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Andrew Hore – Quoted Micro 23 March 2020

AQUIS STOCK EXCHANGE

Gin and spirits supplier British Honey Company (BHC) is using spare capacity in its distillery to produce # alcohol sanitisers. There is a shortage of sanitisers due to the coronavirus and HMRC has given permission for British Honey to produce denatured alcohol. The sanitisers are made with 70% alcohol and extracts of honey and green tea. Longer-term, the strategy is to buy other spirits brands to use spare capacity. British Honey started off as a honey producer and moved into craft spirits infused with honey in 2017. It has a computer-controlled, 1,000-litre capacity still and bottling facility with a capacity of 1.5 million bottles a year. Ingredients can be tracked. There has been £4m invested in this infrastructure. The existing products use a small proportion of this capacity. The company also produces spirits on behalf of third parties. Discussions have begun with some potential acquisitions. British Honey joined Aquis Stock Exchange at the beginning of the week and raised £4.25m (£3.88m after expenses) at 110p a share. Advanced assurance of eligibility for the Enterprise Investment Scheme has been obtained. The initial market capitalisation was £10m. Cairn is corporate adviser and Stanford Capital Partners is broker.

Sativa (SATI) is launching a cannabigerol (CBG) and alcohol-based hand sanitiser. CBG is thought to be effective as an antibacterial product and could combat superbugs.

Energy supplier Good Energy (GOOD) reported better than expected 2019 pre-tax profit. Underlying pre-tax profit still dipped from £2.3m to £2.1m due to lower gross margins. Profit is expected to bounce back to £3.1m in 2020. Both business and domestic customers were higher last year. The total dividend has been increased from 3.5p a share to 3.7p a share. Net debt was £39.2m at the end of 2019.

Brewer Shepherd Neame (SHEP) has decided not to pay the interim dividend of 6p a share announced the week before. The sharp downturn in trading and subsequent closure of pubs due to COVID-19 means that Shepherd Neame is also cutting capital investment and the board is taking a one-fifth cut in pay. Rent receipts from tenants were suspended from 16 March.

KR1 (KR1) has generated $168,000 from selling ATOM, taking the total raised from disposals to $290,000. It still holds nearly 17,000 ATOM.

Sheltered housing developer Walls and Futures REIT (WAFR) has outperformed its benchmark for a third year in a row. The MSCI UK Residential index increased by 4.4% in 2019, while Walls portfolio increased by 23%.

BWA Group (BWAP) says that its subsidiary has been awarded an exploration licence for an area known as Dehane in central Cameroon. The focus is rutile sands and other minerals. The permit is for three years and the financial commitment in year one is £275,000, followed by £207,000 in each of the next two years. Tri Castle Investments is subscribing £100,000 at 0.5p a share.

First Sentinel (FSEN) has raised £389,000 at 20p a share for working capital. VI Mining (VIM) raised £56,000 via a placing at 15p a share that was curtailed because of COVID-19. Further cash will be raised in the future.

Eastinco Mining and Exploration (EM.P) has secured a $200,000 facility from Augustin Corp, which is owned by a trust related to Eastinco executive chairman Charles Bray. The annual interest rate is 6 percentage points above commercial lending rates and the facility lasts for up to 18 months.

SAPO (SAPO) is holding a general meeting on 14 April to gain shareholder approval for increasing the share capital. Executive chairman Dr Keith Harris has been issued 20 million shares at 1p a share. The consideration will be paid by the end of 2024.

Belvedere Leisure Resorts (BELV) believes that once normality is resumed it can accelerate its resort development and deliver phase one on time.

Dozens Savings (DS07) says that 795 investors have subscribed for company bonds.

Trading in Dana International (DANA) shares remains suspended. The property investor is still trying to gain full information about share transfers.

Christian Taylor-Wilkinson has become interim chief executive of Altona Energy (ANR) following the resignation of executive chairman Qinfu Zhang.

AIM

Sales of COVID-19 tests by Novacyt (NCYT) continue to accelerate. It has received orders worth more than £8.7m in a six-week period. Manufacturing capacity is being increased.

Synairgen (SNG) is about to start a phase II trial for SNG001 for the treatment of an initial 100 patients with mild-moderate COVID-19. Initial results should be available by the summer. SNG001 is inhaled interferon beta, which has shown benefits in the treatment of SARS. The existing COPD phase II trial has been paused, but initial results suggest that there is clinical benefit.

Best of the Best (BOTB) would have been in trouble a decade ago when it generated its competition entries from airports and other areas of high footfall. Having gone online, the competitions organiser has continued to prosper. Additional marketing investment has helped the 2019-20 performance to be above expectations. The pre-tax profit forecast for the year to April 2020 has been raised from £2.6m to £3m.

Payment systems provider PCI-Pal (PCIP) has won a contract for its Agent Assist product with a UK government organisation. The annual contract value is £565,500.

