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Andrew Hore – Quoted Micro 29 June 2020

AQUIS STOCK EXCHANGE

Chapel Down Group (CDGP) increased sales last year, but the loss was also higher. Sales of wine and beer grew and revenues from continuing activities improved from £12.86m to £14.8m, while the loss more than doubled from £850,000 to £2.09m. the Chapel Down Gin Works in Kings Cross has been closed. There was still £2.47m in the bank at the end of 2019, even after the loss and £12m of investment in fixed assets and land. There are 428 acres of planted vineyard. Wine stocks have also increased following a good harvest. The Ashford brewery has been completed and full brewing capacity will be available before the end of the year. Martin Glenn is succeeding John Dunsmore as chairman.

Rutherford Health (RUTH) has entered into a £55m development framework agreement with Equitix, an investor in infrastructure assets. This will finance up to five diagnostic facilities in the UK. Each will be owned by a special purpose vehicle funded by Equitix and operated by Rutherford. An initial agreement has been made with a NHS Trust. Rutherford also announced a collaboration with Panthera Biopartners, which will be able to use Rutherford’s clinics for trials of potential cancer treatments.

Racing recommenced at Newbury Racecourse (NYR) on 11 June. Three race meetings have been held and five more are planned by the end of August. No public are being admitted. Revenues are coming from media rights. The Rocking Horse nursery reopened earlier this month.

Good Energy (GOOD) is increasing its investment in Next Green Car, which owns Zap-Map, to 50.1% through the exercise of a convertible loan.

BWA (BWAP) has spent £120,000 of the initial commitment of £250,000 for two rutile licence areas in Cameroon. Drilling programmes are being designed. COVID-19 has hampered progress with the company’s Canadian interests.

Coinsilium Group Ltd (COIN) says that investee company Factom Inc has filed for Cahpter 11 bankruptcy protection because of its failure to raise more cash. It could exit Chapter 11 protection within three months if things go to plan.The investment was valued at £237,000.

IamFire (FIRE) is reviewing strategies having raised £500,000 at 2.5p a share.  Each share comes with two warrants with an exercise price of 10p a share. The investment focus is natural resources, mining and disruptive technology.

SAPO (SAPO) is still seeking a broadband investment and net assets were £1.1m at the end of 2019. At 3.2p a share, SAPO is valued at £6m.

Gunsynd (GUN) has invested £137,750 in Rincon Resources, which gives it a stake of 28.4%. Rincon has the rights to three prospective gold and base metals projects in Western Australia. Gunsynd has sold its stake in United Oil and Gas (UOG).

All Star Minerals (ASMO) has raised a further £200,000 at 0.02p a share, taking the total raised in share issues to £280,000. Convertible loan notes worth £55,000 have been converted into 275 million shares with 34 million shares at 0.01p each to pay liabilities. This means that more than 1.3 billion shares have been issued, which has nearly doubled the shares in issue.

AIM

Recent trading at floorcoverings supplier Victoria (VCP) has exceeded expectations. Manufacturing has restarted in all the company’s plants. All the main countries are doing relatively well considering the disruption due to COVID-19 and in the most recent three weeks revenues were 85% of pre-COVID-19 budget. The UK carpets business is only just getting going again. Net debt is £370m, which is predominantly bonds that last until July 2024. Cash generation can reduce debt, although management is likely to look for potential acquisitions.

Wynnstay Group (WYN) reported a decline in interim revenues but that was due to lower commodity prices. The interim dividend has been maintained at 4.6p a share. The agriculture division maintained its operating profit, but there was an improved profit from the merchanting division. Pre-tax profit edged up from £4.3m to £4.5m. Shore Capital has reinstated forecasts. It expects a pre-tax profit of £6.7m, down from £7.9m. This id a deliberately cautious figure.

MSQ Partners has launched a 0.5p a share bid for Be Heard Group (HRD) and that values the digital media company at £6.2m. The acquirer was the subject of a buyout last year. The combined business will have the backing of Lloyds Development Capital and the greater scale will help to win larger clients.

