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Andrew Hore – Quoted Micro 9 July 2018

NEX EXCHANGE        

Ananda Developments (ANA) joined NEX on 4 July having raised £930,000 at 0.45p a share. Ananda is the latest medicinal cannabis-focused investment vehicle. The pre-money valuation was £500,000 There are already potential investments being assessed and management has built up relationships with businesses in Israel and Canada. A reverse takeover valued at up to £10m appears most likely.

Medicinal cannabis business investor Sativa Investments (SATI) has acquired PhytoVista Laboratories from a company owned by Sativa boss Geremy Thomas. Sativa is paying £235,000 in cash and £200,000 in shares at 4p a share. PhytoVista operates a laboratory that tests cannabis oils and hemp products. Because of the demand for the shares, the shareholders originally subject to the orderly market arrangements will be allowed to trade in the shares with the consent of Peterhouse.

KR1 (KR1) has made four more investments. The company invested £593,000 in Dfinity network tokens. Dfinity is developing a supercomputer to host the next generation of software and it is expected to offer unlimited capacity. A further £100,000 has been invested in the Flying Carpet Project, which is involved with a communication protocol for devices, such as drones and automated cars. The number of tokens that the cash will represent has not been decided. A 1.25% stake has been acquired in Connext Inc, which is developing a payment hub, for $50,000 and the same amount of money has acquired a 10% stake in Blocksmith. There is a 12-month option to acquire a further 5% of blockchain system development agency Blocksmith for $100,000

Ace Liberty and Stone (ALSP) has increased its dividend by 25% to 1.25p a share. The shares go ex-dividend on 12 July. This will cost £500,000. Property acquisitions have been completed in Oldham and Wigan. The total cost is £6.4m and the rental income is just over £597,000.

Monreal (MORE) has left AIM and joined NEX. Monreal has net cash of £730,000 and the plan is to invest in private technology, media and telecoms businesses.

Tectonic Gold (TTAU) has received a refund of €289,000 (£256,000) from the French tax authorities. This relates to the 2009 tax year and Tectonic hopes to get a €416,000 (£368,500) refund for the 2010 tax year.  VSA Capital has been appointed as financial adviser and joint broker.

Ganapati (GANP) is launching blockchain-enabled casino games and plans to issue a utility token, which will be called G eight C, through an initial coin offer. Pre-sales of the tokens should start in the fourth quarter of 2018.

EcoVista (EVTP) has raised £300,000 at 0.035p a share.

There have been previously unreported trades by a broker in Karoo Energy (KEP), All Star Minerals (ASMO), Valiant Investments (VALP) and Clean Invest Africa (CIA).

AIM     

Film and video localisation services provider Zoo Digital (ZOO) continues to gain momentum. Content owners can sell programmes in additional territories because using Zoo’s services means that it is economic when it was not in the past. That means that the addressable market is even bigger because it includes back catalogue that would not have been localised previously. In the year to March 2018, revenues rose from $16.5m to $26.8m and Zoo moved into profit. That pre-tax profit is expected to more than treble to $1.8m this year.

eve Sleep (EVE) is growing but not at the rate that was hoped for and the chief executive and founder has stepped down. That was inevitable considering the ridiculously high valuation put on the company when it floated and how it has not justified that level of optimism. The mattress supplier grew sales by 61% in the first half when the market had expected more than doubled sales. A new distribution agreement with beds retailer Dreams should help supplement growth in the second half. Even so, eve Sleep is not expected to make a profit until 2020.

Sinclair Pharma (SPH) has received a bid approach from Huadong Medicine and discussions are at an early stage. Both companies supply aesthetic products. Sinclair says first half revenues outside of the US grew by 18% and overall sales improved from £20.1m to £21.3m. US sales fell from £2.5m to £800,000 following the split from the company’s former partner. The direct sales operation in the US is beginning to generate revenues. Net debt was £14.8m at the end of June 2018.

Integumen (SKIN) is not proceeding with the reverse takeover of biomaterials company Cellulac but it hopes to acquire a minority stake. The 2017 accounts have still not been published.

Digital imaging technology developer Kromek (KMK) increased its revenues by nearly one-third to £11.8m in the year to March 2018 and the loss was down from £3.79m to £2.34m. There is £7.7m in the bank and that should be enough to enable Kromek to reach a cash generative situation. The medical business is growing particularly well, while nuclear detection has good prospects for medium-term growth.

Telematics firm Quartix (QTX) reported first half revenues grew by nearly 10% and flat profit. Insurance business is declining because of competitive pricing so all the growth is coming from overseas fleet business. Full year earnings per share are likely to be flat. The forecast dividend of 13.5p a share would not be covered by earnings of 12.8p a share.

Defence equipment and services supplier Cohort (CHRT) managed to improve its pre-tax profit from £14.5m to £15.5m even though the defence market was tough. Management believes that the order book has fallen due to delays to projects. The dividend was raised from 7.1p a share to 8.2p a share.

Technology business investor Mercia Technologies (MERC) reported flat NAV of 40.7p a share but it has a number of investments that could mature over the next couple of years and their valuations could be upgraded. Mercia nearly covered its expenses with its revenues. There is still £52.9m of cash that can be invested.

Waste to energy plants developer Powerhouse Energy (PHE) has raised £694,000 at 0.5p a share. Powerhouse had £750,000 in the bank at the end of 2017 but there are still significant cash outflows.

Direct carrier billing company Boku Inc (BOKU) appears on course to make a £2.7m pre-tax profit this year. Boku processed $1.5bn worth of transactions in the first half and revenues should be nearly $17m. There was $30m in the bank at the end of June 2018.

Churchill China (CHH) says that first half trading is stronger than expected on the back of growing sales in Europe. The interims will be published on 30 August.

EQTEC (EQT) has secured $3.2m (£2.4m) in new loan facilities from Cuart Investments Fund and associates. This will be drawn down in two instalments. Origen Capital put together the lenders and it is subscribing £1.15m at 0.6p a share. Existing lenders have agreed to capitalise £693,000 of interest. This means that the previous loan facility has ended.

MAIN MARKET    

Shefa Yamim (SEFA) has made a high grade spinel discovery. The northern Israel-focused gemstone explorer has found nine different gemstone minerals.

Software company Gresham Technologies (GHT) is paying up to €8.5m for B2 Group, which will add €1.4m in revenues and should be earnings enhancing in its first full financial year. The customer base includes banks, insurers and asset managers. Gresham expects its own first half revenues to be 5% lower due to a weak performance in Australia. Net cash was £6.8m at the end of June 2018.

Electronic Data Processing (EDP) has recommended a bid from a company owned by Kerridge Commercial Systems. The cash offer is 91p a share and values the enterprise resource planning software provider at £11.9m.

Andrew Hore

Andrew Hore – Quoted Micro 11 June 2018

NEX EXCHANGE   

There are eight companies in the running for the NEX Exchange company of the year at the Small Cap Awards. The awards will be held at The Montcalm Hotel, Marble Arch.

Kent-based wines maker Chapel Down Group (CDGP) has built up a significant presence in the English wines market. The company has a winery in Tenterden and it is building a new brewery for its beer operations. Chapel Down reported a 15% increase in annual sales to £11.8m. Wine sales were one-fifth higher at £8.12m with cider and beer sales, via associate Curious Drinks, were 7% ahead at £3.68m. Operating profit improved from £346,000 to £470,000 but there was a much larger loss from the Curious Drinks associate so pre-tax profit was lower. The new brewery should be open in the first quarter of 2019.

Cyber security technology developer Crossword Cybersecurity (CCS) is still at a very early stage of its development but it more than doubled its revenues in 2017. The loss still increased from £950,000 to £1.24m despite the improvement in revenues from £345,000 to £737,000. The cash outflow was £1.06m, which left £490,000 in the bank. Since then, £2.16m was raised via a placing at 270p a share. Crossword has interests in a number of early stage businesses, including CyberOwl, a joint venture between Coventry University and Crossword, which has backing from Mercia Fund Management. CyberOwl is developing network security software for target-centric monitoring.

Field Systems Designs Holdings (FSD) has one of the longest track records on NEX and it has its highest share price in more than one decade of trading. Field Systems designs, installs and supplies electrical, instrumentation and control systems, for the water, power and transport sectors. In the six months to November 2017, revenues jumped from £8.47m to £12m, while pre-tax profit improved from £114,000 to £211,000. There was £3.34m of cash in the bank and NAV was £3.31m, which is more than the market capitalisation.

KR1 (KR1) has had a successful year buying and trading various coins and tokens. The KR1 share price has more than quadrupled over the past year. 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.

Dairy and livestock services provider National Milk Records (NMR) was originally part of the Milk Marketing Board and after it was spun off it joined the forerunner of NEX. National Milk Records generated revenues of £5.32m in the three months to March 2018. This means that revenues are £1.51m ahead so far this year, although the comparatives are weak. Herdwise, the screening service for Johne’s disease and other testing services are providing growth with a small improvement from milk recording services. Rising milk supply has started to hold back milk prices.

Energy saving electrical products supplier Sandal (SAND) reported flat interim revenues of £1.88m but it masks the growth in the sales of MiHome products. This growth will continue in the second half. The interim pre-tax profit edged up from £35,000 to £44,000. Sandal secured a term loan of up to £500,000 from major shareholder Greenbrook Industries Ltd and £250,000 was used to buy back 862,068 shares from Greenbrook. The shares were cancelled and this will enhance earnings per share.