Manx Financial (MFX) is buying back the 12.94% shareholding owned by Aaron Banks. Manx intends to pay £1.61m for the shares and then cancel them. This cash will become a loan to Manx and an existing £483,500 convertible will be added to the sum. Banks has requisitioned a general meeting at iodine manufacturer Iofina (IOF) in order to remove Lance Baller from the board and become a director himself. Banks does not intend to make a bid for the company.

Mobile payment services provider Bango (BGO) is still set to move into profit in 2020. End user spend doubled last year.

Indigovision (IND) is recommending a 405p a share cash bid from Motorola Solutions. This values the video security technology company at £30.4m. In 2019, pre-tax profit was $1.3m.

MJ Hudson (MJH) grew organic revenues by 12.5% in the first half. The asset management services provider has net cash of £20.1m following last year’s flotation. The acquisition of Meyler will expand the range of services provided in the US. The customer base is predominantly long-term and closed ended funds. A full year pre-tax profit of £1.1m is forecast.

Big Sofa Technologies (BST) has put itself up for sale and trading in the shares is suspended. The video and data analytics technology developer needs additional cash and it is difficult to raise funds in the market when there is so much uncertainty. The company expects proposals by the end of April.

The Wressle oil field development in north Lincolnshire is set to commence production in the second half of 2020 and Egdon Resources (EDG) has a 30% stake and is operator. Europa Oil and Gas (EOG) and Union Jack Oil (UJO) also have interests. The breakeven oil is estimated at $18/barrel. Production could start at 500 barrels a day. An application has been allowed against North Lincolnshire council for costs relating to delays in gaining a permit.

Diagnostic and precision testing services provider Diaceutics (DXRX) boosted revenues by 30% last year following its flotation. Although gross margins improved, a significant increase in headcount meant that pre-tax profit dipped to £500,000. The initial benefits of the investment in the business are showing through growth in Asia and other regions.

Regional property investor Real Estate investors (REI) increased its dividend by 7% to 3.8p a share. Like-for-like rental income was slightly lower at £16.9m and the weak retail property market led to a 3% reduction in EPRA NAV to 67.4p a share. Loan to value is 46.7%. The Midlands property market is strengthening ahead of the Commonwealth Games in Birmingham. An improvement in NAV to near-69p a share is forecast for 2020.

Xeros (XSG) has signed a joint development agreement with a global commercial laundry business. XFiltra micro-particle filtration technology will be included in the partner’s commercial washing machines. The EU plans to have micro-particle filtration in use by 2026. Xeros is likely to need to raise more cash next year.

Oncimmune (ONC) says NICE has completed a positive review of EarlyCDT Lung and believes that it can help in the early diagnosis of lung cancer.

MAIN MARKET

Trading in the shares of Boston International Holdings (BIH) has been suspended ahead of the proposed acquisition of invoice factoring company Alexanders Discount Ltd, which is based in the South East. Alexanders Discount accounts for the year to November 2019 are for a dormant company and the assets were worth £4. The standard list shell floated in October 2016.

Telecoms services provider Toople (TOOP) says that the integration of DMSL is ahead of plan and it has won two new contracts.

BATM Advanced Communications (BVC) is partnering with Novamed for an at-home COVID-19 diagnostic kit. The kit should be completed within four months.

AIQ Ltd (AIQ) has signed a conditional share purchase agreement for Alchemist Codes, a Malaysian IT services developer. AIQ is paying £2.3m in shares.

Andrew Hore

Andrew Hore – Quoted Micro 6 January 2020

NEX EXCHANGE

Cannabis-related investment company Greencare Capital (GRE) joined the NEX Growth Market last Monday. Greencare raised £514,000 at 25p a share. The rest of the shares were issued at 1p each, raising £100,000. The pro forma NAV is just over 4p a share. The largest shareholder is E Value One with 66.3%, which is owned by Dominic White, who is chairman of fellow NEX-quoted company Eight Capital Partners (ECP) which has a 21.2% stake. Eight Capital acquired 1.5 million of its shares at 1p each and 1.06 million at the subscription price – just over 50% of the subscription shares. Greencare has already identified its first investment, which is a consumer-focused distribution business that has a leading position in one of the larger European markets. The distribution activities cover 30,000 points of sale and that could increase to 45,000. The plan is to acquire an initial 10% stake. Due diligence is being carried out and the investment could be made early in 2020.

European Lithium (EUR) has agreed €7.5m of debt financing that lasts two years and has an annual interest charge of 5%. This is secured on the Wolfsberg lithium project in Austria. The cash will fund the completion of the definitive feasibility study and repay the existing convertible note facility. The Wolfsberg mining and exploration licences have been extended.

BWA Group (BWAP) says that its subsidiary has been awarded an exploration licence in central Cameroon. This will enable the assessment of commercial exploitation of rutile sands, kyanite, ilmenite, zircon and other minerals. The permit lasts for three years with a financial commitment of £650,000 over the period. This has taken four years to negotiate.

