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Andrew Hore – Quoted Micro 6 July 2020

AQUIS STOCK EXCHANGE

Rutherford Health (RUTH) has secured a diagnostics agreement with Somerset NHS Foundation Trust that is worth £19.1m over ten years, although it is initially for five years. Rutherford will supply imaging services from a facility in Taunton, which will be developed in partnership with Equitix. The service should start in the second half of 2021.

Good Energy (GOOD) says that it remains profitable, although smaller business energy demand was lower in the second quarter. Gross margins have been hit because excess energy had to be resold. Operational efficiencies have offset some of this effect. Cash collection has been strong. Four-fifths of customers have been transferred to the Kraken customer services system. This will help to reduce costs.

Shepherd Neame (SHEP) has negotiated additional bank facilities. Total debt facilities are £132.5m. The brewery has been generating income from increased sales to supermarkets and for export. The majority of the company’s pubs should reopen by the end of July.

Cannabis-focused investment company Greencare Capital (GRE) has raised £1.37m at 50p a share. That is double the original flotation price. Management is hopeful that it will make an initial investment in its favoured acquisition target in the near future.

NQ Minerals (NQMI) says that plant production levels at the Hellyer gold mine increased by 44% to more than 1.3 mtpa. NQ has completed the acquisition of the Beaconsfield gold mine in Tasmania.

British Honey Company (BHC) says sanitiser sales have enabled the company to achieve sales of 240% of budget in the past three months. BHC has swapped 4.5% of its shares for a 10% stake in List Distillery LLC. BHC has an option to buy the rest of the company for £4.5m plus up to £500,000 in contingent consideration.

Capital for Colleagues (CFCP) had an NAV of £7.55m (48.9p a share) at the end of February 2020.

Tectonic Gold (TTAU) has changed its corporate adviser from Peterhouse to VSA. Tectonic has published full year figures to June 2019 and interims to December 2019. NAV was £2.49m at the end of 2019.

Wishbone Gold (WSBN) generated sales of $3.64m of sales in the first quarter of 2020, compared with $3.85m in the same period last year. In 2019, revenues were $10.7m.

Human Brands is selling some of its brands, including Shinju Whisky, to Rogue Baron in return for shares and Gunsynd (GUN) will have its £379,000 convertible loan note novated to Rogue Baron, which has been granted EIS advanced reassurance. Rogue Baron plans to float on a UK market and this could trigger the issue of further shares to Gunsynd.

First Sentinel (FSEN) has supplied a £300,000 loan facility to Vox Markets. This is convertible into shares. So far, £250,000 has been advanced. Loan facilities totalling £500,000 have been provided to Ridercam Systems. A £130,000 investment has been made for a 7.4% stake in investment company Malaika. The company’s Australian subsidiary has provided a loan facility to energy producer Direct Energy Holdings.

Ecovista (EVTP) was withdrawn from the AQSE on 1 July. The day after it published interim figures to February 2020. There was £42,000 in cash and this should cover general running expenses. Management says that being quoted cost £60,000 a year. NAV is £735,000.

Formerly known as Welney, Quetzal Capital (WENP) has been readmitted to the market following a share consolidation of 100 existing shares into one new share and placing raising £22,000.

AIM

Cambridge Cognition (COG) continues to win new contracts and the first half order intake was £4.9m. The digital health business has increased its contracted order book to £7.5m. The company is on course to make a much lower loss in 2020.

Construction disputes and expert witness services provider Driver (DRV) improved its profit in the first half thanks to a good performance from its Asia Pacific businesses. However, the Middle East is still a problem and a strategic review is underway. Net cash was £3.3m at the end of March 2020 and it has increased since then. There is no dividend. The second half will be tougher, though.

Forex provider Equals (EQLS) continues its strong growth record in 2019. Trading levels were hit by the COVID-19 lockdown in April and May, but June’s revenues per day recovered to a similar level to June 2019. The administration of Wirecard has had limited effect on business.

AFC Energy (AFC) is raising £31.6m at 16p a share. This will be used to invest in manufacturing for the H-Power fuel cell systems and employing additional staff for the deployment of the technology in the electric vehicle and construction markets. There will also be cash put into the development of the AlkaMem anion exchange membrane and the HydroX-Cell solid-state membrane fuel cell system.

