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Andrew Hore – Quoted Micro 27 July 2020

AQUIS STOCK EXCHANGE

Healthcare IT provider DXS International (DXSP) moved from loss to profit in the year to April 2020. Revenues were slightly lower at £3.28m, while a loss of £200,000 was turned into a pre-tax profit of £239,000. There was £1m in the bank at the end of April 2020, following the recent fundraising. There has only been a marginal drop in revenues due to COVID-19 and growth should return later in the year. Chairman Bob Sutcliffe has bought 46,153 shares at 6.5p each.

KR1 (KR1) has raised $493,000 from the sale of Nexus Mutual tokens. They cost $79,000. KR1 still owns three-quarters of the tokens it originally acquired in the blockchain-based mutual insurance company.

Gunsynd (GUN) has bought a stake in Eagle Mountain Mining at A$0.13 a share. The £110,000 investment in the ASX-listed company provides exposure to copper exploration. The cash will finance exploration at the Oracle Ridge copper mine project.

Clean Invest Africa (CIA) has raised £150,000 at 1p a share. The new shares come with warrants exercisable at 2.75p each.

The Tasmanian government has transferred the mining lease to the Beaconsfield gold mine to NQ Minerals (NQMI).

AfriAg Global (AFRI) had £76,000 in cash at the end of June 2020. There are also £1.16m of investments available for sale.

Eurocann International (BUD) has yet to identify a medicinal cannabis business that fits its acquisition criteria and price expectations, although it has made some short-term investments.

Trading in the shares of Lombard Capital (LCAP) has been suspended following a sharp rise in the share price.

AIM                                                                      

Tungsten Corporation (TUNG) is benefiting from its focus on building up recurring revenues from its e-invoicing platform. Additional products and services are being added to help accelerate growth. As revenues grow they will cover overheads and profit could increase rapidly after this point has been reached.

Frontier IP (FIPP) has raised £2.33m at 55p a share. This will enable the IP investment company to provide bridge finance and invest directly in funding rounds. Frontier also wants to take on more people to help advise and develop investee companies.

In the year to March 2020, Mercia Asset Management (MERC) generated enough income to cover its overheads for the first time. That was with a part-year contribution from Northern Ventures. However, there were fair value write downs of assets of £15.8m. The NAV is 32.1p a share. Funds under management are £658m. Since the year end there was a gain on the disposal of the stake in Native Antigen.

Oil and gas producer Touchstone Exploration Inc (TXP) has confirmed the major potential of the Cascadura discovery in Trinidad. The estimate for 2P reserves is 45 mmboe of gas/condensate. Touchstone’s production could be multiplied by ten. finnCap has set a risked-NAV of 91p a share.

Scientific instruments manufacturer Judges Scientific (JDG) says that first half order intake was 17% lower. North American orders were one-third lower. Like-for-like interim sales were 12% lower. Cash was generated from operations.

Disinfection products supplier Tristel (TSTL) says that full year revenues were one-fifth ahead helped by an additional £1.5m due to COVID-19. Net cash was £6.2m at the end of June 2020.

Synairgen (SNG) says that its phase II trial of SNG001 in hospitalised COVID-19 patient shows a 79% reduction in the development of severe disease and death. Discussions have started with regulators.

Conroy Gold and Natural Resources (CGNR) has secured a joint venture with Anglo Asian Mining (AAZ) to develop a gold mine in Ireland. Anglo Asian is committing to spend €2m for an initial 17.5% stake with an option to spend the same amount to take the stake to 25%. The maximum stake that can be earned is 55%, which would take the Clontibret gold deposit to the point where the mine is ready for construction. Anglo Asian has been issued with 325,000 Conroy warrants exercisable at 16p a share. Sanderson Capital Partners has cut its stake to below 3%.

Bidstack (BIDS) generated revenues of £275,000 in the first half, but the second half is more important. The in-game advertising company is winning business around the world.

Mattress retailer eve Sleep (EVE) generated slightly lower revenues of £12.2m in the first half of 2020, but the loss will be much lower due to cost savings. Cash was generated in the first half and there is net cash of £9.1m. Some competitors are withdrawing from the European market.

MAIN MARKET

Retailer French Connection (FCCN) has reduced costs during a tough trading period. Websites sales were 24% higher in the past 15 weeks. Stores started to reopen on 15 June, but the recovery is gradual.

Standard list shell Auctus Growth (AUCT) had £780,000 in the bank at the end of June 2020.

Bermele (BERM) intends to acquire Singapore-based East Imperial, which sells premium mixers and New Zealand spring water. There is a nine month exclusivity agreement. Trading in Bermele shares is suspended.

Andrew Hore

Andrew Hore – Quoted Micro 11 November 2019

NEX EXCHANGE

Ecommerce technology developer Netalogue Technologies (NTLP) is recommending a 11.2p a share cash offer from TrueCommerce, which values the company at £5.73m. That is nearly double the share price of the most recent share deal. Netalogue clients include Transport for London, Greene King and Bunzl. The deal will bring together ecommerce and supply chain software in one platform and provide cross-selling opportunities. US-based TrueCommerce is a global connectivity business, which also has a B2B client base. The UK part of the business has revenues of £13.8m, but it is losing money. The group as a whole has revenues of $95.2m and made a net loss of $157,000. In the year to March 2019, Netalogue made a pre-tax profit of £300,000 on revenues of £1.35m. There should be potential cos savings from duplication of development spending and overlapping roles.

AFH Financial (AFHP) is acquiring the client portfolios of Warwickshire-based Groom Associates from the two retiring advisers. The initial cost is £321,000 and a further £294,000 could be payable depending on the performance of the acquired assets over 26 months.

AfriAg Global (AFRI) is selling its African operations and consolidating 100 shares into one new share. It can then concentrate on cannabis business Apollon Formularies.

Proton beam therapy firm Rutherford Health (RUTH) grew interim revenues from £197,000 to £2.5m, but the loss increased from £9.17m to £14.9m as the initial proton beam therapy centres get up and running. Since August, a further £12.5m has been raised and a £20m debt facility agreed. The focus is building up patient numbers for the three fully operational cancer centres. At the end of October, 412 shares were traded at 245p each. There is still the Woodford share overhang.

Two months after floating World High Life intends to consolidate every ten shares into one new share. The investment company plans to acquire businesses involved in medicinal cannabis and related products, including nutraceuticals and cosmetics. World High Life has announced plans to acquire Love Hemp in return for £4m in cash and the issue of 30 million (existing) shares. A further £2m could become payable in the next three years depending on the achievement of turnover targets.

Trading in Black Sea Property (BSP) shares has recommenced following its interim results announcement. Interim revenues improved from €272,000 to €312,000, but there was a €1.9m write-down on investment properties. The overall loss was €2.58m. NAV has fallen from 0.95 cents a share to 0.75 cents a share over a six months period.

Eight Capital Partners (ECP) has converted the €2m it is owed by Finance Partners Group into shares that take its stake in the investment company, which has an investment in Italy-based Avantgarde Group, to 40%. Avantgarde owns inventory finance fintech company Supply Me (www.supplyme.tech), which may list on the London market. Eight Capital Partners has paid £1,500 to John Treacy, one of its directors, for a further 30% of Epsion Capital, giving it 100% ownership. It has also invested a further £95,000 in the company, which is applying to the FCA for full regulatory status.

VI Mining (VIM) says that talks with the vendors of the Minaspampa and Rosario de Belen projects are likely to end with them taking back the projects because there is still $42.4m of the payment outstanding. VI will focus on generating cash from tolling operations. David Sumner is waiving the $1.61m of salary owed to him. Sumner, who already provides loans to the company, is raising money via a security token offering and cash raised will be used to finance VI.

Former NEX-quoted company MESH Holdings (MESH) is proposing to gain admission to the standard list. There is a timing extension to the acquisition of AI business Sentiance and the acquisition of additional shares and the exercising of an option has taken the Sentiance stake to 16.8%. The acquisition of a majority stake is dependent on ZASAi and related interests not having to make a bid for MESH after they receive shares in return for the Sentiance stake. MESH will then own 80.1% of Sentiance and be able to issue a prospectus for the listing.

AIM

In the year to June2019, Frontier IP (FIPP) made an unrealised profit of £3.85m on its investee company portfolio, up from £2.06m last year. NAV was £17.6m at the end of the year. A placing has raised £3.8m at 50p a share. This will help to develop and commercialise investee companies.

Rose Petroleum (ROSE) is acquiring a 10% of Captiva Energy Holdings II (CEH) Inc’s 89.5% net working interest in the 317-acre McCoy lease in Colorado. It will also have an option to acquire up to a further 80% of that net working interest. CEH is owned by the chairman and chief executive of Rose. Drilling should happen within one year and there are discussions about a funding partner. Rosehas raised£1.25m at 1.1p a share to provide finance to develop assets. This is expected to be the first in a series of deals. The Morton family trust has taken a 3.84% stake in Rose.

Zoo Digital (ZOO) was hit by a faster than expected decline in Blu Ray and DVD business, but the core localisation and dubbing business did grow its revenues. A stronger second half is expected, and Zoo should return to profit this year. New streaming services from Apple and Disney provide a strong back drop for demand.

Shares (SHRE) subsidiary The Share Centre won two awards at the Shares Awards 2019. They were best stocks and shares ISA provider and best customer service.

Competitions organiser Best of the Best (BOTB) is trading ahead of market expectations. This has sparked a 2019-20 profit forecast upgrade of 16% to £2.2m. The interims will be published on 30 January.

Faron Pharma (FARN) has raised £7.48m at 190p a share. This will finance the clinical programme for potential cancer treatment Clevegen.

Defenx (DFX) is seeking to cancel its AIM quotation. Strand Hanson will continue as nominated adviser until the cancellation. BV Tech, which owns 67.1% of Defenx, will vote for the cancellation.

LIDAR wine sensor technology developer Windar Photonics (WPHO) has been hit by the slow conversion of interest into orders. Revenues in the ten months to October 2019 were €1.2m. Full year revenues will be below expectations. There is limited working capital available. BDO resigned as auditor during October. A share swap has left the interests of Windar director Jorgen Jensen with a 11.2% stake and O-Net Communications with 4.5%.

MAIN MARKET

Nanoco (NANO) has entered into early discussions with potential buyers of the company. This has sparked a review of strategic options for the business. That includes potential additional funding. There are also talks with potential customers in the displays and infra-red sensing markets.