Walls and Futures REIT (WFR) has completed the redevelopment of its Didcot property and it has been let on a 25-year lease to a large care provider. NAV was £3.3m at the end of September 2019.

VI Mining (VIM) has secured a partnership with an established operator in Peru so that commercial operations can commence at the Cushuro mining concession in the second quarter and the Oro Pesa plant can be up and running in the third quarter. They will be owned by 50/50 joint ventures. The Minaspampa and Rosario de Belen concessions are being returned to the previous owners, although VI Mining will have a buy back option.

Healthcare professionals recruiter SG Recruitment Ltd (SGRL) grew interim revenues by 13% to £386,000, while operating costs were halved. There was still a £379,000 loss. SG has secured a contract with Leeds Teaching Hospitals NHS Trust covering seven hospitals. Further mandates are expected from the NHS and in the Middle East.

Adnams (ADB) director Guy Heald has increased his B shares stake from 15.1% to 17.15%.

Alexander David Securities has resigned as corporate adviser to EcoVista (EVTP) and trading in the shares has been suspended until a replacement is appointed.

AIM

Bango (BGO) grew 2019 revenues by more than 40% even though two contracts were not closed by the end of the year. That means that 2019 revenues of the digital payments technology provider will be £2m lower than anticipated. The 2020 forecast revenues have been reduced by £2.6m to £14.2m, although a £600,000 pre-tax profit is expected.

Communications services provider Mobile Tornado (MBT) expects second half revenues to be £1.8m, taking the total for the year to £3.3m. There have been delays in deployments. The company remains loss-making.

Redx Pharma (REDX) could be subject of a bid by a syndicate headed by Samuel D Waksal. The £2.5m loan from Moulton Goodies will be swapped for shares instead of repaying it at the end of 2019. This requires shareholder agreement.

Adams (ADA) has bought 2.4 million shares in Circassia Pharmaceuticals (CIR) at an average price of 19p each. That takes the stake in Circassia to 0.82%. Adams still has £1m in cash.

Tri-Star Resources (TSTR) says that its 40%-owned antinomy and gold production facility operator SPMP is currently in technical default of its banking facility. Tri-Star had guaranteed 40% of the bank facility, but it says that this no longer holds because commercial production has commenced. This still has to be independently certified. Any additional short-term finance provided to SPMP could lead to a dilution of the Tri-Star stake. SPMP’s production facility requires up to $160m of additional investment in order to reach 100% capacity, but there have been no suitable offers of this finance as yet. There is no certainty that the financing can be achieved.

Residential property development funder Urban Exposure (UEX) says that 2019 operating costs will be lower than expected due to lower remuneration and fewer people being hired. The 2020 operating costs will be reduced to around £9.5m and that will enable the company to be profitable. There is no additional news about the proposals for the future of the company. Urban Exposure has also agreed to pay £400,000 to Jones Laing LaSalle in relation to an agreement by former companies, which are being wound down, to pay introduction fees. This settles the claim.

Trading in Attis Oil and Gas (AOGL) shares has been suspended ahead of details of a deal to acquire a North America-focused oil and gas company and the disposal of non-core assets. The acquisition will bring assets and experienced management.

Trans-Siberian Gold (TSG) has signed a new tariff for its electricity. The previous tariff was RUR4.69/kWh and the new agreement is for RUR4.75/kWh, which is still much lower than the standard tariff.

Livermore Investments Group (LIV) is paying an interim dividend of $0.0343 a share on 21 February.

MAIN MARKET

David Sefton has stepped down as chairman of social media company Iconic Labs (ICON) because of market speculation about his involvement with AIM-quoted Anglo African Oil and Gas (AAOG) where he was executive chairman until 13 September 2019. He has not been involved since then. Sefton will continue to be involved with Iconic Labs, where the share price has nearly halved in the past four months. The resolution to allow directors to allot shares without offering them to existing shareholders was not passed at the AGM. Anglo African Oil and Gas has not made the progress it wanted to with its oil and gas interests and it plans to sell its main asset in Congo to Zenith Energy (ZEN). Jub Capital is trying to put a stop to that and has present alternative proposals. This would involve stopping the sale and providing additional cash via a subscription of £100,000 and a $5m loan facility. Jub would also buy the shares owned by RiverFort and that would provide an additional £722,000 to the company.

Anglo African Agriculture (AAAP) has postponed the reverse takeover of Kenya-based port and marine logistics group Camarco. The long stop date for the deal is being extended. A version of the deal is likely to go ahead, but there could be private equity investment in one or more of the subsidiaries.

OTHER MARKETS

Former standard list company Cleantech Building Materials has entered into a three-year offtake agreement with a customer in Thailand. Nasdaq First North Copenhagen-quoted Cleantech Building Materials has the exclusive rights to manufacture Accoya wood (AIM-quoted Accsys Technologies (AXS) owns the technology) in China.

