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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

Andrew Hore – Quoted Micro 11 May 2020

AQUIS STOCK EXCHANGE

British Honey Company (BHC) says its hand sanitiser has generated revenues of more than £500,000 since late March. This helps to offset the reduction in sales of alcohol products. There is sufficient alcohol available for the company’s requirements for the rest of the year. British Honey has appointed finnCap as corporate adviser and joint broker with Stanford Capital.

National Milk Records (NMRP) increased first quarter revenues by 1% to £5.61m. The growth comes from testing revenues with other revenues declining slightly. The company remains positive about the prospects for the dairy sector. The supply chain is rebalancing following a drop in demand for milk from coffee shops.

NQ Minerals (NQMI) says that the total gold resources at the Beaconsfield gold mine in Tasmania have increased to 1.454 million tonnes at 10.3g/t for 483,000 ounces of gold. This excludes any estimate for the upper section of the mine.

World High Life (LIFE) says the Love Hemp brand has increased online sales by 39% each month since January. The brand’s CBD products are being stocked by more retailers.

TechFinancials (TECH) has signed a separation agreement with the cofounders of Footies Ltd and it will own 100% of the business. The cofounders get the original source code from May 2019. TechFinancials is ending its B2B brokerage activities by 1 November.

Investment company Gunsynd (GUN) has consolidated 85 shares into one new share.

Adnams (ADB) has appointed Jenny Hanlon to replace Stephen Pugh as finance director, which is a role he has held for 16 years.

EPE Special Opportunities (ESO) reported a NAV of 266.48p a share at the end of April. That represents a decline from 317.18p a share in the latest quarter.

AIM

Best of the Best (BOTB) has sparked another profit upgrade following its trading statement. finnCap has raised its 2019-20 by 27% to £3.8m.

IP investment company Tekcapital (TEK) increased net assets by two-fifths to $22.3m, which is equivalent to 35 cents a share. The biggest gain in value was for Guident, where nearly $7m was added to the valuation. Alternative salt developer Salarius and medical devices company Bellascura also generated good increases. Hi-tech eyewear developer Lucyd’s value fell by nearly $2m. Tekcapital recently raised £925,000 at 10p a share. This will be invested in portfolio companies.

Lower costs meant that ClearStar (CLSU) made a lower loss than expected in 2019. The background checks provider had net debt of $300,000 at the end of the year and this has increased to $1m. The year commenced with a record order book but there have been delays and reductions in volumes.

Genedrive (GDR) has raised £7m at 80p a share to finance the development of two COVID-19 tests.

Filta Group Holdings (FLTA) has launched FiltaShield, a COVID-19 sanitising services. It has also combined with a technology company to provide temperature screening devices.

VR equipment supplier Immotion (IMMO) has raised money for the second time this year. It has raised £1.35m at 2.5p a share, which is much lower than the 7.25p placing price in February.

Beximco Pharmaceuticals (BXP) says that Bangladesh’s economic slowdown and disruption to supplies due to COVID-19 could hamper the fourth quarter of the year to June 2020. Even so, Beximco still expects to report annual sales growth.

ZOO Digital (ZOO) says that strong cash collections mean that it had cash of $700,000 at the end of March 2020.  Demand for localisation services weakened at the end of March but demand is recovering.

Hargreaves Services (HSP) has conditionally exchanged contracts for a 79 acre plot on the Hatfield site in South Yorkshire, which will be used to develop a national distribution centre for a retailer. The company is trading in line with expectations other than in the property business, where planned land sales will not complete before the end of May as originally anticipated.

MAIN MARKET

JD Sports Fashion (JD.) has been told by the CMA that it has to sell Footasylum. The formerly AIM-quoted footwear retailer was acquired last year. An appeal is being considered.

BATM (BVC) has launched an antibody test for COVID-19 and sales have begun to European countries.

Argo Blockchain (ARB) mined 319.2 bitcoin during April, down from 333.8 the previous month. The revenues were £1.8m in each month.

Andrew Hore

Andrew Hore – Quoted Micro 27 April 2020

AQUIS STOCK EXCHANGE

Cannabis products-focused company Sativa (SATI) has received a bid approach from StillCana Inc, which has built two high volume CBD extraction facilities in Europe. StillCana is Europe’s largest producer of CBD distillate and isolate. StillCana plans to offer 0.33651 of one share for each Sativa share. Sativa shareholders would own 65% of the enlarged business. If StillCana does not go through with the bid it may be required to pay Sativa £1m as a break fee. Trading in Sativa shares has been suspended. Peterhouse has been appointed as corporate adviser.

In the six months to December 2019, there was a £224,000 cash outflow at Imperial X (IMPP) as it assessed the way forward. The new investing strategy is focused on acquiring royalties in the oil and gas sector. There was £179,000 in the bank at the end of 2019. Imperial X has subsequently raised £27,700 at 2.5p a share.

Primorus Investments (PRIM) had net assets of £4.76m at the end of 2019. One of the successes has been the investment in Greatland Gold (GGP) and TruSpine Technologies is moving towards a flotation.

Cadence Minerals (KDNC) owns 16% of AIM-quoted European Metal Holdings (EMH) whose shareholders have approved the £25.8m investment for a 51% stake in the holder of the Cinovec licences in the Czech Republic.

NQ Minerals (NQMI) says that the resource at the Barnes Hill nickel project to 25Mt at 0.6% nickel and 0.05% cobalt on a 0.25% nickel cut-off grade.

Arbuthnot Banking (ARBB) n on-executive director Nigel Boardman has acquired an initial 5,020 shares in two amounts (1,500 shares at 960p each and 3,520 shares at 1010p each).

Altona Energy (ANR) has extended the closing date of its open offer until 12 May and it may consider a further extension if the market uncertainty continues.

AIM

Cyber security services provider Shearwater (SWG) has raised £3.75m at 240p a share. Directors David Williams and Phil Higgins are each investing £125,000. A new £4m, 3-year bank facility has been negotiated. In the year to March 2020, Shearwater generated revenues of £33m and underlying EBITDA was £3.2m. There has been a move towards higher margin business. Management believes that COVID-19 will provide opportunities to expand the business. There are acquisition opportunities with revenues of between £2m and £20m.