InnovaDerma (IDP) executive chairman Haris Chaudry has stepped down the day after the beauty products supplier’s AGM. He has reduced his stake from 28.6% to 0.2%. The shares were sold at 52.4p each. Edale Capital has taken a 9.11% stake. Revenues have grown by 38% in the first four months of the financial year. A new skincare product will be launched in 2020.

Robbie Rayne does not want Gresham House Asset Management to be reappointed as external manager of LMS Capital (LMS) and he and his family intend to vote their 42% shareholding against the reappointment at a general meeting. He wants a return to internal management of the portfolio of assets and a £7.5m distribution to shareholders.

Standard list shell Contango Holdings (CGO) intends to try to raise £1m at 5p a share in order to help finance the acquisition of the Lubu coalfield project in Zimbabwe. Contango has advanced $310,000 to the project. If the acquisition does not go ahead by Christmas Eve, then the money should be returned.

Zenith Energy (ZEN) is planning an all share offer for Nordic Petroleum. One Zenith shares will be offered for every 100 Nordic shares. This will require the issue of up to 9.1 million shares. Nordic is involved in heavy oils in Canada. It has tax credits in Norway and a legal claim against a UK party, the rights to which will be retained by Nordic shareholders. A prospectus has been approved for an issue of up to €25m of Euro Medium Term notes at par.

Andrew Hore

Andrew Hore Quoted Micro 21 October 2019

NEX EXCHANGE

Third quarter trading at Arbuthnot Banking (ARBB) shows a one-third increase in loans to £1.6bn, while deposits are 17% ahead at £2bn. Impairments are rising, though. The private bank is adding 40 new clients each month.

Although Vox Markets has called off merger discussions with PCG Entertainment (PCGE) the latter’s shareholders will have preferential rights to participate in the flotation of Vox. Shareholders have to be on the register on 11 October to benefit. PCG has released any claims it may have against Vox, although Vox has the right to sue Align Research, the third party in the merger plans. PCG says nothing negative was found about Align in due diligence. First Sentinel has resigned as corporate adviser to PCG and trading in the shares has been suspended.

Good Energy (GOOD) has launched One Point to offer electric vehicle charging. The company has also been awarded he green classification and mark.

The Home Office has awarded Sativa Group (SATI) a controlled drug licence to grow medicinal cannabis. This covers cannabis with a THC content of greater than 0.2%. Sativa already has a low-THC industrial hemp licence.

AfriAg Global (AFRI) says that its investee company Apollon Formularies has received its third medical cannabis licence in Jamaica. This is for experimental research and development.

World Health Life (LIFE) has completed the acquisition of Love Hemp and a £2m convertible debenture fundraising. A second tranche of debentures should be issued in the next few weeks. Love Hemp has product distribution agreements with supermarkets and health food stores.

Triple Point Investment Management is providing a £20m loan facility for Rutherford Health (RUTH) and this will be drawn down in phases. The loan terms improve as patient numbers increase at the three proton beam therapy centres.

Tectonic Gold (TTAU) has received the first quarterly interest payment from Silverstream. The 12-month note matures in August 2020.

Primorus Investments (PRIM) will consolidate 20 shares into one new share and trading will commence on 22 October.

Secured Property Development (SPD) had £537,000 in the bank at the end of June 2019, but it is finding it difficult to find a suitable acquisition.

AIM

Immunodiagnostic Systems Holdings (IDH) is as consistent as ever. It has published a trading statement related to its interims at 4.35pm on Friday. The 2018-19 trading update was published at 4.35pm on Thursday 18 April – the last day before a long weekend. There was no particular reason to hide the latest statement. First half revenues were flat compared with a first quarter decline of 2%. Cash fell £300,000 to £28.1m over a three-month period.

Murgitroyd (MUR) is recommending a 675p a share bid from a company set up by Sovereign Capital Partners LLP. This values the patent and trademark attorney at £62.8m. Murgitroyd joined AIM 18 years ago at 121p a share and has been a consistent dividend payer.

Fully listed logistic services provider Wincanton (WIN) is considering a bid for Eddie Stobart Logistics (ESL) and DBAY Advisers is also still assessing whether to bid.

Disinfection products supplier Tristel (TSTL) plans to grow its revenues by up to 15% a year in each of the next three years. This follows an 18% increase to £26m in the year to June 2019, while pre-tax profit grew by one-fifth to £5.6m. The dividend was 21% higher at 5.54p a share. International markets account for 55% of revenues. Tristel is waiting for a response from the FDA, which should be forthcoming by the end of 2019.

Power projects developer Kibo Mining (KIBO) has raised £1.99m at 0.45p a share. This will be used to fund the development of power generation projects in Africa. The portfolio includes 1,055MW of power generation capacity with 355MW having heads of terms power purchase agreements. Each new share comes with a warrant exercisable at 0.8p a share.

Filtronic (FTC) has agreed to pay a warranty claim of $2m (£1.6m) and change a faulty component in antennas supplied in 2016-17. The fault relates to certain bandwidths in hot countries. The cash is payable in four instalments up until December 2020. On 23 October, Filtronic is set to report sales from continuing activities of £15.9m, down from £21.6m, and a small positive EBITDA. Filtronic has already received more than £10m of orders for its 5G backhaul transceivers due for delivery in 2019-20.

Woodford Investment Management has cut its stake in GYG (GYG) from 19.98% to less than 5%. That appears to have been a relief to the market because the share price of yacht painting services provider has recovered since the disposal. UBS has taken a 11.2% stake.

Kestrel Partners continues to build its stake in Pebble Beach Systems (PEB), taking its stake from 25% to 26.1%. Kestrel owns 23 million shares in Brady (BRY) and, even if it makes a loss, it will be having a cash inflow. Hanover Acquisitions is offering 10p a share for the risk management software company, which values it at £8.3m.

Construction consultancy services provider Driver (DRV) says it will report underlying pre-tax profit of £3m for the full year, after £400,000 of rationalisation costs. That represents a strong performance in the second half. Net cash was £5m at the year-end, after share buy backs.

Frontier IP (FIPP) has taken a 43% stake in Elute Intelligence Holdings, which is developing software to search complex documents and detect plagiarism. Frontier IP is providing some of its own IP to an existing business to form Elute with the rest of the stake coming from providing services to the company.

Blue Star Capital (BLU) is raising £900,000 at 0.1p a share and the cash will be equally split between six investments in esports companies.

Power transmission products manufacturer Renold (RNO) says that cost savings are offsetting a downturn in trading. It is still on track to report an underlying full year pre-tax profit improving from £10.1m to £10.4m. Order intake remains weak.

Rose Petroleum (ROSE) has announced a restructuring of the Paradox project. This will enable the oil and gas company to focus on the most prospective acreage.

MAIN MARKET

Quantum dots developer Nanoco (NANO) still has a cash buffer so that it can find a new manufacturing partner to replace the US one that has withdrawn from an agreement. There could still be net cash of £1.5m at the end of July 2020.

Zenith Energy (ZEN) is planning to raise cash at NOK0.35/share in Norway. That is equivalent to 2.95p/share, compared with a market price of 3.5p. The Azerbaijan-focused oil and gas company has a drilling rig that will be mobilised before the end of the month and well M-247 has been identified as a target. It was previously in production. Zenith has identified wells in the Muradkhani oilfield in which perforations of untapped intervals can generate additional production. This will happen in the next fortnight.

OTHER MARKETS

Former AIM company Getmapping has launched a strategic review and a formal sales process. Management of the believes that the geospatial services provider could grow faster with additional investment. A company taking a minority stake is another alternative. The process should be completed by the end of 2019. The shares are traded on the Britdaq matched bargains market.

Vienna-listed Fashion On Screen is moving into theatre by acquiring musicals producer Shaftesbury Avenue. The all-share purchase is valued at £2.5m. Fashion On Screen believes that some of the musicals could become film productions.

Andrew Hore

Andrew Hore Quoted Micro 1 April 2019

NEX EXCHANGE

Brewer Adnams (ADB) increased its revenues last year, but it reported a loss. Beer volumes grew by 2.2% and revenues were 6% ahead at £78.9m. The loss of £877,000 was after £1.77m of pension and property impairment costs. The final dividend is unchanged at 150p per B share. Adnams is optimistic about the proposed government review into small breweries relief – if Adnams paid the same duty rates as small brewers it would save £7m a year.

European Lithium (EUR) is making progress with its definitive feasibility study for the Wolfsberg lithium project in Austria. The plan is to produce lithium chemical for batteries. A test programme has been completed and this is designed to improve grades and the amount of lithium-bearing mineral. Laser sorting was found to be the best method.

Capital for Colleagues (CFCP) has increased its NAV by 9% to 48.05p a share in the six months to February 2019.

Trading in the shares of Block Commodities (BLCC) has restarted following the publication of its interim results. There was $1,000 in the bank at the end of 2018 and a further $400,000 has been raised via a convertible loan. This will fund the entry in the cannabis market. Block is collaborating with Hexis Lab to develop cannabis-based therapeutic and cosmeceutical products

Altona Energy (ANR) has net assets of £11m, but these are predominantly intangible assets. There are also £19.8m of potential tax losses. Altona is re-evaluating its underground coal gasification project in South Australia and assessing an investment in a Chinese vanadium mine.

MetalNRG (MNRG) plans to move to the standard list. An option agreement has been replaced with a farm-in agreement for the Kamushanovskoye uranium deposit. This will reduce the immediate cash outflow. A $161,000 payment was made under the option agreement and $400,000 more has to be paid by 10 April to earn a 51% economic interest. This payment is conditional on a capital raising at the time of moving to the standard list. A further $1.99m investment is required in three equal tranches in order to maintain the stake. The payments are due in November 2019, April 2020 and October 2020.

Walls and Futures REIT (WAFR) outperformed the MSCI UK Residential Property index last year, because it achieved 8.75% growth, compared with 5.2% for the index.

The net liabilities of Welney (WENP) increased from £234,000 to £301,000 in 2018. This is being funded by loans from directors. Costs have been kept low as management seeks a suitable acquisition.

Sport Capital Group (SCG) has issued 800,000 shares at 0.625p each to pay for adviser fees on the unwound acquisition of Palermo FC.

AIM  

Churchill China (CHH) improved margins last year. Revenues were 7% higher at £57.5m, but underlying pre-tax profit was 26% higher at £9.4m. Growth in exports is a major factor and they account for three-fifths of revenues. Retail sales fell and hospitality sales increased by £5m. The total dividend was raised from 24.6p a share to 29p a share. There was £14.4m in cash at the end of 2018.

