Home » Posts tagged 'GGP'

Tag Archives: GGP

Andrew Hore – Quoted Micro 18 March 2019

NEX EXCHANGE

Peel Hunt forecasts a dip in Shepherd Neame (SHEP) pre-tax profit from £11.8m to £11.2m in the year to June 2019. The broker still expects the total dividend to be increased from 29.2p a share to 30p a share.

Etaireia Investments (ETIP) has suspended Ian Fellman as a non-executive director pending investigation into certain matters. The mortgagee of two units at Whitehouse Business park in Peterlee has enforced security and sold the properties and these have been written off the Etaireia balance sheet. David Barnett, who owns 37.8% of the company, has requisitioned a general meeting in order to have himself appointed to the board.

European Lithium (EUR) expects to commence drilling in the second quarter in order to convert the resource in zone one of the Wolfsburg lithium project into measured and indicated categories. The company is part of a syndicate applying for grant funding for building up battery production in Germany. Lithium hydroxide is expected to continue to rise in price until 2022 and then fall back. European Lithium is in talks with lithium battery plant operators in Europe about an offtake agreement. The company had £3.3m of cash and financial assets at the end of 2018, as well as a convertible note of £2.56m, with more available to draw down. There was a cash outflow of £2.6m in the six month period. European Lithium is also ASX-listed and is considering a listing in Vienna.

Sandal (SAND) has decided to leave the NEX Exchange growth market after four years. Management says that share trading is limited, and the company has not been able to raise the cash it wanted to. They believe it would be easier to raise funds as an unquoted company. The company already has the backing of enough shareholders to make a general meeting pointless. The last day of trading is 10 April.

Primorus Investments (PRIM) has already made a significant gain on its stake in Greatland Gold (GGP) after the miner announced a $65m farm-in agreement with Newcrest for the Havieron gold copper project in Western Australia. Newcrest, which will ear up to 70% of the project, also has first right of refusal over the rest of the Paterson project area. The Greatland stake cost 1.71p a share. Even after some profit-taking, the Greatland share price is 2p, which represents a gain of more than £100,000 on the Primorus investment. Primorus has invested £875,000 in WeShop Ltd and has a 3.5% stake worth more than £1m. WeShop has developed new branding for its platform, added to its product range and enhanced the management team. The number of WeShop retailers has trebled to more than 9,000. The technology provides access to more than 20,000 merchants around the world. Vela Technologies (VELA) has a 1.42% stake in WeShop, which cost £100,000 and is valued at £427,000. Two Shields Investments (TSI) invested at a later date and has a 1.2% stake valued at £350,000.

Barkby Group (BARK) made a small interim loss on revenues of £1.82m. The three gastropubs operated by the company were profitable before central overheads and exceptionals. There was £37,000 in the bank at the end of 2018 and a VAT refund is expected. This period is before the acquisition of Centurian Automotive, which was acquired for shares.

Gunsynd (GUN) has sold its stake in UK Oil and Gas (UKOG) at 1.405p a share. The 31.17 million shares raised £438,000. Gunsynd had net assets of £2.18m at the end of January 2019, including £543,000 in cash. The flotation of FastBase Inc has been delayed and Gunsynd is no longer advising the company. Human Brands International Inc, where Gunsynd has a £300,000 convertibles investment, is on course for a standard listing.

Coinsilium Group Ltd (COIN) has incorporated a subsidiary in Gibraltar and it is applying for a business licence.

Ganapati (GANP) says that its subsidiary GanaEight Coin Ltd, which is developing and operating a blockchain-based online casino platform, has launched a virtual token private pre-sale of its initial virtual financial asset offering.

Gavin Burnell has bought 5.83 million shares in Hot Rocks Investments (HRIP) and that takes his stake to 22.3%. His fellow director Charles Vaughan bought 750,000 shares, taking his shareholding to 1.67%. Non-executive chairman Brian Rowbotham bought the same number of shares, taking his stake to 3.09%. The shares were all acquired at 0.136p each.

Tectonic Gold (TTAU) has commenced gold mining under the joint venture agreement with VAST Mineral Sands in Australia, where it has a 50% economic interest. Tectonic has provided the initial funding. Tectonic is considering moving to the standard list.

First Sentinel (FSEN) has taken a 3.48% stake in standard listed coal bed methane company Curzon Energy (CZN). Brian Kinane has resigned as a director of Curzon.

AIM  

Driver Group (DRV) disappointed the market with a warning because of delayed expert witness contracts in the first half. The construction consultancy services provider has not made the expected progress in the Middle East and south east Asia and full year underlying pre-tax profit will be slightly lower than the £3.5m originally forecast. There is a strong pipeline of potential business, but this has to be secured in order to reassure investors about the full year outcome. There is still £5.1m in the bank. Driver will spend up to £500,000 buying back shares and it has already spent £124,000 at 55p a share. The directors have also been buying shares.

Bowmark Capital has increased its bid for Tax Systems (TAX) from 110p a share to 115p a share, valuing the company at £102.3m. The subsequent general meeting voted in favour of the scheme of arrangement.

Cyber security services provider ECSC (ECSC) increased its revenues from £4.12m to £5.38m, while the loss was cut by two-thirds to £1m. The loss should be much lower in 2019 and cash should be generated so that net cash exceeds £1m. Demand for cyber security continues to grow and the consulting division is getting business from existing and new clients. This is also feeding through to additional managed services business.

Marshall Motor (MMH) managed to edge up its underlying pre-tax profit to £25.7m even though trading conditions remain tough for car dealers. There was a strong last quarter for the used cars division. A small dip in profit to £24.1m is expected for 2019.

Franchise Brands (FRAN) had a full 12-month contribution from the Metro Rod business acquired in 2017, although the full benefits of the restructuring of the business and IT investment are still to come through. These changes should help to generate organic growth this year. Allenby forecasts a rise in pre-tax profit from £2.9m to £3.5m in 2019. The group is in a position to seek more acquisitions, particularly ones that add to the services provided by Metro Rod.

Microsaic Systems (MSYS) grew its full year revenues by 69% to £578,000 and gross margin improved. The protein identification product ProteinID will be launched later this month. There was still £5.4m in the bank at the end of 2018. This is enough to cover the expected cash requirements.

Standard list shell Safe Harbour Holdings (SHH) has appointed James Brotherton as finance director. He was previously finance director at Tyman, where he was involved in acquisitions, and he earned £568,000 in 2017. Fully listed Tyman, which was previously on AIM, made an underlying pre-tax profit of £72.7m in 2018. The acquisition Safe Harbour is seeking will be in distribution and business services. WSP founder Chris Cole was recently appointed as independent non-executive director. There was £28.1m in the bank at the end of June 2018.

Immupharma (IMM) is seeking partners for its lupus treatment Lupuzor and is also seeking to commence a managed access programme in Europe for the treatment. An extension study from the original phase III trial has commenced.

RedT Energy (RED) is raising up to £3.2m via a placing and open offer at 2p a share, ahead of a strategic review to decide how to finance the business. Last October, the energy storage equipment developer raised £5.03m at 7p a share. The company could generate $1m from the sale of its US business and costs are being cut. The plan is to cut the monthly cash costs to less than £500,000. Discussions continue with strategic partners.

SimplyBiz Group (SBIZ) has signed a five-year contract with insurer Aviva, which will use the company’s Zest employee benefits technology platform to deliver a new benefits product for smaller clients. This follows a three-year contract with Taylor Wimpey, which will use Zest to deliver employee benefits to its 5,000 plus employees.

Concepta (CPT) is supplying its myLotus fertility test to Walgreens Boots Alliance.