Daniel Thwaites (THW) is a brewer, hotels and pubs operator that has been trading for more than two centuries. It has also been on NEX for more than two decades, since the London Stock Exchange closed rule 4.2, which was a matched bargains facility for unquoted companies. Some of these former rule 4.2 companies moved to AIM, while others, including a number of regional brewers, moved to Ofex/NEX. In the six months to September 2017, revenues improved from £44m to £48m and underlying pre-tax profit were flat at £5.9m. The shares are trading at a near-50% discount to NAV.

Walls & Futures REIT (WAFR) is an ethical housing REIT and it is also on the shortlist for the impact company of the year. The company develops new housing for people with learning and physical disabilities or needing extra care. Earlier this year, Walls and Futures raised £80,000 from an open offer at 94p a share. In 2017, Walls and Futures achieved a total return on its portfolio of 11.5%, ahead of its benchmark total return of 7%. Walls and Futures has joined the MSCI IPD UK Residential Property Index.

The winner will be announced on Thursday 14 June.

Cannabis investment company Sativa Investments (SATI) is widening its remit. It is asking shareholders to agree to investments outside of Canada.

Ace Liberty and Stone (ALSP) has completed the acquisition of offices in Leicester for £4.385m. The Leicester Crown Prosecution Service pays an annual rent of £290,000.

St Mark Homes (SMAP) is paying a maintained interim dividend of 5.5p a share and the ex-dividend date is 5 July. The dividend will cost £247,000. The carbon emissions trading business has also started electronic currency mining.

China CDM Exchange Centre Ltd (CCEP) reported a small dip in revenues from £898,000 to £888,000 but it managed to increase its profit from £2,000 to £35,000.

Karoo Energy (KEP) has secured Contax Partners as technical partner and project manager for the shale gas project in Botswana. Contax will accept £800,000 worth of shares in Karoo as payment for services. Karoo hopes to apply for admission to AIM by 1 July.

Wishbone Gold (WSBN) says full production at its Honduras processing plant has been delayed because permits have not been received for the processing of larger amounts of gold ore.

EPE Special Opportunities (EL.P) had an NAV of 228.16p a share at the end of May 2018.

AIM   

Property investment adviser First Property Group (FPO) reported flat pre-tax profit of £9.23m in the year to March 2018. The final dividend is 3% higher at 1.18p a share. The underlying NAV rose from 47.6p a share to 53.1p a share. Third party assets under management were 45% higher at £454m, which is mainly down to the new office fund. Progress this year will be held back by the departure of the tenant in a building in Poland. Some of the space has already been re-let and the rest should be during the year.

Pawnbroker Ramsdens (RFX) continues to grow on the back of strong foreign exchange revenues. Last year, they were 26% higher at £11.3m. Group revenues were 16% ahead at £39.9m, while underlying pre-tax profit rose 60% to £6.5m. Net cash was £12.7m, although that does include foreign currency stocks. The total dividend was 6.6p a share.

Gooch and Housego (GHH) increased interim revenues by 7% to £55.6m and underlying pre-tax profit was13% ahead at £7m. Aerospace was the main growth area as subsea telecoms demand was weak. The photonics and optical equipment company is on course for a full year profit of £18.5m.

Artilium (ARTA) is recommending a cash and shares bid from Pareteum. The offer is 0.1016 of a Pareteum share and 1.9p in cash for each Artilium share, which values the telecoms software supplier at £78m. The offer follows a strategic alliance between the two companies that was announced last year.

IT managed services provider Redcentric (RCN) says that some public sector contracts have been cancelled and there will be upfront costs for a new contract with the NHS in Yorkshire. That means that 2018-19 EBITDA will be 10% lower than previously forecast.

Imaginatik (IMTK) has completed its strategic review and the chairman and chief executive are both leaving and they are waiving compensation. This will help to reduce annual costs by £750,000. The business is no longer up for sale because no suitable bid was received. Annualised revenues are £2.8m and the innovation software business could move into profit after a full year’s benefit of the cost savings. Former chairman Matt Cooper has sold £225,000 worth of shares at 0.5p each and reinvested the cash in a new £225,000 convertible, interest free loan note. Octopus has reduced its stake from 27.2% to 7.1%.

Mass spectrometry instruments supplier Microsaic Systems (MSYS) has raised £5.5m at 2p a share and an additional £102,000 via a PrimaryBid.com offer.

Trading in cash shell Monreal (MORE) has been suspended because the former Cogenpower has not completed a deal. The board is asking for shareholder approval to move to NEX after the AIM quotation is cancelled on 3 July. The investment strategy will focus on technology, media and telecoms.

Education-focused virtual reality content supplier VR Education (VRE) has delayed the full launch of the latest version of its Titanic VR product until August but it is not expected to affect full year expectations. Work has started with the BBC on 1943: Berlin Blitz.

Driver Group (DRV) continues to improve its margins and profit helped by the growth of the Diales expert witness business. Middle East revenues were lower but profit was higher, while high utilisation rates in Asia Pacific meant that was a sharp swing back to profit in the region. Underlying pre-tax interim profit doubled to £2.1m om the six months to March 2018 and Driver ended the period with net cash of £800,000. The sale and leaseback of the company’s head office was completed in April and net cash is forecast at £5.5m for the end of September 2018. A full year profit of £3.5m, up from £2.5m, is forecast. A return to dividend payments is a possibility in the next year or so.

Rose Petroleum (ROSE) has enough cash to push forward with the exploration of its Paradox basin acreage in the US. Rose is still earning its 75% working interest in the acreage and it has already received interest from potential farm-in partners that could help finance the first well, which could cost $7m-$8m. A competent person’s report will provide an updated resource in the next few weeks.

The smart machines division was behind the small improvement in profit at Vianet (VNET) in the year to March 2018. That was helped by a contribution from the Vendman acquisition. The smart zones drinks dispensing technology made a slightly lower contribution to profit as it lost more pub customers but the US side is making progress. Research and development spending on technology peaked at £1.5m last year and should fall this year. Net cash fell to £1.27m because of the extra spending but the dividend was maintained at 5.7p a share. The investment should start to pay off this year and pre-tax profit is expected to rise from £2.7m to £3m.

MAIN MARKET    

LED lighting supplier Luceco (LUCE) is closing its loss-making US business at a cost of £2m. The US business lost £1.9m last year. Luceco announced an operating profit of £14.2m in 2017.

Quarto Group Inc (QRT) has appointed former finance director Mick Mousley as interim finance director following the departure of Carolyn Bresh. This follows the change of control at the AGM.

Lb-shell (LBP) is asking for shareholder approval for the creation of £435,000 of unsecured convertible loan notes with a conversion price of 0.025p a share. That requires the par value to be reduced to 0.025p a share. Full conversion could mean the issue of shares equivalent to 89.4%. Three directors will own a total of £290,000 of the loan notes. The former Intelligent Energy will offer shareholders the chance to sell their shares for 0.025p each.

Andrew Hore

Andrew Hore – Quoted Micro 12 March 2018

NEX EXCHANGE   

Shepherd Neame (SHEP) improved its interim revenues and underlying pre-tax profit. Revenues were 6% ahead at £84.1m and underlying profit edged up from £5.7m to £5.8m. The interim dividend has been raised from 5.62p a share to 5.75p a share. Net debt was £79.5m. The main growth in revenues was in the managed pubs and hotels division. There was an underlying improvement in the profitability of the brewing business, where own beer volumes were 4.2% higher.

Ashley House (ASH) has reached financial close on the Scarborough extra care housing development. There are 63 apartments plus communal areas and the gross development value is £10m. completion is expected in spring 2019. A housing development and health scheme are likely to follow. This development is not part of the Morgan Sindall joint venture. Non-executive director Christopher Lyons has bought 31,000 shares at 10.09p a share.

EPE Special Opportunities (ESO) had a fully diluted NAV of 239p a share on 5 March 2018 but that was prior to the Luceco profit warning. The NAV included Luceco (LUCE) shares at 77.8p each but the price has subsequently fallen to 57.2p a share. EPE is the largest shareholder in LED lighting products supplier and this was the second profit warning in three months. The original 2017 profit expectation was £16.7m and this has been cut to £11m.

Western Selection (WESP) has raised £668,000 from the disposal of shares in Swallowfield (SWL) and it has a remaining stake of 7.71%. Western sold 120,000 Swallowfield shares at 330p each and 80,000 at 340p each. Last month, personal care products supplier Swallowfield bought men’s grooming brand, Fish for an initial £2.7m.

Ace Liberty and Stone (ALSP) has issued £4.76m of convertible loan notes as part of the £4.85m open offer. A holder of an existing £500,000 loan note is converting into the latest convertible loan notes and like the other subscribers is receiving one warrant for each £1 of loan notes.

MetalNRG (MNRG) says a licence has been granted relating to the Palomino cobalt project, where the company has the right to acquire a 100% stake in return for two million shares at 1.5p each. MetalNRG is also issuing 500,000 shares for work that has already been carried out.

Crossword Cybersecurity (CCS) has raised £2.16m at 270p a share. The cash will be invested in sales and marketing and developing new cyber security products.

Good Energy (GOOD) says that holders of £3.6m of its first energy bonds have agreed to retain them, while the other £4.3m worth will be repaid on 29 March.

Co-chairman David Sumner has increased the amount of Healthperm Resourcing Ltd (HPR) loan notes he will subscribe for to £5m. The outstanding balance is currently £2.7m and additional tranches of up to £200,000 can be subscribed for each month.