Cloud-based communications software provider Cloudcall (CALL) increased recurring revenues by one-third last year and total revenues were 28% ahead at £8.8m. The fastest growth was in the US. The cash outflow from operations increased from £1.57m to £2.38m. This is due to higher operating costs in terms of product development and marketing.

Frontier IP (FIPP) has increased the value of its portfolio of investments by 27% to £11.5m in the six months to £11.5m. NAV is 38.8p a share. The deal by investee company Exscientia, which is involved in AI-based drug discovery, with Celgene Corporation should result in a substantial uplift in its valuation in the current six month period.

Parity (PTY) says it has lost a major contract with the Scottish government, but it should not have a significant effect on profit because it is low margin. This year’s revenues will be 10% below expectations. The 2018 results will be announced on 16 April.

Rambler Metals and Mining (RMM) has launched a one-for-one open offer to raise up to £1.7m at 1.4p a share and it closes on 12 April. This follows the £8.4m placing at 1,4p a share, which raised cash to pay off debt and provide working capital.

Alliance Pharma (APH) improved its pre-tax profit from £23.9m to £28.1m. This excludes a £1.9m write down of an acquired intangible relating to a manufacturing supply contract. A pre-tax profit of £32.8m is forecast for 2019.

Quixant (QXT) reported a strong second half to 2018 even though the gaming machines market was tough. Full year revenues were 5% higher at $115.2m and pre-tax profit improved from $17.7m to $18.2m. This year will also be second half weighted with revenues expected to hit $119m and pre-tax profit of $20m forecast.

MAIN MARKET 

Funds managed by Epiris LLP have launched a recommended cash offer of 193p a share for Ireland-based financial services group IFG (IFP), valuing it at £206m.

Ovoca Bio (OVB) is increasing its stake in IVIX to 59.9%. The additional 9.9% costs $2.04m. IVIX’s drug Libicore has met the pre-specified primary efficacy endpoint and significant outcomes in secondary endpoints as part of its phase 3 clinical trial for the treatment of hypoactive sexual desire disorder.

Standard list shell Baskerville Capital (BASK) still had £1.54m in the bank at the end of 2018. Potential technology acquisitions are being assessed.

Blockchain Worldwide (BLOC) is still seeking an acquisition after the deal to buy Chorum fell through due to weak stockmarkets. There was £1.21m in the bank at the end of 2018.

Andrew Hore

Andrew Hore – Quoted Micro 25 March 2019

NEX EXCHANGE

Good Energy (GOOD) increased full year revenues from continuing operations from £104.5m to £116.9m, helped by last winter’s cold weather and a price increase, and pre-tax profit recovered from £700,000 to £1.7m. The renewable electricity supplier and generator has increased its dividend from 3.3p a share to 3.5p a share. Net debt was £40.1m at the end of 2018. Energy supply volumes increased by 3%, but domestic volumes were 1.2% lower in an increasingly competitive market. The growth came in the business side, which increased volumes by 23%. Good Energy generates energy from six solar sites and two wind farms. The company expects to continue to grow business volumes and invest in digital technology. Non-executive director Nemone Wynn-Evans has bought 9,500 shares at 105p each.

Trading in PCG Entertainment (PCGE) shares has been suspended because it is in talks to acquire VOX Markets and Align Research.

Karoo Energy (KEP) has been told by its potential nominated adviser does not believe its is suitable for an AIM quotation. This also means that the planned fundraising cannot go ahead. A refinancing is required. There are trade creditors of around £300,000. Trading in the shares has been suspended.

Primorus Investments (PRIM) has maintained its 3.4% stake in Fresho by participating in its latest fundraising, which was at a 76% premium to the price paid for the initial investment. The investment is worth A$673,000.

Dana Group International Investments Ltd (DANA) reported swing from loss of $129,000 to a profit of $95,000 in the six months to December 2018, due to other income of $276,000.

Tectonic Gold (TAU) says that roc chip samples from the Clermont project in Queensland show up to 8.01g/t gold, 140g/t silver and 6.32% copper.

Panther Metals (PALM) has completed the acquisition of Parthian Resources and its former shareholders own 16.1% of Panther.

Inqo Investments Ltd (INQO) has raised a further £225,000 at 90p a share.

Imperial X (IMPP) has changed its focus to medicinal cannabis. There was a small cash outflow in the six months to the end of December 2018. There was nearly £70,000 in the bank with net cash of £19,000. There are net liabilities and more cash will be required later this year.

Steve Howson is stepping down as chief executive of SG Recruitment Ltd (SGRL) and he will become a non-executive director. Majority shareholder David Sumner will be interim chief executive.

AIM  

Footasylum (FOOT) has recommended a 82.5p a share bid from JD Sports Fashion (SPD) which values the footwear retailer at £90.1m. JD Sports was buying shares between 50p and 75p and built up a 18.7% stake. The bidder promises to maintain the separate commercial identity. Footasylum floated in November 2017 at 164p a share.

Diaceutics (DXRX) ended the week at 97.5p, having floated at 72p. The company provides data analysis and advisory services to pharma companies seeking to develop and commercialise diagnostic tests. There were £15.2m of placing proceeds net of expenses and £5.5m will be spent on the acquisition of data, while the rest will be used to pay off debt and develop AI analysis technology. There is limited liquidity in the shares because they are tightly held.

Wynnstay Group (WYN) warns that trading in the second quarter is weak because of the warmer winter weather. There has also been a weakening in farmgate prices. Interim figures will be well below the first half of last year and the full year will be below forecast. Peel Hunt argues that it has already factored these elements into its forecast for rival feed supplier NWF (NWF) and it is not changing its forecasts.

Pelatro (PTRO) has launched a data monetisation platform with a revenue share contract with an existing client, which is worth $500,000 in the first year. This is a product that can be sold to other customers.

Financial trading platform Aquis Exchange (AQX) reported 2018 revenues ahead of expectations and it doubled its market share during the year. The subscription-based model means that higher trading levels by a trader lead to subscription income levels going up. Aquis will continue to be loss-making this year, but the relatively fixed cost base means that once this is covered the profit should grow significantly as revenues grow.

Scientific instruments supplier Judges Scientific (JDG) increased is cash generation from operations from £10.9m to £15.7m in 2018. There was 5.5% organic growth in revenues and underlying operating profit rose by just over one-third to £14.7m. The cash balance has increased to £15.7m, which provides firepower for acquisitions. Shore Capital has edged up its earnings per share forecast from 188.8p to 190p.

Volvere (VLE) says full year revenues from continuing operations will rise from £16.2m to £18.6m. There was a £23.1m gain on the sale of Impetus Automotive. There was an underlying loss on continuing activities, but the frozen pie maker Shire Foods improved its profit contribution. There is £34.1m of cash in the Volvere balance sheet.

Frontier IP (FIPP) says that the outcome for the year to June 2019 is likely to be ahead of management expectations. A deal by investee company Exscientia, which is involved in AI-based drug discovery, with Celgene Corporation should result in a substantial uplift in its valuation.

Science in Sport (SIS) had a 25-day contribution from the profitable PhD Nutrition business in 2018. The group’s underlying loss increased last year, but PhD will help to reduce the loss and the cash outflow from operations, which was £6.42m last year. There is £8m in the bank and even with capital investment requirements that should be enough to cover requirements this year.

Ceramic products supplier Portmeirion Group (PMP) increased its 2018 pre-tax profit by 10% to £9.7m and a further rise to £10.3m is forecast for this year. Online sales are growing rapidly from a relatively low base. The home fragrance business is doing well, and capacity is being added. The total dividend is 8% higher at 35.7p a share.

Share (SHRE) improved its significantly improved its profitability in the second half of 2018, although trading levels weakened towards the end of the year. That weakness has continued into the early months of this year. Evan so, Cenkos forecasts a rise in pre-tax profit from £700,000 to £1.3m, upgraded from £1.1m, in 2019.

Clear Leisure (CLP) has placed its 50%-owned data mining operation in Serbia on a care and maintenance basis. This is due to the fall in the price of cryptocurrency. Legal actions and negotiations continue concerning a number of past investments. Clear has paid £76,000 for a 10% stake in PBV, which provides data services for the Italian legal sector. At the end of 2018, there were €2.1m of bonds converted into shares.

Andrew Perloff has increased his stake in 600 Group (SIXH) from 6.19% to 8.85%.

Midatech Pharma (MTPH) has changed the ratio of its ADRs from two shares for each ADR to 20 shares for each ADR. This is a way of getting the trading price of the ADRs on NASDAQ back above $1.

EQTEC (EQT) could be a beneficiary of the deal done by its largest shareholder EBIOSS with Urbaser for the collection, treatment and possible conversion of waste to energy. Urbaser is conducting due diligence on EQTEC’s gasification technology and this could be used for any waste to energy plant if all three parties come to an agreement on a specific opportunity. Projects could be in Bulgaria, Greece, Macedonia and Romania.

A local authority report has placed a five year reserve status on the Plymouth Airport site where Sutton Harbour (SUH) has a 135 year lease. The local authorities are keen that the site should be used for general aviation, but a viable business plan needs to be put together. Sutton Harbour would like to develop the site.

Tau Capital (TAU) has sent a circular to shareholders concerning a capital return of $1.19m or 2.42 cents a share, raise $150,000 via a placing at 0.1 cents a share and change its name to UK Onshore. Reverse takeover candidates are being assessed. Gerwyn Williams and Nigel Burton will join the board.

Synectics (SNX) has won a £1m order from the oil and gas sector. This is the largest order for its surveillance systems from this sector for a number of years. Synectics reported a rise in full year revenues from £70.1m to £71.2m and pre-tax profit slipped from £3.02m to £2.86m. The full year dividend is increased from 4p a share to 4.7p a share.