United Oil and Gas (UOG) says that average production from the Abu Sennan concession in the first two weeks of June was 13,900 boepd, of which its working interest is 3,060 boepd. That is 69% higher than the average daily figure in April. The 2P reserves at Abu Sennan have been increased by 12.55 to 13.5MMboe

Transense Technologies (TRT) has transferred its iTrack tyre monitoring business to a Bridgestone subsidiary for $1m and it will receive quarterly royalty revenues for the next ten years. That royalty would be £150,000/ quarter currently, but growth should be faster under Bridgestone. Two Transense directors are moving with iTrack. This leaves Transense with its SAWsense (wireless tyre sensor technology) and Translogik (tyre test equipment) businesses. Transense could move into profit in 2021-22.

A positive trading statement from allergy vaccines developer Allergy Therapeutics (AGY) led finnCap to increase its 2020 pre-tax profit forecast even though revenue growth is slower than expected. A 2019-20 profit of £2.9m is expected, partly due to the timing of research spending. Allergy is expected to move back into loss in 2020-21.

Beximco Pharmaceuticals (BXP) increased its revenues and pre-tax profit in the nine months to March 2020, with particularly strong growth in the third quarter. There is some disruption to international distribution and supply and full year revenue growth will be lower than originally expected.

Dekel Agri-Vision (DKL) reported flat full year revenues of €20.9m for 2019. The loss was barely changed at €3.29m. There has been a decline in the palm oil price in recent months, which will hamper performance this year. The cashew project is making good progress.

MAIN MARKET

Strong first half trading at BATM Advanced Communication (BVC) has led to broker upgrades for 2020. The biomedical division has done particularly well, but the networks and cyber division has also done better than expected.  Stifel is raising its revenues forecast from $138m to $155m, while the EBITDA estimate has been increased by one-third to $13m. Shore Capital expects to increase forecast revenues by 17% to around $154m with a significant improvement in EBITDA expected.

Construction services provider nmcn (NMCN) made a positive start in the first quarter of this year. Revenues were 4% ahead at £97.9m and pre-tax profit 6% higher at £1.8m. This period was hardly affected by the lockdown. Since the end of March, work has been at three-quarters of normal levels. There was £11.8m in cash at the end of March 2020. The interims will be reported on 6 August and there should be guidance for the full year outcome.

Tex Holdings (TXH) expects to make further cost savings and consolidate more of its activities. The plastics division is operating at 70% of expected levels, while the engineering division has suffered delays but not lost business.

Standard list shell Boston International (BIH) had £302,000 in cash at the end of 2019. It is still assessing the proposed acquisition of invoice factoring company Alexanders Discount Ltd

Rainbow Rare Earths (RBW) has raised £1.25m at 3p a share. The cash will accelerate trial mining at the Gakara rare earth project in Burundi.

The 2019 figures of Ross Group (RGP) include pharmaceutical grade Chitin producer Archipelago Aquaculture Group (AAG) for the first time. There were restructuring and impairment costs relating to the acquisition. Pilot production is being implemented and there are joint venture discussions with the company that has developed the Ionic Liquid extraction process licenced by AAG. There was a £3.6m loss in 2019.

SMALL CAP AWARDS 2020

Company of the year: Volex

Technology company of the year: Avacta

Impact company of the year: ITM Power

IPO of the year: Diaceutics

Transaction of the year: Kape acquisition of Private Internet Access

Executive director of the year: David Cicurel (Judges Scientific)

Innovative financing of the year: Yu Group

Journalist of the year: Joanne Hart (Mail on Sunday)

Analyst of the year: Lorne Daniel (finnCap)

VCT manager of the year: Amati

UK smaller companies fund manager of the year: JPM UK Smaller Companies

Lifetime achievement award: Giles Hargreave

Alan Green talks markets, #AVCT, #NCYT, #VLG, #TM17, #KDNC & #BRES on UK Investor Mag podcast

Alan Green talks markets, Avacta #AVCT, Novacyt #NYCT, Venture Life Group #VLG, Team 17 #TM17, Cadence Minerals #KDNC & Blencowe Resources #BRES on the UK Investor Mag podcast

Alan Green talks Avacta #AVCT, Airtel Africa #AAF & Team 17 #TM17 on Vox Markets podcast

Alan Green discusses Avacta #AVCT, Airtel Africa #AAF & Team 17 #TM17 with Justin Waite on the Vox Markets podcast. Interview is 39 minutes in.