London Capital Group Holdings (LCG) is selling a 91.5% stake in its Tradex and 100% of other subsidiary companies to its main shareholder in return for £4.64m of loan notes with a coupon of 8%. The costs of the NEX quotation will also be covered by the buyer. The remaining 8.5% of Tradex can be acquired for £431,000 in loan notes. The disposal requires FCA approval. London Capital will seek a fintech business to acquire within the required six month period.

PCG Entertainment (PCGE) and Wishbone Gold (WSBN) have joined NEX. They are both retaining their AIM quotations and are chaired by Richard Poulden.

AIM   

VR Education has raised more cash than it originally asked for. It has raised £6m at 10p a share and this values the company at £19.3m. The company has developed the ENGAGE education platform and is also developing corporate training and educational content to go on the platform. The business is generating revenues but it still has to take full advantage of the technology it has developed.

Energy supplier Yu Group (YU.) increased its revenues from £16.3m to £47m last year and annualised bookings continue to grow. Underlying pre-tax profit jumped from £195,000 to £3.08m. Yu has gained a licence to supply water. The dividend has been increased from 2.25p to 3p a share.

Share (SHRE) has continued to add to its market share. In 2017, the broker revenues grew from £14.6m to £18.7m and it moved back to underlying pre-tax profit. Digital investment continues and the benefits of this will increasingly show through over the next couple of years. This year the recent partnerships will make a 12 month contribution. Higher interest rates will also help to increase interest income on the cash held.

Smart audio sales started to take off last year and Frontier Smart Technologies (FST) continues to invest in this area. The original digital radio technology business is profitable but the development costs for smart audio more than wipe that profit out. Net cash was £3m at the end of 2017 and this should be enough for Frontier’s requirements. There is scope to grow the digital radio business but smart audio will provide the main growth. From a tiny percentage in 2016, smart audio could contribute nearly two-fifths of revenues in 2019.

Begbies Traynor (BEG) has bought Springboard Corporate Finance for an initial £2.75m in cash and shares. Springboard generated a pre-tax profit of £750,000 on revenues of £2.3m in 2016-17. Up to £500,000 more will be payable depending on performance over the next five years. Begbies says that third quarter trading is in line with expectations. Corporate insolvencies are increasing, albeit from low levels.

Polemos (PLMO) has terminated the proposal to acquire SecurLinx Corporation, which still hopes to come to the London market. Trading in the shares has been restored. Polemos is raising £270,000 at 0.01p a share, plus a further £140,000 conditional on shareholder approval. These placings are before the planned share consolidation of one new share to every 100 existing shares. When additional approvals are given by shareholders a share offering will be made via PrimaryBid.

Netcall (NET) more than doubled its interim SaaS revenues thanks to the purchase of MatsSoft. Interim revenues grew by one-third to £10.7m, which includes organic growth of 5%. Underlying pre-tax profit was 8% ahead at £1.8m. Net debt is £2.5m.

Audio products supplier Focusrite (TUNE) reported sales growth of more than 25% in the first half. Edison upgraded its full year profit forecast by 4% to £10.4m.

Applied Graphene Materials (AGM) has secured the use of its graphene-enhanced epoxy prepreg in the tailgate of the W Motors Fenyr sports car. This is a limited market but it is a good showcase for the technology.

Second half trading was stronger than expected at FIH Group (FIH) as both trading in the Falkland Islands and Momart improved their performance. This has led to an upgrade in the 2017-18 profit forecast from £2.5m to £2.8m.

GRC International (GRC) raised £5.04m at 70p a share when it joined AIM on 5 March. The share price ended the week at 115p. GRC provides services relating to IT governance and compliance.

Zamano (ZMNO) had €5.05m in the bank at the end of January 2018. It remains in talks for potential acquisitions that would enable the company to remain quoted. Part of any deal would be the offer of a cash return to existing shareholders. Trading in the shares has been suspended.

Microsaic Systems (MSYS) had £3.2m in the bank at the end of 2017. Microsaic is focusing on the biopharma market but it could take until 2019 for its partners to start to generate revenues from its technology. There should be enough cash for more than one year but more will be required. Costs have been reduced.

SysGroup (SYS) has signed a three-year managed hosting deal with TJ Morris Ltd, trading as discount retailer Home Bargains, worth more than £950,000.

Contract research organisation Fusion Antibodies (FAB) says that its 2017-18 revenues are expected to grow by at least two-fifths to £1.9m. Last year’s flotation took up management time so revenues are lower than hoped.

Attraqt (ATQT) reported a full year loss of £4.05m, including exceptional costs of £2.38m. The e-commerce software provider intends to focus on operational efficiency this year. There was £2m in the bank at the end of February.

BOS Global Holdings (BOS) has been placed in administration.

Instem (INS) has switched a long-standing client to the SaaS model and this will increase recurring revenues by two-fifths. There are potentially £10m of fees that could be converted to the recurring revenues model.

WANdisco (WAND) has announced more deals including a partnership with Alibaba, which will embed WANdisco Fusion in some of the cloud services that it offers. Total bookings increased by 45% to $22.5m in 2017 and this has sparked a 2018 revenues upgrade by WH Ireland from $25.5m to $30.8m, although a slightly higher loss of $6.5m is expected. WANdisco could move near to breakeven in 2019.

Mirada (MIRA) has secured a £3m loan facility, which adds to the existing facilities. An initial £1.5m will be drawn down within two months. This provides working capital to finance additional contract wins. The annual interest rate is 15%. The provider of the facility is a 27% shareholder.

Strategic Minerals (SML) has paid A$1.5m in cash and A$1.45m in shares for the Leigh Creek copper mine. Strategic has acquired 24,900 tonnes of JORC compliant resource copper. Production should build up to 200 tonnes of copper each month and there is an offtake agreement for 100% of copper production. Strategic has extended its rolling agreement with the owner of the Cobre magnetite stockpile until March 2019. This deal generated revenues of $5.64m in 2017.

Zoo Digital (ZOO) says full year revenues will be at least $28m, up from $16.5m last year, while EBITDA will be ahead of expectations and be at least $2.3m. Localisation services remain the main growth area. Herald has reduced its stake from 15.7% to 14.6%.

Volvere (VLE) says that its 2017 pre-tax profit improved from £1.94m to £3.22m. Impetus Automotive contributed the growth in profit with CCTV software company Sira and Shire Foods reporting lower profits. NAV is 656p a share, with £18.4m in cash and marketable securities.

AFC Energy (AFC) reduced its loss to £5.5m in 2017. The fuel cell technology developer should have enough cash for this year, but it is likely to run out in 2019. AFC could move into profit in 2020.

Pallet developer RM2 International (RM2) has received $2m from the disposal of a building in Switzerland. That means it will have enough cash until mid-April.

Drilling is set to recommence at the Stonepark zinc project in Limerick and Connemara Mining (CON) has set aside £250,000 to cover its share of the spending over the next 12 months. Connemara has a 23.4% stake in the joint venture that owns the project.

Drilling results from the Kodal Minerals (KOD) lithium project at Bougouni in Southern Mali continue to be positive. The latest 19 drill holes have shown high grade intersections of consistent pegmatite mineralisation of up to 1.68% Li2O.

Clear Leisure (CLP) is ready to set up its Bitcoin mining joint venture in Serbia. Management says that the joint venture could produce more Bitcoins at a lower cost than expected. That would increase the return on the €200,000 investment. Assuming a Bitcoin price of $10,000 and an 8% discount rate, the investment could eventually be worth €389,000.

MAIN MARKET    

Bioquell (BQE) reported a rise in pre-exceptional profit from £1.6m to £2.9m in 2017. This was despite a decline in defence revenues. There is £14.6m in the bank. The focus is the biodecontamination business and management believes that this will show through in improved performance this year.

InnovaDerma (IDP) has warned that its full year figures will be below expectations. The personal care products supplier always expected the year to be second half-weighted and full year revenues will be higher. However pre-tax profit will be similar to the £1.03m reported for last year. Last October, £4.4m was raised at 276p a share. The share price has fallen to 121.5p.

Toople (TOOP) has raised £250,000 at 1.022p a share. This will keep the telecoms business going as it tries to increase its revenues in order to reduce its loss. Last June, Toople raised £1.41m at 3.25p a share. Toople joined the standard list in May 2016 when it raised £2m at 8p a share.

Path Investments (PATH) is delaying its exit from the standard list until 29 March. The plan is to move to AIM when an oil and gas asset acquisition is made.

Andrew Hore

Andrew Hore – Quoted Micro 5 February 2018

NEX EXCHANGE   

Health and community care property developer Ashley House (ASH) reported a decline in interim revenues from £10.7m to £7m and the company fell into loss. A second half recovery should mean that full year revenues will be flat at £18.7m but there will be a full year profit of £1.8m. The new joint venture with Morgan Sindall has a pipeline valued at £203m but the revenues of the joint venture will no longer be consolidated in the Ashley House revenues.

Property construction and development company Formation Group (FRM) increased revenues from £29.4m to £37m in the year to August 2017, but there was a swing from a pre-tax profit of £2.16m, thanks to the benefit of the Norwich House profit share agreement, to a loss of £152,000. The cash position has improved significantly. There was net debt of £3m but this became net cash of £4.23m at the end of August 2017. The NAV of £10.2m is four times the market capitalisation.