Musical instruments retailer Gear4Music (G4M) has confirmed that profit for 2019-20 was better than expected and gross margins improved from 22.8% to 25.9%.

Last year was tough for transport and logistics firm Xpediator (XPD) and this year won’t be easy, but it has a good base and the new Southampton warehouse will come on stream early in 2021. In 2019, revenues grew but lower freight forwarding margins and higher overheads hit pre-tax profit and it fell to £5.2m. Xpediator should still be profitable in 2020 and the second quarter tends to be a weaker period. A scrip dividend of 1.05p a share has been declared.

Health monitoring equipment supplier LiDCO (LID) had a strong start to its new financial year thanks to strong demand from the NHS. Since January 195 monitors have been sold, which is nearly as many as last year. The pre-tax loss is expected to continue to reduce and LiDCO has started to generate cash from operations.

Foreign exchange provider Equals (EQLS) increased first quarter revenues by one-third to £8.3m. The majority of this was business to business revenues. There was a sharp decline in travel money business in March.

Dragon Capital Group is offering a purchase facility to minority shareholders in Dragon-Ukrainian Properties and Development (DUPD) as part of the plan to cancel the AIM quotation. The purchase price is 10p a share.  Shareholder approval for the departure from AIM will be sought at the general meeting in Kiev on 6 May.

DBAY Advisers is building up a stake in Wynnstay Group (WYN) and it has reach ed 6.47%. It is taking advantage of the decline in the share price, although it has rebounded strongly in the past few weeks. Investec has sold most of its stake. Trading has been subdued in the current financial year.

Dawn Ward and Tracy Lewis have resigned from the board of Staffline (STAF) and the company is seeking replacements. Henry Spain Investment Services has increased its stake in Staffline to 13.6%.

Mark Greenwood has taken his stake in Richland Resources (RLD) to 29.1%.

MAIN MARKET

LED light fittings and wiring accessories supplier Luceco (LUCE) reported 2019 figures in line with expectations. Revenues were %5 ahead at £172.1m and improved margins meant that pre-tax profit jumped from £6.3m to £15.8m. Revenues and profit are expected to fall back this year due to COVID-19 with the major hit coming in the second quarter after modest supply issues in the first quarter. Cash outflow should be limited to £500,000 a month while lockdowns are in force in Europe. There are bank facilities available to the group. Looking further ahead, Luceco is involved in a growth market and there should be acquisition opportunities.

J Smart Contractors (SMJ) reported a decline in interim pre-tax profit from £1.12m to £265,000. Net cash was £13.7m at the end of January 2020. An unchanged interim dividend of 0.95p a share has been announced.

Cathay International Holdings (CTI) has launched a 16.7456-for-one open offer at 1.5p each, plus a subscription to at the same share price. This could raise up to £105m. This will reduce borrowings and provide cash to put into investee companies.

BATM (BVC) has received a $31m order for 1,000 critical care ventilators. One-quarter of the cash has been paid upfront and the rest will be paid when the ventilators are delivered later this year.

A trading statement by fasteners supplier Trifast (TRI) sparked a 6% 2019-20 profit downgrade to £17.2m by finnCap.

Motor dealer Lookers (LOOK) says that sales and margins have fallen so far this year. Operating costs have been reduced. Sales of former sites are helping to reduce net debt, which is £65m. The fraud investigation has led to a £4m non-cash charge and there could be further write-downs.

Andrew Hore

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 2 March 2020

NEX EXCHANGE

Incanthera (INC) raised £1.21m at 9.5p a share prior to joining NEX on 28 February. The price at the end of the first day of dealings was 10.5p (9.5p/11.5p). There were no trades. Incanthera is developing Sol, a topical product for the treatment of solar keratosis and prevention of skin cancer, which could be licenced to a partner within 18 months.

Mechanical and electrical installation services provider Field System Designs Holdings (FSD) continued to be hit by problems with its energy from waste customer in the first half. Revenues dipped from £11.8m to £11.5m, but it went from profit to loss due to litigation costs. The water sector is the main focus of the company. The new AMP7 water investment period starts in April. There was cash of £4.38m at the end of November 2019. The NAV was £3.28m compared with a market capitalisation of £2.4m.

Employee-owned business finance provider Capital for Colleagues (CFCP) broadly maintained its NAV at 43.44p a share at the end of August 2019. A £800,000 investment valuation gain plus a £126,000 write back of provisions was offset by loan impairments of £908,000. Management believes that several investee companies will have encouraging developments this year.

Ashley House (ASH) has decided to withdraw from NEX on 26 March and maintain its AIM quotation. Cash remains in short supply due to the failure to receive more than £1m owed by two debtors. More cash needs to be raised. Non-core assets could be sold. There are good prospects for the business. Three memoranda of understanding / framework agreements have been signed with institutions. There is a pipeline of nine potential affordable housing schemes, four of which have planning permission.

AfriAg Global (AFRI) says it intends to bid for the rest of Apollon UK, which has the right to 95% of net profit of Apollon Formularies Jamaica and the right to acquire a 49% stake in that business. AfriAg owns 2.68% of Apollon UK and is trying to satisfy regulatory requirements for the offer to go ahead.

PCG Entertainment (PCGE) had less than $24,000 left in the bank at the end of September 2019. A proposed deal fell through last year and management is considering a new strategy which could be announced in a few weeks. Trading in the shares remains suspended.

Eastinco Mining and Exploration (EM.P) has signed a joint venture agreement with Dynasty Construction, which owns 600 hectares of land in Rwanda, to explore for tin, tungsten and tantalum. Eastinco says the operation of the wash plant at the Kuaka mine has been delayed. It should be in operation by the end of April.

Dozen Savings 5% secured bonds 1 March 2020 have been withdrawn from NEX.