Telecoms equipment supplier Filtronic (FTC) says it grew revenues from continuing operations in the year to May 2020 and it made a small underlying profit. Delays to deliveries mean that it is difficult to assess the outcome for the current financial year.

Redx Pharma (REDX) is raising $29m through a convertible loan note issue to Redmile and Sofinnova Partners and £812,000 via a share issue to Sofinnova.

Robinson (RBN) is paying an interim dividend of 3.5p a share. The packaging supplier did not pay a final dividend and the interim will be payable on 30 July to make up for that. First half trading was in line with expectations. Full year pre-tax profit is expected to be flat at £2.3m.

MAIN MARKET

Trading in Lookers (LOOK) shares has been suspended because it has not published 2019 results. They should be published in August. An investigation by Grant Thornton suggests that there will be a £4m non-cash write-off relating to fraud with a further £15m non-cash write-off for incorrect or inconsistent accounting, mainly relating to stock.

Andrew Hore

Andrew Hore – Quoted Micro 29 June 2020

AQUIS STOCK EXCHANGE

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

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

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

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

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

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

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

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

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

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

AIM

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

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

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

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

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

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

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

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

MAIN MARKET

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

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

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

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

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

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

SMALL CAP AWARDS 2020

Company of the year: Volex

Technology company of the year: Avacta

Impact company of the year: ITM Power

IPO of the year: Diaceutics

Transaction of the year: Kape acquisition of Private Internet Access

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

Innovative financing of the year: Yu Group

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

Analyst of the year: Lorne Daniel (finnCap)

VCT manager of the year: Amati

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

Lifetime achievement award: Giles Hargreave

Andrew Hore – Quoted Micro 8 June 2020

AQUIS STOCK EXCHANGE

Sativa Group (SATI) has agreed a merger with Stillcana Inc. The share swap is 0.33507 of a Stillcanna share for every Sativa share. That values the cannabis products company at £10.7m and its shareholders will own 65% of the enlarged group. Trading in Sativa shares restarted on 4 June.

Engineering businesses consolidator Vulcan Industries (VULC) floated on 1 June. It was valued at £6.98m at the 3p a share placing price. Vulcan raised £746,500 via a subscription and placing and £239,000 will be spent on costs. . Vulcan has already completed four acquisitions. They supply automotive components, fire doors and frames, nails and architectural metal work. Trading was weaker than expected last year. Zanete Fergusone sold three businesses to Vulcan and her family interests own 47.7% of the company. A manufacturer of pressed steel bearing housings is set to be the next acquisition.

Adnams (ADB) has put its refinancing negotiations on hold since the COVID-19 lockdown. The long-term facilities have been extended by six months. Adnams is considering the government loan scheme. There will be a substantial interim loss.

IFA group AFH Financial (AFHP) believes that £3m of temporary annualised cost savings will help to offset a decline in gross revenues this year. Interim revenues were 5% ahead at £38.2m but pre-tax profit was flat due to higher interest costs. The interim dividend is 5p a share, instead of the anticipated 7p a share. A further 2p a share may be paid later in the year depending on the prospects at the time. Underlying full year pre-tax profit should improve from £16.9m to £18m, which is a small downgrade on previous forecasts.

Good Energy (GOOD) has seen no significant financial impact from COVID-19. Cash collection has been in line with previous years. The generation assets have produced above average output. The final dividend has been deferred.

Altona Energy (ANR) is assessing the potential acquisition of a majority stake in a rare earths project. The Chambe project is in Southern Malawi. Due diligence will take up to three months.

Tectonic Gold (TTAU) has sold a majority interest in Tectonic South Africa to AIM-quoted Kazera Global. Tectonic will retain a 10% interest in the diamonds project. Tectonic has received £100,000.

Investment company Gledhow Investments (GDH) increased net assets from £735,000 to £907,000 by March 2020. Gledhow had £147,000 in cash at the end of March.

Welney (WENP) has published full year and interim figures. At the end of December 2019, net liabilities were £361,000. A consolidation of 100 shares into one new share will be followed by a £15,000 placing at 0.3p a share. A loan stock issue will raise £35,000. Trading in the shares restarted on 3 June. Keith, Bayley, Rogers has been appointed as corporate adviser. The company’s name will be changed to Quetzal Capital

Black Sea Property (BSP) is renegotiating its credit facilities. Management is uncertain how trading will fair this year.