Proton Power Systems (PPS) has signed a letter of intent with Skoda for the development of fuel cell electric buses using Proton’s HyRange systems. The plan is to build 10 buses by the first quarter of 2020.

i3 Energy (I3E) has raised £16m via a placing at 16p a share, although it is partly dependent on shareholder approval for the issue of additional shares. Existing shareholders are being given the opportunity to subscribe up to £2m through an open offer. Along with a £24m loan, the cash will fund the drilling of three wells. Two will be on the Liberator oil field and the other will be on the Serenity prospect.

Paragon Entertainment Ltd (PEL) has raised £150,000 at 0.8p a share, which was a 23% discount to the market price. Management and an existing shareholder bought the shares.

Urals Energy (UEN) failed to replace Allenby as nominated adviser and the quotation has been cancelled.

Mereo BioPharma (MPH) expects its merger with OncoMed Pharmaceuticals Inc to close in the second quarter of 2019.

Touchstone Exploration Inc (TXP) achieved crude oil sales of 1,994 barrels per day in January and 2,179 barrels per day in February. The realised prices were $52/barrel and $56.84/barrel for each month respectively. Current estimated production is 2,358 barrels per day.

MAIN MARKET 

Quarto Group (QRT) reported a 51% recovery in underlying 2018 pre-tax profit to $5.9m, although the publisher’s revenues were slightly lower. The best performance was in children’s publishing. Net debt fell by 6% to $60.4m.

Local Shopping REIT (LSR) has responded to the bid by Thalassa (THAL) and it continues to find it opportunistic. The company is committed to returning cash to shareholders and it argues that they will get more cash than the £9m on offer as part of the cash and shares bid. The offer is 14.64p in cash and 0.26 of a Thalassa share for each Local Shopping REIT share.

Path Investments (PATH) has withdrawn from the proposed transaction with ARC Marlborough after due diligence. The plan was to acquire ARC, which has a nickel and cobalt project in Queensland.

European High Growth Opportunities Securitization Fund has converted more of its bonds into shares in WideCells Group (WDC) having sold most of the recently converted shares. A further 115 million shares have been issued in return for £115,000 of bonds and a penalty payment of £172,500.

Bluebird Merchant Ventures (BMV) has submitted an application for a permit to develop the Kochang Mine in South Korea. The application for the Gubong mine should get a response by 23 March.

Andrew Hore

Andrew Hore – Quoted Micro 11 March 2019

NEX EXCHANGE

Brewer Shepherd Neame (SHEP) reported a 1% increase in underlying 2018 pre-tax profit of £5.9m. Pubs provided higher revenues and profit, while the brewery reported a reduction in profit contribution due to the ending of third party contracts and a small decline in volumes of its own beers and ciders. The brewing volumes have recovered in the early part of 2019.

Good Energy (GOOD) is making a strategic investment in Zap-Map owner Next Green Car Ltd. This is a business that provides electric vehicle market data and will help Good Energy move into the electric vehicle charging market. The initial investment is £1.08m for a 12.9% stake and £800,000 of convertible loan notes. If the loan notes are converted and payment of deferred consideration of £720,000 dependent on achieving financial targets, then the stake will increase to 50.1%.

Gunsynd (GUN) and Northbay Capital Partners have agreed with TSX-V-quoted Oyster Oil and Gas Ltd to settle debts of C$1.43m with the company in return for the outstanding share capital of Oyster’s subsidiary that owns production sharing contracts in Madagascar and Djibouti. Oyster shareholders have to agree to the deal for it to go ahead.

IMC Exploration Group (IMCP) has commenced drilling on PL2551 in County Wexford. The drilling should help to prove the presence of a major gold mineralisation trend.

Primorus Investments (PRIM) has increased its stake in Greatland Gold (GGP) by two million shares, taking the stake to 1.15%. The average cost is 1.71p a share. Over the next 18 months Greatland will pursue targeted exploration campaigns in Australia and accelerate the development in the Paterson region.

Ananda Developments (ANA) says 15%-owned Liberty Herbal Technologies reports that the first 11 weeks of sales of the hapac medicinal cannabis products in Italy have grown strongly from a low base.

Cadence Minerals (KDNC) is acquiring three prospective lithium assets in Australia. They are Picasso in Western Australia, Litchfield in Northern Territories and Alcoota in Northern Territories.

Clean Invest Africa (CIA) lost £204,000 in the near-13 months since incorporation. There was £69,000 in the bank at the end of September 2018. The reverse takeover of the 97.5% of CoalTech not owned by the company has still to be completed.

Barkby Group (BARK) has secured an eight-year operating agreement for the Queens Arms in East Garston, Berkshire. The pub and restaurant also operates a 120-capacity function room and 12 bedrooms.

Eight Capital Partners (ECP) has paid £3,500 for a 70% stake in financial adviser and investment firm Epsion Capital, which could provide advice to Eight Capital investee companies. Former ZAI corporate finance director and current Eight Capital non-executive director John Treacy is the sole director and other shareholder of Epsion, which is working on two corporate finance transactions.

Following the demise of Daniel Stewart, NQ Minerals (NQMI) has changed its corporate adviser to Arden, Gamfook Jewellery (GAMF) has switched to Peterhouse and VI Mining (VIM) has moved to VSA.

AIM  

Telephony services and technology provider Netcall (NET) is increasing its cloud revenues and bookings. Interim revenues improved from £11.4m to £10.7m but pre-tax profit dipped from £1.9m to £1.2m because of increased investment. Annual contract value has risen by 11% to £15.1m.

Tracsis (TRCS) improved its interim revenues from £18.1m to £19m and pre-tax profit will be higher than the £3.9m reported last year. There was £18.7m in cash at the end of January 2019. Chris Barnes has joined the transport optimisation software and services provider ahead of becoming chief executive.

Ramsdens Holdings (RFX) is buying 18 Money Shop sites for £1.5m. They are in north west England and Scotland and will be rebranded as Ramsdens. The pawn books of the sites and five others that will be closed are being acquired by Ramsdens. City Financial Investment has sold its remaining 9.73% stake.

WH Ireland (WHI) has raised £4.95m at 45p a share, which was a 30% discount to the market price. The cash will make sure that the broker has enough regulatory capital. Trading is tough and the operating loss in the second half will be higher than previously expected.

SimplyBiz (SBIZ) grew 2018 revenues by 15% to £50.7m and earnings per share were 28% higher at 11.9p. The supplier of compliance and business services to financial advisers continues to add to member numbers and sell more services to them. Net cash was £6.4m at the end of 2018.

DX (Group) (DX.) is making progress with its turnaround but there is still a long way to go. The parcel delivery business has restructured its business and raised prices to clients. The cash outflow was significantly reduced in the first half. DX could move back into profit next year.

Swallowfield (SWL) was hit by weak trading in its cosmetics manufacturing operations. The brands business maintained its revenues and profit. The second half outlook for manufacturing is better and costs have been reduced. The interim dividend was raised by 7.5% to 2.15p a share. Fidelity has increased its stake to 5.73%.

Ilika (IKA) has secured an 18 month project with Network Rail for the use of its Stereax battery technology in a ultra-low power wireless sensor for the network’s condition monitoring platform.

Pelatro (PTRO) has won a contract with Ooredoo Maldives worth $1.6m over three years. There is a fixed monthly fee and a share of the incremental revenue generated. There are also opportunities to cross-sell to other Ooredoo telecoms operations.

Cambria Automobiles (CAMB) has traded ahead of the first five months of the previous financial year. Although new car sales were lower, Cambria made more profit because of the higher value franchises. It was a similar trend in used cars. The aftersales operations increased sales and profit.

FFI Holdings (FFI) says that the film competition contracts business has been slow because of a lack of films and smaller productions. There are also possible claims. Delayed productions have hit the insurance agency business. That has reduced operating profit by $6m. The expected range for this year is $7.5m-$11m.