AIM

Netcall (NET) increased its total annual contract value by 10% to £16.6m at the end of 2019. The customer engagement software provider has been increasing the sales of its low-code products, which represent one-third of group revenues just a couple of years after the products were launched. The Liberty Connect conversational messaging platform has generated the first orders.

Fashion retailer Quiz (QUIZ) has been performing poorly almost since it joined AIM and many investors have lost patience. Fidelity sold its 5% stake, but one investor that believes it is a good time to buy the shares is Cavendish Asset Management, which has more than doubled its stake from 5.24% to 11.8%.

Redx Pharma (REDX) has terminated merger discussions with Yesod Bio-Sciences because the offer was not high enough. Redmile Group will provide up to £26.3m of funding to Redx. Redmile will subscribe for 11.5 million shares at 11.2p each, which is higher than the market price in the past six months. There will also be a £5m short-term loan and a £20m convertible loan. The share subscription will provide enough cash until April while the terms of the loans are agreed.

Cora Gold (CORA) has announced further drill results for the Sanankoro gold project in the Yanfolila gold belt in southern Mali. The results confirm significant additional mineralisation with some grades above 2g/t. There are more results to come.

finnCap is not changing its forecast for Surface Transforms (SCE) following its seven month figures. The carbon fibre brake discs developer is changing its year end from May to December. In the 17 months to December 2020, revenues of £3.3m and a loss of £1.7m are forecast.

Empire Metals (EEE) has raised £600,000 at 1p a share in order to invest in its assets in Georgia and identify other assets.

United Oil and Gas (UOG) has completed the acquisition of Egyptian oil and gas assets from Rockhopper Exploration (RKH) and it was readmitted to AIM on 28 February.

Eden Research (EDEN) is raising up to £10.6m at 6p a share via a placing and open offer. The biopesticides developer will spend the cash on gaining regulatory approval and registration for its products, as well as on further development.

AssetCo (ASTO) had cash of £17.1m at the end of September 2019 and since then a further £11m has been received. There are also bonds of £3.5m. Grant Thornton is appealing the judgement for negligence and the decision of the Court of Appeal should be made in the summer.

Billing Services Group (BILL) has completed the sale of its business and will distribute cash to shareholders by the end of March.

Mereo BioPharma (MPH) says it received positive feedback from the FDA following an end of phase 2 meeting for Setrusumab, a treatment for osteogenesis imperfecta in the young. A phase 3 study programme has been agreed.

STM Group (STM) has confirmed previous expectations for its 2019 figures which will be reported on 24 March. An underlying pre-tax profit of £2.5m is forecast.

Firestone Diamonds (FDI) wants shareholder permission to leave AIM. The general meeting is on 13 March. A weak diamond market and lower recovery levels than expected have made it difficult to finance the debt burden. Leaving AIM will reduce costs and there has been little liquidity anyway.

MAIN MARKET

Packaging supplier Macfarlane (MACF) increased its pre-tax profit by 10% to £12m. The full year dividend was raised by 7% to 2.45p a share. Both distribution and manufacturing made higher profit contributions. This year’s profitability is ahead of 2019, so far.

Personal care products supplier InnovaDerma (IDP) has a lot to do to make its full year forecast. Interim revenues increased from £3.9m to £5.4m and there was a slightly lower loss. There is £ in the bank but that could recover to more than £2m by the end of June 2020.

Chief executive George Bennett has leant $1m to Rainbow Rare Earths (RBW) to fund exploration and operations. He already has a 8.6% stake and there are warrants over 2 million shares exercisable at 4.55p each that have been issued in return for the loan, which does not have an interest charge.

Commercial aircraft leasing company Avation (AVAP) trebled its interim profit to $45.2m, including an unrealised gain of $37m on aircraft purchase rights, and the net asset value was 15% higher at $4.29 a share. This is equivalent to 325p a share. The dividend was raised by 5% to 2.1 US cents a share.

Trading in the shares of Mila Resources (MILA) has been suspended following an agreement to progress with the purchase of E-Tech Metals in a share deal. The transaction is subject to due diligence. The attraction is high grade neodymium and praseodymium mineralisation, which are important rare earths, in the Eureka rare earth project in Namibia.

BATM Advanced Communications (BVC) has won a $4m cyber contract from an existing government customer. This customer has and will generate contracted revenues of more than $18m.

Investment company London Finance and Investment (LFI) increased net assets by 7% to 63p a share at the end of 2019, although it fell to 62.6p a share by the end of January. An increase in the value of the stake in AIM quoted cake maker Finsbury Food (FIF) more than offset declines elsewhere in the six months to December 2019.

Andrew Hore

Andrew Hore – Quoted Micro 17 February 2020

NEX EXCHANGE

NEX and AIM-quoted Arbuthnot Banking Group (ARBB) says that there has been an increase in the level of confidence in its markets since the General Election. That was too late to have much effect on the 2019 results, but full year pre-tax profit will be at the upper end of expectations. Last year, customer loan balances rose by 31% and deposits by 22%.

Sativa Group (SATI) says that it welcomes the guidance from the Food Standards Agency on the safe use of CBD products and the timetable for novel food authorisation. Management points out that Sativa’s products do not include THC. Sativa expects to report 2019 gross profit slightly higher than expectations on lower than marginally lower than expected. Goodbody Wellness has piloted three retail stores, but they did not perform as well as expected. PhytoVista Laboratories has completed more than 3,000 tests on cannabis-based products. That includes Sativa’s own products and a new sports range is near launch. Medicinal cannabis-based development is focused on veterinary treatments.

EPE Special Opportunities (ESO) has increased its NAV by 55% to 317.2p a share following a strong performance by Whittard of Chelsea and a recovery in the share price of fully listed Luceco. Pharmacy2U continues to grow strongly. Last year, 2.3% of the shares in issue were bought back by the company. New investments are being sought for available funds.

Ethical housing investor Walls and Futures REIT (WAFR) increased its NAV by 15% to 106p a share in the year to January 2020. Chief executive Joseph McTaggart bought 1,991 shares at 61.75p each.

Hellyer gold mine operator NQ Minerals (NQMI) has raised a further £210,000 at 7p a share.