Andrew Hore

Andrew Hore – Quoted Micro 8 July 2019

NEX EXCHANGE

AIM-quoted Aquis Exchange (AQX) is acquiring NEX Exchange from CME Group Inc, which bought it as part of its £3.9bn takeover of NEX Group. Aquis will pay £1, plus £2.7m for working capital requirements. The deal requires FCA approval so it is unlikely to complete before the autumn.

Arbuthnot Banking Group (ARBB) is purchasing a residential mortgage portfolio for £258m. The loan portfolio has £266m outstanding and the yield is 3.6%.

Equatorial Mining and Exploration (EM.P) is raising £1.3m via a share issue at 0.1p a share and loan notes worth £904,000, which are convertible at the same share price. The cash will be used to acquire Rwanda-based Eastinco.

MESH Holdings (MESH) has reached an early agreement to exercise the option to acquire Sentiance. MESH will issue 4,000 shares for each Sentiance share. Sentiance will have €19m in cash when the deal completes. More than 404 million MESH shares will be issued, which is nearly two-thirds of the enlarged share capital. Trading in the shares is suspended until a circular is published in order to gain shareholder approval.

The forecast 2018-19 loss for health and community care properties developer and modular buildings supplier Ashley House (ASH) has been increased from £1m to £1.6m following clarity about what deals were signed prior to the year end. A return to profit is expected this year.

Ace Liberty and Stone (ALSP) has announced a third interim dividend of 0.84p a share. The ex-dividend date is 11 July.

NQ Minerals (NQMI) has extended its A$4m loan facility to 5 September. The two month extension cost A$160,000.

Gunsynd (GUN) has invested a further $130,000 in Oyster Oil and Gas, taking its stake to 30%.

Trading in Ganapati (GANP) shares has been suspended because accounts for the year to January 2019 have not been published.

Wheelsure Holdings (WHLP) has appointed Cairn as its corporate adviser.

AIM

Science Group (SAG) has launched a 35p a share cash bid for Frontier Smart Technologies (FST) and that is higher than the indicative offer of 30p a share. Frontier advises that shareholders take no action and says that it has received approaches from other parties and there are discussions with one of them about the structure and pricing of any deal.

Independent directors of FFI Holdings (FFI) are recommending a bid of 25p a share, which values the film completion insurance provider at £39.5m. The mandatory offer comes two years after FFI floated at 150p a share.

IMImobile (IMO) continues to grow strongly in the Americas and Europe with 42% growth in revenues last year. The cloud and mobile services provider increased total revenues by 28% to £142.7m, with organic growth of 14% on a constant currency basis. Net debt was £7.5m at the end of March 2019 and cash generation is strong. Thee was £14.6m generated from operating activities last year.

Plastic components and packaging producer Synnovia (SYN) has refinanced its debt. The maximum amount available is £25.3m. The maturity has been extended from June 2021 to June 2023. The full year results will be published on 9 July.

Bango (BGO) has partnered with appScatter (APPS) in order to help the latter’s app development clients to grow in-app revenues.

Gfinity (GFIN) has generated better than expected revenues in the year to June 2019. The esports company expects to breakeven by 2021.

Mirriad Advertising (MIRI) is raising £14.18m via a placing at 15p a share, while an open offer could raise up to £3.94m. Revenues remain modest and the cash is required to cover continuing losses. Cash consumption is running at £1m a month and 2019 revenues of £1.1m are anticipated.

Churchill China (CHH) has generated higher than expected revenues in the hospitality sector, particularly in Europe. Full year trading will be ahead of expectations. The interims will be announced on 29 August.

Mirada (MIRA) is raising £2.1m from the sale of its Mirada Connect car park payment services business to part of VW. The business generated revenues of £633,000 and pre-tax profit of £122,000 in the year to March 2019. This will enable Mirada to concentrate on its digital TV business, where annual revenues are approaching $12m. Mirada had net debt of $4.9m at the end of March.

LightwaveRF (LWRF) has signed an agreement with Google to jointly market Lightwave compatible smart speakers that provide voice-controlled lighting.

Intelligent Ultrasound (MED) has secured its first OEM agreement for its AI-based imaging software and the share price nearly doubled on the back of the deal. The technology will be integrated into ultrasound systems. Initial royalties are expected in 2021.

Cellcast (CLTV) plans to sell its operating subsidiary to its management team, but it is unlikely to generate a good price because of its poor performance. The company will become a shell. Fraser Cropper of e-cigarette company Totally Wicked has taken a 3.7% stake.

MAIN MARKET

InnovaDerma (IDP) has reassured investors that it is on course to more than double pre-tax profit to £1.5m in the year to June 2019. The pharma and beauty products supplier had £1.7m in the bank at the end of June 2019, which is better than expected. It is still down from £1.9m one year earlier.

Associated British Engineering (ASBE) has appointed FRP Advisory to find a buyer for loss-making British Polar Engines Ltd. There is a deficit of £1.35m on the pension scheme.