Allergy Therapeutics (AGY) reported a 11% increase in interim revenues to £46.7m and underlying pre-tax profit was 70% higher at £11.4m. That was partly down to lower development and marketing spending. Cash more than doubled to £31.6m, helped by a £10.2m placing. Net cash was £28.5m. The data from the phase III PQ Birch allergy study is expected in the next few weeks.

Finance provider ThinkSmart (TSL) reported a lower interim loss and there is cash in the bank of £11.3m. A special dividend of around 2p a share will return £44m to shareholders.

Accounting regulation changes mean that Paragon Entertainment Ltd (PEL) will not be able to recognise as much revenue in 2018 as it thought it would. That could reduce the figure by £700,000. The new range is £8.8m to £9.2m. The loss will be more than £2.5m. Revenues are expected to be higher this year.

Touchstone Exploration Inc (TXP) increased its proved reserves to 11,222 Mbbl at the end of 2018. Proved plus probable reserves are 19,275 Mbbl. NPV of future net revenues of proved reserves has increased by 18% to $79.8m.

Begbies Traynor (BEG) has completed a number of contingency engagements in the third quarter and there should be more in the fourth quarter. Corporate insolvencies are rising.

GetBusy (GETB) has increased its revenues from its core software products by 17% to £10.9m and it is making progress with its GetBusy productivity software which is in use with beta users. Cash generated from operations is being ploughed back into development spending.

Gfinity (GFIN) more than doubled its interim revenues from £1.8m to £4.4m with the growth coming from the managed services division, which includes the F1 Esports series. The Esports business is targeting breakeven in 2021.

Independent Oil and Gas (IOG) has rejected a proposed 20p a share bid from RockRose Energy (RRE) which would value the company at £26.6m. Trading in the standard list company’s shares is suspended due to the proposed $140m acquisition of Marathan Oil West of Shetland.

Housebuilder Springfield Properties (SPR) is on track to increase full year pre-tax profit from £9.8m to £16.1m, following a strong first half. The housing market is stronger in Scotland than in the rest of the UK. The business has a mix of private housing and affordable housing developments. The Walker Group acquisition takes the company further upmarket in price terms and will make an initial contribution in the second half.

PhotonStar LED Group (PSL) has raised a further £170,000 at 0.01p a share, while directors John Treacy and Jonathan Freeman intend to subscribe a £24,000 when the company has authority to issue more shares. A general meeting will be held where the company will become a shell and change its name to Bould Opportunities. The operating business is being wound down. Antos Glogowski has a 20.9% stake.

In the past ten months, the valuation of the property assets of Sutton Harbour (SUH) has increased by 7% to £45.7m.

MAIN MARKET 

Small company-focused investment company Athelney Trust (ATY) reported a 21% decline in NAV to 225.9p a share at the end of 2018, although that is not a surprise given the weak stockmarket at the end of the year. The final dividend was increased by 2% to 9.1p a share. The board is in the process of appointing a fund management team. The plan is to increase the size of the fund to between £50m and £150m.

Standard list shell Cobra Resources (COBR) has agreed to acquire the owner of a 100% right title and interest in the Prince Alfred licence in South Australia. Prince Alfred was a producing copper mine. There is also an entitlement to earn 75% of five tenements in South Australia. Trading in the shares has been suspended.

European High Growth Opportunities Securitization Fund has converted £140,000 of convertible bonds and penalty payments of £210,000 into 140 million shares in WideCells (WDC) and that has nearly doubled the number of shares in issue. The first 60 million shares have been sold.

Andrew Hore

Andrew Hore – Quoted Micro 11 February 2019

NEX EXCHANGE

Primorus Investments (PRIM) says that investee company Sport:80 has delayed its flotation because it has been tidying up its shareholder register. Fintech company Engage Technology is also seeking to float later in 2019 following new product launches. Engage raised £2.6m at £22 a share at the end of 2018, whereas the average buying price by Primorus was £20.03 a share. Investee company, AIM-quoted Greatland Gold (GGP) has published results from the second drilling campaign at Havieron in Western Australia. Every drill hole intersected mineralisation and they extend the overall mineralisation. Drilling will recommence in March. Primorus has raised cash by selling most of the stake in UK Oil and Gas (UKOG) and Primorus was debt free at the end of 2018.

NEX has decided not to suspend trading in the shares of VI Mining (VIM) even though its corporate adviser Daniel Stewart is no longer a member of NEX. VI Mining had little or no notice of its adviser’s withdrawal. A new corporate adviser is being sought.

Milamber Ventures (MLVP) has acquired apprenticeship training provider Astara Training for £16,666 in shares at 9p each. Milamber lost £179,000 in the third quarter and there was £30,000 in the bank at the end of 2018.

Panther Metals (PALM) has announced the initial results of exploration activity at the Bear Lake project in Ontario. There was gold in soil anomalies at four of the five areas tested. Four areas have quartz vein sample assays above 5g/t gold. Two samples had large grade samples. The next phase of exploration is being planned and could start in the second quarter of 2019.

Auxico Resources Canada Inc (AUAG) has signed a deal that could enable it to earn a 70% interest in a joint venture that owns the Palha tantalum property in northern Brazil.

AIM  (February 2019 AIM Journal available here)

DP Poland (DPP) is running short of cash and is more than doubling its share capital through a heavily discounted placing raising £5.3m at 6p a share, with the possibility of an additional £500,000. The Domino’s Pizza franchisee for Poland has found competition is getting tougher and growth has slowed. The cash is required to cover losses and open more outlets. Peter Shaw is stepping down as chief executive at the end of June, nearly a decade after founding the business.

Ticketing and queueing technology provider Accesso Technology (ACSO) is reviewing its investment priorities although it says that 2018 figures should be broadly in line with expectations. These will be published on 27 March. A deal fell through and this cost $1.7m. Tom Burnet is moving from executive chairman to a non-exec role. The share price is less than one-third of last year’s high. BlackRock has cut its stake below 5%.

Midatech Pharma (MTPH) has launched a placing and 0.318-for-one open offer to raise up to £4.75m at 3.85p a share on top of the £8m subscription by former AIM company China Medical System Holdings, which will licence products for the Chinese market. The clinical trial for cancer treatment MTD201 will cost up to £7m.

Duke Royalty (DUKE) is acquiring its UK rival Capital Step and this will double the size of the portfolio to eleven investments and diversify it in terms of sectors. There is an initial £10m cash payment and the assumption of debt of £11.65m. There is performance related consideration of up to £1.5m. The deal is immediately earnings enhancing.

Visa has increased its bid for Earthport (EPO) from 30p a share to 37p a share, which beats the Mastercard offer of 33p a share. The latest bid values Earthport at £247m.

Taptica (TAP) has launched a recommended bid for RhythmOne (RTHM) and this will create one of the largest video advertising companies in the US. The offer is 28 Taptica shares for every 33 RhythmOne shares. Taptica shareholders will own 50.1% of the enlarged group. A $15m share buyback programme is planned after the merger. Ofer Druker will become chief executive.

Polemos (PLMO) has finalised the details of its reverse takeover of Digitalbox Publishing for £10m in shares and it is also acquiring the owner of the Daily Mash satirical news website for up to £1.2m in cash and shares. The model for the Entertainment Daily website will be used to improve the performance of the Daily Mash. A placing will raise £1.02m at 14p a share. The company will change its name to Digitalbox.

Hardide (HDD) is raising £3.6m at 1.5p a share so that it can move to new premises in the UK and invest in additional equipment. The surface coatings company is experiencing increasing demand from the oil and gas sector and there is potential for orders from aerospace companies. It will take two years to fully equip and move into the new facility. Hardide also intends to consolidate 40 shares into one new share.

finnCap has raised its forecasts for Tracsis (TRCS) following recent acquisitions. There is a 3% increase in earnings per share for this year and an 11% rise to 30.5p next year.