Investment company Primorus Investments (PRIM) has benefitted from the sharp share price rise in Greatland Gold (GGP) and the stake is worth two-fifths of the company’s market value. The current profit is £1.25m. Investee company TruSpine is on course to float in London this year. The spine stabilisation devices developer has gained a new cornerstone investor. Primorus is debt free.

Trading in the shares of Altona Energy (ANR) has been suspended because it has not published its annual report for the year to June 2019. Cash needs to be raised to keep the company going and management says that shareholders will be invited to participate in a fundraising. The company says it expects to publish the report in the next two weeks and blames the delay on a change of auditor and a new accounting treatment for its exploration licences. Final terms for the acquisition of the previously announced new petroleum exploration licence application are being negotiated.

SG Recruitment Ltd (SGRL) majority shareholder and chief executive David Sumner has also taken on the role as chairman after the resignation of Alan Kitchin and Katie Hiess from the board.

AIM

Brickability (BRCK) has acquired McCann Roofing Products for £2.75m. Essex-based McCann imports roofing and building products from Europe and generated a 2019 pre-tax profit of £700,000 on revenues of £8.2m. This deal adds additional suppliers to the group and should be immediately earnings enhancing.

Nostra Terra Oil and Gas (NTOG) has convened the requisitioned general meeting on 3 March. Eridge Capital wants to remove Matt Lofgran and Ewen Ainsworth from the board and replace them with Andrew Morrison. Eridge was previously known as former AIM company New World Oil and Gas. Nostra Terra’s subsidiary has loans that have a key man clause which stipulate that Lofgran has to be president of the subsidiary unless it give consent or there will be a default.

Drug discovery platform developer e-Therapeutics (ETX) has overhauled its board and raised £1.6m at 3p a share. Former Silence Therapeutics boss Ali Mortazavi becomes executive chairman. Ian Ross is stepping down to concentrate his role at Silence Therapeutics. Chief executive Ray Barlow and finance director Steve Medlicott are also leaving. An additional independent non-executive director will be appointed.

Gemfields Group Ltd (GEM) joined AIM last Friday. The share price ended the day at 11.7p.

Bidstack (BIDS) expects to have generated £150,000 from programmatic advertising for video games. That is much lower than previously hoped because it is taking much longer to get advertising agencies to take in-game advertising seriously. There was cash of £3.14m at the end of 2019 following a loss of £5.3m. There was £6m in the bank at the end of June 2019. First half revenues will still be small.

Knights Group Holdings (KGH) has acquired Nottingham law firm Fraser Brown Solicitors for up to £8.28m in cash and shares. This follows the purchase of Croftons Solicitors, which is based in Manchester, for up to £2.8m. A new revolving credit facility of £40m has been agreed and it lasts until June 2023.

Octopus Investments has cut its stake in Staffware (STAF) from 13.2% to 0.53%. Gresham House Asset Management increased its stake from 6.7% to 10.6%.

Filta Holdings (FLTA) says it should make an EBITDA of £3.2m in 2019. Cost savings and investment software will help the fryer management services provider to produce a much better performance in 2020.

Keystone Law (KEYS) has traded in line with expectations. Pre-tax profit is forecast to increase from £5.1m to £5.7m.

Hormonal disease treatments developer Diurnal (DNL) says that the FDA has accepted the new drug application for Akindi Sprinkle as a treatment for infants and children. Approval could be gained by the autumn and it will be the only licenced treatment specifically for children. There was cash of £4.6m at the end of 2019.

MAIN MARKET

Automotive information publisher Haynes Publishing (HYNS) is recommending a 700p a share bid from Infopro Digital, valuing the company at £114.5m. The two companies fit well together and will have greater scale.

Finance provider S and U (SUS) says that its figures for the year to January 2020 will be in line with expectations and trading has been getting better in the past few weeks. The used car market has held up well even though the new car market is week. This is why second hand car finance provider Advance should produce another record performance in 2020-21. Property bridging finance provider Aspen has made the progress hoped because of delays in repayments and the loan book is lower than expected, but it is still a young business. A 2019-20 pre-tax profit of £35.5m is expected to increase to £39m this year. The latest total dividend will be raised by around 5% to 124p a share.

JLEN Environmental Assets (JLEN) is raising cash from the placing of up to 49.7 million shares. This will fund a pipeline of investments. The bookbuild will close on 26 February.

Ultimate Products (UPGS) says that sales growth is easing this year with first half revenues 3% ahead at £67.7m. There is also uncertainty about the supply of products from China. Even so, Shore is maintaining its full year pre-tax forecast of £8.77m, a small increase on last year. That could change.

Zenith Energy (ZEN) is widening the geographic scope of its activities by negotiating to acquire an oil production licence in West Africa. Zenith has raised £135,000 through a share issue at 1.5p a share. It has also entered into an equity sharing agreement with a consortium of institutional investors. The nominal amount raised is £810,000, but the ultimate amount will depend on the share price when each tranche is paid over the next 12 months. The benchmark price is NOK0.2231/share, equivalent to around 1.85p. The share price is 1.43p, so the first instalment is likely to be below the notional level if there is no share price recovery.

BATM Communications (BVC) has gained a $1.3m order from a Middle East-based poultry firm for its agri-waste treatment system.

Fasteners supplier Trifast (TRI) says market conditions are more challenging and there has been a slow start to the fourth quarter, which is normally the strongest. Margins have fallen and profit will be at the lower end of the range of forecasts. The Coronavirus has led to the extended closure of Chinese sites, but this is a small percentage of production.

Cathay International Holdings (CTI) says that production at its plants is on hold or preparing to gradual resume production because of the effects of the Coronavirus. The hotel business has been hit by a sharp reduction in occupancy rates.

Avation (AVAP) has made firm orders for two ATR 72-600 aircraft that will be leased to US-Bangla, the largest private airline in Bangladesh.

Predator Oil and Gas (PRD) is raising £3.56m at 4p a share. This will finance the drilling of the Moulouya well in Morocco and provide cash for further investment in Trinidad.

