services provider has closed its loss-making digital division. Underlying EBITDA is likely to be in the range of £13m-£15m for the full year, compared with previous expectations of £22.8m. Excluding digital, the EBITDA will be between £18m and £20m.

Immupharma (IMM) has further analysed the results of the phase III lupus treatment trial for Lupuzor. There were different results in the European and US parts of the trial with antibody positive patients in Europe showed a statistically significant improvement.

MAIN MARKET    

Haynes Publishing (HYNS) expects to report a better than expected full year profit. Underlying pre-tax profit will be 10% ahead at around £2.9m. Earnings per share will be hit by US tax changes.

Falcon Media House (FAL) has decided to leave the standard list. The digital media group says that the share price fall has hampered its ability to raise more cash to develop its Q-Flow technology. Revenues have not come through as quickly as expected. If cash were raised, it could reduce the free float so the shares would be suspended.

Andrew Hore

Quoted Micro 18 September 2017

NEX EXCHANGE

Good Energy (GOOD) is hoping that efficiency improvements will help it to grow its profit. So far annualised savings of £1m have been made with more to come in 2018. Customer churn meant that electricity and gas customers were 1% lower in the first half. In the six months to June 2017, revenues were 16% higher at £52m but pre-tax profit was 37% lower at £700,000 due to restructuring and investment costs. Net debt was £60.4m.

Blockchain-focused investment company Kryptonite1 (KR1) has sold tokens relating to Golem, Melonport and Omisego for significant multiples of their buying prices. The gain on the disposals was nearly £400,000 with the majority coming from the Omisego disposal. The holding in Bancor has been sold for the original acquisition price. Kryptonite1 has invested £100,000 in the FOAM project seed funding round and it will receive discounted tokens in the public token offer in the fourth quarter. A further £100,000 has been invested in 208,333 tokens in the pre-sale of the Enigma Catalyst project. There has been £202,000 invested in the private sale of tokens in the RChain project and £120,000 in Rocketpool tokens. Keld Hans van Schreven has been appointed an executive director of Kryptonite1.

Block Energy (BLOK) is raising $600,000 from the sale of its Ghanaian mining assets. An initial $50,000 has been received and $550,000 will be paid by the end of 2017. The cash will be reinvested in the company’s oil and gas assets in Georgia.

Karoo Energy (KEP) is making progress towards an AIM quotation. Andrew Smith, who has worked in the finance functions of a number of AIM companies, has been appointed as a non-executive director.

WMC Retail Partners (WELL) has asked for trading in its shares to be suspended while it clarifies its financial position.

AfriAg Global (AFRI) has raised £200,000 at 0.25p a share. Via Developments (VIA1) has issued a further £300,000 of 7% debenture stock 2020. That takes the debenture stock in issue to £4.9m.

EPE Special Opportunities (ESO) had a NAV of 412.26p a share at the end of July 2017. The flotation of Luceco has helped to boost NAV.

AIM

Pennant International (PEN), which provides training and simulation equipment and services for aircraft and defence equipment. The interim profit was £1.1m, compared with around breakeven in the first half of 2016. An electro-mechanical trainer and courseware contract with a MoD contractor has been changed so second half revenues will be lower than expected but Pennant still has the contract and the changes mean it will probably earn more over the medium-term. This year’s profit will be flat at around £2.1m because of the lack of contribution from the contract. The order book of £42m includes £15m to be delivered in 2018, compared with forecast revenues of £18.5m.

Audio visual products distributor Midwich Group (MIDW) reported a one-third increase in interim revenues to £212m. Organic growth was 15%. Margins have fallen but they remain relatively strong. The van Domburg acquisition takes the group into the Benelux countries. Midwich is on course to increase full year pre-tax profit from £17.9m to £22.1m. Midwich will join the FTSE AIM 50 index later in September.

Group Eleven, which is on course for a flotation in Toronto, has acquired Teck’s 76.56% stake in the Stonepark zinc licences in Limerick, Ireland, where Connemara Mining (CON) owns the remaining 23.44%. Connemara took the decision to hang on to its stake even though it could have received C$2.8m and a 1% net smelter royalty. Stonepark is west of the Pallas Green zinc deposit.