Stride Gaming (STR) has traded in line with previously downgraded expectations. Cost cutting continues to cover higher regulatory and tax costs. The online gaming operator will report a lower profit in 2018 and it is set to fall again in 2019. Net cash was £22.1m at the end of 2018.

Bowmark Capital has offered 110p a share for Tax Systems (TAX) and discussions continue. Tax Systems reduced net debt from £20.5m to £13.9m by the end of 2018. Pre-tax profit of £5.8m is forecast for 2018.

Victoria (VCP) has sold surplus land in Kidderminster for £2m. The land was in the books for £100,000 but it has obtained planning consent for housing.

Starcom (STAR) has renegotiated its agreement with Xplosive in South Africa, having originally announced it in October 2017. Xplosive has signed a 36-month agreement to pay a monthly fee for each of the Kylos units supplied for the monitoring of cattle. The fees are higher in the first six months and then reduce. The agreement should be worth $500,000.

Strix Group (KETL) has offered to acquire most of the assets of HaloSource (HAL) for $1.3m. Strix has provided working capital of $100,000. Due diligence is being carried out on the water filtration technology and if the deal goes through the cash will pay creditors, but there will be nothing for shareholders.

Prospex Oil and Gas (PXOG) has announced that the Selva gas field in northern Italy has net 2P reserves of 13.3bcf and there are 2.26bcf attributable to Prospex, which has a 17% stake. Selva could start production in 2020 at a rate of up to 150,000 cubic metres/day.

Tau Capital (TAU) plans to raise cash via a placing through Peterhouse and then a capital distribution will be made to all shareholders. This will enable Tau to seek an acquisition. It has until 18 April to secure a deal or trading in the shares will be suspended. Armstrong Investments has increased its stake from 11.7% to 15.7%.

Evgen Pharma (EVG) says that the SFX-01 clinical trial for subarachnoid haemorrhage is on course having completed recruitment and the primary endpoints should be available in the second quarter. Partners Investment Company has acquired at 3.15% stake.

Sports Direct International (SPD) made a £15m offer to buy Patisserie Valerie from the administrator, but this was not deemed enough. Even a higher selling price won’t provide anything for Patisserie Holdings shareholders.

MAIN MARKET  

Solicitor DWF plans to raise £75m via a March flotation an some of the cash will repay members’ capital contributions as well as invest in the business. Existing shareholders will also sell shares and partners’ remaining stakes will be locked up until April 2024.

Two former AIM-quoted companies are coming together to join the standard list. Daniel Stewart Securities, which is closing its broking business, is making an offer for Atlantic Carbon, which was previously known as Atlantic Coal, where Adam Wilson, who has had connections with Daniel Stewart, is executive chairman. Singapore-based backer Epsilon Investments refused to put more money into the broker and that is why it is closing. Epsilon holds a majority stake in Hyde Park Holdings, which owns broker Novum Securities. Last October, SeeThruEquity research suggested that Atlantic had an equity value of $86.8m and $68m of debt. In 2017, Atlantic was the largest producer of anthracite in the US with a market share of one-third based on 1.18 million tonnes produced. Atlantic is expected to have moved into profit in 2018, although it did generate cash from operations in 2017. The owners of more than 50% of Atlantic shares have agreed to accept the bid of 1.5587 shares for each Atlantic share.

Thalassa Holdings (THAL) is offering 14.64p a share in cash and 0.26 of a share for each share in The Local Shopping REIT. Thalassa already owns 25.5% of the bid target, which is valued at 32.8p a share. The bid is an alternative to the winding up of The Local Shopping REIT.

Blockchain Worldwide (BLOC) is no longer acquiring blockchain technology developer Chorum Group because of political uncertainty affecting the UK equity markets. Former Avanti Communications boss David Williams is the director of Chorum. Blockchain Worldwide has more than £1m in the bank and is also looking at other technology sectors for acquisitions.

Drilling of the Colter appraisal well in Dorset has commenced and United Oil and Gas (UOG) has a 10% interest. The drilling should take three weeks. The Selva gas field in Italy has net 2P reserves of 2.7bcf attributable to United, which has a 20% stake. Selva could start production in 2020. United intends to move to AIM.

Oil and gas producer Zenith Energy (ZEN) has raised £607,000 in Canada and the UK at C$0.05 a share and 3p a share respectively.

Motor finance provider S and U (SUS) has confirmed that its figures for the year to January 2019 will be in line with expectations. The Aspen property bridging loan business had a loan book of £18m at the end of January 2019. Cautious lending criteria means that new business has slowed in recent months and this has led to a 5% 2019-20 earnings downgrade to 230.1p a share.

BATM (BVC) has won a $3.2m cyber security contract and this takes contracted revenues from this government customer to more than $10m. The latest contract will be delivered this year.

Chesterfield Resources (CHF) is expanding its exploration programme in Cyprus. Initial drilling in an area near historic mining has shown gold, copper and zinc mineralisation. Chesterfield is also applying for licences to extend its licence area.

Dev Clever (DEV) has launched pay per play multi-player, virtual reality game Vanguard: Fight for Rudiarius in Harlow shopping centre. The game will be rolled out to other UK sites.

Bluebird Merchant (BMV) has applied for a grant to help finance drilling at the Kochang project in South Korea and there should be news by the end of the month. There has also been a permit application to develop Kochang.

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 3 December 2018

NEX EXCHANGE        

European Lithium (EUR) joined NEX on 26 November. European Lithium is the 100% owner of the Woflsberg lithium project in Austria and it is already quoted on the ASX. The plan is to produce battery grade lithium hydroxide for the European market. Capex of $390m is required for the project. WH Ireland estimates the NPV at $223m.

Crossword Cybersecurity (CCS) has confirmed its move to AIM in the middle of December. The cyber security systems developer plans to raise up to £2.25m.

Wheelsure Holdings (WHLP) raised £125,000 at 1p a share. This will finance product development. Wheelsure has established a project with Haydale Graphene Industries (HAYD) and the University of Manchester. This will develop a product combining graphene with Wheelsure’s failsafe locking system.

Ace Liberty and Stone (ALSP) has completed the acquisition of the Mecca bingo hall in Chesterfield for £4m. The property has a ten year lease and generates annual rent of £388,000. Ace has issued 147,070 shares at 100p each covering the conversion of convertible loan notes and payment of related interest.

Sandal (SAND) says that it needs more to cash in order to fully exploit the potential for Energenie MiHome products. Revenues in the first five months of the new financial year are higher than in the same period last year, even though there was a stock overhang at one Energenie MiHome customer.

IMC Exploration (IMCP) is relinquishing two licences in order to focus on its three main projects. They are the tailings project in Avoca, Wicklow, the north Wexford gold project and the zinc project in County Clare. There was €212,000 in the bank at the end of June 2018.

TechFinancials Inc (TECH) has launched the Beta version of its CEDEX blockchain diamond exchange.

Barkby Group (BARK) has taken on a ten-year lease for The George at Burpham in Sussex.

Primorus Investments (PRIM) has purchased 27 million shares in Greatland Gold (GGP) at an average price of 1.67p a share. The investment totalled £450,000. This is on the back of positive drilling results. At the Havieron gold/copper project in Western Australia.

Dana Group International Investments (DANA) reduced its underlying loss in the year to June 2018 and it ended the period with a NAV of 21 cents a share. There was a sharp decrease in NAV due to the write-down in the value of investments.

Imperial Minerals (IMPP) is still seeking a resources acquisition. There was £20,000 in the bank at the end of June 2018 and subsequently a further £50,000 was raised by a convertible issue.