Andrew Hore

Andrew Hore – Quoted Micro 13 January 2020

NEX EXCHANGE

NQ Minerals (NQMI) says that in 2019 the Hellyer mine in Tasmania produced 24,980 tonnes of lead concentrate, 15,646 tonnes of zinc concentrate and 77,853 tonnes of pyrite concentrate. Metal recovery has improved with average lead recoveries of more than 50%. The focus will be on generating lead revenues. Additional high-grade underground resources have been acquired from Bass Metals, which was subleasing the area. The purchase includes 1.175 million tonnes of underground JORC resources.

Inqo Investments Ltd (INQO) is investing natural insecticide developer Kentegra Biotechnology. The Kenya-based company produces pyrethrum, a natural ingredient from the chrysanthemum flower for use in the home, agricultural and pharma markets. There is a shortage of supply of pyrethrum, which can only be produced in a limited number of places around the globe. There is a move away from synthetic versions of the ingredient.

Panther Metals (PALM) has completed its move to the standard list.

Black Sea Property (BSP) has raised €4.79m via a placing at 1.1 cents a share. The cash will be used for property investments. Mamferay Holdings, which is owned by majority shareholder Phoenix Capital Holdings, is swapping €1.4m of debt for shares at the same price.

Equatorial Mining and Exploration has changed its name to Eastinco Mining and Exploration (EM .P).

Wishbone Gold (WSBN) says that the 100p-for-one share consolidation will take effect on 21 January.

EPE Special Opportunities Ltd (ESO) reported a NAV of 273.9p a share for the end of 2019.

AIM

Packaging equipment supplier Mpac (MPAC) says that the 2019 profit is going to be much better than expected. The pension deficit should be eliminated by 2024.

Ultrasound simulation equipment developer Intelligent Ultrasound (MED) expects its 2019 revenues to grow to between £5.7m and £5.9m. There will be a slightly higher loss due to higher development spending. There was £7.3m in the bank at the end of 2019. The agreement signed with FUJIFILM SonoSite Inc will help sales this year in the training market.

Shield Therapeutics (STX) has licenced its Ferracru/ Accrufer iron deficiency treatment to Beijing Aosaikang Pharmaceutical for an upfront payment of $11.4m. This means that there should be net cash of £7.5m at the end of 2020. A further $11.4m payment is due when the treatment gains approval in China, following a clinical trial funded by the licensee, possibly in 2023. There could be further milestone payments of up to $40m depending on sales. Ongoing royalties on sales will be 10% or 15%,

Biopesticide products developer Eden Research (EDEN) says that its three EU-registered active ingredients have been approved for use in organic farming. A one-year exclusive agreement with Corteva Agriscience, will give the company time to evaluate Eden’s Sustaine encapsulation technology for use with seeds. Coreva could be granted exclusive distribution rights in the EU, Turkey, Russia and Ukraine.

Accrol Group (ACRL) management believes it has turned the fortunes of the toilet paper manufacturer around. Even so, it still lost £3m in the six months to October 2019. Net debt was £24.8m and this could fall to £20m by the end of April.

Telecoms services provider Maintel (MAI) has warned that public sector contracts continue to be delayed. finnCap has cut its 2019 pre-tax profit forecast from £10.4m to £8.1m, while the 2020 estimate has been reduced by one-quarter to £8.8m.

Software company CloudBuy (CBUY) wants to leave AIM and it expects to save £100,000 a year in overheads. Lyn and Ronald Duncan subsequently sold 11.1 million shares at 0.414p each. The share price has fallen but it is still 0.6p.

Promotional products software supplier Altitude Group (ALT) has signed a strategic alliance with the Advertising Speciality Institute, which will use its software platform.

Surface Transforms (SCE) expects more contract announcements with OEMs this year. In the seven months to December 2019, revenues were £1.45m, nearly treble the same period in the previous year, but lower than expected due to delays. The new financial year end is March. There was £768,000 in the bank at the end of 2019 and a further £425,000 has already been received.

Asimilar Group (ASLR) has raised £6.8m at 40p each. This will be received in two tranches. Formerly known as YOLO, the company will invest the cash big data, machine learning, telematics and internet of things businesses.

MAIN MARKET

Avation (AVAP) has started a strategic review, which could include the sale of the aircraft leasing business. Avation has 49 aircraft with an average fleet age of 3.7 years. It has also purchased a spare engine that can be leased.

InnovaDerma (IDP) grew interim revenues by 28% to £5m. This represents a slowdown in growth in the later part of the period and is slightly lower than expected. Skinny Tan was responsible for most of the growth. The second half will benefit from the launch of new skincare products in Superdrug.

Pembridge Resources (PERE) says its Minto Explorations business has received a $5.4m payment for copper concentrate produced during December. The Minto mine produced 2,247dmt of copper concentrate in the fourth quarter 2019.

BATM Advanced Communications (BVC) says that its molecular diagnostics business Ador Diagnostics has received its first commercial order from an Italian customer for meningitis testing.

Andrew Hore

Andrew Hore Quoted Micro 9 December 2019

NEX EXCHANGE

GP clinical software supplier DXS International (DXSP) broadly maintained its interim revenues at £1.66m. Admin costs were lower so DXS returned to profit. There was also a higher tax credit. It made a pre-tax profit of £90,000 in the six months to October 2019, while the post-tax figure was £202,000. The final accreditation for the NHS Digital Care Services (GP IT Futures) contract is due this month. This will provide a positive outlook for the rest of this year and next year.

Formation Group (FRM) is investing £10m in Irish property development sites in Dublin, Limerick and Kildare. These sites were owned by major Formation shareholder Zandra Holdings, which also shares directors with Formation. Market Equities is buying the sites and it will be 45%-owned by Formation and 55% by Zandra.

Eight Capital Partners (ECP) has bought a 59.9% stake in Financial Innovations Team, which provides corporate finance services. Eight Capital also owns 40% of Finance Partners Group, which owns the rest of Financial Innovations Team. The strategy is to eventually become the single direct owner of the business.