Wynnstay Group (WYN) says it is placing its pet retail business Just for Pets into administration. In the six months to April 2017, the business lost £250,000 on revenues of £7m. Wynnstay made an operating profit of £4.24m in the same period. The Just for Pets business has net assets of £2.2m and there is likely to be a significant write-off.

MX Oil (MXO) is seeking to broaden its investing policy so that it is not purely focused on natural resources and also covers oil services and energy activities, where opportunities are lower risk. MX has warned that the carrying value of its investment in Nigerian oil assets may have to be revised.

Central Rand Gold Ltd (CRND) is seeking additional finance and this is likely to be highly dilutive for existing shareholders. The disposal of some or all of the company’s interests is also a possibility.

CSF Group (CSFG) has accepted a conditional indicative offer for one of its subsidiaries for a nominal amount. That would significantly improve the financial position of the group due to a reduction in liabilities. Net liabilities were RM27.5m at the end of September 2016. Last October, shareholders voted against cancelling the AIM quotation.

Kin Group (KIN) hopes to resurface after a company voluntary arrangement and a share placing. The administrator has sold the main assets of the core business have been sold to Australia-based SMG Investment Holdings for £50,000. The shares remain suspended.

Investment company Adams (ADA) has bought shares in fully listed-Petrofac (PFC), which is the subject of a Serious Fraud Office investigation. Adams has invested £941,000 at an average share price of 447.66p a share in the oil services provider. Adams has £100,000 left in the bank.

MAIN MARKET

Standard list shell Silver Falcon (SILF) is buying a US biotech focused on blood diseases such as bone marrow failure and leukaemia. The main product of Hemogenyx is still at preclinical stage but preparing to move into clinical trials over the next 18 months. This product redirects existing immune cells to eliminate unwanted cells in a patient waiting for a bone marrow transplant. This could replace chemotherapy. There is also a second product in preclinical development. Silver Falcon is issuing 228.6m shares at 3.5p each to acquire the company. It is also raising £2m at the same price. Readmission to standard list under the new name of Hemogenyx Pharmaceuticals (HEMO) will be on 5 October.

Papillon Holdings (PPHP) has agreed heads of terms to acquire Phestor and Greenway Activated Carbon, which are involved in ultra-supercapacitor development for energy storage and supply of active carbon produced from biomass. Greenway plans to set up bio-refineries to extract cellulose and other materials from sugar beet pulp, straw and brewery biomass. The active carbon produced can be used in the ultra-supercapacitors. Phestor was set up in October 2016, while Greenway was set up in March 2016, although its name was changed last month. James Etherington Thorpe, who is resident in Denmark, is the sole director of each of the companies. Papillon had previously ended talks with MyClubbetting.com (see below).

Ocelot Partners Ltd (OLOT) still had $413.9m in the bank at the end of June 2017 and it is still on the look out for companies involved with the European technology, media or telecoms sectors. Shares in Ocelot commenced trading on the standard list on 13 March, when the cash shell raised $418m at $10 a share (currently trading at $9.91 each). A further $7.35m was raised from founder preferred shares with one warrant attached to each share. There was a $34.1m non-cash charge relating to founder preferred share dividend rights in the figures to June 2017.

Standard list shell Rockpool Acquisitions (ROC) says that it has been approached by additional reverse takeover targets in a range of sectors. Rockpool wants to buy a Northern Ireland-based business.

Andrew Hore

Quoted Micro 24 July 2017

NEX EXCHANGE

Ace Liberty & Stone (ALSP) has raised £10m via a 6% convertible loan note. The conversion price is 71.25p a share and full conversion would be the equivalent of 26% of the share capital. The loan note is redeemable on 23 May 2019. The holder of the loan note has also been granted an option to purchase some of Ace’s properties.

Block Energy (BLOK) has increased its ownership of the Norio onshore oil field production sharing contract in Georgia from 38% to 69% at a cost of $310,000 in cash. The plan is to move to a 100% working interest. Schlumberger estimates that Norio contains 118.7 million stock tank oil initially in place and it has produced 1.9 million barrels. The production is running at 25 barrels per day and the plan is to increase this to more than 250 barrels per day. That could happen within six weeks of the start of a work programme.