MAIN MARKET 

Athelney Trust (ATY) has responded to the letter from former director Dr Pohl, who wants to regain his place on the board along with Simon Moore and remove David Lawman. Dr Pohl has acquired more than 100,000 shares in the past month, and this means that five shareholders own more than 50% of the investment company putting its investment trust status at risk. As long as there is more than 35% of the company held by the public this is not a problem, but it would be if Dr Pohl joined the board. There have been £90,000 of extra costs because of disputes between the two major shareholders. The plan remains to bring Gresham House on board as fund manager

WideCells Group (WDC) is changing its name to Iconic Labs and moving into digital marketing and technology. The management of this business previously built up social publisher Unilad. In the first 12 months, an agency consulting division will be launched to assists clients to develop brands. There are plans to build up a distribution and publishing division through acquisitions and launch content licensing and e-commerce divisions. There is little indication of what will happen to the stem cell operations, although management appears to believe that the insurance business could be worth pursuing. Historic liabilities are being resolved. The convertible loan note holder continues to convert a proportion of the loan note that is below 30% and then sell the shares. There are 785.6 million shares in issue with more to come.

Bluebird Merchant Ventures (BMV) has raised £436,500 at 2.25p a share. The cash will be used for the pre-construction phase of the South Korean gold projects. An agreement has been made with a local landowner for the use of land outside the main entrance of the Kochang mine.

Highlands Natural Resources (HNR) has raised £1.56m at 8.5p a share via an offer through PrimaryBid.com. This cash will fund a move by the natural resources company into the organic cannabidiol market. It has established Zoetic Organics in the US and it believes that hydrogen produced by Highland in Kansas can be used as a fertiliser with potential to increase the size of the plant. First revenues could be achieved in the summer.

Standard list shell Stranger Holdings (STHP) claims that Alchemy Utilities Ltd has sabotaged the proposed reverse takeover by refusing to provide audited accounts. Stranger is trying to get back the £300,000 it lent to Alchemy as well as its reverse takeover costs of £450,000. Stranger believes that the Alchemy management team may have misrepresented its financial status. An alternative acquisition is being lined up, but Stranger had negative net assets at the end of September 2018 and there are additional costs since then.

Standard list shell Hertsford Capital (HERT) still had £2.88m in cash at the end of 2018.

Telecoms services provider Toople (TOOP) is growing its gross profit but EBITDA is similar to the same period last year, which was around £650,000.

PV Crystalox Solar (PVCS) has ended its wafer production activities in Germany and it intends to apply its wire sawing expertise to cutting non-silicon materials. There are plans to return £38.5m to shareholders, which is equivalent to 24p a share and that is not far short of the current market price. That could still leave more than €10m of cash. Management is considering whether to maintain a listing.

Sure Ventures (SURE) says 23%-owned Suir Valley Ventures has maintained its 10% stake in WarDucks, which is developing an AR game, by participating in a €3.3m fundraising.

Andrew Hore

Andrew Hore – Quoted Micro 18 February 2019

NEX EXCHANGE

National Milk Records (NMRP) increased its interim revenues from £10.5m to £11.7m, although some of this was due to seasonal factors and one-off testing business. Pre-tax profit improved from £0.96m to £1.13m. Net debt was £2.06m at the end of December 2018. Every part of the business grew its revenues. Milk volumes are set to be strong in the second half, although milk margins are been squeezed by a decline in the milk price and higher feed costs.

Barkby (BARK) has completed the acquisition of Centurian Automotive for an initial payment of £201,000 in shares at 4.775p each, with up to £251,000 more based on performance over three years. Operating profit in each of the years is required to be at least £200,000 in order to achieve the full payment. The consideration represents a discount to net assets and will be equivalent to up to 20% of Barkby. In the year to March 2018, the automotive dealer made a pre-tax profit of £123,000 on revenues of £5.6m.

Sandal (SAND) says there was a significant increase in Energie MiHome sales in December, particularly later in the month, but trading is still below expectations because of a lack of cash to spend on marketing. The stock overhang has been unwound. A Wi-Fi adapter plug has been added to the range, which is being rolled out in Denman’s Electrical Wholesale branches.

Sport Capital Group (SCG) owned Palermo Football Club for less than one month before selling it back to the previous management team. It was bought for a nominal sum and is being sold for a nominal value, following further due diligence. The company’s representatives joined the board in December and resigned last week. Debt will be settled at the same time. Sports Capital had been trying to raise up to £20m over the next few months.

Trading has recommenced in the shares of EcoVista (EVTP) after it published its results for the year to August 2018. There was a £142,000 property revaluation gain and net assets were £1.39m. There are plans to launch a €10m Eurobond issue to fund further property site acquisitions in London, Hertfordshire and Essex.

Gold explorer Tectonic Gold (TTAU) has completed stage one drilling on the Specimen Hill project in Queensland and each hole drilled intersected gold. Geological modelling results will be available in March. A further 7,500 metres of drilling is being planned.

Auxico Resources Canada Inc (AUAG) has raised $400,000 at 20 cents a unit (one share and one-half warrant). The expenses of the placing were $28,000. The cash will be used for assessing coltan opportunities in Colombia and Brazil. NQ Mining (NQMI) has raised £54,000 at 11p a share.

AIM  

Panoply Holdings (TPX) has made its third acquisition since floating in December. UK-based GreenShoot Labs provides digital services using artificial intelligence technology. There is no initial consideration and any payment will depend on performance.

Marketing and media services provider Ebiquity (EBQ) traded in line with expectations last year. The disposal of the advertising intelligence was completed on 2 January. This cut net debt to around £8m. The continuing business is expected to continue to grow at 8% a year.

Online merchandising software and services provider ATTRAQT Group (ATQT) increased its 2018 revenues by 26% to £17.1m and the loss declined from £4.1m to £2.7m. The largest customer has renewed for two years. Annual recurring revenues are £16m.

GRC International (GRC) has acquired data consulting business DQM Group for an initial £5.9m with up to £5m in deferred consideration, although it is not expected to be more than £3.5m. This is a significantly earnings enhancing deal.

Cabot Energy (CAB) is consolidating 100 shares into one new share and raising up to £2.85m at 10p per consolidated share. The cash will pay off trade creditors. The main focus is Canada but Cabot believes its Italian oil and gas exploration assets could still be valuable even though the Italian government has suspended exploration work and is reviewing the situation.

The administrator has sold most of the businesses of Patisserie Holdings (CAKE) but there will be no money for shareholders. Dublin-based Causeway Capital has acquired Patisserie Valerie and AF Blakemore acquired Philpotts for a total of £13m, of which £3m is deferred. Baker and Spice was sold to the Department of Coffee and Social Affairs for £2.5m. The AIM quotation will be cancelled on 25 February. Paul Mumford of Cavendish Asset Management believes that the company’s banks should have supported a rescue and been more attentive to what was happening at the company. He thinks that shareholders should seek compensation from the banks.

Malvern International (MLVN) has confirmed that it moved into profit in 2018. The education business has doubled its London-based revenues and this made up for difficult trading in Malaysia.

Realm Therapeutics (RLM) is selling is hypochlorous acid assets for $10m and intends to leave AIM. Realm already had $18.8m in the bank at the end of 2018. The plan is to use the cash to complete a strategic transaction in the life sciences sector. The ADSs will continue to be listed on Nasdaq.

Stride Gaming (STR) has started a strategic review. The choices are acquisitive or organic expansion or the sale of the online gaming company.

Renalytix AI (RENX) has secured a joint venture with laboratory and clinical trials operator AKESOgen and this will enable Renalytix AI to provide additional services in the US. The artificial intelligence-based kidney diagnostics already has a presence in New York and the new joint venture is based in Georgia.

Administrators have been appointed to Utilitywise (UTW) but none of the subsidiaries is in administration. Shareholders are not likely to get anything from the administration process. Unitlitywise was unable to raise the cash it required to keep going and meet liabilities.

Heavitree Brewery (HVT) improved full year revenues from £7.3m to £7.61m and pre-tax profit grew from £1.55m to £2.25m, although that included profit on the sale of pubs and other property of £824,000, up from £6,000. The previous year had benefited from the write-back of a bad debt provision. The final dividend is being increased from 4p a share to 4.25p a share. Heavitree no longer has to cover a pension scheme deficit because three people transferred out of the scheme.

Bowmark Capital has launched a 110p a share recommended cash bid for Tax Systems (TAX) and MXC Capital Ltd (MXC) has accepted with its 25.6% stake. The bid values the tax software provider at £100.6m.

Kodal Minerals (KOD) has published the results of the drilling programme at the Bougouni lithium project. These will be used to update the JORC resource, which should happen by the end of February. Kodal has met with the Mali authorities to update them.

Insignals Neurotech is the third Portuguese spin out for Frontier IP (FIPP) and it will hold a 33% stake. Insignals is developing technology for brain stimulation surgery.

Scientific Digital Imaging (SDI) has made another scientific instruments acquisition and it has raised £2.5m at 34p a share to help finance it. A further £100,000 was raised via PrimaryBid. Graticules manufactures reticules and graticules and fits with the digital imaging division. It cost £3.4m and has added 6% to next year’s earnings per share.

Strategic Minerals (SML) has announced a trebled resource at Redmoor, in which it has a 50% stake. There is an inferred tin equivalent contained metal of 137,000 tonnes.

James Latham (LTHM) has acquired the timber merchant that has the rights to sell Accoya wood in Ireland. Abbey Woods will cost an initial €1.825m with a further €300,000-€400,000 depending on completion accounts. Further deferred consideration of up to €400,000 depending on performance over two years. Last year, Abbey Woods generated EBITDA of €379,000 on revenues of €7.5m and it has operations in Dublin and Cork.

Vast Resources (VAST) says that the tranche B offtake finance from Mercuria Energy Trading did not happen. This means that the planned December and January repayments of the loan from Sub Sahara Goldia Investments have not been made Talks continue with potential finance providers to replace the cash to invest in 80%-owned copper, silver, gold, zinc, lead, tungsten, molybdenum Baita Plai project. Bergen Global Opportunities Fund is pausing the second tranche of the $3m bridge facility because the share price has been below 0.2p for two days. A placing has raised £896,000 at 0.135p a share and this will repay the £525,000 owed to Bergen. There are discussions with a potential cornerstone investor for a diamond project in Zimbabwe.

RiverFort Global Opportunities (RGO) has subscribed for shares in Pires Investments (PIRI), that will give it a 24.3% stake. RiverFort is taking nearly 50% of the shares issued in a placing that raised £782,000 at 2.4p a share for Pires. The cash will be used for new investments.

Trading in the shares of African Battery Materials (ABM) will resume on Monday 18 February following the issue of 200 million shares at 0.5p each. The cash will be used to pay creditors and leave enough to finance the business for 12 months. Andrew Bell has been appointed executive chairman and Paul Johnson as executive director.