Hellyer generated record profit for NQ Minerals (NQMI) in November. The gold mine has provisionally reported net profit before tax of A$2.44m on revenues of A$5.64m.

Belvedere Leisure Resorts has obtained a NEX quotation for its 6.25% secured bonds. Up to £25m of bonds can be issued. The company is a subsidiary of Belvedere Leisure Park, which owns a site in Dumfries & Galloway with planning permission for a lodge park resort of 444 holiday lodges.

SAPO (SAPO) has joined the NEX Growth Market and set its sights on gaining some of the £200m that the government has set aside to make sure that rural people can have fast broadband.

Gunsynd (GUN) has bought a 7.67% stake in Kolosori Nickel, which owns 80% of the Kolorosi prospect in the Solomon Islands. Gunsynd has a 90-day option to purchase a further 22.33%. Gunsynd’s stake in Sunshine Minerals will be diluted to 15.5%, if Malachite Resources earns a 15% stake by financing geological data and technical work.

TechFinancials (TECH) is dropping its AIM quotation and concentrating on the NEX-quotation. The company is reviewing the future of its original financial trading software operations and closing its loss-making business-to-consumer operations. There will be a $2.6m write-off. Blockchain-based ticketing business Footies has still not signed up a client. The first version of the platform is being tested with clubs and the feedback is helping to focus development. The focus is mid-sized clubs. Diamond platform developer Cedex is still commercialising its technology and TechFinancials may consider selling its stake.

Block Commodities (BLCC) has sent a circular to shareholders to convene a general meeting to expand the investment strategy in terms of cultivation of medicinal cannabis, as well as to gain approval for issuing more shares.

Trading in Welney (WENP) shares has been suspended because it has not published its accounts for the year to June 2019.

AIM

A large contract has been won by telecoms marketing technology provider Pelatro (PTRO) has been won in the form of a recurring revenue deal rather than a one-off licence. This has led to short-term downgrades, but the longer-term prospects are better. The contract is worth up to $12m over five years, with $10m fixed and the other $2m coming from gain share with the global telecoms client. Pelatro has 50% of next year’s forecast revenues of $8m in the form of recurring revenues. That would generate pre-tax profit of $2.2m.

Shareholders have voted in favour of the DBAY rescue proposal for Eddie Stobart Logistics (ESL) and will acquire a 51% stake in the main operating subsidiary of the transport business.

Summit Therapeutics (SUMM) is raising £38.7m at 22.1p a share with most of the shares being acquired by Robert W Duggan who will own 72.8% of the antibiotics developer. He will also become a non-executive director. Summit will leave AIM and retain its Nasdaq listing.

ReNeuron (RENE) is expanding the scope of the phase IIa study of its hRPC stem cell therapy treatment in order to speed up the process towards a phase III study. Further data will be published next year. Patient recruitment for a treatment for stroke disability is being accelerated. The main data will be published in the middle of 2021. There was £21.3m in the bank at the end of September 2019.

Subsea cable protection services provider Tekmar (TGP) continues to benefit from increasing investment in offshore wind. Interim revenues were 140% higher at £17.1m and the business moved from loss to profit. Acquisitions boosted organic growth. The order book was at a record level of £15.9m at the end of September 2019.

Renalytix AI (RENX) will receive $950 per KidneyIntelX test used in the US from 1 January. This price lasts for three years and is set by the US authorities. Insurance companies are likely to pay a similar amount. Initial revenues have been generated by a pharma testing programme.

Fashion retailer Quiz (QUIZ) is still finding trading conditions tough with like-for-like store sales 10% lower so far this year. Costs have been reduced, but a pre-tax loss of £3.3m is forecast for this year.

Medical grade collagen components supplier Collagen Solutions (COS) is building up sales of tissue and starting to benefit from the collaboration with its major US shareholder. Investment in the Glasgow facility will increase collagen supply.

Antibody discovery company Fusion Antibodies (FAB) improved interim revenues from £660,000 to £1.75m. There was still £1.31m left in the bank at the end of September 2019. Belfast-based Fusion has launched its RAMP service, which helps clients to optimise the performance of an antibody. The Mammalian Antibody library should be launched by next September.

MAIN MARKET

Standard list shell National World (NWOR) has asked for trading in the shares to be suspended as it negotiates the potential acquisition of regional titles from JPI. There are also other acquisitions being assessed.

Zenith Energy (ZEN) has acquired the Italian gas production and exploration assets of Coro Energy (CORO) for an initial £402,000 in shares at 6p each. Up to £3.5m in also payable in shares if gas production averages 100,000 scm/day over a period of four successive months. Production is expected to reach 113,000 scm/day following developments planned over the next 6-9 months. The Italian authorities have to agree to the deal, which adds to Zenith’s existing assets in Italy.

Haynes Publishing (HYNS) says that interim pre-tax profit will be 37% higher than in the corresponding period last year. This is all organic growth. The interims will be announced on 30 January.

Digital inkjet technology developer Xaar (XAR) says that Stratasys has completed its increased investment in Xaar 3D and it has an option to acquire the rest of Xaar 3D within three years. Xaar sold 20% of the 3D printing business for $10m and Stratasys can buy the 55% it does not won for at least $33m.

Nanoco (NANO) says that interested parties have been asked to submit acquisition proposals by mid-December. The majority of contracted revenues of £3.5m will be delivered in the first half. Progress with new customers has been hampered by the formal sale process.

IMC Exploration (IMC) says that the exploration programme in the Goldmines River licence in Wicklow has confirmed gold values ranging up to 0.4g/t. Drilling results are still being analysed.

Pembridge Resources (PERE) says that its Minto mine in Canada has received £3.7m in payment for copper concentrate. Sumitomo makes a 90% advanced payment for the concentrate. The rest is paid on delivery. Pembridge is on a roadshow to raise between £3m-£5m.

BATM (BVC) has gained a $4m contract in Asia for its agri-waste business. Three units will be supplied to two poultry processing facilities.

MATCHED BARGAINS

MESH Holdings, which recently left NEX will have its shares dealt on the JP Jenkins dealing platform. The acquisition option for AI company Sentiance has lapsed but management is in talks to agree a new option, which would require MESH to invest more cash in Sentiance, where it has a 16.8% stake.