Alan Green discusses Marks & Spencer #MKS, Severn Trent #SVT, Avacta #AVCT & CVS Group #CVSG on the UK Investor Magazine podcast

Alan Green discusses Marks & Spencer #MKS, Severn Trent #SVT, Avacta #AVCT & CVS Group #CVSG with Jonathan Roy on the UK Investor Magazine podcast

Alan Green talks markets, insurer dividends, Avacta #AVCT, LocoSoco #LOCO & ECR Minerals #ECR on UK Investor Mag podcast

Alan Green talks markets, insurer dividends, Avacta #AVCT, LocoSoco #LOCO & ECR Minerals #ECR on the UK Investor Mag podcast. Link on the image to listen.

Alan Green talks i3 Energy #I3E, Bidstack #BIDS, Avacta #AVCT & RA Intl #RAI on Vox Markets podcast

Alan Green discusses i3 Energy #I3E, Bidstack #BIDS, Avacta #AVCT & RA Intl #RAI with Justin Waite on the Vox Markets podcast. Interview is 42 minutes 8 seconds in.

Alan Green discusses Sainsburys #SBRY, Eddie Stobart #ESL & Avacta #AVCT on Vox Markets podcast

Alan Green discusses Sainsburys #SBRY, Eddie Stobart #ESL & Avvakta #AVCT with Justin Waite on the Vox Markets podcast. Interview is 46 minutes 58 seconds in.

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 1 May 2017

NEX EXCHANGE

Cyber security technology developer and consultancy Crossword Cybersecurity (CCS) continues to scale up its business and there is a product launch planned for this summer. 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 DDoS platform on the market.

Brewer Adnams (ADB) says sales of beers and spirits continue to grow and its 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. The £7m investment in the brewery is almost complete.

Sandal (SAND) has 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 the annual revenues of Sandal.

Healthcare staff provider Healthperm Resourcing Ltd (HPR) has revised its strategy and candidates need to have passed the International English Language Testing System, which is required for a visa anyway. Healthperm has opened its own IELTS training facility in the UAE and this is focused on nurses. Healthperm has won two new mandates and there are three other potential mandates on the cards. Chief executive David Sumner has agreed to increase the maximum amount of loan notes he will subscribe for from £1m to £1.8m. The loan notes have a 10% interest charge.

Capital for Colleagues (CFCP) has raised £1.44m at 42p a share from its open offer and a further £980,000 in a placing at the same price. Coinsilium Group (COIN) has raised £118,000 at 2p a share and it will use £60,000 to finance the development of a blockchain-based management system. Goldcrest Resources (GCRP) is raising £380,000 at 0.5p a share. The cash will help to finance the competent persons report on the Norio block, which the company is in the process of acquiring.

NQ Minerals (NQMI) has entered into a A$6.5m loan facility to help finance the acquisition of the Hellyer gold mine in Tasmania. This means that NQ has A$15m of the A$20m in cash it requires to make the purchase.

Indigo Holdings (INGO) is investing £200,000 in Iranian Fast Moving Consumer Goods Ltd, an online retail delivery business associated with a convenience store chain.

Ashley House (ASH) has secured a £500,000 loan facility from its non-executive deputy chairman Stephen Minion. The secured facility lasts for 12 months.

Housebuilder St Mark Homes (SMAP) has appointed Alfred Henry Corporate Finance as its corporate broker. Merchant Place had performed this role for 18 years.

AIM

Mortice (MORT) has made a second UK acquisition. The facilities management services provider is paying up to £4.5m for Elite Cleaning and Environmental Services – £3.5m in cash and shares plus a 12-month earn-out of up to £1m in cash and shares. Elite provides cleaning services and clients include ITV and BMW. Elite made EBITDA of £1m on revenues of £12.3m. finnCap has increased its earnings forecast by 5% to 7.8 cents a share.