AIM   

Active Energy Group (AEG) has raised nearly £1.5m at 1p a share and there is one warrant with every four new shares. The warrant is exercisable at 1.75p a share over a 12 month period. Creditors have been issued 15.5 million shares for the money they are owed. The cash will be used to finance the plans for a CoalSwitch plant with its joint venture partner and the working capital for the newly awarded cutting permits in Newfoundland.

Financial services provider STM Group (STM) expects a significant release from the London and Colonial Assurance of at least £500,000 before the year end. Last year, the release was £1.3m. There have also been one-off costs, but overall pre-tax profit should be in line with expectations.

Kropz (KRPZ) began trading on AIM on Friday. The share price ended the day at a 3.5p premium to the 40p placing price. The plant nutrient producer raised £27.3m to finance the Elandsfontein phosphate project.

Inland Homes (INL) has a land bank of 7,000 plots and 1,700 of them have planning consent with a further 2,000 in the planning pipeline. The sale of 386 plots in Buckinghamshire has generated a management fee of more than £7m. There should be 80 houses completed in the first half. The Rosewood Housing business has obtained approval to become a provider of affordable housing.

Argentina-focused oil and gas producer and explorer President Energy (PPC) has completed the acquisition of additional assets. Incremental production will start in December. Drilling of the third well at the Puesto Flores field has started.

Gift wrap supplier IG Design Group (IGR) has grown in the first half via a combination of acquisition and organic growth. The interim figures have led Progressive Equity Research to raise its 2018-19 earnings forecast from 25.9p a share to 27p a share.

Babestation broadcaster Cellcast (CLTV) says that revenues are declining and this is likely to continue. There is £700,000 in the bank and management is trying to collect money owed in Kenya.

IDOX (IDOX) says that full year revenues, excluding the former digital division, fell from £73.5m to £67.2m. The information management software provider generated adjusted EBITDA of £14.4m, down from £16.7m. Annualised recurring revenues are running at £32.4m. The annual results will be published in February.

Safestay (SSTY) is raising up to £11m via a placing and one-for-12 open offer at 34p a share. This cash will finance the conversion and refinancing of two hostels as well as investment in other existing sites and acquiring new ones.

Faroe Petroleum (FPM) has rebuffed a bid approach by DNO. Faroe says that the 152p a share cash offer, which values the oil and gas company at £607.9m, undervalues the business and its prospects. DNO already owns a 28.2% stake in Faroe.

Rose Petroleum (ROSE) has been paid around $300,000 in shares for providing its uranium database to enCore Energy Corp. The shares have to be retained for four months.

Timber merchant James Latham (LTHM) reported a 10% increase in interim revenues, while underlying pre-tax profit was £7.6m, prior to a £1.1m gain on the sale of the Yate site. The order book is strong, but it is more difficult to pass on price rises. There is £12.9m in the bank.

Maistro (MAIS) has launched a one-for-7.28423264 open offer at 1p a share. That could raise up to £250,000, which could take the total raised to £2.2m.

TLA Worldwide (TLA) is planning to sell its US operations to major shareholder Gatemore and may also sell its Australian activities. This may raise enough to pay off debt and leave a small amount of cash in TLA.

Gaming demand continues to be strong for security technology provider Synectics (SNX) but UK bus demand means that the full year profit forecast has been cut from £3m to £2.8m. The £4m profit forecast for the following year has been maintained.

The optimism about the Wressle oil project proved false and the planning permission was not approved as had been recommended. The original application was refused two years ago and an appeal is planned. Operator Egdon Resources (EDR) owns a 30% interest in Wressle, Europa Oil and Gas (EOG) has a 30% interest and Union Jack Oil (UJO) has a 27.5% interest. Humber Oil and Gas owns the other 12.5%.

Altona Energy (ANR) has temporarily suspended its activities at the Westfield Tenement in Australia. Management believes that other coal deposits may be more suitable for its pyrolysis technology.

Realm Therapeutics (RLM) has selected a shortlist of potential transactions, including a potential sale of the company. Further news will be published in the first quarter of 2019.

Fishing Republic (FISH) is still trying to raise additional funds for the business and it is also assessing options for selling the business.

Webis (WEB) improved its pre-tax profit from $5,000 to $103,000 in the 12 months to May 2018 and this is before any benefit from legalised online sports betting in the US.

MAIN MARKET  

Bioquell (BQE) is recommending a 590p a share cash bid from US-based Ecolab. That values the bio-decontamination business at £140.5m. The bid is nearly four times the level of the share price three years ago.

Standard list shell Hertsford Capital (HERT) has raised £3mat 10p a share. The technology-focused investment company has £2.8m in cash after costs. The share price ended the week at 11.75p.

Interim revenues declined from £666,000 to £498,000 at Associated British Engineering (ASBE) although the loss fell from £377,000 to £342,000 due to an improved performance at British Polar Engines as annual cost savings of £150,000 start to show through. There is around £1m of cash and available for sale financial assets, which is similar to the NAV.

PV Crystalox Solar (PVCS) has received the final payment of €14.3m in settlement of claims against a customer.

Flavour and fragrance ingredients supplier Treatt (TET) increased its revenues by 11% to £112.2m in the year to September 2018. Pre-tax profit improved from £11.7m to £12.6m. US capital investment should be completed next year.

Vertically integrated gemstone explorer Shefa Yamim (SEFA) is set to begin trial mining early next year. The latest exploration results have increased the volumes of mineralised placer gravels at three target sites from 1.1 million tonnes to five million tonnes.

Cardiff Property (CDFF) increased its net assets from 2126p a share to 2178p a share at the end of September 2018. The property investor has no debt and there is cash and financial assets of £5.8m. The dividend has been increased from 15.5p a share to 16.6p a share.

Andrew Hore

Andrew Hore – Quoted Micro 26 November 2018

NEX EXCHANGE        

Blockchain venture builder Coinsilium Group Ltd (COIN) says that RIF Labs is acquiring RSK Labs, where Coinsilium owns 65,000 series Seed-1 preferred shares. The cost of the investment was $83,750. The acquisition is a share for token swap and Coinsilium will end up with 1.95 million RIF tokens, which is the equivalent of 139.4 bitcoins, currently valued at $773,000. However, an initial 12.5% of the consideration will be released six months after the deal is completed and then 2.5% each month for 42 months.

NQ Minerals (NQMI) has entered into an additional marketing and off-take agreement with Traxys Europe. The deal covers the production from the Hellyer project in Tasmania for the first five years. This includes a facility for prepayment.

Tectonic Gold (TTAU) says that its Australian subsidiary has received a A$590,000 tax rebate from the Australian government. A 43.5% rebate is due on qualifying technical expenditure and so far more than A$2m has been received. Spending continues.

Gowin New Energy Group Ltd (GWIN) chief executive Chen Chih-Lung is lending £40,000 to the company for 12 months at an annual interest rate of 2%.

AIM    

Music and audio equipment supplier Focusrite (TUNE) is continuing to grow internationally although Asia is growing at the fastest rate. Full year revenues grew by 14% to £75.1m, while pre-tax profit improved from £9.51m to £11.3m. The dividend is 22% higher at 3.3p a share. There is £22.8m of cash in the bank and this could be used for add-on acquisitions. Tariffs on Chinese exports are being used as a way of testing out price rises for the US market. Forecast profit growth is modest but there is potential for outperformance.

Tristel (TSTL) is buying its distributor in Benelux and France and this will enhance earnings. The maximum payment for Ecomed will be €6.8m (£6m) with €5m paid up front. The deal also provides an additional warehouse in Europe. A full year contribution in 2019-20 will increase pre-tax profit by £700,000 to £6.5m.