Andrew Hore

Andrew Hore – Quoted Micro 26 August 2019

NEX EXCHANGE

Walls and Futures REIT (WAFR) grew revenues by one-third to £136,000 but the ethical housing provider moved from profit to loss. In the year to March 2019, revenues improved from £103,000 to £136,000. The main reason behind the reported loss was a reduction in the gain on revaluation of assets from £198,000 to £145,000. The NAV still increased from £3.25m to £3.31m. These figures were prior to the acquisition of a property in Didcot. There is a pipeline of other potential transactions.

Barkby Group (BARK) has appointed finnCap as its corporate adviser.

Peterhouse has resigned as corporate adviser to Gamfook Jewellery (GAMF) and that follows the resignation of its auditor Crowe and the continued delays to the publication of the accounts for 2018. Peterhouse took over as corporate adviser from Daniel Stewart in March. Gamfook floated in December 2018.

Rutherford Health (RUTH) has opened its latest centre in Reading. The company was previously known as Proton Partners International Ltd.

Henry Lees-Buckley is taking on the chief executive role at Sativa Group (SATI) and Geremy Thomas has moved to deputy chairman.

AIM  

Injection moulded plastic products Coral Products (CRU) returned to profit in the year to April 2019, although the underlying pre-tax profit only edged up from £568,000 to £580,000 because of a decline in exceptional costs. The second half was not as good as the first half, but cost cutting enabled a recovery at the end of the year. Net debt was £8.2m at the end of April 2019. There is no final dividend following the interim of 0.25p a share. Continuing problems at a major customer could continue to hamper progress. Equipment enabling recycling of plastic products is up and running. New products will be launched later this year, including roof tiles and road highway sound barriers.

International staffing provider Empresaria (EMR) had a tough first half, but despite this the company still expects to maintain its full year profit at £11.4m. Interim net fee income was 7% ahead but underlying pre-tax profit was one-fifth lower at £3.7m. That suggests a much stronger second half even though the German and Japanese businesses remain subdued, although they could start to recover. The diversification of the business in terms of sectors and geographies helps to offset the weakness in parts of the group. New chief executive Rhona Driggs is putting in place a new strategy, which should help next year’s figures.

Adamas Finance Asia Ltd (ADAM) has maintained its NAV at $1.10 a share (88p a share). Investee company Hong Kong Mining Holdings is still on course to restart mining operations and it is acquiring additional land for mining activities. Fook Lam Moon is assessing opportunities to expand its catering operations. The internal fit out for Infinity Capital’s Tellus Niseko project should be completed before the end of September.

MySale Group (MYSL) has raised £11.2m at 2p a share, which is a 58% discount to the market price. There will be £5.5m used to pay down bank facilities. The number of shares in issue is trebled. This follows a strategic review by the retailer, which is refocusing on Australasian operations and the selling down of stock. The cost base will be reduced.

Transport optimisation software and equipment supplier Tracsis (TRCS) grew its cash pile to £24m at the end of July 2019, even after paying around £9m on acquisitions. Pre-tax profit is in line with expectations at £9.4m, up from £8.5m.

Breedon Group (BREE) intends to change its tax domicile from Jersey to the UK. The company will still be incorporated in Jersey. The general meeting to gain approval to change the article of association will be held on 9 September.

Packaging supplier Robinson (RBN) improved gross margins by 12 percentage points to 19.7% in the first half, but that was partly offset by higher overheads. Pre-tax profit improved from £478,000 to £684,000. Net debt was £9.1m. The interim dividend is unchanged at 2.5p a share.

IT services provider Adept4 (AD4) is in talks to acquire CloudCoCo, which was set up by former sales directors of Redcentric. The deal would involve the issue of new shares that would nearly double the number in issue. The Business Growth Fund has agreed to sell £5m of unsecured loan notes to MXC Capital for £3.5m.

Data software and services provider D4T4 (D4T4) says that the figures will be second half weighted this year but not as much as last year.

Science Group (SAG) has increased its stake in Frontier Smart Technologies (FST) by subscribing £1m at 25p a share. This takes the stake to 52.3% (costing £6.9m) and this means that Frontier’s results will be consolidated. A standby facility is also being provided. Frontier’s cost base is being reduced.

Commodity trading and risk management software provider Brady (BRY) expects 2019 revenues to be around one-fifth lower than previous forecasts. That means that revenues are expected to decline from £23.2m in 2018 to £19m and this will lead to a loss of more than £4m.

Three directors have been removed from the board of Management Resource Solutions (MRS) and they have been replaced by John Copley and Robert Wall following a requisitioned general meeting.

Cancer therapies developer Scancell (SCLP) has initiated the UK SCIB1 phase 2 clinical trial for advanced melanoma, where SCIB1 is used in conjunction with the checkpoint inhibitor Pembrolizumab.  

The financial director of Maestrano (MNO) has resigned to take up a role in Australia. The software company continues to undertake due diligence on a potential acquisition. An Australian bank client has decided not to go ahead with a new banking platform. There should be enough cash to last into next year.

Cyber security company Osirium Technologies (OSI) has signed up the first customer for its Opus privileged process automation software, plus two customers for the PxM platform. The Opus client is an asset manager that is already a user of PxM.

Cellcast (CLTV) has called a general meeting on 6 September in order to approve the sale of its operations. The company will change its name to Vintana.

MAIN MARKET 

BATM (BVC) reported an improved interim profit, but that was due to a one-off unrealised gain after an investment in the Ador diagnostics joint venture. Revenues dipped from $58.2m to $56.2m. The second half performance will be more important. Revenues are expected to grow from $119.6m to $128.5m, with pre-tax profit jumping form $2m to $6.7m. There is further longer-term growth to come from both the biomedical and networking divisions. The recent fundraising means that there is plenty of cash to finance growth.

Argo Blockchain (ARB) is further increasing its capacity and this could make it the largest quoted cryptocurrency miner by next year.