Argo Blockchain (ARB) has announced further outperformance by its crypto mining activities as the bitcoin price continues to recover. The company had £3.07m of crypto assets in the balance sheet at the end of June 2019, which is more than £200,000 more than expected. Additional equipment is being acquired.

Rainbow Rare Earths (RBW) is raising £4.3m at 3p a share. The money will finance production growth at the Gakara rare earth project. There should be some cash left to pay for additional drilling.

Papillon Holdings (PPHP) has revised its 2018 accounts. The original version did not reflect two transactions with director James Longley.

Gulf Keystone Petroleum (GKP) has paid an initial dividend of 5.68p a share with a further dividend double that level (depending on exchange rates) due to be paid after the interim figures are published.

Boston International Holdings (BIH) has returned from suspension following the termination of the reverse takeover of Cornhill FX, which was first announced in August 2017. Boston could not raise the cash required. Management is assessing future strategy. The costs of the proposed transaction mean that cash is below £150,000, which is less than 50% of share capital.  

Andrew Hore

Andrew Hore – Quoted Micro 31 December 2018

NEX EXCHANGE 

China-based Gamfook Jewellery (GAMF) joined NEX on 24 December. The online retailer of customised jewellery was introduced at 15p a share, and the shares ended the first week at 15.5p (14p/17p).  That values Gamfook at £15.5m. Executive chairman Jindian Lin and his wife own 72.8% of Gamfook. A dividend based on 28% of profit attributable to shareholders is promised.

Part of the £407,000 Sanderson Capital Partners loan to Wishbone Gold (WSBN) has been converted into shares. The conversion of £258,500 was done at 0.1247p a share.

Milamber Ventures (MLVP) reported an increased interim loss of £343,000, up from £263,000. There were net liabilities at the end of September 2018, but the balance sheet has been improved by the issue of shares for cash and to pay off creditors. Problems at apprenticeship training company Eseential Learning are being sorted out.

PCG Entertainment (PCGE) had $913,000 in the bank and shareholders’ funds of £1.02m at the end of September 2018. There was a cash outflow from operations of £817,000 in the six month period to September 2018.

A subsidiary of Lombard Capital (LCAP) is issuing two bonds. The first is a 4% bond, raising up to £50m and expiring at the end of January 2022, and the other is a 4.5% bond, raising up to £90m and expiring at the end of January 2024. It is intended that both bonds should be lised on a recognised exchange.

AIM  

For a change the last major announcement of the year is a positive one. Gordon Dadds (GOR) has completed the acquisition of international law firm Ince UK and it will trade as Ince Gordon Dadds. Trading in the shares recommences on 2 January. The deal will cost £27.3m over four years, plus options over three million shares, and the combined group generated fees of £30.5m in the year to April 2018. The deal should be earnings enhancing in the current financial year.

Earthport (EPO) is recommending a 30p a share bid from Visa Inc. This values the payments technology company at £198m. The bid is 50% higher than the 20p a share placing price in October 2017, but lower than the 40.85p a share placing price in September 2014.

Chamberlin (CMH) improved its trading in the first half and the cash from the sale of the Exidor business has improved its balance sheet. The foundries business moved back into profit in the first half as demand continues to increase for turbo charger housings, which are used for hybrid cars as wells as conventinal ones. The company’s debt has been reduced from £10.5m at the end of September 2018 to £3.7m. The pension deficit has been cut from £4m in the last balance sheet to £1.5m.

Facilities management and security services provider Mortice Ltd (MORT) increased its interim revenues by 10% to $116.7m. Underlying pre-tax profit was 5% ahead at $2.3m. Net debt was $20.1m at the end of September 2018.

TUS International has published a circular for a general meeting in January in order to gain shareholder approval for the acquisition of the Telit Communications (TCM) automotive business, whose reorganisation is near completion.

In the six months to September 2018, Stanley Gibbons (SGI) continues to lose money although costs have been reduced. Revenues fell from £7.14m to £5.03m. Coins and medals are the part of the business still making a profit. The overall loss has been reduced from £2.93m to £2.37m.

The People’s Operator (TPOP) does not expect to appoint a new nominated adviser and the share placing with the owner of LycaMobile has been pulled. The investment of £1.3m in shares (29.9%) and convertible loan notes will not go ahead but the potential investor is considering its options. The AIM quotation will be cancelled on 3 January.

TSX-V quoted PetroTal Corp (PTAL) has gained an AIM quotation. The Peru-focused oil producer is developing its interests at Bretana and growing near-term production.

IT compliance and security services provider GRC International (GRC) increased its interim revenues by 54% to £8.91m, thanks to a boost from GDPR, but it moved from a pre-tax profit of £614,000 to a loss of £2.18m. There was additional investment following the flotation of the company in March. Cash is running out and an overdraft and a loan facility have been secured.