African Potash (AFPO) has raised £50,000 at 0.045p a share and appointed Alexander David as its new corporate adviser. This will help to get the trading suspension lifted. Warrants to raise a further £50,000 will last for 90 days from the lifting of suspension. An agreement has been entered with African Agronomix, which is being given the right to acquire 100% of the company’s 70% interest in the Lac Dinga project in the Republic of Congo.

NQ Minerals (NQMI) has appointed Beaumont Cornish as its provisional nominated adviser for a proposed move to AIM. NQ Minerals has secured a $7m loan facility from the RIVI Opportunity Fund and this funds the final payment for the Hellyer gold mine in Tasmania. A gold purchase agreement means that 14% of the first 22,000 ounces of payable gold and 7% of the amount in excess of that figure has to be sold to RIVI.

The joint venture between a 40%-owned subsidiary of food and logistics company AfriAg Global (AFRI) and LGC Capital, which is quoted on TSX, is acquiring a 60% stake in South Africa-based House of Hemp, which has a long-term lease on the only certified indoor cannabis growing facility. The joint venture is paying nearly C$20,000 and C$37,000 a month for six months. The joint venture will also secure C$4.9m to scale up production. David Lenigas is chairman of both joint venture companies.

MiLOC Group Ltd (ML.P) has raised £166,000 at 28.5p a share.

AIM

Audio visual products distributor Midwich Group (MIDW) says that the weakness of sterling has helped it to grow and the recently acquired Spanish business has done better than expected. This has led to upgrades for the next three years. Investec has raised the 2017 earnings forecast to 21.3p a share. Cash generation remains strong and the net debt forecast has been reduced to £20.2m. The interim figures will be reported on 12 September.

Regenerative medical devices developer Tissue Regenix Group (TRX) is acquiring CellRight Technologies, a US-based developer of bone processing and soft tissue products, for an initial $25.9m (£19.9m) with an earn-out of up to $4.1m (£3.1m) depending on revenues. The bone technology widens the group product range from a pure focus on soft tissue products. The deal also includes a US manufacturing facility. CellRight has launched 13 products since 2012 and more are due in the second half of 2017. The products are sold through distributors. In 2016, revenues were $5.42m and the gross margin was 62%. Two-fifths of revenues were from spine products. In the eleven months to December 2016, Tissue Regenix revenues were £1.44m. Tissue Regenix raised £40m at 10p a share and the additional funds will finance the growth of the enlarged business. All but one of the directors has subscribed for new shares. Management believes it is possible for the group to move into profit by 2020. Tissue Regenix plans to launch seven products over the next two years.

Qannas Investments Ltd (QIL) is using $8m to tender for 12.9% of the share capital at $0.90 each. There are not enough distributable reserves to pay a dividend of this size.

Transport optimisation software and services provider Tracsis (TRCS) has won a multi-million pound contract with a UK rail operator. The contract will last four years and includes the renewal of some existing licences. There should be recurring revenues after the four year period. There will be no contribution in the year to July 2017.

Tristel (TSTL) says that sales in the year to June 2017 were 17% higher at more than £20m and pre-tax profit is going to be more than 10% higher than forecast. The pre-tax profit is expected to be £4m. The growth is predominantly from international sales.

Crop enhancement technology developer Plant Impact (PIM) says that full year revenues will be between £8.5m and £9m, up from £7.2m the previous year. This is despite the cancelation of shipments of Veritas to Brazil. Contract discussions about Veritas with Bayer in Brazil are continuing and they may take some time. However, new buying arrangements are expected to help 2017-18 revenues reach £13m. There is £3.2m left in the bank but a further £2m is being raised at 31p a share with the possibility of a further £2m. This cash is required to finance R&D.

IP Group has raised its all share offer for Touchstone Innovations (IVO) but technology business developer says that the offer of 304p a share, based on an IP Group share price of 137p, is still below its NAV of 312p a share.

EQTEC Group (EQT) is in talks to acquire the waste-to-energy technology subsidiary of its majority shareholder, EBIOSS. EQTEC will pay for the business in shares and it will also need to raise more cash for working capital. Due diligence is being undertaken.