Windar Photonics (WPHO) will undershoot the 2018 forecast, but there should be higher orders from Vestas and another manufacturer next year. Even so, 2019 forecasts are likely to be reduced. Total 2018 revenues were 59% ahead at €3.5m and higher gross margins meant that the loss before interest, tax, depreciation and amortisation fell from €1.22m to €360,000. The end of year order book was worth €1m.

Nostra Terra Oil and Gas (NTOG) has more than trebled its proved and probable reserves to 2.43 million barrels of oil. Net proved reserves are 764,030 barrels of oil.

President Energy (PPC) has updated the reserves position. The Argentina and Louisiana reserves are valued at almost $300m, which is equivalent to 21p a share. That is more than twice the market capitalisation. Production is predominantly oil but gas production will increase this year.

Harwood Wealth Management (HW.) has acquired IFA Castleton Financial Planning for up to £1.6m.

Trading in the shares of Urals Energy (UEN) has been suspended following the resignation of Allenby as nominated adviser. A general meeting, which will be held on 22 February, has been called by Adler Impex SA in order to remove three directors and appoint four other directors. Oil production was 1,690 barrels/day in January. Loans made without board approval have meant that the company is short of cash.

Waste-to-energy technology developer PowerHouse Energy (PHE) is confident that it could sign up a customer in the next quarter. There is increasing interest and six potential sites are being assessed. Potential engineering, procurement and construction contractors have approached PowerHouse. Development partner Waste2Tricity is in negotiations with Toyota Tsusho, which would be a way of entering the Japanese market.

Braveheart Investment Group (BRH) has reduced its stake in Remote Monitored Systems (RMS) from 5.9% to 1.32%. Stephen Jones increased his stake from below 3% to 14.5% in just over one month.

Dewscope Ltd, where Mark Horrocks is a director, has cut its stake in Sabien Technology (SNT) from 12.7% to less than 3%. Chris Akers has also reduced his stake from 16.9% to less than 3% and Brendan Adams has cut his shareholding from 4.2% to under 3%. These stakes were acquired on 14 December, when the mid-price was 0.11p. On 11 February, when the shares were sold, the share price increased from 0.145p to 0.175p. Sabien reported a decline in interim revenues from £462,000 to £342,000, but the loss was reduced from £233,000 to £207,000 due to cost reductions.

TV programme producer DCD Media (DCD) expects to report revenues of £7.3m and a small EBITDA in 2018. Trading has started well in 2019 helped by business that was delayed from last year.

HaloSource (HAL) is seeking shareholder approval for the disposal of assets to Strix (KETL) for $1.3m. The cash will pay creditors and fund the winding down of the business. The AIM quotation will be cancelled on 12 March.

WANdisco (WAND) has raised $17.5m at 546p a share to provide cash to support relationships with partners. WANdisco has become an advanced technology partner with Amazon Web Services.

Adamas Finance Asia Ltd (ADAM) is issuing 6.1 million shares to China Aerospace for a 6.8% stake in Hong Kong Mining Holdings, where Adamas already has a 84.8% stake. This is a complicated deal, but Adamas can tell China Aerospace where to transfer these shares. It means that Adamas will not necessarily increase its shareholding in the mining company. Sorting out what was effectively a stock overhang should make it easier to do a deal that will unlock cash for Adamas.

NetScientific (NSCI) has concluded its strategic review and it has decided to cancel its AIM quotation. The remaining cash will be spent on the investee companies with the best prospects of providing a return before the company runs out of money.

Angus Energy (ANGS) is repaying the £1.5m initial advance from YA II and RiverFort Global Opportunities. Angus has raised £2.2m at 4p a share.

The University of British Columbia has ordered a polariser system from Polarean Imaging (POLX).

Begbies Traynor (BEG) has made the earnings enhancing acquisition of profitable Newcastle insolvency practice KRE. The initial payment is £450,000 with up to £150,000 more based on revenue targets over 12 months.

Full year figures will be lower than expected at IFA Tavistock Investments (TAVI) but a maiden dividend is still on the cards.

Crossword Cybersecurity (CCS) will report a 45% increase in 2018 revenues, with most of the growth coming from software.

MAIN MARKET 

Cryptocurrency mining services provider Argo Blockchain (ARB) is refocusing its business. All existing contracts will be terminated by the beginning of April. The focus will be Argo’s own currency mining. Ongoing costs will be cut by one-third. Net cash is £15m and that is much more than the market capitalisation of Argo. The cash outflow should be stemmed in the second half of 2019. Hadron Capital recently increased its stake to 7.6%.

Trading is in line at fasteners supplier Trifast (TRI) even though the UK automotive market is weak. More than two-thirds of sales are overseas. Additional UK stocks for Brexit are worth around £2m.

Commercial aircraft leasing company Avation (AVAP) expects to report a doubled interim profit on revenues that have risen from $52.4m to $58m.

Outdoor digital media company Grand Vision Media Holdings (GVMH) has signed a partnership agreement with Rakuten Bank in Japan to add to the one it signed with CY Group in South Korea. GVMH’s marketing services will help its partners promote themselves to Chinese tourists. GVMH has glasses-free 3D technology.

Helen Sachdev has been appointed as a non-executive director of Athelney Trust (ATY) and Frank Ashton has taken on the role of executive chairman. Discussions continue with Gresham House Asset Management about taking over the management of the company’s investments.

Future (FUTR) has secured a new £90m revolving credit facility and it is acquiring CyclingNews.com and Procycling Magazine, which generate annual revenues of £2m. This deal widens the sports publishing activities.

REA Holdings (RE.) significantly increased palm oil production in 2018, even though extraction rates were lower than expected. The Kota Bangun coal concession is heading towards reopening the mine, although there are local disputes.

Andrew Hore

Andrew Hore – Quoted Micro 14 January 2019

NEX EXCHANGE

Bruce Pubs (PUB) has raised £100,000 from an issue of 7.2% bonds and trading has commenced on NEX. The pubs operator wants to raise up to £20m. The cash will be used to acquire pubs in Scotland. Bruce owns 18 licenced premises with another licence pending. Bruce Pubs is a subsidiary of the holding company Bruce Group, which had net assets of £3.8m at the end of June 2018.

Sativa Investments (SATI) is investigating ways of raising cash to finance the company’s glasshouse and working capital for the first cannabis crop. There are also talks with vets about using medicinal cannabis in animal health. Sativa is pleased with the platform that NEX has given the business. Imperial X (IMPP) is the latest NEX company to change its investing strategy to cannabis investments.

Trading in the shares of Clean Invest Africa (CIA) following news that it has negotiated an agreement to acquire the 97.5% of CoalTech LLC it does not own. The company has technology that can convert waste coal into coal pellets for industrial and commercial use. A circular will be sent to shareholders in the first quarter of 2019.

Primorus Investments (PRIM) has increased its stake in Greatland Gold (GGP) to 35 million shares, which is equivalent to 1.09%. The average cost is 1.71p a share. The investment has been made ahead of further drilling results at the Havieron gold/copper project in Australia.

EPE Special Opportunities (ESO) reported a NAV of 189.95p a share for the end of 2018.

AIM

President Energy (PPC) beat its production target for the end of 2018. The Argentina-focused oil and gas company was producing 3,300 boepd by the year end, which is 10% above the target. The latest drilling programme of three wells has been a 100% success. President intends to build on this base during 2019. The next reserves audit should be published in March. There should be a significant jump in profit in 2019. Panmure Gordon forecasts a 2019 pre-tax profit of $18.6m. The cash generated will help to finance forecast capital investment of around $40m during the year. The target price is 15p a share.

Gateley (GTLY) continues to trade strongly with organic growth supplemented by contributions from acquisitions. The legal services provider increased interim revenues by one-fifth to £46.4m, while pre-tax profit rose from £4.2m to £5m. Net debt increased from £7.1m to £8.2m after acquisitions spending and dividend payments. The second half tends to be more cash generative. More business is coming from litigation work but management is confident that its revenue recognition policies mean that the strong cash generation will not be hit.

Castleton Technology (CTP) is paying £1.8m for Deeplake Digital, which provides digital communications services between landlords and tenants. Thirty of its 90 customers are new to Castleton.

ATTRAQT (ATQT) is expecting to make a small EBITDA figure for 2018. The online shopping performance enhancement services provider will report its 2018 results on 14 February.

More woe for Footasylum (FOOT) as gross margins come under pressure. Revenues were in line with expectations over Christmas but less money was made from them as old stock was discounted. The 2018-19 loss forecast has been edged up to more than £5m.

Higher input costs mean that Accrol Group (ACRL) will not do as well as expected and it will make a significant 2018-19 loss after exceptional charges.

Packaging machinery supplier Mpac Group (MPAC) says 2018 trading was in line with expectations and the year has started with a strong order book. The company is assessing the potential additional cost of pension equalisation for its defined benefit scheme.

Bowleven (BLVN) is paying a 15p a share special dividend on 8 February. This will leave the oil and gas explorer with the cash it requires for its exploration programme.

Wealth manager Mattioli Woods (MTW) says that its interim EBITDA margin was substantially ahead of the 20% target. Gross discretionary assets under management were £2.4bn at the end of November 2018.

Churchill China (CHH) had a strong finish to the financial year with a better second half performance in the UK. The 2018 profit will be higher than expected. The figures will be published on 27 March.

Shoe Zone (SHOE) stands out amongst its peers because it has had strong 2017-18 figures and a good Christmas. Last year’s pre-tax profit improved from £9.5m to £11.3m. Forecasts have been upgraded with 2018-19 earnings per share increased from 16.4p a share to 17.6p a share based on flat profit and a higher tax charge.

Quiz (QUIZ) sales continue to decline, albeit at a slightly lower rate of 5% like-for-like. The fashion retailer had to discount and gross margins were two percentage points lower. Overheads are also too high because of the lack of growth. The full year profit forecast has been cut from £6m to £4.4m.

A North African order for the Helios product supplied by Starcom (STAR) has been delayed until 2019 so 2018 revenues will be lower than expected. The total order value is $1.1m and the majority was expected to be recognised in 2018. Even so, revenues were better than expected, but the loss will be higher.

A general meeting has been requisitioned at Angus Energy (ANGS) by shareholders owning 6.2% of the company. It is believed that former chairman Jonathan Tidswell-Pretorius is behind this requisition, which involves the proposed removal of Paul Vonk from the board and the appointment of the Earl of Lucan and George Bingham. Non-exec Rob Shepherd has resigned. Angus has entered into a 24 month, £3m loan facility with YA II PN Ltd and Riverfort Global Capital in order to finance the development of the Balcombe field in the Weald basin. A £1.5m drawdown is planned immediately.