Sustainable timber supplier Accsys Technologies (AXS) has increased its capacity for Accoya production by 50% and this will help production in the second half. Demand for Accoya is strong and sales increased from €28.3m to €31.1m in the six months to September 2018. The development of the Tricoya plant in Hull is progressing. Construction could be completed in the middle of 2019 and it will breakeven at 40% of capacity. Tricoya, which is used in MDF-type panels, is currently produced from Accoya and this plant will free up Accoya production for other customers. Numis forecasts a rise in full year revenues from €60.9m to €73.1m and a decline in loss to €5.1m. Net debt is expected to be €46m at the end of March 2019 and it will continue to rise because of the capital investment programmes. If partners can be secured in the USA and Asia then this could provide a significant boost to the company.

Initial drilling results at the Havieron licence area in Western Australia provided good news for Greatland Gold (GGP) with two wide zones of gold and copper mineralisation intersected. This significantly extends the known mineralisation.

Immunodiagnostic System Holdings (IDH) is up to its old tricks. The interim figures were published at 5.04pm on Friday 23 November. To be fair this is 14 minutes earlier than the half year trading statement so maybe the company is improving. Here’s hoping. Interim revenues were flat at £18.5m but the company fell into loss. There was £27.8m of cash in the bank (net cash of £26.5m) at the end of September 2018. Maybe some of this should be spent on an alarm clock so management can get up in the morning to release its results.

Chris Jagusz has stood down as chief executive of Redcentric (RCN) as revenue growth has been hard to come by. The latest interims have sparked downgrades for 2018-19 with revenues cut by 5% to £94.2m.

SIMEC AtlantisEnergy (SAE) has singed a joint venture with AD Normandie Developpement and this will enable the commencement of tidal energy projects between France and Alderney. A capacity of 3,000MW is being targeted and there is potential for EU grants.

Innovation software provider Imaginatik (IMTK) has achieved annualised cost savings of £1.2m, but the strategic review held back revenues and new orders in the first half. The cash outflow declined. Trading levels are picking up.

There are no competition concerns about the Ebiquity (EBQ) disposal of its advertising intelligence business to Neilsen Media Research. The business has been underperforming because of the uncertainty and this will enable the deal to go ahead. Ebiquity says that 2018 operating profit will be lower than expected.

Positive news about the Wressle oil project, where the planning officer for North Lincolnshire has recommended approval. The original application was refused two years ago. Operator Egdon Resources (EDR) owns a 30% interest in Wressle, Europa Oil and Gas (EOG) has a 30% interest and Union Jack Oil (UJO) has a 27.5% interest. Humber Oil and Gas owns the other 12.5%.

Integumen (SKIN) has raised £355,000 from a placing at 0.44p a share. This cash will support the development and commercialisation of Labskin. Integumen is paying €40,000 and six million shares to former chief executive Declan Service.

Sutton Harbour (SUH) returned to profit in the six months to September 2018, although the corresponding period had a hefty asset write-down, and it is raising cash for pre-construction funding. An open offer of 77-for-786 at 29p a share will raise up to £3m and close on 6 December. Planning approvals have been received for the Sugar Quay and Harbour Arch Quay schemes in Plymouth.

Electronic and battery products supplier Solid State (SOLI) is starting to improve its performance, although there may still be a decline in full year profit. In the six months to September 2018, revenues were 5% ahead at £23.6m and pre-tax profit improved from £1.55m to £1.66m. The interim dividend was 5% higher at 4.2p a share. The order book was worth £29.6m at the end of September 2018.

TomCo Energy (TOM) has appointed Turner Pope to replace SVS as broker and trading in the shares has recommenced.

SEC (SECG) is acquiring France-based public and corporate affairs business CLAI. An initial 10% stake, but with 50.1% of voting rights, will cost €490,000 in cash. A further stake of 40.01% will be acquired in the second half of 2020 and another 10% in the second half of 2023. The shareholders can ask SEC to buy the remaining shares between 30 July 2025 and 30 November 2025. The final payments are based on an earnout although the maximum will be €8.8m. In 2017, CLAI made a pre-tax profit of €551,000 on revenues of €4.49m. The acquisition could be earnings enhancing. CLAI will continue to be run by existing management.

Majestic Wine (WINE) is finding the UK market tough and margins are coming under pressure. Peel Hunt has reduced its 2018-19 pre-tax profit forecast by £2m to £12.8m, partly due to increased investment in Naked.

Kestrel has increased its stake in Pebble Beach Systems (PEB) to 22.2%.

Another disappointing trading statement from Fire Angel Safety (FA.) has led to a 2018 profit downgrade. Stock problems and delays to orders have hit the smoke alarms supplier. Scottish legislation due to be passed next year should provide a boost to demand. Fire Angel will be loss-making in 2018 but should make a small second half profit.

Legal services firm Knights Group (KGH) says that interim figures will be in line with expectations with double digit organic revenue growth. The interims will be announced on 15 January.

Maritime identification systems developer SRT Marine (SRT) had already flagged its 9% increase in interim revenues to £3.2m and increased underlying loss of £1.3m. There was little contribution from the GeoVS analytics system. There are expected to be significant deliveries in the second half, but timing cannot be guaranteed. A full year profit of around £3m is expected if the deliveries do take place. SRT is no longer considering investing in its own satellite constellation for this business.

FIH Group (FIH) reported flat interim profit, although there was a sharp improvement in contribution by the Momart art and museum logistics business. There was a decline in the performance of the Gosport ferry and Falkland Islands activities.

Lawyer Gateley (GTLY) says interim revenues will be one-fifth higher at £46.4m with around 50% of this organic growth. Full year revenues should be at least £102m. EBITDA margins should be maintained suggesting full year EBITDA of more than £19m. That is slightly higher than previous consensus.

Argentina-focused oil and gas producer and explorer President Energy (PPC) says the first Puesto Flores development well is producing at 600 bopd, having peaked at 1,000 bopd. This is as much as was anticipated from all three development wells. The results from the second development well appear positive and testing is about to commence. finnCap believes that the first well could have a post-tax NPV of $20m.

Pallett developer and manufacturer RM2 International (RM2) is raising £13m at 105p a share, following a 200-for-one share consolidation. This replaces the second tranche of a previously announced placing which would have happened at 1p a share (200p a share equivalent) but RM2 did not meet the performance requirements to spark the other placing. All but one of the investors set to buy shares previously will subscribe to the new placing. The cash will be used to fit track and trace devices to existing pallets, produce new pallets and cover admin costs. The cash will last until next April.

finnCap has sharply downgraded its pre-tax profit forecasts for telecoms services provider Maintel Holdings (MAI) due to project delays. The 2018 figure has been cut from £12.9m to £9.8m and the 2019 figure from £16.1m to £12.7m. The 2018 dividend is still expected to be 34.5p a share, although the cover will fall to 1.6 times. There is a move towards recurring revenues which will have a longer-term benefit for Maintel.

Restaurants operator Tasty (TAST) has revised its £7m term loan facility, which will be extended until March 2022. Quarterly repayments will be reduced from July 2019, by which time the amount draw down will be reduced by £1.1m. Net debt is currently £4.3m.

The NAV of value-focused investment vehicle Gresham House Strategic (GHS) has held up well considering the stockmarket decline. It grew to 1264p a share at the end of September 2018 and it was still 1243.2p a share on 16 November. The stake in IMImobile (IMO) has been reduced but it remains a strong performer. Cloud communications software supplier IMImobile improved its interim revenues by one-quarter and organic growth was 15%. The growth came from the European and American operations. Established customers are buying more services from the company and acquisitions are supplementing growth. Liontrust has increased its IMImobile stake to 21.4% but Kestrel has cut its to below 3%.