TV programmes producer Zinc Media Group (ZIN) expects to make EBITDA of £300,000 in the year to June 2017. The business has been restructured and starts the new financial year with a strong base. There is a commissioned TV slate of £6.5m for this year.

Security technology supplier Synectics (SNX) reported a 5% increase in revenues and a rise in gross margins, which enabled the interim pre-tax profit to increase by £1m to £1.3m. The oil and gas sector is showing signs of recovery and the order book is worth £33.7m. There is net cash of £1.8m. A full year profit of £3m is forecast.

Inland Homes (INL) increased its completions by 28% to 188, helped by the development of the company’s in-house construction team. In the year to June 2017, revenues will fall from £102m to £90m, although this excludes the revenues from two land sales.

First Property Group (FPO) has launched a new fund which could double third party assets under management. Fprop Offices LP has eight institutional investors and will invest in office blocks and business parks over a seven year term. So far, £182m has been invested in the fund, including £3m by First Property. A loan to value of up to 30% is allowed. This new fund will not pay recurring management fees and instead First Property will take a share of any profit.

Parity Group (PTY) continues to increase its exposure to consultancy activities. WH Ireland has trimmed its revenues expectation for this year but has maintained its pre-tax profit forecast at £1.6m.

Pembridge Resources (PERE) is raising £2.5m at 1.6p a share as part of the planned move to a standard listing.

MAIN MARKET

World Trade Systems (WTS) has dispatched a circular to shareholders in order to gain retrospective approval for loans from Kudrow, which is deemed to be a related party. This is part of the process of the re-application for a standard listing. Kudrow has waived its right to interest and there is an intention to convert the remaining loan of £860,000 into shares.

Bluebird Merchant Ventures Ltd (BMV) says that work has started on reopening the Gubong mine in South Korea.

Andrew Hore

Quoted Micro 3 July 2017

NEX EXCHANGE

A 40%-owned subsidiary of food and logistics company AfriAg Global (AFRI) has signed a deal with LGC Capital, which is quoted on TSX and acquired former NEX-quoted Leni Gas Cuba but it is no longer purely focused on Cuba, to create a 50/50 joint venture to grow and distribute medical and recreational cannabis products in southern Africa. David Lenigas is a director of both companies.

MetalNRG (MNRG) has obtained the right to acquire 100% of exploration licence applications, which are known as the Palomino cobalt project in Western Australia, in return for A$15,000 and one million MetalNRG shares at 1.5p each. Once the licences are granted a further two million MetalNRG shares will be issued. MetalNRG has formed a cobalt business. The cobalt price has moved from $24,000/t to $59,000/t in the past year.

Kryptonite1 (KR1) has invested £384,000 in 73,272,717 FunFair tokens. FunFair enables anyone to launch a blockchain casino. The company has also invested £83,416 in 46,860 Bancor tokens. Instead of an intermediary matching trades, Bancor tokens use automatically executed rules to do the matching.

Block Energy (BLOK) has successfully acquired up to 75% working interest in permit XIf, West Rustavi 12km from Tiblisi in Georgia, from Gerogia Oil and Gas. A $100,000 cash payment will be made for a 5% interest with a further 20% interest costing $500,000 in cash and $1m in shares and it is dependent on a move to AIM. Once the AIM flotation happens, a further $1m payable in three tranches will pay for a further 25% interest. The remaining 25% will be earned by a commitment to a side-track in two specified wells. Further bonus payments totalling $1.25m in cash or shares are payable depending on the achievement of milestones. Block is raising £90,000 at 0.85p a share and £210,000 via a convertible loan and this will finance a competent persons report on the Rustavi block.

Management believes that social media and consumer games apps developer Ganapati (GANP) could move into profit in two years. Ganapati improved revenues from £2.3m to £3.27m in the year to January 2017. The loss increased from £7.47m to £8.73m because of higher costs and interest charges. There was £2.38m in the bank at the end of January 2017.

Via Developments (VIA1) plans to issue up to $4m of 7% debenture stock 2020 with the first tranche expected to be £100,000.

NQ Minerals (NQMI) has appointed Bedford Row Capital Advisers to raise up to £25m through an asset-backed bond. The cash will be used to refinance existing borrowings and to refurbish plant and equipment to enable production at its mine in Australia.