Gaming technology developer Nektan (NKTN) is raising £1.5m at 15p a share, although not all the shares will be issued until the company gets shareholder approval at the AGM on 7 February, and it will generate £2m from the sale of 57.5 of US subsidiary Respin. There are also plans to restructure the conversion terms of loan notes and a shareholder loan. These proposals are dependent on each other going ahead and on the successful negotiation with the HMRC over the payment terms for £2.9m of UK point of consumption tax. There was £1.4m in cash at the end of June 2018, which is similar to the cash outflow from operations in the preceeding 12 months.

Functional food ingredients developer Provexis (PXS) improved interim revenues from £124,000 to £194,000. The company’s Fruitiflow products are being more widely sold and the prospects for the deal with BY-HEALTH in China are positive. Pro forma cash was £556,000.

Veltyco Group (VLTY) is going to launch its own regulated financial trading brand in the first quarter of 2019, although this depnds on regulatory approval.

Oil and gas explorer and producer Cabot Energy (CAB) says that it is still trying to raise cash via a share issue and it would be at a large discount to the current share price. The cash needs to bre raised by the end of January in order to pay overdue creditors and provide working capital.

Building materials sector consolidator SigmaRoc (SRC) has announced its plans to redeem its £10m of 6% convertible loan notes. SigmaRoc is offering 105p for each 100p loan note, plus 0.378p a note in interest payments. The last acceptance date for the tender is 16 January.

Mobile commerce services provider Bango (BGO) will be loss-making in 2018, although there was an EBITDA in the fourth quarter. End user spend more than doubled to £550m. There should be £3.5m in the bank at the end of 2018.

WANdisco (WAND) has secured a three-year agreement with an American healthcare company worth £700,000. The deal involves WANdisco Fusion and comes via the sales partnership with IBM.

Paracale Gold is providing a loan of up to $1.224m to Goldstone Resources (GRL) to finance the development of the Akrokeri-Homase project in Ghana. This mine could be in production in 2020. Paracale will receive 40.35 million warrants exercisable at 1.2p a share, which replace existing warrants.

Mobile payments technology provider MobilityOne Ltd (MBO) has secured an agency and reseller agreement with MBP Solutions for the company’s products in Malaysia.

In the six months to September 2018, Vast Resources (VAST) reported a 8% increase in gold production to 13,352 ounes at the Pickstone-Peerless gold mine in Zimbabwe. There was a 61% increase in copper concentrate produced to 1,526 tonnes at the Manaila polymetallic mine and zinc concentrate produced has nearly doubled to 199 tonnes. Revenues increased from $14.9m to $21.9m. There was still a cash outflow from operations of $1.79m.

Michael Principe and Greg Genske have resigned from the board of TLA Worldwide (TLA) following the sale of its core US business. The agreement with SunTrust Bank to defer capital and interest payments has been extended to 31 January.

Phoenix Global Mining (PGM) has raised £358,000 at 28p a share. There is a warrant exercisable at 28p, lasting until the end of 2021, with every four new shares. The cash will be invested in the Empire copper, gold, silver, zinc and tungsten mine in Idaho, where news of the most recent drilling is expected. A new resource statement will be prepared and additional acreage acquired.

Urban Exposure (UEX) had committed new lending of £522m during 2018. It has secured a £165m loan facility for its joint venture with KKR, as well as a £32.8m loan from Aviva for a single transaction by the joint venture.

MAIN MARKET    

Nanoco (NANO) has achieved the third milestone in its cadmium-free quantum dots technology development and supply agreement with a US customer and triggered a £1.6m. This is the final milestone of three and they have generated £4.2m.

Robin Boyle has requisitioned a general meeting at Athelney Trust (ATY) in order to get himself reappointed. He also wants David Lawman and Paul Coffin to be appointed and the three existing directors, Dr Emmanuel Pohl, Simon Moore and Jemma Jackson, to be removed. The other two resolutions are to terminate Jason Pohl as alternate director and any other director appointed by the time of the general meeting on 22 January.

Standard list shell Stranger Holdings (STHP) is still awaiting UKLA approval for its proposed reverse takeover of waste energy technology developer Alchemy, which was announced in August 2017. Management is hopeful that the deal could go ahead by the end of the first quarter of 2019. Stranger had net liabilities of £435,000 at the end of September 2018.

Dukemount Capital (DKE) has forward-funded and pre-sold its first development at West Derby to a fund managed by Alpha Real Capital. Dukemunt will receive £570,000 for the site and the total funding package for the development will be £3m. The development involves demolishing the existing building and constructing 17 supported living appartments and retail space. Dukemount continues to manage and develop the project on behalf of the supported living housing association that has taken a 50-year lease.