Payment protection software provider PCI-PAL (PCIP) is paying former boss William Catchpole his contracted entitlements plus £100,100 in settlement of his claims. The board unanimously asked Catchpole to leave in October. The final loan note repayment of £250,000 has been received from the buyer of the contact centre business.

Digital and media recruiter Nakama Group (NAK) reported flat interim net fees of £2.7m, but it managed to return to profit thanks to reduced costs. Further cost cutting is underway. There was a £558,00 cash inflow from operations and net debt was £488,000.

Antennas developer MTI Wireless Edge (LSE: MWE) has completed its merger with Israel-quoted majority shareholder MTI Computers and the initial benefits will show through in the second half. The interim figures show organic growth in revenues of 2%, but that growth should accelerate in the second half. Water management technology provider Mottech is winning new business and there are good prospects for the other divisions. The NAV is 17.8p a share and the full year dividend could be 1.25p a share.

Two directors have invested nearly £230,000 in shares in Condor Gold (CNR) at 22pa share. Non-executive Jim Mellon took his stake to 7%, while executive chairman Mark Child has reached 6%. Condor has been granted an important environmental permit for the development of a processing plant at its La India project in Nicaragua. SRK Consultants is preparing an updated mineral resource.

Juridica Investments Ltd (JIL) plans to leave AIM as part of the process of winding-up the company. The quotation will be cancelled on 21 December after liquidators from KPMG Channel Islands are appointed. Management fees will be reduced.

Online women’s fashion retailer Sosandar (SOS) continues to build up its sales, having been trading for two years, and they reached £1.84m in the six months to September 2018. The loss was nearly £2m. Returns were 52% but that was put down to a high level of dress sales in the period and it can be more difficult to get the right fit. The benefits of the move to the Magento 2 ecommerce platform and the investment in the website are showing through in the second half. October was a record month. A placing raised £3m after the balance sheet date so pro forma cash is £5.56m.

600 Group (SIXH) has rationalised its UK business and sorted out its pension problems. Interim revenues were slightly ahead but underlying margins improved from 5.1% to 6%. The machine tools and laser marking equipment supplier is expected to improve its full year pre-tax profit from $3.05m to $3.9m.

Motor dealer Cambria Automobiles (CAMB) has performed well considering the dip in the new car market. Used vehicles and aftersales offset some of the decline. There was a 2% decline in revenues to £630m and underlying pre-tax profit fell by 13%  to £9.8m. The capital investment programme for new sites has peaked and the benefits of that investment are still to come.

Veltyco Group (VLTY) is still finding it difficult to collect the money it is owed. This means that its cash is running low and this will impact its ability to promote its own brands.

Graphene materials supplier Directa Plus (DCTA) is confident that it will achieve 2018 revenues of €2.3m and this figure could double in 2019. Growth is coming from textiles, environmental and elastomers customers.

Ubisense Group (UBI) is selling RTLS SmartSpace for up to £35m, which is around two-thirds of the software company’s current market value. The group had cash of £6.8m in the middle of November 2018. Funds managed by Investcorp Technology Partners will pay an initial £30m. Liabilities of £3.1m and a loan of £1.75m will have to be paid out of the proceeds. The company’s name will be changed to IQGeo and it will focus on the myWorld product, which helps telecom companies to integrate their technology ecosystem. The myWorld business generated interim revenues of £5.7m but £3.2m was geospatial services from third party products. Some of the cash will be distributed to shareholders.

The decline in annual pre-tax profit at Stride Gaming (STR) from £18.9m to £14.8m was no surprise given the impact of regulation and tax. The online bingo and gaming company is likely to report a further fall in profit this year. A special dividend of 8p a share has been announced and in future 50% of net earnings will be paid in dividends.

MAIN MARKET  

Packaging and labels supplier Macfarlane Group (MACF) continues to grow revenues organically, supplemented by recent acquisitions. Organic growth has been 5% and overall growth is 13%. The fourth quarter is important, though. Full year pre-tax profit is forecast to improve by 47% to £13.6m and earnings per share by one-third to 7p. Acquisition payments should be offset by cash generated in the second half.

S and U (SUS) has increased its investment in Aspen Bridging from £20m to £30m. Aspen has been trading for less than two years and is already in profit.

Creightons (CRL) increased its interim profit by 44% to £1.38m on revenues one-third ahead at £22.3m. The main growth in sales has come from retailer own brands, while Creightons own brands raised their sales by 11%.

David Brown has sold his 4.55% stake in Associated British Engineering (ASBE).

Sealand Capital (SCGL) has formed a new subsidiary called ePurse (HK) Ltd, which is generating commissions from WeChat Pay activities in Hong Kong. Licences have been obtained in the UK and Dubai.

Andrew Hore

Andrew Hore – Quoted Micro 22 January 2018

NEX EXCHANGE

Capital for Colleagues (CFCP) reported a decline in full year revenues from £560,000 to £372,000 and there was no repeat of the realised gains on investments in the previous year. There was an increase in unrealised gains from £71,000 to £317,000. However, there was a £1.32m investment impairment. This meant that a profit of £158,000 was turned into a loss of £1.17m. There is £1.28m in the bank. The employee-owned businesses investor is focusing on managing its portfolio and the advisory business spun off into a joint venture. The NAV is 42.7p a share.

First Sentinel (FSEN) has invested the £1.4m it raised when it joined NEX last year. These investments include fellow NEX-quoted company NQ Minerals, where First Sentinel boss Brian Stockbridge is chairman, AIM-quoted UK Oil and Gas Investments and AIM-quoted Premier African Minerals. There is a £65,000 loan to unquoted tea cafés operator Yumchaa, where Stockbridge is 50% shareholder. The loan has an interest rate of 12% and lasts until October.

Block Energy (BLOK) has further delayed the planned move to AIM. The oil and gas company has a new expected admission date of end-February. Trading remains suspended on NEX.

AIM

Mark Watkin Jones intends to step down as chief executive of student and private rental accommodation developer Watkin Jones (WJG) but he will stay until a successor is identified. In the year to September 2017, revenues were 13% higher at £301.9m and underlying operating profit rose by a similar percentage to £42.7m. The dividend was 6.6p a share, equivalent to a 10% increase if Watkin Jones had been quoted for all the previous year. Investor demand for student accommodation and private rental residential property remains strong.

Van Elle (VNL) has an outstanding debt of £1.6m from failed facilities management and construction company Carillion. finnCap has also assumed lower second half profit of £1.3m relating to expected business from Carillion. The specialist piling contractor has a poor record since floating and this does not help.

Engineering and IT recruitment company Gattaca (GATC) says that most of Carillion’s debt to the company is insured with around £100,000 uninsured. Premier Technical Services (PTSG) says that it has £800,000 of annual revenues with Carillion with £300,000 still owed. Elsewhere, business is in line with expectations. Bilby (BILB) says that it does not think that the contract with CarillionAmey will be impacted.

Sinclair Pharma (SPH) directors have been buying shares on the back of the news that it has received regulatory approval of Ellanse pre-mixed bioresorbable collagen stimulating fillers in Brazil, one of the most important global markets. Ellanse will be soft launched immediately and the full launch is a matter of weeks away. Other Sinclair dermatological products are selling well in Brazil.

K3 Capital (K3C) reported interim figures that were better than forecast. This led to a £1m increase in forecast full year revenues but the pre-tax profit forecast is maintained at £5.4m because of additional costs required to accelerate the growth of the business. The business broker and corporate finance adviser announced an interim dividend of 2.85p a share and a total dividend of 8.2p a share is forecast for the full year.

Full year trading at Midwich (MIDW) was better than expected with revenues 28% ahead at £470m, helped by acquisitions performing ahead of expectations. The audio visual equipment distributor has also improved gross margin. The 2017 results will be published on 13 March.