Internet domain registry company Minds + Machines (MMX) moved into profit in 2016. Revenues grew from $5.5m to $13.5m, while a loss was turned into an underlying pre-tax profit of $3.5m. This follows a restructuring of the business and the sale of non-core operations. Sales of the .vip domain in China were the major factor in the growth in revenues and .boston should be launched later this year. Cash conversion was poor due to restructuring costs and increased working capital.

Directa Plus (DCTA) had technological problems which held back the progress of the graphene producer last year. In 2016, revenues fell from €1.7m to €0.8m and the loss more than doubled to €4.1m. The reason behind the fall in revenues was the lack of sales of mobile decontamination units with sales of G+ graphene nearly doubling. The focus is textiles and environmental uses of the company’s graphene. Directa Plus has net cash of €6.8m and this will be enough to absorb the expected cash outflows for the next couple of years.

Diagnostic tests supplier Omega Diagnostics (ODX) says that its underlying pre-tax profit will fall from £1.3m to £1.1m in 2016-17. All divisions increased their revenues, helped by currency movements. Field trials are planned for the VISITECT CD4 test and the CE mark could be obtained by the end of the year.

TLA Worldwide (TLA) continues to embarrass itself with disastrous trading statements. Having issued a trading statement at 6.26pm on 23 December 2016, it has released its latest profit warning at 4pm – management probably thinks that is a big improvement because it was before the market closed. It turns out that four months after the end of the financial year TLA’s 2016 figures will be even worse than expected. Changes to revenue recognition and provisions for money that TLA thought it was owed but has not been paid are the reason. There is also money that TLA believed it was owed in financial periods prior to 2016 but has not been paid. That will lead to write-downs and the current estimate is between $1.5m and $2.5m. The 2016 figures may eventually be released in late May, according to the company.

Imaginatik (IMTK) says its revenues for the year to March 2017 will be flat at £3.9m but the loss should still be reduced. Bookings for the innovation software were lower at £3.5m but new clients were won in the second half. Imaginatik could be on course to breakeven in the current financial year.

AstraZeneca has returned the rights to AZD9412 to Synairgen (SNG) following a phase IIa study. The inhaled interferon beta did have a beneficial impact on lung function but the positives were not enough to continue with trials. The data will be returned to Synairgen for it to analyse. Synairgen has £4m in the bank.

Avacta (AVCT) has signed its first non-therapeutics licence for its affimers. The licensee is a major global diagnostics companies. The upfront payment is probably small but this is a significant deal.

Radiation detection technology company Kromek (KMK) is trading in line with expectations and it expects to continue to win new contracts.

Property management services provider HML Holdings (HML) has confirmed that its 2016-17 profit will be in line with expectations of £1.8m. There were six acquisitions during the year. A 2017-18 profit of £2.2m is forecast.

Instant communication mobile services provider Mobile Tornado (MBT) has raised £1.1m at 5p a share and the cash will be used for further development of its technology and support the launch of the Dispatch Console service. Last year, revenues fell 10% to £2.02m but recurring revenues increased to more than 90% of the total. The loss increased from £2.03m to £3.73m. Net debt was £9.06m at the end of 2016.

MAIN MARKET

Sealand Capital Galaxy Ltd (SCGL) has completed the acquisition of social media business SecureCom and Sealand hopes that a share split/bonus issue will improve liquidity. Existing shareholders will receive nine bonus shares for each one they own, leaving them with ten times the number of shares and the share price would be adjusted from 25p to 2.5p. The November 2015 flotation price was 10p and earlier this year a further £1.4m was raised at 20p a share. Pro forma cash was £3.26m at the time of the acquisition.

A number of standard list shells have reported their annual figures so that they beat the deadline of the end of April. Financial services-focused shell Vertu Capital Ltd (VCBC) is still discussing the potential acquisition of VCB Malaysia but there is still some way to go before a deal is secured. There was £553,000 in the bank at the end of 2016. Auctus Growth (AUCT) still had £1m in the bank at the end of 2016 and it continues to assess potential acquisitions.

Papillon Holdings (PPHP) is still proceeding with the long drawn out acquisition of Myclubbetting.com and it is near to lodging a readmission document with the UKLA. The publishing of the accounts of Papillon has been delayed because of difficulties concerning quantifying the costs of the acquisition.

Andrew Hore

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