Gledhow Investments (GDH) increased its NAV from £486,000 to £714,000 in he year to September 2017. There was £103,000 in the bank. Since the balance sheet date, Gledhow has sold 6,500 shares in Coinsilium Ltd (COIN) and this generated a profit on the original investment of £115,000. Gledhow still owns 1.8 million Coinsilium shares. The share price has fallen back from its high but the value of the stake is still around £180,000.

Kryptonite 1 (KR1) has invested $443,000 in 4.72 million tokens in the Bluzelle project. Bluzelle is a scalable database service for decentralised applications. A further €167,000 has been invested in 2.2 million Rock tokens for the Gibraltar Blockchain Exchange (GBX) platform. Kryptonite 1 will become a sponsor for token-based projects listing on the GBX. Kryptonite 1 has also invested $174,000 in 12,800 tokens in the Elastos project, which is developing a virtual, digital smart economic zone.

Botswana-based coal mine developer Minergy, where Hot Rocks Investments (HRIP) invested $260,000 in March 2011, plans to join AIM later this year.

Property investor Ace Liberty and Stone (ALSP) has committed to property purchases totalling £20.1m. In the six months to October 2017, revenues were 24% higher at £1.47m but the pre-tax profit dipped from £598,000 to £352,000. That was because there was a £500,000 disposal project in the comparative period. After this period, Ace raised the £4.85m it was seeking from the issue of convertibles.

Healthcare information and clinical support systems provider DXS International (DXSP) continues to be hampered by the lack of NHS spending. In the six months to October 2017, revenues fell from £1.78m to £1.61m and there was a swing from profit to loss. Tax credits more than covered the loss.

Gunsynd (GUN) is assisting analytics software developer FastBase with its proposed AIM flotation in the second quarter and in return it will receive a consultancy fee of 0.75% of the market capitalisation of FastBase after admission. This fee will be paid in FastBase ordinary shares.

IMC Exploration Group (IMCP) has raised £75,000 at 1p a share. Each share comes with a warrant exercised at 2p a share. The cash will be used to finance the feasibility study for PL3850 in Avoca, County Wicklow.

First Sentinel (FSEN) is planning to raise up to £4m from a bond issue. The secured bonds have a 7% coupon and are repayable at a 5% premium on 28 February 2023. These bonds will be traded on NEX. The investment is partly protected by a credit insurance policy provided by Equinox Global. The cash will be invested in Perennial Enterprise, which will use it to fund its invoice discounting business.

Angelfish Investments (ANGP) is loaning £150,000 to YBOO Ltd, which operates a mobile app that enables customers to find the best mobile network deal. The loan is repayable in three years or convertible into 15% of YBOO. The conversion could be triggered by a flotation, fundraising or disposal.

EcoVista (EVTP) has written down its holding in Italian property business Cignella by £482,000, leaving it valued at £152,000.

Karoo Energy (KEP) has reported positive exploration news for its oil and gas assets in Botswana. In the six months to October 2017, the loss increased from £127,000 to £425,000, but most of the increase is due to the costs of trying to gain an AIM quotation. There is £187,000 in cash.

BWA Group (BWAP) says that its investee company Prego International is migrating from Guernsey to Norway and restructuring its shareholder base. Once this is completed there is a plan to apply for a Norwegian matched bargain dealing facility.

Doriemus (DOR) is leaving NEX Exchange and concentrating on the ASX listing it gained on 29 December 2017.

Via Developments (VIA1) has raised £175,000 from a further issue of 7% debenture stock 2020.

AIM   

Frontier IP (FIPP) investee company MolEndoTech has secured a subsidiary of fully listed Halma as its partner for a test for faecal matter in marine bathing water. Frontier IP has a 19.6% stake in MolEndoTech with a book value of £10,000.

Trading in the shares of Utilitywise (UTW) has been suspended because it has been unable to complete its annual report and accounts by the end of January. The main problem is the change in the revenue recognition policy.

Mike McAuliffe surprised the market by resigning as chief executive of Seeing Machines (SEE) a matter of weeks after £35m was raised. Executive chairman Ken Kroeger will take control.

PCI-PAL (PCIP) has raised £4.95m at 45p a share. The cash will be used to grow the North American operations of the secure contact centre payments provider. There will also be higher marketing spending and investment in other markets.

PCG Entertainment (PCGE) has raised £675,000 from a share issue at 0.2p each. A company related to PCGE chairman Richard Poulden invested £125,000 of this money. This follows a settlement with the former chief executive that cost £286,350.

Veltyco Group (VLTY) will potentially acquire Ruleo Alpenland, which operates the BTTY sportsbook brand, for €6.5m. An exclusivity period lasts until 15 March. This would provide an opportunity to grow in Germany and Austria.

Tracsis (TRCS) has acquired Travel Compensation Services, which provides software for delay repay solutions on the railways, and Delay Repay Sniper, which runs a web portal for rail delay compensation. The combined businesses are profitable.

Fishing Republic (FISH) has raised £1.3m at 10p a share, the original placing price when the fishing tackle retailer floated. The cash will be invested in the e-commerce operations.

ASX-listed Newfield Resources is planning a potential all-share bid for Stellar Diamonds (STEL) which values the diamonds company at 12.7p a share. The offer is likely to be 0.76 of a Newfield share for each Stellar share. Newfield has diamond licences in Sierra Leone. This deal would provide access to the finance to develop the Tongo-Tonguma diamonds project. Newfield is undertaking a placing and non-renounceable rights issue and has loaned Stellar $3m.

Altus Strategies (ALS) has completed the acquisition of gold assets from TSX-V-listed Legend Gold in return for shares. These Altus shares will be distributed to Legend shareholders and this will provide a shareholder base when Altus achieves its TSX-V listing. The deal gives Altus six gold projects in western and southern Mali.

MAIN MARKET  

Book publisher Quarto Group (QRT) says that full year profit will be in line with expectations. Net debt has risen by $2.1m to $64m but this is still a £11.8m reduction on the June 2017 figure. The full year figures will be published on 29 March.

Sportech (SPO) has extended the timetable for seeking valid offers for the company.

SQN Asset Finance Income Fund (SQN) was involved in the purchase and onward sale of the business of the former AIM-quoted Snoozebox. The new owner is involved in modular accommodation for the oil and gas sector.

Andrew Hore

Quoted Micro 1 January 2018

NEX EXCHANGE    

Commercial property investor Ace Liberty and Stone (ALSP) has launched an open offer of convertible notes and warrants to raise up to £4.85m. The conversion price is 25p a share, while the warrants are exercisable at 80p a share. The closing date is 22 January.There are already commitments for £3.01m. Additional cash is required to make more property purchases.

Good Energy (GOOD) chairman John Maltby has invested £100,000 in the renewable energy supplier. He acquired 58,000 shares at 173p a share.

In the six months to September 2017, Via Developments (VIA1) increased its operating income from £309,000 to £557,000 but still made a small loss. There were net liabilities at the end of the period.

Positive Healthcare (DOC) made a maiden profit of £64,000 on revenues of £4.67m in the six months to September 2017. The year end is being changed to March. The healthcare staffing business continues to control costs.

Technology company incubator Milamber Ventures (MLVP) reported an increase in interim loss from £196,000 to £263,000. Milamber has launched the Milamber Education Technology Fund and has completed the acquisition of healthcare training company Essential Learning. The education sector will be increasingly important to Milamber.

Hot Rocks Investments (HRIP) reported a decline in NAV from £901,000 to £853,000 in the year to September 2017. Hot Rocks has 14 investments in oil and gas, mining and pharma companies.

AIM    

Stanley Gibbons (SGI) put out its interim results just before the end of the year, thereby avoiding suspension. In the six months to September 2017, revenues fell from £17.3m to £16.6m, while the loss fell from £6.36m to £3.09m. The stamps business continues to lose money and the profit from coins was lower.

Avanti Communications (AVN) was another company bringing out results just days before trading in shares would have been suspended. The satellite communications operator’s revenues fell from $82.8m to $56.6m. There was net debt of $562m at the end of September 2017, which was before the refinancing plans. David Williams will step down as chief executive after March.

Telit Communications (TCM) says that its main bank has granted a waiver for breach of covenants at the end of 2017.

Parallel Media has completed the acquisitions of Brick Live and Parallel Live for £10m and changed its name to Live Company Group (LVCG). The previous businesses have been sold. There was £1.26m raised at 30p a share and £2.03m of debt was capitalised.

A net gain on its investment portfolio enabled Legendary Investments (LEG) to report an interim pre-tax profit of £248,000. The gain was on the stake in business services software supplier Virtual Stock Holdings. There was a net cash outflow from operations of £28,000. The NAV was £5.22m at the end of September 2017.

Clear Leisure (CLP) is injecting its 4.53% stake in 3D mapping company Geosim Systems Ltd into a new subsidiary company that will also be launching a joint venture called Miner One to develop bitcoin mining blockchain data centre. Clear Leisure will invest €200,000, lent by Eufingest, a 10% plus shareholder in Clear Leisure, for 50% of the joint venture. The new subsidiary will be used to acquire other IT business and could eventually be spun-off in order to gain its own quotation.

Thor Mining (THR) has appointed exploration manager Richard Bradley to the board. The definitive feasibility study for the Molyhil tungsten/molybdenum project should be finalised in the first quarter of 2018. A mineral resource estimate is expected for the Kapunda copper project is due early in the year.

Clean water technology company HaloSource (HAL) says that the Chinese government has halted production facilities in the region that supplies its glass pitchers so fulfilment of orders for JiuBan will be delayed. This means that 2017 revenues will be up to $3m and the loss will be up to $5.5m. There should be revenues of at least $840,000 from JiuBan in 2018.