Rose Petroleum (ROSE) has acquired additional acreage in the Paradox Basin in Utah at a cost of $35,000. Rose believes that the new acreage could have an NPV10 of around $12m. The deal follows the results of the Schlumberger study which suggests that the site of a proposed well in the area should be in an optimal position.

Diurnal Group (DNL) has been granted a second patent for hydrocortisone treatment Chronocourt, which already has orphan drug designation. The patent lasts until 2033.

A £2m subscription and $5m investment into an internal finance note by 1795 Volantis Fund will provide Obtala Ltd (OBT) with additional funds. 1795 Volantis Fund will own 12.9% of Obtala, as well as 40 million warrants exercisable at 10p each. The disposal of a Tanzanian agricultural business will bring in a further $2.5m. Obtala intends to acquire the 25% it does not own in Montara Continental for $5m, which will be reinvested in the internal finance note.

Fuel cell developer Proton Power Systems (PPS) will own 33.33% of Hamburg-based Clean Logistics, which is being set up to build heavy trucks powered by fuel cell hybrid systems in the range of 75kw-150kw. The other two equal shareholders are Hopen, which has interests in battery and electric vehicle developers, and modular transport service provider Hary.

Sopheon (SPE) had a strong end to 2018. The software provider will provide more details in its trading statement later this month, when finnCap says it will reassess its forecasts.

Dekeloil (DKL) says that fourth quarter volumes were in line with expectations with a 2% increase in crude palm oil production on the third quarter. The annual production was 15% lower because of the weak first half. Selling prices have been at a premium to the market price. The purchase of a 43.8% stake in the Tiebissou cashew processing project has been completed.

Imaginatik (IMTK) has decided to sell its software business and assets to Planbox. The initial cash payment is $1.7m and up to $800,000 more could become payable. If it is all paid then the selling price would be higher than the book value of the assets. Imaginatik will become a shell with around £1m in cash left from the initial payment. If the disposal is approved by sharehodlers the company will change its name to Abal Group.

Telematics firm Quartix (QTX) continues to grow fleet sales but lower insurance sales are partly offsetting that growth. A supplementary dividend will be announced with the final dividend when the 2018 figures are published on 25 February.

Brighton Pier Group (PIER) says problems with the railways are hampering the income generation of Brighton Pier and earning shave been lower. The trading of the bars division was flat last year. Pre-tax profit will be around £3.2m, which is 18% lower than previous expectations.

Frontier IP (FIPP) says that its investee company Exscientia has raised $26m and is collaborating with Roche in a deal worth up to CHF67m. Frontier IP owns 3.32% of artificial intelligence-driven drug developer Exscientia.

MAIN MARKET

InnovaDerma (IDP) has revealed a 6% dip in first half revenues to £3.9m, even though retail sales grew strongly. Direct sales fell, although there are indications that they are recovering. The cosmetic products supplier will have to do well in the second half to achieve full year forecast revenues of £14.4m.

Trident Resources (TRR) has £1.85m in the bank at the end of October. The shell raised £4m when it floated in October. The balance sheet includes trade receivables of £2.1m, although management says that it started the year with just under £4m in cash. Potential acquisitions are being assessed.

Andrew Hore

Andrew Hore – Quoted Micro 19 November 2018

NEX EXCHANGE        

Renewable energy supplier Good Energy (GOOD) has traded slightly ahead of expectations and been cash generative in the first ten months of 2018. Customer numbers have remained flat. The financial year should be in line with expectations. This reassurance led to a 17% increase in the share price, although it is still more than two-fifths lower than one year ago.

Capital for Colleagues (CFCP) has made a further investment in TG Engineering Ltd, which makes steel and aluminium components for the aerospace and medical sectors. A loan of £150,000 takes the total loan to £625,000, alongside a 35% stake.

MetalNRG (MNRG) has raised £159,500 from a placing at 1p a share and the exercise of warrants. This will fund the investment in the uranium mine in the Kyrgyz Republic, over which MetalNRG has an option, and progress work at the Gold Ridge project in Arizona. There was £77,000 in the bank at the end of August 2018.

NQ Minerals (NQMI) has produced its first lead, gold and silver concentrate from the Hellyer polymetallic project in Tasmania. This has been delivered to Traxys Europe and payment has been received.

Tectonic Gold (TTAU) has mapped a large intrusive intersection of two major crustal faults at Mount Cassidy. This could a significant intrusive related gold system.

Clinical support systems provider DXS International (DXSP) has set a target of achieving a six-fold increase in turnover over the next five years and it believes that post-tax profit could reach £7m a year. This would come on the back of past investment in developing new products, two of which have been launched recently.

Ganapati (GANP) says that its Malta-based subsidiary has signed a games licence agreement with NYX Interactive for the supply of gaming software. After the initial software is supplied, Ganapati will supply one game each month for three years.

TechFinancials Inc (TECH) will receive a $867,000 dividend from 51%-owned Asia Pacific-focused subsidiary DragonFinancials.

AIM    

Frontier IP (FIPP) has raised £2.49m at 65p a share from existing and new investors and this will finance an expansion of the management team and provide working capital for the business. The value of the company’s investment portfolio has increased by one-third to £9m and there was £1.1m in the bank at the end of June 2018. The NAV increased from £11.8m to £12.7m. The cash should last into 2020 even if there are no proceeds from investment realisations.

SVS has pulled the £532,000 placing at 8.5p a share for TomCo Energy (TOM) and resigned as broker. SVS says that there has been a material change because of the suspension of the field test on the Holliday block in Utah. Trading in the shares has been suspended. TomCo has cash of £250,000.

There were disappointing phase III trial results for the Hutchison China Meditech (HCM) drug Fruquintinib, which did not achieve the primary endpoint in treating non-small cell lung cancer patients. That knocked nearly one-fifth off the share price.

AB Dynamics (ABDP) continues to grow strongly and is already planning to add to its capacity at its new site. Forecasts were raised for the automotive testing and simulator systems supplier earlier in the year and the full year outcome was a 51% increase in revenues to £37.1m and a jump in underlying pre-tax profit from £5.9m to £8.6m. A profit of £10.4m is expected this year.

Eve Sleep (EVE) is changing its focus following the appointment of a new chief executive. The mattress supplier will focus less on heavy marketing for one-off purchases and instead expand its range and generate repeat purchases. Lower marketing spending will reduce the growth rate of revenues. There was £7m in the bank at the end of October 2018 and the company wants to raise a further £15m.

Genedrive (GDR) has raised £5.6m after expenses from a placing at 23p a share, jointly run by Stanford Capital Partners and Peel Hunt, and an issue of loan notes to the British Growth Fund. There was £3.53m in the bank at the end of June 2018. The funds will finance the launch of the Genedrive HCV-ID kit for hepatitis C diagnosis and further assay development for antibiotic induced hearing loss and tuberculosis.

Trakm8 (LSE: TRAK) slipped out its interims on a Friday, albeit at 7am and not at Immunodiagnostic Systems Holdings (IDH) o’clock (around 4.30pm). In the six months to September 2018, revenues fell 38% to £8.84m and even excluding contract manufacturing, which is not done any more, the decline is 26%. Recurring revenues fell by 7%. Even taking the most flattering figures, a pre-tax profit of £363,000 last time was turned into a £2.46m loss. Net debt more than doubled to £5.73m.

Marshall Motor Holdings (MMH) is going to make a better full year profit than expected despite the disruption of new testing rules. That has helped used car sales. The 2018 pre-tax profit is still expected to decline from £29.1m to £25.7m, but that is an improvement for the continuing operations.

Beximco Pharmaceuticals (BXP) has increased its first quarter revenues by 26%, although some of the improvement came from Nuvista, which did not contribute in the corresponding period. Pre-tax profit was 17% higher at BDT973 million. Beximco reported a 37% increase in export sales for its last financial year and they accounted for 12% of total sales. There are five treatments with US approval and it will take time to build up sales. The plan is to eventually generate two-fifths of revenues from exports.

Trinidad-focused oil and gas producer Touchstone Exploration Inc (TXP) generated $9.12m from operations in the nine months to September 2018, up from $2.22m in the corresponding period last year, thanks to higher production and selling prices and slightly lower operating expenses. This cash has been used to increase development spending.

Wynnstay Properties (WSP) is increasing its interim dividend by 8% to 7p a share. The NAV was760p a share at the end of September 2018 and 99% of the property portfolio is let. There was a decline in income due to disposals.

AIM shell Stirling Investments (STRL) had £7.7m of cash at the end of September 2018. Management includes ex-Melrose management. The share price has fallen from 100p to 74.5p, which is less than the cash per share.

IFA Lighthouse Group (LGT) has signed an agreement with Tavistock Investments (TAVI) for the use of the latter’s investment products, which will be offered by Lighthouse as well as its own Luceo Asset Management products. Tavistock raised £1.2m at 3.28p a share and Lighthouse subscribed for £1m of the total.

Event driven marketing technology services provider Mporium Group (MPM) has raised £2.3m at 5p a share.

Mercantile Ports and Logistics (MPL) is raising £27.75m at 2p a share and could raise a further £2.07m via an open offer.

Fastjet (FJET) has raised £9m at 1p a share in order to keep itself going. There has also been a £3.16m subscription from Solenta Aviation and £19.1m worth of shares have been issued to acquire four Embraer 145s from Solenta and settle various fees, charges and loans. A further £4.1m could be raised via and open offer at 1p a share. This should finance the airline business for 2019.

Empyrean Energy (EME) has raised £1m at 10p a share and this will provide working capital.

Allenby Capital has resigned as nominated adviser to CSF Group (CSFG) and will step down at the end of 2018. CSF has been turned down by potential replacements and trading is likely to be suspended at the end of 2018 and the quotation cancelled at the end of January 2019.

Rasmala (RMA) plans to cancel its AIM quotation and tender for up to 20% of tis share capital at 150p a share.

MAIN MARKET  

Resources-focused standard list shell Cobra Resources (COBR) floated on 15 November when it raised £523,500 at 1.5p a share. The share price ended the week at 1.75p. The board believes this is a good time to identify and acquire undervalued base and precious metals projects, which are already have a good management team and are well on the way to becoming a producing asset. There could be direct investments or farm-ins. There are 59.9 million warrants exercisable at 2p each.