Andrew Hore

Ian Pollard – Uncle Still Thriving On The Impoverished Wealthy

H&T Group HAT expects profit before tax for the full year to 31st December will be above market expectations following a strong fourth quarter in pawnbroking, with quality watches doing particularly well. The pledge book increased by11.6% on a year ago following the higher gold price and the personal loans book rocketed by 94.7%, after the introduction of a lower interest rate, long term product

Micro Focus International MCRO is increasing its interim dividend by 16.4% for the half year to the 31st October and afrer completion of its complex acquisition of HPE Software on the 1st September. The interim figures include results from HPE. as from 1st September. Revenue rose by 80.7% and pre tax profit by 28.7% ( or 33.8% at constant currency rates). Basic earnings per share fell by 9.5% but on an adjusted basis rose by 16%. Micro Focus is confident that its industry leading margins will ensure that it can deliver on its strategy which will be enhanced by further acquisitions.

System 1 group SYS1 (formerly Brainjuicer) After a fall of 9% in first half gross profit, trading in quarter three has continued to be worse than expected and expectations for gross profit for the full year are that it will show a 20% decline on the previous year. Profit before tax for the full year will be only a little over breakeven point. The cas position is however sound with a balance of £4.6m and no debt

Bango BGO saw total End User Spend for the year to 31st December, grow by  by 105%, from £132m to 271m. It has also now entered into partnership with Netflix to launch carrier billing for Netflix customers in Mexico, making carrier billing available to over 12 million Mexican customers.

Mattioli Woods MTW The six months to the end of November has produced another period of strong and sustainable growth with EBITDA margins for the first half substantially ahead of the 20% target.

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Quoted Micro 25 September 2017

NEX EXCHANGE

Shepherd Neame (SHEP) improved both beer volumes and like-for-like sales in its managed pubs last year. The first phase of investment in the brewery has been completed and new beer brands have been launched to replace the contract brewing of Asahi lager, which comes to an end next February. In the year to June 2017, revenues were 12% ahead at £156.2m, while underlying pre-tax profit was 8% higher at £11.2m. The total dividend has been raised by 3% to 28.35p a share, which is more than twice covered by earnings. Net debt was £60.1m because of investment in the brewery and pub acquisitions. In the first ten week of this financial year, like-for-like managed pub sales were up by 1.5% and beer volumes were ahead by 4.4%. Graeme Craig has resigned as brewing and brands director. Peel Hunt has become corporate broker.

Equatorial Mining and Exploration (EM.P) had £5,000 left in the bank at the end of June 2017 but since then £40,000 has been raised via loan securities. Equatorial has signed a three year exploitation rights agreement covering an open cast coal mine in central Nigeria, which will be called the St Leonard mine. The mining will be outsourced and production should build up over a six month period.

Kryptonite1 (KR1) is investing £200,000 in Vo1t Ltd, a digital custodian of bitcoin assets, for a 5% stake. Kryptonite1 is the first beta client.

Walls & Futures REIT (WAFR) says the refurbishment of the first supported housing investment in Stroud is complete and the first residents will move in during October. There is a pipeline of other supported housing projects.

Lombard Capital (LCAP) has identified an investment product around which it intends to build a business. This involves the provision of reinsurance to reduce the risks relating to investments secured on Senior Life Settlement (SLS) policies. The details of the product are still to be finalised. Lombard has issued a total of £150,000 of 7.5% convertible unsecured loan notes 2020, out of a potential £3m note issue. The conversion price is 10p a share and there are ten warrants for each £1 loan note exercisable at the same share price.

Primorus Investments (PRIM) is investing $200,000 in Stream TV Networks Inc, which has developed a glasses-free 3D technology. The strategy is to licence this technology for TVs and smartphones, followed by PCs and other uses. Stream is valued at $336m and plans to join Nasdaq in 2018. Primorus still has £350,000 in the bank.

AIM

Electronic coupon and loyalty technology developer Eagle Eye (EYE) reported faster than expected growth in revenues in the year to June 2017 and they are likely to grow by around one-third in the first quarter of this financial year thanks to the new John Lewis contract. Full year revenues improved from £6.5m to £11.1m, while the underlying loss was slightly lower at £3.8m. Recurring revenues were 68% of the total and this percentage is likely to increase. There was £3.7m left in the bank and there is likely to be net debt by the end of June 2018.

Safestyle UK (SFE) is not immune to the tough consumer climate but it still performed well in the first half of 2017. There was a small increase in interim revenues to £82.1m but there was a 15% fall in underlying pre-tax profit to £9m. The full year profit forecast is £16m, down from £20.4m. This means that the forecast dividend is flat at 11.3p a share. Safestyle is taking share in the replacement windows market and new manufacturing facilities will make it more efficient.

Bango (BGO) says that end user spend via its mobile billing platform doubled to £92.3m in the first half of 2017. This prompted Cenkos to lower its forecast loss for 2017 from £800,000 to £600,000 and raise its 2018 profit forecast from £1.1m to £1.5m. There is room for improvement if there is further roll outs around the world by Amazon.

Electricity supplier Flowgroup (FLOW) continued to make significant losses in the first half of 2017 but it has raised £25m to improve the strength of its balance sheet. The rate of customer acquisition will be lower but Flowgroup should make more money from the customers it does obtain. Breakeven is possible by the end of 2018 and there could be positive cash flow in 2018.