Alliance Pharma (APH) has completed the purchase of Vamousse from TyraTech Inc (TYR) for an initial $13m plus additional payments of up to $4.5m. The human head lice treatment has been developed by TyraTech and it has built up Vamousse as an international brand. The deal is earnings enhancing for Alliance and provides TyraTech with the cash to develop animal health products. TyraTech launched a tender offer of up to $8.5m. The tender offer price is 3p a share. Alliance will be able to distribute Vamousse through its existing European and international partners.

Kestrel Partners is building up a shareholding in STM Group (STM) and just before Christmas it took its stake to 3.72%.

Oil re-refiner HydroDec Group (HYR) has extended the repayment date of three facilities to the end of 2018 and one of them has been increased by £500,000. The facilities are provided by director Andrew Black.

Oracle Power (ORCP) has raised £621,000 at 2.3p a share and broker Brandon Hill has exercised warrants at 0.65p each, which raised £150,000.

Silence Therapeutics (SLN) has sold further shares in Arrowhead Pharmaceuticals, taking the total sale proceeds to £17.2m ($23m). The total cost of the Arrowhead stake was £9.2m ($11.3m) and Silence still owns 472,509 shares.

TechFinancials Inc (TECH) will invest $200,000 for a fully diluted 2% stake in Cedex Holdings, a Blockchain-based diamonds exchange. There is also an option to acquire a further 90%, fully diluted, stake at an exercise price of $40,000. These stakes could be diluted by other share issues.

Copper and gold producer Rambler Metals and Minerals (RMM) has amended its offtake agreement with Transamine Trading, which is making a $4m advanced payment in return for a right of first refusal on any offtake agreement for five years from January 2022. The advance payment plus interest is repayable over 18 months. The phase II expansion is nearly complete and this will extend the mine life by 20 years.

EQTEC (EQT) has completed the acquisition of Eqtec Iberia for £14m in shares just over five months after it was announced. The acquisition owns the EGT gasification technology. EQTEC also raised £1.6m at 0.65p a share.

China New Energy Ltd (CNEL) is holding general meeting on 17 January In order to gain permission to buy back up to 20% of the shares in issue. This could benefit the share price, which currently has a modest rating given the profitability of the business.

New Trend Lifestyle Group (NTLG) is selling its remaining China-focused business for £100 and concentrating on Singapore. The Feng Shui business continues to trade poorly and is seeking acquisitions in Asia.

Xeros Technology (XSG) has completed its £25m placing at 225p a share. The polymer technologies developer will use the cash to further develop cleaning, tanning and textile technologies.

Gresham House (GHE) is selling its Newton-le-Willows property for £2.1m. The completion of the sale of legacy assets will have raised more than £18m. Gresham House should qualify for IHT exemption.

Summit Therapeutics (SUMM) is acquiring Discuva, which is a developer of antibiotics using a bacterial genetics based platform. Summit is paying £5m in cash and £5m in shares for Discuva but no employees will be taken on. Summit will still have enough cash to last it until the end of 2018.

Aquatic Foods Group (AFG) has been unable to publish its accounts and it has lost its AIM quotation.

URU Metals Ltd (URU) had £1.84m in cash at the end of September 2017. The first drill results for the Zebediela nickel and copper project in South Africa have been published and the drill results for the most recent three holes are due in January. URU also has a 9.7% stake in AIM-quoted Management Resource Solutions (MRS).

Draper Esprit (GROW) has made a gain of £7.2m on its stake in Clavis Insights, having originally invested £8.1m in December 2016. This gain will add 3p a share to NAV. Clavis, which is an e-commerce data analyser, was acquired by Ascential for $119m.

Windar Photonics (WPHO) has received a new order from its Chinese distribution partner for five WindVision LiDAR systems. Windar has already delivered 50 systems.

MAIN MARKET    

World Trade Systems (WTS) has reached agreement with Germany-based Naturemed and related companies about the commercialisation of its personal hygiene and healthcare products and it will also help to obtain Chinese registration for them. WTS has signed a five year lease on a London office. Shares in WTS are still suspended.

Over the top video streaming business Falcon Media House (FAL) made initial revenues of £232,000 in the six months to September 2017. The interim loss was £2.71m. Since then, £3.4m has been raised from a convertible loan note issue.

Rockpool Acquisitions (ROC) still has nearly £385,000 in the bank. Negotiations are continuing concerning the possible acquisition of Greenview Gas Ltd.

Andrew Hore

Andrew Hore – Quoted Micro 11 December 2017

NEX EXCHANGE

First Sentinel (FSEN) has bought a 80% stake in Perennial Enterprises in Australia in an all share deal. Perennial is a profitable debtor finance business and it is purchasing A$5m of invoices each month. Shane Perry of Perennial will join the First Sentinel board.

Primorus Investments (PRIM) has sold its investment in Gold Mines of Wales to Alba Mineral Resources (ALBA) in return for 83.3 million shares in Alba (3.6% of the company). That was worth £317,000 at an Alba share price of 0.38p.

NHS-focused software systems supplier DXS International (DXSP) has been hit by budget cuts but management is hopeful that NHS restructuring will have a positive effect. A tender has been won for a pilot of a new product range. The NHS will launch the GPSOC3 tendering in 2018 and this could provide opportunities for DXS.

Block Energy (BLOK) has delayed its move to AIM until mid-January. It was originally expected to make the move on 7 December.

Etaireia Investments (ETIP) had net assets of £1.88m at the end of September 2017. Since then, two buildings in Peterlee have been acquired and more acquisitions are promised in the near future.

Early Equity (EEQP) impaired two investments in the year to August 2017. The full year loss was £139,000. Further cash has been raised since the year end.

Commercial property investor Ace Liberty and Stone (ALSP) has completed the purchase of the New Majestic Bingo Hall, Middlesbrough for £4.15m and it generates rent of £313,000 a year.

All Star Minerals (ASMO) has raised £30,000 at 0.075p a share.

AIM

Sula Iron and Gold (SULA) is acquiring a controlling interest in a cobalt licence in the Democratic Republic of the Congo (DRC) for $100,000. This is near to existing cobalt and copper mines. A holding company will be 70% owned by Sula and 30% owned by the vendor. A placing is raising £1.75m at 0.05p a share. This will provide cash for the exploration of the new licence and finance the development of the assets in Sierra Leone. Sula will assess other opportunities in the DRC. The Riverfort facility will be terminated and shares bought back from D-Beta. The company is changing its name to African Battery Materials.

Evgen Pharma (EVG) has raised the cash to finance the completion of the phase II studies for SFX-01, which uses its synthetic sulforaphane called Sulforadex. There is a phase II trial assessing the treatment of metastatic breast cancer and there should be an interim reading in the first half of 2018 and it will report fully before the end of the year. There is also a phase II trial for subarachnoid haemorrhage stroke, which should also report by the end of 2018. Evgen has raised £2.3m at 12p a share. Hardman says that cash burn is £300,000 a month.

Mirriad Advertising (MIRI) has reset its flotation date to 19 December and it is raising £25.4m, before costs of £1.2m, at 62p a share. Numis is nominated adviser and broker, while Baden Hill is joint bookrunner. Mirriad, which has developed technology to enable product placement in existing TV and film content, will be valued at £63.2m. Management is raising £800,000 from the sale of existing shares. IP Group is a major shareholder and is investing a further £3.7m, leaving it with a 27.2% stake. Amati VCT, Amati VCT 2, Edge Performance VCT and Oxford Technology 4 VCT, which acquired its shareholding around a decade ago, also have stakes, although it does not appear that the VCTs will generate much of an increase in the value of their holdings at the placing price.

Brighton Pier Group (PIER) has agreed to buy mini golf site operator Paradise Island Adventure Golf for an initial £10.5m. The business made an EBITDA of £1.21m on revenues of £3.49m in the most recent financial year. Six sites are being operated with two to be added. This is less seasonal than Brighton Pier. A placing raised £3m at 95p a share, with executive chairman Luke Johnson investing £850,000.

Delays with a project at Hinckley C hampered last year’s figures from Redhall (RHL) but the underlying business has been put on a much firmer footing. The order book is higher and so are the gross margins on the work.

Collagen Solutions (COS) has been hit by a delayed order from a major tissue customer which is launching a new product incorporating the tissue. This will hamper full year revenues. Interim revenues were flat at £1.86m and the full year revenues are expected to still rise from £3.95m to £4.31m but this is around £800,000 lower than previous forecasts. There should still be £6m in the bank at the end of March 2018. The long-term prospects for the ChondroMimetic cartilage repair product are positive.

Vianet Group (VNET) is switching its revenue model for its smart machines division to focus increasingly on regular recurring revenues from contactless payment technology sales. This held back interim revenues. Since the end of the first half, Vianet has completed the acquisition of Vendman and this should make a small profit contribution in the second half. Full year group revenues are expected to rise from £14.3m to £15.4m, while pre-tax profit should move from £2.5m to £2.8m. Vianet is changing its sector to telecommunication equipment.

Accounting software supplier FreeAgent Holdings (FREE) grew its interim revenues by 28% to £4.6m without any significant contribution from its partnership with Royal Bank of Scotland. Growth was slowed by regulation changes relating to public sector contractors. The policy of moving towards digital tax returns will provide a future boost to demand for the company’s software from small businesses. House broker N+1 Singer has trimmed its forecast revenues for the next two years and does not expect FreeAgent to make a full year pre-tax profit over that time scale.