The former Golden Saint Resources, now known as Golden Saint Technologies (GST), is planning to join the standard list. A placing at 0.75p a share will raise £911,000, of which £270,000 will go to pay directors fees that are owed. The rest will pay other costs. The company has switched from diamond exploration to an installer of network and connectivity products.

Trifast (TRI) reported interims in line with expectations and the fastenings supplier is on track to improve full year pre-tax profit from £22.2m to £23.1m. Management is cautious about the UK, but two-thirds of revenues are overseas.

Andrew Gaughan is stepping down as chief executive of Sportech (SPO) in February. The chairman will take up an executive position for an interim period and he purchased 250,000 shares at 40.6p each. The potential acquisition of ilottery provider Lot.to Systems was also announced with a strategic alliance initially put in place.

Avation (AVAP) has announced a 2 cents a share interim dividend. The aviation leasing business estimates that in the six months to December 2018 leasing revenues will increase from $41.7m to $57.8m and, along with a disposal gain, this means that interim profit will be better than expected and much higher than the $7.3m achieved in the first half of the previous year.

IQ-AI (IQAI) has made its first commercial sale of StoneChecker Software to a South Korean hospital.

BigDish (DISH) is building up resources to grow its business in the UK next year. The restaurants platform is considering selling its Asian business.

Bluebird Merchant Ventures Ltd (BMV) has completed a $380,000 placing at 2.5p a share. Each of the new shares has a warrant exercisable at 2.5p, which has to be done if the share price trades at 3p a share or above for ten consecutive days.

Andrew Hore

Andrew Hore – Quoted Micro 5 November 2018

NEX EXCHANGE        

Brewer Shepherd Neame (SHEP) has secured long-term facilities of £50m, which expires in 2023, and a £35m private placement of loan notes with BAE Systems Pensions Fund which lasts for 20 years. These replace existing loans. A revaluation of pub assets has delivered a £24m gain on book value.

Mechanical and electrical services provider Field Systems Designs Holdings (FSD) has benefitted from strong spending in the water sector as Asset Management Plan 6 reaches its mid-point, as well as demand from the energy from waste sector. However, the energy from waste customer’s tough stance has held back group gross margin. In the year to May 2018, revenues improved from £17.2m to £25.9m, but pre-tax profit fell from £839,000 to £625,000. If the defined benefit scheme settlement gain is stripped out, then there is an improvement in profit from £463,000 to £558,000. There is £3.97m in the bank. The current order book is worth £12m.

Coinsilium Group Ltd (COIN) is pushing ahead with Flowstone Capital Ltd, which is a private crypto fund and it has set up Flowstone Management Ltd to manage the fund. Coinsilium has also secured a strategic advisory partnership with LC LITE, which is planning a token generation event to finance the development of a digital letter of credit system for importers and exporters.

Startup Giants (SUG) still had £665,000 in the ban at the end of July 2018. Thee are plans to raise more cash via the event management services provider Exponential Events’ platform.

TechFinancials Inc (TECH) is in talks with blockchain-based sports ticketing platform Footies Tech to establish a new subsidiary to develop a blockchain-based venue management system. The idea is that TechFinancials will own 75% of the company and it would provide finance of up to $500,000 to develop a proof of concept. TechFinancials will licence its technology to the new company for free.

Formerly AIM-quoted Metminco (MNC) has withdrawn from the proposed acquisition of Gunsynd (GUN) investee company Sunshine Minerals after it failed to complete due diligence. Gunsynd says that there are other interested buyers even though the nickel price has fallen since the original announcement about the proposed acquisition.

The chairman and chief executive of DXS International (DXSP) have bought further shares last week. Chairman Bob Sutcliffe bought 18,857 shares at 10.5p each, while chief executive Bob Immelman acquired 19,802 shares at 10p a share which took his stake to 10.4%.

Ananda Investments (ANA) executive director Melissa Sturgess has bought another 500,000 shares at 0.4501p each.

AIM    

Gordon Dadds (GOR) is acquiring Ince and Co International LLP and its associates, which will make it the largest quoted law firm. Annual revenues will be more than £110m. The estimated consideration will be £34m, depending on revenues generated in the three years after acquisition. The merged company will be called Ince Gordon Dadds. Share trading remains suspended until the full details of the deal are published.

Watkin Jones (WJG) says that its full year figures will be slightly better than expected. Good progress is being made with the build to rent operations, but the benefits will come in the future. The sale of a client portfolio of the student accommodation management division has led to a termination fee and a share in the profit of the disposal, which totals £4m.

Concepta (CPT) has obtained a CE Mark for its myLotus fertility testing technology. This enables women to test for their optimal level of fertility. The self-test platform has been launched at the Fertility Show in London. Initial sales will be via the company’s own website. It will take time to build up sales and it is likely to be next year when they become more significant. Concepta raised £2m in August so it is well-funded for its current requirements.

Goldplat (GDP) says that first quarter production fell to 6,100 ounces of gold because of problems sourcing raw materials in Ghana and South Africa, but there has been a recovery in the second quarter and it should be able to achieve full year production estimates of 39,5000 ounces of gold. The Kilpesa mine is being put on care and maintenance if a partner cannot be found and that could knock 3,700 ounces off the production figure.

Next Fifteen Communications (NFC) has raised £20m at 475p a share. The PR firm will use some of the cash to finance the acquisition of Activate Marketing Services for an initial $9m in cash. This technology-focused business is data-led and will continue to be operated separately. This is the latest example of Next Fifteen’s strategy of growing its digital marketing operations.

Gama Aviation (GMAA) says that growth has been slower than anticipated in the second half. The main culprits are the US air associate and slower than expected growth at the new Bournemouth ground services facility. This equates to a $3m cut in forecast operating profit for 2018 and the earnings per share forecast has been reduced by 19% to 21.3 cents.

The share price of floorcoverings manufacturer Victoria (VCP) slumped on the back of a warning that margins were coming under pressure. Like-for-like revenue growth was more than 3% in the six months to September 2019, but less profit is being made. Victoria is attempting to refinance its two-year bank facility through the issue of a five-year €450m bond, which has been given a BB minus credit rating by Standard & Poors.

Safestay (SSTY) has acquired a 20-year lease on a site in Vienna. This is currently a hotel and it will be converted into a 234 bed hostel at a cost of less than €300,000. Safestay will have 13 hostels.

Pires Investments (PIRI) had a NAV of £950,000 at its year end. The £200,000 increase was mainly due to investments in SalvaRx and Eco (Atlantic) Oil and Gas.

Imaginatik (IMTK) has launched its six-for-nine open offer to shareholders. This could raise up to £253,000 at 1.1p a share. The closing date is 26 November.

Market research firm System1 Group (SYS1) has declared a maintained interim dividend of 1.1p a share, but the final dividend may be reduced. Interim revenues declined by 5% and pre-tax profit was lower without the £250,000 exceptional credit. That is due to investment in the Ad Ratings business. There was £3.55m in the bank at the end of September 2018.

Mporium (MPM) has signed a deal with BPC Land and Sales Marketing, a services provider to property developers. BPC will use Mporium’s IMPACT technology for digital advertising campaigns. This is a new sector for Mporium.

Biome Technologies (BIOM) has increased nine months revenues by 59% to £7m, which is more than for the whole of 2017. Biome is profitable and it had £2.5m in the bank at the end of September 2018. The main growth has come in the RF Technologies division. The bioplastics business increased its third quarter revenues, but nine months revenues are still lower.

Parity (PTY) has warned that there will be a significant shortfall in profit in 2018 because of the continuing delay of a major contract. WH Ireland has slashed its pre-tax profit forecast from £1.9m to £850,000, suggesting limited profit in the second half.

Meat and delicatessen products retailer Crawshaw (CRAW) is appointing an administrator because it was unable to raise the cash it required.

Elektron Technology (EKT) has increased its nine months revenues from £22.1m to £25.8m and the full year outcome is set to be ahead of expectations. Sight screening technology developer Elektron Eye Technology is expected to move into profit. Net cash was £8.5m at the end of October 2018.

Transportation software and services provider Tracsis (TRCS) has received a renewal and extension of data hosting services and software with a rail client. The contract is worth more than £2m over two years.

More bad news from superyacht painting and maintenance services provider GYG (GYG) as 2018 figures are set to be well below expectations that have already been revised downwards. There will be a full year loss on revenues of €44m. There will be no dividend. Refit projects have been delayed and one shipyard undergoing maintenance. New build contracts have been won for 2019. The order book is worth €31.3m, of which €18.2m relates to 2019.

BlueRock Diamonds (BRD) has raised £626,000 at 0.3p a share with every two new shares coming with a warrant to subscribe for a share at 0.4p. The directors have invested £170,000. The cash will be used to open two of the five kimberlite pipes at the Kareevlei diamond mine in South Africa.

Tern (TERN) has invested a further £1.1m in in virtual reality training and data analysis technology platform developer FRVS.

PhotonStar LED Group (PSL) has appointed Menzies as administrator of its subsidiary PhotonStar LED Ltd. That business generated £1.15m of first half revenues of £1.33m. It also made most of the loss. More cash will be required for the remaining subsidiary.

TomCo Energy (TOM) has raised £100,000 at 8.5p and disposed of its stake in Red Leaf Resources for $133,333, which had no value in the balance sheet. This will take cash resources to £335,000. The field test on the Holliday block has been delayed due to a failure of couplings.

Ascent Resources (AST) is still finding it difficult to obtain the permits it is waiting for from the Slovenian authorities so that it can generate revenues from gas. Ascent is considering taking action in the European Court.

N4 Pharma (N4P) says clinical data suggests that its Nuvec technology is suitable for use with multiple antigens. It has delivered mRNA and pDNA in sufficient levels to generate the required immune response. The results of the next study should be available in the first half of 2019.

Wey Education (WEY) reported good results but WH Ireland has downgraded its forecasts for this year and next year. The broker is being more cautious about international growth prospects and cut the 2018-19 pre-tax profit forecast from £1.95m to £1.31m and the following year’s from £5.2m to £3.3m.

Frontier IP (FIPP) has made its second Portuguese investment. Des Solutio is developing greener versions of chemicals used to make beauty, pharma and personal care products. Frontier IP has taken a 25% stake.