Utilitywise (UTW) has changed its accounting policy relating to initial revenue recognition of new contracts.

LiDCO (LID) has signed up a new Japanese distributor. Merit Medical has a three year exclusive agreement and there is potential to significantly increase last year’s sales of £117,000. The LiDCOunity version 2 monitor has been approved in Japan.

African Battery Metals (ABM) is the new name for Sula Iron and Gold. Prior to the name change, £1.75m was raised and the Riverfort facility terminated with an associated buy back of shares. ABM is paying $100,000 ($50,000 is still outstanding) for a 70% stake in cobalt licences in the Democratic Republic of Congo. The other shareholder will retain its 30% stake up until a decision is made to mine, so ABM will pay the exploration costs.

Orosur Mining Inc (OMI) produced 7,052 ounces of gold at an average cash operating cost of $867/ounce in the second quarter and plans to produce at least 30,000 ounces in the financial year. Although the South America-focused gold producer and explorer generated $2.16m in cash in the second quarter, there was a $251,000 loss in the period because the all in sustaining cost was higher than the gold price received. Asset Chile has forfeited the 16% stake it earned in Anillo because it did not move into phase 2 of the project.

Shareholders have approved share buybacks by China New Energy Ltd (CNEL) until the end of 2019. Up to one-fifth of the shares can be acquired for less than 2p a share. The bioenergy technology developer and operator increased revenues from £8.85m to £24.7m in 2017 and the order book is worth £13.7m. The company was profitable last year and anticipates it will be in 2018.

Data software company WANdisco (WAND) says bookings increased 45% to $22.5m in 2017 with two-thirds generated by WANdisco Fusion software. There was cash of $27.4m at the end of 2017, with $4m from a new growth capital facility.

Thor Mining (THR) has had its stake in US Lithium diluted to 20.8% due to a A$240,000 fundraising at A$0.12 a share, which is four times the Thor acquisition price. US Lithium plans an ASX-listing.

Veltyco Group (VLTY) is acquiring a 51% stake in Varkasso, which has exclusive rights to use the crypto wallet technology platform 8Crypt, for £265,000 in cash and shares. Veltyco will incorporate the 8Crypt crypto wallet in all the gaming platforms it is involved with.

Newmont Mining has decided not to become involved in the Greatland Gold (GGP)-owned Ernest Giles gold project in Australia. It appears that the project was not in the right place or large enough for Newmont to go ahead with, although it took its time to make a final decision. Greatland benefits from the work conducted by Newmont, which has identified a large gold anomaly. Targeted exploration will be undertaken at Ernest Giles in the first quarter of 2018.

Kodal Minerals (KOD) says that the authorities have approved its exploration licences for the Bougouni lithium project in southern Mali. Triumvirat Mining Company will have a 10% economic interest in the licences, which are for an initial three year life. There has been positive drilling news concerning the Ngoualana and Sogola-Baoule prospects.

Electrical accessories supplier Volex (VLX) moved from the Main Market to AIM on 19 January.

Waste gasification technology business EQTEC (EQT) has partially repaid a five-year, £1.1m loan facility with an annual interest rate of 15%. The remaining balance of £621,000 is repayable in July 2020. The £2m of convertible secured loan note with Altair Group Investment Ltd has been extended until July 2020 and the interest rate doubled to 15%.

Renewable fuels technology developer Velocys (VLS) has raised £14m via a placing at 10p a share and hopes to raise up to £4.4m through an open offer at the same price. Last year, there was a £1.16m share issue at 45p a share. The cash will be used to finance initial development of the Mississippi biorefinery and fund the UK waste-to-renewable jet fuel project which has been around for many years.

Generic drugs supplier Beximco Pharmaceuticals (BXP) expects to complete the £18.2m acquisition of a 85.2% stake in Nuvista Pharma by the end of February.

Gama Aviation (GMAA) says last year’s trading was in line with expectations. The business aviation services provider has incurred $1m of costs relating to legal proceedings and there will be a similar amount to come. There will be around $2.5m of restructuring costs and write-downs. Net debt fell from $19m to $13m.

Although Blancco Technology Group (BLTG) says that first half sales declined this is due to the fact that certain contracts were not repeated in the latest period. The data erasure software business is expected to report continuing full year revenues 6% higher at £28.5m. However, higher overheads mean that there will be little profit.

Cyber security software supplier Crossrider (CROS) says that 2017 trading was in line with expectations and revenues improved 16% to $65.8m, while underlying EBITDA was 29% ahead at $8.3m. Profitability from the core activities more than doubled. There was $69.4m in the bank at the end of 2017.

Legend Gold Corp shareholders have agreed to the arrangement for Altus Strategies (ALS) to acquire the entity that owns the Legend gold projects in Mali in return for 41.1 million Altus shares. The mining projects investor is also applying for a dual listing on the TSX-V. Legend shareholders will be issued three Altus shares for each Legend share that they own, giving them 27.6% of Altus.

Toys supplier Character Group (CCT) says it has exited Christmas with “virtually no excess stocks”. International sales were poor but domestic sales grew. Pokemon products will be launched during the summer.

Caledonia Mining Corporation (CMCL) reported higher than guided annual production at the Blanket gold mine. The prediction was 54,000-56,000 ounces but the outcome was 56,135 ounces.

Sustainable pallets manufacturer RM2 International SA (RM2) had unrestricted cash of $4.1m at the end of 2017, but that could fall to $2m by the end of January. That means that there should be enough cash until the third week in February. Management continues to seek additional finance. There are plenty of potential customers but little in the way of orders.

Tiziana Life Sciences (TILS) has raised a further £150,000 at 150p. This is on top of the £150,000, £275,000 and £200,000 raised at the same price during November and December. There is a warrant with each new share and they are exercisable at 160p a share, although the most recent warrants last until January 2024. The cash is being invested in the phase IIa clinical trial for the Milciclib cancer treatment.
Remote tracking and monitoring products developer Starcom (STAR) says that last year’s turnover improved from $5.1m to $5.5m and lower operating costs mean that it will move from loss to breakeven. Strong orders mean that revenues and margins should improve this year.
Condor Gold (CNR) has obtained a TSX listing.

MAIN MARKET

Path Investments (PATH) is cancelling its standard listing even before finalising its acquisition of a 50% participating interest in the Alfeld-Elze licence and gas field in Germany. The plan is to cancel the standard listing on 19 February and raise money and apply for an AIM quotation in the first quarter of 2018. Path has previously been on AIM in a different guise but if the deal does not go ahead the plan would be to maintain the standard listing.

World Trade Systems (WTS) plans a transaction involving the sale of its assets to a new company that will float on the Channel Islands-based The International Stock Exchange. WTS shareholders will be distributed shares in the new company that will be used to acquire the assets.
Loss-making telecoms firm Toople (TOOP) did not publish a full set of figures on RNS. That is always a giveaway. It did announce that the operating loss declined by 23% to £1.31m in the year to September 2017. Cash flow is much more important for a colander company like Toople.

Technology investment company Sure Ventures (SURE) has joined the Specialist Fund Segment of the Main Market, having raised £3.31m at 100p a share. The main focus is augmented reality, fintech and the Internet of Things.

Challenger Acquisitions Ltd (CHAL) has invested $300,000 in a new giant observation wheel for Dallas, Texas. Challenger also has the opportunity to operate the wheel.

Andrew Hore

I would like to receive Brand Communications updates and news...
Free Stock Updates & News
I agree to have my personal information transfered to MailChimp ( more information )
Join over 3.000 visitors who are receiving our newsletter and learn how to optimize your blog for search engines, find free traffic, and monetize your website.
We hate spam. Your email address will not be sold or shared with anyone else.