Sovereign Mines of Africa (SMA) ran into regulatory and tax issues relating to its proposed reverse takeover of an Indian eyewear manufacturer. Trading in the shares was suspended on 21 July so it has until 27 January to find a potential acquisition.

Pennant International (PEN) is partnering with Capewell Aerial Systems, a producer of military and law enforcement equipment. The two companies will develop opportunities and an initial product is already under development. The news that BAE is selling Typhoon aircraft to Qatar is also good for Pennant.

Wind measurement technology developer Windar Photonics (WPHO) has received an order for 300 WindEYE LiDAR systems from a Chinese distributor. There will be 50 delivered this year and the rest in the first half of 2018.

Software supplier Pelatro plans to join AIM on 19 December. The mViva software is developed in India and used for marketing by telecommunications companies.

Video games developer Sumo Group plans to float by the end of December. Video games industry veteran Ian Livingstone is a non-executive director.

MAIN MARKET

Hemogenyx Pharmaceuticals (HEMO) has made good progress since it reversed into a standard list shell. Hemogenyx continues to work with contract research organisation LakePharma Inc, whose holding company invested £350,000 in Hemogenyx, to develop its therapies for bone marrow or blood stem cell transplants. This collaboration should help to progress the CDX technology towards clinical studies in 16 months time and preparatory work has started on a submission to the US FDA. The company has recently announced a collaboration with Oxford University that could generate work that will significantly improve the efficiency and safety of bone marrow transplants. A reliable supply of human tissue has been secured from a US research university.

Rainbow Rare Earths (RBW) has shipped the first load of rare earth mineral concentrate and it is currently on the road Mombasa. Production has commenced on time and within budget. Gasagwe is the only producing rare earths mine in Africa. Arden believes that Rainbow could make a profit of $3.4m in the year to June 2018, rising to $4.2m in 2018-19.

Deloitte has been appointed as administrator to Torotrak (TRK) because of a shortage of cash. Trading in the shares has been suspended.

Andrew Hore

Quoted Micro 9 October 2017

NEX EXCHANGE

National Milk Records (NMRP) has changed its year end to June and its latest figures are for the 15 months to June 2017. This is a period when the dairy information and data services provider sorted out its pension deficit problem and this removed significant, and volatile, liabilities from the balance sheet. The market has been tough for at least two years because of the weak milk price but it is starting to recover. In the 15 month period, revenues were £25.3m and operating profit before pension and one-off charges was £1.1m. The total loss before tax is £11.9m, which is after a pension related charge of £12.5m. Trading is improving.

WH Ireland believes that Ashley House (ASH) could report a pre-tax profit of £1.8m for the year to April 2018, although it is likely to be second half weighted. This follows a decline in underlying pre-tax profit to £53,000 last year because of uncertainty about government policy. The community care properties provider has a strong pipeline of potential developments. The acquisition of an off-site manufacturing business will help the group to win modular buildings business.

Energy efficiency products supplier Sandal (SAND) reported a 14% rise in full year revenues to £3.75m. The Energie MiHome range grew by 154%, albeit from a low base. The loss was halved to £135,000 but refunded tax reduced the cash outflow from operations. Development expenditure will broaden the product range in the smart home sector.

Ace Liberty & Stone (ALSP) reported a jump in pre-tax profit from £612,000 to £1.12m in the year to April 2017 and this is prior to the disposal of all the residential properties. The property investor made a £1.02m gain on disposals but this was offset by a £391,000 unrealised reduction in property values, compared with a £283,000 unrealised gain in the corresponding period. NAV was £18.1m at the end of April 2017.

Capital for Colleagues (CFCP) had a net asset value of 42.58p a share at the end of August 2017. Recent investment include £400,000 in timber frame buildings company Employee Owners Group and £150,000 follow-on investment in Computer Application Services.

London Nusantara Plantations (PALM) has £129,000 in the bank following the disposal of its initial land investment. There was a small gain on disposal but it was not enough to wipe out the interim loss. Management is assessing acquisition opportunities of plantations and mill capacity in Sumatra and Kalimantan, Indonesia. This will require additional funding.

Black Sea Property (BSP) has completed the €5.4m fundraising, at €0.01 a share, which it requires to progress the acquisition of the office building in Ivan Vazov Street in Sofia from UniCredit Bulbank. Debt funding of €7m still has to be secured from UniCredit Bulbank. Black Sea Property has paid a deposit of €1.04m out of the purchase price of €10.5m.

AIM

Bushveld Minerals Ltd (BMN) has published the circular for the demerger of its tin interests. Shareholders will receive one share in Afritin Mining Ltd, which will own the company’s Greenhills business, for each Bushveld share. Afritin will own the Mokopane tin project and Zaaiplaat tin tailings project in South Africa plus an interest in the Uis tin project in Namibia. Bushveld will still have coal assets but the main focus will be the vanadium assets and the potential value adding battery-related products.

Toilet tissue supplier Accrol Group Holdings (ACRL) has asked for trading in its shares to be suspended because of uncertainty about its financial position. It has been difficult to pass on extra raw materials costs and operational problems have also increased costs. There is also going to be a large fine relating to a health and safety incident.

Earthport (EPO) has raised £25m at 20p a share. This cash will be used to expand the corss-border payment services company’s market and global presence, develop further products and invest in the operating platform.

The requisitioner of the general meeting at Conroy Gold and Natural Resources (CGNR) failed to get any of its resolutions passed so there are no more changes to the board. Conroy raised €240,000 at €0.30 a share. The exercising of warrants raised €167,000. The cash will be used to develop the Clontibret deposit and pay for additional exploration at the Slieve Glah gold prospect.

Reabold Resources (RBD) is raising £1.76m at 0.5p a share. This follows a £3.96m subscription at the same share price. Reabold intends to change its focus to European oil and gas projects. Two former M&G analysts have joined the board.

City of London Group (CIN) has completed the reverse takeover of Milton Homes, which provides equity release products for residential property owners.

Stanley Gibbons (SGI) has found a new buyer for its interiors division. Gurr Johns is paying £1.25m with up to £400,000 deferred consideration. Stanley Gibbons is retaining £300,000 of inventory and the Mallett premises in New York. It has also retained the Mallett and Made by Meta brands. Millicent had agreed to pay £2.4m for the assets and brands and it has to pay a termination fee. Stanley Gibbons reported a £30.2m loss for the year to March 2017. Even taking out exceptionals the underlying loss was £11.1m. The NAV is £18m.

Kin Group (KIN) has raised £1m at 0.001p a share and every four shares come with a warrant to subscribe for a new share at 0.004p each. A CVA is proposed where unsecured creditors will swap their money owed of £2.27m for shares at 0.01p each. A capital reorganisation is required to reduce the nominal value of a share to below the placing price. John Taylor, who has been involved in the aerospace and military sectors, and Lindsay Mair, a corporate financier at SP Angel, are joining the board.

Redcentric (RCN) has appointed Chris Jagusz as chief executive. Net debt is falling but it is still £33.3m. Working capital management has improved. Profit should start to recover this year.

Orosur Mining Inc (OMI) has announced a drilling programme for the Anza gold project in Colombia. There will be 15,000 metres of diamond core drilling and the first results should be available by next February. The plan is to define a maiden resource and the potential for further mineralisation.

Avacta (AVCT) has announced a research collaboration with FIT Biotech in order to assess the effectiveness of is Affimer technology with FIT’s vector technology for delivering a gene.

The Environmental Protection Agency in the US has asked Tristel (TSTL) to resubmit its application for its Duo surface cleaner. This means that approval could be five months later than planned.

Northland has initiated coverage of Venture Life (VLG) and it expects the consumer healthcare firm to move into profit in 2018. Northland believes that Venture Life will benefit from growth in demand for self-care products because of the ageing global population. Venture Life already sells its products in more than 40 countries.

Angling Direct (ANG) is acquiring Fosters Fishing for £3m in cash. Fosters have a 17,000 square feet store in Birmingham and made an operating profit of £460,000 last year. When a new store in Slough opens Angling Direct will have 18 outlets.

SkinBioTherapeutics (SBTX) says that its technology has passed third party cytotoxicity tests. Phototoxicity and in vitro ocular toxicity tests are underway.

AdEPT Telecom (ADT) has declared a 13% increase in interim dividend to 4.25p a share. Recent acquisitions are performing well and are helping to focus the group on managed services.

Redhall Group (RHL) says delays on nuclear and infrastructure will hit its figures for the year to September 2017. The Hinckley Point C contract is expected to start in October 2017. The Chieftain facility is being closed. The 2016-17 profit forecast has been halved to £500,000. The 2017-18 profit forecast has been trimmed by £200,000 to £3.4m.

Adams (ADA) has taken its cash pile to £660,000 following the sale of £584,000 worth of shares in GVC.

Former AIM company Clinical Computing has sold its trading subsidiaries to TSX-listed Constellation Software.

MAIN MARKET

InnovaDerma (IDP) is raising £4.4m at 276p a share. The Skinny Tan brand owner needs the cash for working capital. Despite declaring a profit of more than £1m in the year to June 2017 there was a £607,000 cash outflow from operations as inventory levels soared.

Curzon Energy (CZN) raised £2.33m at 10p a share but the share price has declined to 9.25p. Curzon has acquired coalbed methane licences in Oregon. Curzon believes that gas could be produced before the end of the year.

Haynes Publishing (HYNS) has completed the acquisition of E3 Technical from Solera UK for £4.72m. This will expand the data-related operations of Haynes, as well as providing cross-selling opportunities. E3 provides repair and maintenance information and vehicle registration look-up services.