Myanmar-focused social media platform operator MySQUAR Ltd (MYSQ) is raising £600,000 at 0.35p a share. Management is focusing on active users and in the first quarter of this financial year there were 412,338 active users of the mobile games offer and 426,750 media and mobile apps users. Last year’s revenues were $1.84m but they need to be much higher than that.

Property investor Safeland (SAF) has acquired North Downs golf club in Surrey for £1.07m and it will invest in the facilities.

Rose Petroleum (ROSE) says that the US Bureau of Land Management has approved the application for a permit to drill the GV 22-1 well on the Paradox acreage in Utah.

MAIN MARKET 

Zotefoams (ZTF) has improved revenues by 16% in the nine months to September 2018. Full year profit is expected to be slightly better than anticipated. HPP sales have nearly doubled due to demand from the footwear and aviation sectors. Capacity is being increased.

Books publisher Quarto Group (QRT) has extended its facilities to the end of August 2020. The bank facility has been reduced. Large shareholders have agreed to provide unsecured and subordinated loans of $13m, repayable on 31 August 2020.

Stem cell services provider WideCells Group (WDC) is restructuring its Wideacademy educational subsidiary and closed its London office. Annualised savings are worth £400,000. Alan Greenberg has stepped down from the board.

Social media investment company Sealand Capital (SCGL) has published its full year figures and subsequent interim results. Trading in the shares has recommenced. The SecureCom business has been sold. Sealand has subscribed for a 55% interest in Guangzhou Ruiyou Information Technologies Co, which is a mobile game distributor. It is also party to a licenced operator agreement of the WeChat advertisement product in the UK and UAE. There was £758,000 in the bank at the end of June 2018.

Gems explorer Shefa Yamim (SEFA) has raised £250,000 at 80p a share. The shares each come with one warrant exercisable at 100p a share.

Dukemount Capital (DKE) has gained planning permission for a minor extension on its second property in north west England.

Andrew Hore

Andrew Hore Quoted Micro 24 September 2018

NEX EXCHANGE       

In the first half of 2018, Newbury Racecourse (NYR) increased media revenues by one-fifth and, along with growth in nursery and lodge revenues, this helped the racecourse operator to raise revenues by 5% to £7.33m even though two race days were lost to bad weather. Enough cash was generated to more than cover capital spending.

Block Commodities (BLCC) has signed a non-binding letter of intent with the Eelleet Network Corp, which intends to buy Block. There would be an all share recommended offer and the enlarged business would list on the Canadian Stock Exchange. Trading in Block shares has been suspended.

Ananda Developments (ANA) has obtained a £300,000 convertible loan facility with two directors, Charles Morgan and Melissa Sturgess. The annual interest rate is 10% and the conversion price is 0.75p a share. The manufacture of 15%-owned Liberty Herbal Technologies’ vaporisers and consumable packs containing four hapac sachets of 0.25g medicinal cannabis has commenced in China. AfriAg Global (AFRI) has applied for a medicinal cannabis licence in the UK. Fellow cannabis investment company Sativa Investments (SATI) has set up a German wholesaling subsidiary and it will invest €80,000 for a 60% stake.

In the six months to June 2018, St Mark Homes (SMAP) increased revenues from £71,000 to £139,000 and it made a small loss excluding negative goodwill release. The interim dividend was unchanged at 5.5p a share. The NAV is £5.9m, including £754,000 in cash, which is equivalent to 134p a share. St Mark is trying to gain planning permission for the commercial development in Sutton High Street. Two other properties in London are being redeveloped and sales have commenced. A development in Wembley should start in 2019.

TechFinancials Inc (TECH) reported a profit in the first half of 2018, but that was due to a change in the fair value of the option to acquire 90% of Cedex. Revenues fell 48% to $3.78m and the underlying loss of the fintech software provider increased from $282,000 to $971,000. The blockchain operations made an initial contribution of $1.23m to revenues. The B2C operations have ceased in Europe and the company wants to sell its subsidiary with a FSA licence. Higher regulations have hampered the B2B technology customers.

NQ Minerals (NQMI) reported an increased interim loss of $9.43m due to higher finance costs. Admin costs were flat. The development of the Hellyer gold project in Tasmania is progressing well and the first sales of concentrate should happen before the end of this year. Work continues towards a move to a standard listing.

Less than one month after asking for trading in the company’s 7% bonds 2021 to be suspended Positive Healthcare (DOC) has appointed Eric Walls and Wayne Harrison of KSA to advise on a liquidation process. Irregularities were identified at the principal operating subsidiary and Positive is unable to pay the next instalment of interest on the bonds.

Eight Capital Partners (MORE) had cash of £773,000 at the end of June 2018. That was before the former Cogenpower acquired €111,100 worth of 8% corporate bonds 2020 in Italian financial services company Finance Partners Group. Other financial services and technology investments are being considered.

EPE Special Opportunities (ESO) has been readmitted to NEX and AIM on 21 September, after it completed its migration from the Isle of Man to Bermuda.

AIM  

IT recruitment and consultancy Parity (PTY) remains on track for an improvement in pre-tax profit from £1.7m to £1.9m but cash generation is not as good as expected. Net debt is still expected to reduce from £1.6m to £900,000. The previously announced Primark managed services contract has started well, although another contract has been delayed. The consultancy business continues to contribute a growing proportion of profit.

Tlou Energy Ltd (TLOU) has agreed locations for pilot production at the Lesedi coal bed methane project in Botswana and the first well should be spudded in October.

N+1 Singer has upgraded its forecast for EKF Diagnostics (EKF) following the interim figures. There was a 5% decline in revenues to £20.4m, while underlying profit improved from £2.3m to £2.7m. Around £250,000 has been added to the profit, taking pre-tax profit to £7.7m. The launch of haemoglobin analyser DiaSpect following FDA approval will boost next year’s figures. The spin out of RenalytixAI continues and it will require a general meeting.

Audio products supplier Focusrite (TUNE) says full year revenues were in line with expectations of £75.4m, while cash of £22.8m is better than forecast. A pre-tax profit of £10.8m is forecast. There are concerns about US tariffs.

Tanfield (TAN) has warned that it may not get anything for its stake in Snorkel if the call option is exercised. Management has already said that it will write down the value of the investment to £19.1m ($25.3m), which already knocks 12p a share off NAV, but there is a disagreement about the interpretation of the original agreement.

Disappointing results from the Atopic Dermatitis study has led Realm Therapeutics (RLM) to appoint MTS Health Partners to advise on strategy alternatives. Realm is considered to be in an offer period. There was $21.3m in the bank at the end of August.

Short-term weakness in the oil palm price has held back the progress of plantations operator MP Evans (MPE) in the first half, but crude palm oil production is increasing in line with expectations (91,900 tons in the first half). That means that full year revenues are likely to be flat and pre-tax profit will be lower. Longer-term growth will come from increased production from more recently planted areas.

Online women’s fashion retailer Sosandar (SOS) is coming up to its first year on AIM and the growth momentum continues.

Huadong Medicine Aesthetics has launched its recommended 32p a share cash bid for Sinclair Pharma (SPH) and that values the company at £166.6m.

There has been a lot of activity at Frontier IP (FIPP) in the past week. The AB Sugar head of innovation Matthew White is joining the company as head of commercialisation. Recycled building materials developer Alusid has raised £1.34m, including the conversion of a £348,000 loan from Frontier IP, which has a 35.6% stake. The Alusid investment had been valued at £700,000 and the latest fundraising values it at £1.73m. The cash will be used by Alusid to invest in its manufacturing facility, which should start production in 2020. The total cost will be £10m. A new company has been set up to develop new antibiotics. Frontier IP has a 10% stake in Amprologix, which has been spun out of the University of Plymouth. The first product is likely to be a cream that contains epidermicin, which can kill antibiotic-resistant bacteria, including MRSA.

There was a switch in the mix of revenues at job screening services provider ClearStar Inc (CLSU) in the first half as revenues increased by 11% to $9.9m. The growth has come from Medical Information Systems, which has lower margins and this means that the overall loss is reducing more slowly than expected. The cash outflow is small. Net cash is $1.2m.

Diurnal Group (DNL) is going along as expected with the launch of its Alkindi paediatric adrenal insufficiency treatment in Germany but the market has been unnerved by a negative comment from a German government research organisation. It pointed out that the performance of Alkindi was not compared with another treatment which has not been given regulatory approval. This does not appear likely to affect the relationship with the German regulatory authorities. There will be news from the European phase III trial for Chronocort before the end of the year.

Stockdale has initiated research on professional services group Christie Group (CTG) and expects a full year profit of £3.5m. It has already achieved an interim profit of £1.75m.

VR Education (VRE) still had £4.9m in the bank at the end of June 2018. Since then there have been improvements to the ENGAGE platform ahead of the full commercial launch before the end of the year. The full version of Titanic VR was launched in August and it is set to be launched on Playstation.

Energy supplier Yu Group (YU.) continues to grow rapidly and it is moving into the water sector. Interim revenues jumped from £20.8m to £35.8m, while underlying pre-tax profit moved ahead from £1.15m to £1.8m. Growth is coming from the larger corporate sector which has held back margins because they are via brokers. The interim dividend is one-fifth higher at 1.2p a share. There was £18.2m in the bank at the end of June 2018.

N4 Pharma (N4P) has undertaken a strategic review following the failure of the reformulation of sildenafil to achieve its key targets in its clinical trial. It would cost a lot and increase risk if the company undertook further reformulation of this generic. The generics division has been closed and the focus will be the Nuvec delivery system. Initial results from research should be available before the end of the year. There was £1.6m in the bank at the end of June 2018.

MAIN MARKET  

Books publisher Quarto Group (QRT) increased interim revenues from $50.2m to $56.2m and the underlying loss fell from $8.7m to $6.6m. Net debt was $73.2m at the end of June 2018. Management is talking to banks to extend the bank facility until August 2020. Costs are being reduced.

Spinnaker Opportunities (SOP) intends to broaden its investment remit to include cannabis processing, as well as the energy and industrial sectors. Finance professional Alan Hume has joined the board of the standard list shell. He was previously an adviser to the company and until last year finance director of Zenith Energy (ZEN). Between 2010 and 2012 he was finance director of Xtract Energy (XTR).

Bluebird Merchant Ventures Ltd (BMV) has completed its feasibility report into the reopening of the Gubong gold mine and the joint venture with Southern Gold has started. Production of 10,000 ounces of gold is initially targeted.

Andrew Hore

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