MAIN MARKET

Macfarlane Group (MACF) has acquired Nottinghamshire-based packaging distributor and manufacturer Greenwoods for up to £16.75m, which was partly funded via an oversubscribed £8m placing at 66p a share. The deal helps Macfarlane move into the clothing and apparel sector. The acquisition will be earnings enhancing in its first full year.

Sportech (SPO) is undergoing a strategic review and it expects to update shareholders on 9 November. Chief executive Ian Penrose, who is leaving at the end of 2017, and his wife have sold 300,000 shares at an average price of 95.2916p each, which takes their stake to 561,800 shares.

Last Thursday, telecoms-focused cash shell Stapleton Capital (STC) joined the standard list. Stapleton raised £1.5m, £1.4m net, at 5p a share. The potential acquisition would be valued at between £2m and £3m. Cash shell Baskerville Capital (BASK) started trading on the standard list last Friday, having raised £1.8m, £1.65m net, at 5p a share. The focus of the Chris Akers-backed shell is on companies in the technology sector that have strong management and the potential for scaling up their business. Rodger Sargent is a director of Stapleton and Baskerville, and he was previously a founder of the shell that became Satellite Solutions Worldwide (SAT).

Standard list shell Spinnaker Opportunities (SOP), which is focused on the energy and industrial sectors, still has £1.1m in the bank. Management is pressing ahead with discussions for the acquisition of the most attractive of its potential acquisitions.

Intelligent Energy Holdings (IEH) expects its current year revenues to decline from £91.8m to around £21m but the loss after tax should fall from £82.7m to around £24m. If the large Indian contract is excluded then the decline in revenues is from £6.7m to £4.3m. There is still £2.7m in the bank but this will not last long if the loss is not stemmed. The cash burn is currently £1.6m per month, although an R&D tax credit is anticipated in the next couple of months. Management has put the fuel cell technology developer’s assets up for sale. The fact that some of these assets are part of the security of the company’s £30m of convertible loan notes could prove a constraint. There is likely to be little, if anything, left for ordinary shareholders. That led to the share price more than halving to 2.45p.

Andrew Hore

Daily Actions – UK Main & AIM markets 11012016

IntellisysLogoDaily Actions is a daily summary analysis of changes in short term actions from our Daily Recs – AIM and Daily Recs Main markets reports. This report is typically distributed before the open of trading in London.

AIM Market

ST Rec. changed
Basic Resources From To
Mariana Resources Buy Neutral
Chemicals From To
Plant Healthcare Neutral Buy
Construction From To
React Energy Buy Neutral
Michelmersh Brick Holdings Neutral Buy
SWP Group Neutral Sell
Health Care From To
Deltex Medical Group Buy Neutral
Industrial Good & Services From To
Dart Group Sell Neutral
Elektron Technology Neutral Sell
Nakama Group Buy Neutral
Impellam Group Sell Neutral
Restore Sell Neutral
21st Century Technology Neutral Sell
Oil & Gas – Explorers From To
Borders & Southern Petroleum Neutral Buy
Oil & Gas – Producers From To
Hydrodec Group Buy Neutral
Pantheon Resources Buy Neutral
SeaEnergy Neutral Buy
Retail From To
CVS Group Sell Neutral
Technology From To
Bango Neutral Buy
SciSys Sell Neutral
Telecommunications From To
Mobile Streams Neutral Buy

 


 

Main Market

ST Rec. changed
Aerospace & Defence From To
Smiths Group Buy Neutral
Beverages From To
SAB Miller Neutral Sell
Chemicals From To
Victrex Neutral Buy
Building Materials & Fittings From To
Wolseley Buy Neutral
Heavy Construction From To
Costain Group Neutral Sell
Morgan Sindall Group Neutral Sell
Engineering & Machinery From To
Castings Sell Neutral
Vesuvius Neutral Buy
General Retail From To
JD Sports Fashion Sell Neutral
Insurance From To
Amlin Neutral Sell
Leisure & Hotels From To
Rank Group Neutral Sell
Media & Entertainment From To
Sky Neutral Sell
Mining From To
Lonmin Neutral Buy
Oil & Gas From To
Royal Dutch Shell B Neutral Buy
Pharmaceuticals & Biotechnology From To
Dechra Pharmaceuticals Sell Neutral
Oxford Biomedica Buy Neutral
Real Estate – REIT From To
The Local Shopping REIT Sell Neutral
Town Centre Securities Sell Neutral
Speciality & Other Finance From To
Aberdeen Asset Management Buy Neutral
Support Services From To
Aggreko Neutral Buy
Bunzl Neutral Sell
Rexam Neutral Sell
RPC Group Sell Neutral
Telecommunication Services From To
Cable & Wireless Communications Neutral Sell
Utilities From To
National Grid Sell Neutral

 

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