Andrew Hore

Quoted Micro 2 October 2017

NEX EXCHANGE

Newbury Racecourse (NYR) reported a slightly lower interim operating loss of £268,000 on revenues 10% higher at £7.04m. More racedays helped the racing operations but there were fewer other events which offset that. The nursery business made a much better contribution. Investment in the racecourse continues and income from residential property development of £1.95m helped to fund this. NAV is £44.1m.

Interim revenues were 22% ahead at £4.98m at Chapel Down (CDGP) helped by a 29% increase in wine sales. Management has reassured investors that there was a good harvest in 2017, which will help to improve wine revenues. The Curious Beer brewery is about to commence construction at Ashford.

St Mark Homes (SMAP) has launched a crowdfunding offer via Crowdstacker to raise up to £2m from a bond offering interest at 6% a year. The bonds can be held in ISAs. The cash will finance residential developments, which will predominantly focus on the government’s Help-to-Buy scheme. The company’s NAV per share was 136p at the end of the interim stage.

Block Energy (BLOK) is acquiring the 31% interest in the Norio field in the Republic of Georgia that it does not own and becoming operator of the field. The deal also includes 90% of the Satskhenisi field. The cost is $310,000 in cash. This is classed as a reverse takeover and trading in Block shares is suspended. An assessment of the reserve potential of the oil and gas assets in Georgia ahead of a return to NEX and a dual quotation on AIM.

V22 (V22O) increased its NAV from 1.55p a share to 3.94p a share in the 12 months to June 2017. That includes £235,000 of cash. If the art portfolio is included at its revalued level then the NAV goes up to 7.47p a share. An uplift in the value of the property portfolio offset an operating loss.

Investment company Western Selection (WESP) made a 2016-17 profit of £850,000 and nearly all of this came from the gain on the sale of shares in Swallowfield. Dividend income fell because Northbridge Industrial did not pay a dividend last year. NAV was one-fifth higher at 95p a share. The stake in Bilby was increased during the period. The total dividend has been raised from 2.1p a share to 2.2p a share.

Coinsilium Group Ltd (COIN) lost money in the first half of 2017 but it expects token investments to generate near-term revenues. There was £344,000 left in the bank at the end of June 2017 and this has subsequently been boosted by the sale of the shareholding in SatoshiPay. Coinsilium’s NAV is £2.34m.

Chris Bateman has resigned as chief executive of Forbes Ventures (FOR) after the sale of £500,000 of loan notes in Primus Care to his company Gravity Investment Group. Gravity has handed back 1166.7 million shares in Forbes, which have been cancelled. Gravity still owns 49.7% of Forbes, which still owns stakes in K&C REIT and challenger bank Civilised Investments. Trading in Forbes shares remains suspended ahead of the raising of further cash.

Ace Liberty & Stone (ALSP) has purchased Princes House, Barnstaple, which generates annual rent of £190,000, for £2.325m and College Square Margate, generating annual rent of £630,000, for £8.3m. Disposals of residential properties have raised £3.25m. Ace has raised £500,000 at 71.25p a share.

BWA Group (BWAP) had two investments and £17,000 in the bank at the end of April 2017. Pre-paid cards provider Prego Investments has taken longer to build up its business than expected. Mineralfields Group is in the process of obtaining mining licences in Cameroon.

Trading has commenced in Doriemus (DOR) shares on the ASX. A$3.5m was raised at A$0.26 per share equivalent. The cash will be used to complete drilling on the Lidsey and Brockham oil fields in the UK

Healthcare IT provider DXS International (DXSP) says that growth has been held back by changes in the NHS and the benefits of recent development spending are not likely to show through until 2018-19. In the year to April 2017, revenues were 5% higher at £3.43m but pre-tax profit fell from £46,000 to £39,000. There was £166,000 in the bank at the end of April 2017.

IMC Exploration Group (IMCP) has commenced its drilling programme on the zinc licence in south west Ireland. The licence in County Clare is near to other licences where mining companies have achieved encouraging results.

Angelfish Investments (ANGP) is providing a £150,000 loan facility to healthcare company Rapid Nutrition. The interest rate is 10% a year until the end of February 2018 when it rises to 15% a year. If Rapid Nutrition floats before the end of February 2018 the loan is convertible at 13.32p a share. The loan remains convertible after that but it also becomes repayable in instalments over 18 months. Angelfish is still seeking to recover transaction costs related the repaid investment in 4Navitas.

Crossword Cybersecurity (CCS) has licenced blockchain intellectual property to defence-focused ByzGen, which has just raised £500,000 from Regulatory Financial Services Ltd.

NQ Minerals (NQMI) has raised £782,000 at 8.5p a share and paid £400,000 of expenses via a share issue at 10p a share.

Via Developments (VIA1) has raised a further £215,000 from a debenture issue that takes the total value of debentures in issue to £5.11m.

Gunsynd (GUN) has invested £160,000 in a 3.01% stake in standard listed United Oil & Gas. The average cost was 2.7p a share. United has an onshore UK licence and an Italian onshore licence.

AIM

Premier African Minerals (PREM) is raising up to £3.5m at 0.3p a share with the help of PrimaryBid.com. The cash will go towards funding the underground development of the RHA tungsten mine and repaying and cancellation of the YA II loan agreement and D-Beta equity swap.

AP Systems Holdings says that it is considering a bid for RedstoneConnect (REDS). The underlying business of AP has been going since 1985 but AP Systems Holdings is a couple of years old and has only published accounts as a dormant company. The share capital was recently increased followed by a sub division of the shares. It appears that David Anderson still owns 100% of the group.

ITM Power (ITM) is raising £25m via a placing at 40p a share plus up to £4.4m from an open offer at the same price. ITM has £20m of projects under contract and £17m under negotiation. The cash will help to service these projects and finance the winning of additional contracts. The open offer closes on 17 October.

Recruitment software provider Dillistone (DSG) is launching its new software product and this has held back performance in the first half of 2017. The full benefits of the GatedTalent, which enables executives to share their personal information with recruitment consultants on a confidential basis, will not be seen for more than a year. House broker WH Ireland believes that full year profit could fall to £200,000 and it expects the 2018 profit to be flat. Profit is then expected to more than double I 2019 but the exact pace of take u of GatedTalent will be a significant factor in how quickly profit recovers.

Photonstar LED (PSL) significantly reduced its first half costs so even though revenues fell from £2.53m to £2.26m the interim loss decreased from £914,000 to £604,000. Research and development of the new LED systems range is almost complete and the second half sales should be better.

Full year figures from Real Good Food (RGD) show a slump into loss while net debt increased to £16.2m at the end of March 2017. There has been a subsequent refinancing and corporate governance is being improved.

MAIN MARKET

Curzon Energy (CZN) is joining the standard list following the acquisition of coalbed methane licences in Oregon. Curzon believes that gas could be produced before the end of the year. Curzon is raising £2.3m and this will be used to connect five existing wells to a pipeline and drill two more wells. The average cost is $350,000 per well.

Papillon Holdings (PPHP) had £9,000 left in the bank at the end of June 2017 following the costs of the abortive acquisition of Myclubbetting. Papillon 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.

Associated British Engineering (ASBE) says that the level of enquiries for its products are increasing.

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 19 June 2017

NEX EXCHANGE

Newbury Racecourse (NYR) says that raceday attendances are 29% so far this year and no meetings were lost to the weather. Conference and events revenues have been maintained despite the refurbishment of the racecourse. Occupancy levels are building up at on-site hotel The Lodge. The Rocking Horse nursery has increased revenues by 29%. The pre-parade ring and saddling boxes are completed and the Owners’ Club conference and wedding venue will be finished in the late summer. Further improvements will begin later this year. The first home owners have moved into the residential development, which will take until 2021 to complete. Newbury is involved in the new racecourse controlled betting pool from July 2018.

Coinsilium Group Ltd (COIN) has signed a memorandum of understanding with hedge fund HyperChain Capital. This will lead to co-investment opportunities in blockchain companies. Singapore-based HyperChain predominantly invests in tokens, which has proved more profitable than direct investment in companies in recent times – see Kryptonite 1. The two investors are each invested in social trading crypto platform CoinDash, which is about to launch a token offering.

Kryptonite 1 (KR1) has made a profitable turn on tokens in blockchain-related investments, some of which were acquired four months ago. The company sold 6,407 Melonport tokens for £33.17 each, raising £212,520, compared with the buying price of £3.87 each providing a profit of just over £187,000. The 2,105,254 tokens acquired in the Golem project were sold for an average price of 27p each – 27 times the original investment – raising £569,418 and representing a gain of just over £548,000. Kryptonite 1 has tax losses, which it should be able to use to offset against the total gains of £735,000. A small amount of the cash raised has been reinvested in 126,796.5 tokens in the initial coin offering of the Mysterium project – a peer-to-peer, server-less virtual private network.

Property investment company Ace Liberty & Stone (ALSP) is paying an interim dividend of 1p a share. The shares go ex-dividend on 22 June.

Peterhouse has resigned as corporate adviser to African Potash Ltd (AFPO), which has also completed the acquisition of a 21% stake in Advanced Agricultural Holdings in return for 221.6 million African Potash shares (11.8% of the enlarged share capital).

 

 

NEX Exchange Company of the Year

 

Here are the companies on the shortlist for NEX Exchange Company of the Year which will be awarded at the 2017 Small Cap Awards on 22 June.