AIM

Robotic software supplier Blue Prism (PRSM) continues to outstrip growth expectations. In the six months to April 2017, revenues increased by 133% to £9.3m but the loss jumped from £1.94m to £3.11m as Blue Prism invests in growing the business. The current run-rate of revenues is £1.72m/month. There was still £10.6m in the bank.

Jangada Mines (JAN) has one of South America’s largest potential platinum group metals projects and it has floated on AIM. There is the prospect of a low cost open pit mine. Previous explorers have already invested more than $35m in developing the potential mine. An updated resource inventory is expected before the end of the year.

Phoenix Global Mining Ltd (PGM) has joined AIM and raised £4.6m at 1p a share, which doubles the shares in issue. British Virgin Islands-based Phoenix (www.pgmining.com) has an option to acquire 80% of the ExGen Resources Inc subsidiary Konnex, which holds the leases to the Empire mine project in Idaho. The plan is to mine 7,000 tonnes of copper a year from an opencast pit with a downstream plant extracting gold and silver. Pre-feasibility study work is already underway.

Bricks maker Michelmersh Brick (MBH) is acquiring Barnsley-based Carlton Main Brickworks for £31.2m. This will increase Michelmersh’s output by 40% to 100 million bricks a year. The acquisition will be significantly earnings enhancing this year. The Dunton brickworks is being sold for £2.68m.

TLA Worldwide (TLA) timewatch: TLA announced that trading its shares was suspended at 2pm on Thursday 29 June. TLA, which is best known for publishing a profit warning at 6.26pm on 23 December 2016, has not been able to complete the auditing and publishing of its accounts by the end of June.

Kromek Group (KMK) has already got the vast majority of its forecast revenues in its existing order book and it is set to reduce its loss this year. Revenues from medical, nuclear and security markets are forecast to grow from £9m to £12.5m and the loss should fall from £3.8m to £2.9m. There is plenty of cash in the bank to cover losses as Kromek moves towards profit.

Niche pharmaceuticals supplier Quantum Pharma (QP.) has sold its non-core biodose services for an initial £1.75m. More importantly this means that the low margin medical adherence division no longer exits and Quantum can focus on the core operations.

Strategic Minerals (SML) says that its Central Australian Rare Earths (CARE) subsidiary plans a three stage exploration programme with stage one including 40-50 drill holes totalling 2,000 metres. This will focus on cobalt and nickel laterites. The second phase will focus on deeper nickel sulphide deposits. Stage three is the sampling of soil for signs of rare earths. This is all fully funded from existing cash and cash to be generated from the tailings operation in the US.

Zoo Digital (ZOO) grew revenues from $11.6m to $16.5m in the year to March 2017. There was an unusually strong second half and Zoo almost broke even compared with a loss of $1.6m the previous year. Demand for localisation services from the likes of Netflix is expanding Zoo’s market and making it less dependent on its main customer. The recent fundraising and loan conversion has significantly reduced debt and net debt is forecast to be less than $1m at the end of March 2018. A small profit is expected this year.

Savannah Resources (SAV) says that metallurgical test work at its lithium project in Portugal demonstrates that a high-grade, low iron spodumene concentrate can be produced. This would be suitable for lithium batteries.

Fairpoint (FRP) says that it will not be able to publish its accounts before the end of June and trading in the shares has been suspended.

MAIN MARKET

Hipgnosis Songs Fund Ltd says that an institutional investor has agreed to subscribe for 20% of the fund which intends to invest in songs and music rights. The offer closes on 5 July. The fund has been set up by Merck Mercuriadis, who has decades of experience in the music industry, particularly managing parts of Sanctuary Group. Former AIM-quoted Sanctuary ran into problems with its accounts when it was quoted and was eventually taken over.

Nanoco Group (NANO) has received its first commercial order for the supply of CFQD resin to Wah Hong Industrial, which manufactures optical films and sheets for displays. The resin will be used to supply films to a manufacturer of TV and monitor products.

Aircraft leasing company Avation (AVAP) has declared an interim dividend of 6 cents a share, up from 3.25 cents a share. The ex-dividend date is 20 July. Revenues for the year to June 2017 are expected to be $94m.

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

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