Injection moulding and engineering company Tex Holdings (TXH) says net assets per share have fallen from 168p to 140p after it swung into loss last year. There is no final dividend. The plastics division is trading profitably and orders have improved at the engineering division.

Path Investments (PATH) plans to acquire FineGems Extraction Corporation, which has a 75% stake in a company that holds the Jagoda licence in Zambia. The assets are near to production. They are manganese ore and tourmaline deposits. The acquisition would leave existing shareholders with 50% of the enlarged share capital.

Gold explorer IMC Exploration (IMC) has raised £150,000 at 1p a share and has paid £27,000 of professional fees in shares. The cash will be spent on exploration and geological work on a tailings project in Avoca, County Wicklow.

Dev Clever (DEV) has appointed Novum Securities as joint broker and raised £436,000 at 3.4p a share. The consumer engagement systems company has secured a three-year agreement with Toshiba Global Commerce Solutions, which will offer Dev Clever’s Engage gamification platform and its learning and development platform to retail customers.

 Andrew Hore 

Andrew Hore – Quoted Micro 5 August 2019

NEX EXCHANGE

Netalogue Technologies (NTLP) increased its revenues by 26% to £1.35m in the year to March 2019. Pre-tax profit jumped from £82,000 to £300,000 thanks to the ecommerce technology provider keeping overheads flat. There is £770,000 in the bank. Netalogue will consider paying a dividend when it reports its interim results. Netalogue focuses on the B2B market and it continues to win new customers.

European Lithium Ltd (EUR) has secured a A$10m finance facility in the form of convertibles from Winance Investment, which replaces the existing facility. The company is still seeking a strategic investor to help finance the development of the Wolfsburg lithium project.

None of the three Morgan Ashley extra care schemes that Ashley House (ASH) was expecting have closed. They could close over the next couple of months, but Ashley House was hoping to get the cash and it is investigating additional funding.  

Trading in the shares of Equatorial Mining and Exploration (EM.P) was restored after the annual report was published. There was a £221,000 loss in 2018 but the business is very different now. A placing has raised £400,000 at 0.01p a share. The date for completing the acquisition of tantalum business Eastinco has been extended until the end of September. This is a part of the strategy to consolidate mining operations in Rwanda. Align Research believes that Equatorial could generate revenues of £1.19m this year, rising to £9.19m in 2020, which would enable it to make a pre-tax profit of £1.77m.

Social impact company Inqo Investments Ltd (INQO) increased its revenues from R23m to R23.8m in the year to February 2019, while additional finance income and fair value adjustments meant that the loss was cut from R5.99m to R2.5m. There was also an increased share of revenue from Bee Sweet Honey in Zambia. Trading is improving at Kuzuko Lodge with room rates and occupancy rising thanks to the weak Rand.

Coinsilium Group (COIN) says that its Gibraltar-based blockchain consultancy has signed a new advisory agreement with IOV Labs Ltd. This involves supporting the RSK Smart Contract Network and RSK Infrastructure Framework blockchain services. These are focused on Asia.

Eight Capital Partners (ECP) has launched a bond to raise up to €5m and it will be traded on the Vienna Stock Exchange. The interest rate is 7% and the redemption date is 26 July 2022.

AIM  

Transport services provider Xpediator (XPT) has not performed as well as hoped this year and earnings estimates have been cut by one-quarter. There has also been some additional investment in the business, which will double central costs.

Information management software provider IDOX (IDOX) has raised £7m via a placing at 28.5p a share, which will be used to finance the acquisition of Northern Ireland-based Tascomi for up to £7.15m. Tascomi is a cloud-based software supplier to local authorities.

Beximco Pharmaceuticals (BXP) has launched a fifth product in the US. Blood pressure drug Nadolol is the generic equivalent of Corgard tablets. The market is worth $63m.

Elektron Technology (EKT) is selling its original Bulgin electricals business for £105m, £94m after costs, and intends to return a substantial amount of the cash to shareholders. Net cash will be £95m after the transaction. The company will change its name to Checkit and become a Software-as-a-Service business.

The Property Franchise Group (TPFG) says that its lettings brands grew revenues by 3% in the first half. Online estate agency EweMove increased revenues by 11%. Group revenues were £5.5m in the first half. Net cash was £2.8m at the end of June 2019. Ian Wilson will step down as chief executive at the end of 2020.

Property adviser Fletcher King (FLK) reported an improvement in full year pre-tax profit from £274,000 to £282,000 on slightly lower revenues. Management says that market conditions will make it difficult to maintain profitability, although there are substantial funds available for investment when the uncertainty ends. The total dividend is maintained at 1.75p a share. There is £2m in the bank.

Digitalbox (DBOX) subsidiary Daily Mash will publish video content from NextUp on its site. This will enable the company to generate advertising on the back of the videos.

MAIN MARKET

A US customer has released Nanoco (NANO) from the obligation to pay back £4.25m of capital funding. This relates to the investment in the Runcorn facility where demand for nanomaterials has not come through from the customer. The book value of the facility, after depreciation, is £3.7m and may be written down further, along with the value of some materials. The facility is available if Nanoco can secure demand from customers.

BATM (BVC) has completed the sale of its stake in a new fibre optic network being developed in Israel. This should generate cash of $3.4m and add $3m to profit. Net cash could be $38m bythe end of 2019.

Oil and gas company Zenith Energy (ZEN) has secured the financing it requires for its drilling programme. A placing in Canada has raised the equivalent of £1.2m at C0.04 a share.

Trading in the shares of Associated British Engineering (ASBE) has been suspended because it has not published its accounts. This should happen this week.

Standard list shell Landscape Acquisition Holdings (LAHL) still has more than $496m in cash and it has done well to preserve the cash it raised when it floated at the end of 2017. There is a broad remit, but the main focus is a property-related/backed business in Europe or North America.

Stranger Holdings (STHP) is still seeking to close a reverse takeover after its first deal fell through. The shell is in talks to acquire local government supplier HCS. There is no cash in the bank and Stranger has net liabilities.

Andrew Hore

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