Adnams (ADB)

£33.6m @11750p (11500p/12000p)

Brewer and distributor Adnams has been around the longest of the five nominees for this award and it is also much larger than any of the others. Adnams, which sponsored last year’s Tour of Britain cycling event, continues to invest in its brewery with beer sales moving above 100,000 barrels in 2016. More of that beer is being sold in kegs. The £7m investment in the brewery is almost complete.

In 2016, revenues improved from £65.7m to £70.3m, while pre-tax profit increased from £4.07m to £5.02m, predominantly down to a rise in asset disposal gains from £625,000 to £1.43m. The NAV has fallen to £27.5m because of an increase in the pension liability. There is a dividend of 150p per B share and 37.5p per A share.

So far this year, sales of beers and spirits continue to grow and Adnam’s pubs are trading well, although the sale of smaller pubs will reduce the profitability of this part of the group. Currency movements, the sale of the UK distribution rights for Lagunitas beers and the renovation of the Swan Hotel will hamper overall progress in the first half. This year there will be the first beer duty tax increase in four years.

 

Capital for Colleagues (CFCP)

£6.9m @45p (40p/50p)

Employee ownership-focused investment company Capital for Colleagues has not had a smooth ride in the past year with a major investee company going bust but it is still able to attract more cash from investors. Capital for Colleagues raised £1.44m at 42p a share from its recent open offer and a further £980,000 in a placing at the same price.

One of the group’s employee-owned investee companies FJ Holdings sold its businesses and was placed in administration. Capital for Colleagues was not kept up to date with these moves. The figures for the six months to February 2017 show the aftermath of this loss. The profit from ongoing activities improved from £40,000 to £159,000 but the write-off for FJ of £1.32m, more than one-fifth of the previous asset value, meant that there was a loss of £1.16m. The NAV fell to 43.5p a share at the end of February and this will be slightly diluted by the subsequent fundraising.

There remains strong demand from companies wanting to encourage employee ownership and the Capital for Colleagues management has, excluding FJ, a good record.

 

Chapel Down Group (CDGP)

£94.9m @94p (90p/98p)

English wines producer Chapel Down has been one of the most high-profile companies on NEX. Revenues grew by one-quarter to £10.2m in 2016. The Tenterden-based wine business grew revenues by 22% and the brewing operations increased revenues by one-third.

Brewer Curious Drinks separately raised money to build a new brewery but Chapel Down still effectively controls the business – although it is now classified as an associate in accounting terms. The Ashford brewery will be open in mid-2018 and this will free up space for wine making at Tenterden.

Continuing operations moved from an underlying pre-tax profit of £156,000 in 2015 to £340,000 in 2016. Gross margins on the wine business improved from 40% to 43%. More premium wines are being launched this year.

Some of the Chapel Down vineyards were hit by frosts in late April but there will be firmer evidence of any effect this month. However, management says they were the worst April frosts in two decades.

 

Crossword Cybersecurity (CCS)

£6.2m@195p (190p/200p)

Crossword Cybersecurity is developing cyber security products with six UK universities. A blockchain-related Ministry of Defence smart documents contract was won with the University of Warwick and cyber risk product, Rizikon, which uses expertise from City University, has started to generate revenues.

Crossword is also involved with CyberOwl, a spin-out from Coventry University that is commercialising research into the early warning of cyber attacks. CyberOwl has been selected to join GCHQ’s Cyber Accelerator.

In May, Crossword Cybersecurity took advantage of the high profile of cyber security problems to raise cash at a large premium to the market price. Crossword raised £145,000 at 230p a share. Brenlen Jinkens took up 50% of the new shares and he has 5.13% of the company.

In 2016, revenues jumped from £21,000 to £345,000 but the loss increased from £755,000 to £950,000 – even after £78,000 of R&D tax credits. There was £1.55m in the bank at the end of 2016. AIM-quoted Iomart is cooperating with Crossword on launching the Nixer machine learning Denial of Service (DDoS) platform on the market.

 

Sandal (SAND)

£4.9m @ 29.5p (28p/31p)

Sandal is a developer and manufacturer of energy efficiency and other electronic products. It has signed a number of agreements with retailers and distributors for its Energenie MiHome range, which is also being integrated with a number of home automation systems, including those of Google and Amazon. Retailers selling the company’s products include Argos, Sainsbury, Robert Dyas, Shop Direct Group and Ocado.

Recently, Sandal signed an agreement with Spanish smart home technology business Momit, which will redesign its smart thermostat so that it is compatible with the Energenie MiHome platform. This is part of Momit’s strategy to enter the UK market. The redesigned product should be launched in September and, along with related radiator valve sales, could add £500,000 to Sandal’s annual revenues.

In the six months to November 2016, revenues were 13% ahead at £1.88m, with Energenie MiHome products growing revenues by 74%, and the pre-tax profit has improved from £7,000 to £35,000. Further growth is expected in the second half as home automation becomes a more mainstream product area.

 

AIM

PrimaryBid.com is helping Myanmar International Ltd (MIL) to raise between $3m and $5m. The Myanmar-focused investment company is offering shares at $1.18 each – a 9.2% discount to the market price. Myanmar wants to widen its shareholder base. The proceeds are expected to be invested within six months. This is the 23rd offer by PrimaryBid and it closed at 5pm on 18 June.

Disruptive Capital says that it is not going to make on offer for Stanley Gibbons (SGI) because it was not given the information it required, although the stamps and coins dealer has effectively put itself up for sale. A strategic review has commenced and the formal sale process is part of this.

Wynnstay Properties (WSP) has kept up its record of increasing its dividend. The 19% rise took the total dividend to 15.75p a share. The NAV was 15% ahead to 674p a share at the end of March 2017.

Home improvements company entu (UK) is taking longer to turn around than was hoped. There were problems with installation capacity, which is not enough to meet demand but there are also problems with the supply chain. The underlying interim loss is likely to be similar to the restated loss in the first half of 2016. There will also be a full year loss. Net debt was £6.5m at the end of April 2017. The boilers and energy switching businesses have been closed and the LED business scaled back.

FIH Group (FIH) reported a 4% increase in 2016-17 revenues to £40.5m, while underlying pre-tax profit fell from £3.1m to £2.4m. The profit decline was not as great as originally expected.

Egdon Resources (EDR) is acquiring a 50% interest in PEDL278 in the East Midlands, with the other 50% being acquired by the proposed operator IGas (IGAS). The licence area includes a tight gas discovery from 1985.

Keras Resources (KRS) says drilling at the Warrawoona gold project in Australia, which is now part of Calidus Resources, has commenced. Calidus Resources is about to join ASX.

Savannah Resources (SAV) has received approval in principle for a tailings storage facility at the abandoned Lasail West pit in Oman. There is still potential for further copper mineralisation at the Lasail copper mine. It is taking longer than expected to gain licensing approval for the copper mine development at Mahab 4 and Maqail South. Mining should still start in the first half of 2018.

Italian PR firm SEC (SECG) reported a decline in revenues in 2016 as markets are growing slowly and competition is fierce. There was also a lack of large one-off events. Revenues fell from €21.2m to €18.5m, while pre-tax profit has slumped from €3.25m to €734,000.

Starcom (STAR) has secured a three-year, $1.5m equipment and tracking order. Shiptek Solutions is paying $1.2m for Tetis R container tracking units and there should be at least $250,000 of income from online tracking services over three years.

MAIN MARKET

IT consultancy and resourcing firm Triad Group (TRD) believes that the appointment of Arden as broker in February “is a significant step in returning the group to its former glory”. In the year to March 2017, revenues improved from £28.3m to £30.9m and pre-tax profit increased from £863,000 to £1.52m. Net cash was £2.24m. Triad intends to build up business outside of the public sector and increase exposure to new technologies, such as blockchain. Triad is returning to paying a dividend with the latest pay out of 0.5p a share. The ex-dividend date is 10 August. The trustee in the bankruptcy of former boss Mira Makar has been selling down her shareholding, which was over 21% but it has been reduced to 17.4%. The share price has held up over the past couple of months despite this.

Storage and communications semiconductors developer CML Microsystems (CML) increased full year revenues by one-fifth to £27.7m and organic growth was 14%. Underlying pre-tax profit improved from £3.5m to £4.3m. The dividend was increased to 7.4p a share. R&D investment continues to increase but there is plenty of cash to fund this. Net cash was £12.5m at the end of March 2017.

Industrial fasteners supplier Trifast (TRI) increased its pre-tax profit by more than one-quarter to £20.5m, which was better than expected. Growth is coming from the top 25 key accounts and new product launches.

Flying Brands Ltd (FBDU) has completed the acquisition of kidney stone analysis company Stone Checker Software in return for the issue of eight million shares at 3p each and been readmitted to the standard list on 16 June. A placing raised £550,000 at 3p a share. Stone Checker was previously 50%-owned by AIM-quoted Feedback (FDBK), which licenced its TexRAD software to the company for use with kidney stones.

North Midland Construction (NMD) has been awarded a joint venture infrastructure contract for Severn Trent Water on the Birmingham Resilience project worth more than £100m. This contract will be split between North Midland and its joint venture partner. The scheme starts in the third quarter of 2017 and this means that the 2017 figures will be ahead of expectations.

Jacek Slotala has stepped down as a director of fully listed shell Highway Capital (HWC). He joined the board in December 2015. Trading in the shares has been suspended since 22 September 2016. Highway has been seeking a significant acquisition for approaching two decades.

Andrew Hore

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