Lombard Capital (LCAP) is changing its accounting reference date from 31 March to 30 June. Barry Fromson has been appointed as an executive director.

Wishbone Gold (WSBN) has raised £300,000 at 1.35p a share and issued £70,000 worth of share for fees and to convert loans. Peterhouse has replaced Turner Pope as broker.

AIM

Mereo Biopharma (MPH) has raised $70m (£56m) including $19.4m (£15.5m) via a share placing at 17.4p each and $50.6m (£40.5m) through a convertible loan note issue. The cash will be used to reduce debt and fund the company into 2022. Mereo plans a phase 1b study for cancer treatment etigilimab during the fourth quarter.

Life sciences IT services provider Instem (INS) continues to trade strongly and net cash was £8.3m at the end of April 2020. The 2019 figures show a rise in pre-tax profit from £2.8m to £3.2m and a jump to £4.2m is expected in 2020. Existing business continues but new business may take longer to secure, and this led to a small downgrade.

Amryt Pharma (AMYT) has signed a distribution agreement with Swixx BioPharma for leptin deficiency treatment Myalepta in 17 eastern European countries.

Armadale Capital (ACP) says that the definitive feasibility study update has increased the NPV of the Mahenge Liandu graphite project in Tanzania by 20% to $430m. That is based on a 30% rise in average annual production.

Bidstack (BIDS) has raised £5.5m at 4p a share. The in-game advertising technology developer will use the cash to expand internationally and fund marketing and further technology development.

Telematics firm Quartix (QTX) says that subscriptions have held up and installations are recovering after an initial slump in April. Trading in the first four months of 2020 was ahead of the same time last year. Some clients have been allowed payment deferrals. There is £9.5m in the bank.

President Energy (PPC) has raised £2.24m at 1.85p a share via PrimaryBid. A placing raised a further £2.5m. Trafigura is subscribing a further $6m at the same share price. Along with a $4.1m debt for equity swap this will reduce debt to around $15m. There will be a $98.5m write down of assets, particularly the Paraguay exploration activities. Even excluding this, there will be a loss this year. The crude oil reference price in Argentina has been set at $45/barrel until the end of the year, which is higher than the current global price.

MAIN MARKET

Tex Holdings (TXH) improved sales and gross margins last year, but there was still a slightly increased pre-tax loss due to redundancies and professional fees. Revenues increased from £40.1m to £43.1m, and if exceptional costs are stripped out there was a decrease in pre-tax loss to £661,000. The plastics division is profitable, but the engineering division is losing money. The overdraft has been repaid with the proceeds of a shareholder loan. The pension surplus has increased NAV from 127p a share to 134p a share. There are plans to reduce costs by an annualised £1.5m.

LED lighting supplier Luceco (LUCE) says trading has improved in recent weeks and it expects the first half profit and cash generation to be at least as good as the same period last year. That is despite lower revenues.

Motor dealer Lookers (LOOK) is closing 12 more dealership sites. Annual savings of £50m are anticipated. Trading has recommenced at Lookers sites, but activity is still weak. Net debt was £57m at the end of May.

Andrew Hore

Andrew Hore – Quoted Micro 23 March 2020

AQUIS STOCK EXCHANGE

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

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

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

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

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

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

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

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

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

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

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

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

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

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

AIM

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

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

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

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

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

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

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

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

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

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

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

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

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

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

MAIN MARKET

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

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

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

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

Andrew Hore

Andrew Hore Quoted Micro 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 14 October 2019

NEX EXCHANGE

National Milk Records (NMRP) increased its pre-tax profit by one-fifth to £2.4m in the year to June 2018. Revenues improved from £21.4m to £22.8m. The farm-based milk recording business grew, but the main growth came from the much smaller traceability and reproductive businesses. These figures are for the period before the recent virus attack. The dividend has been halved from 2.5p a share to 1.25p a share because management wants to invest in laboratories and IT. Net debt was £1.7m.

Good Energy (GOOD) has clarified its interim figures. The renewable energy supplier says that there was a misclassification of £4.9m relating to cash and current assets and current liabilities. The problem was the timing of payments. This does not change NAV and profit. There was a £20m in the bank at the end of September 2019. Good Energy has signed a technology platform agreement with Octopus Group, which could involve investment of £4m in order to improve efficiency. The existing technology will be written down over the 12 months to June 2019. Operating cost savings should cover the investment in 18 months of full implementation.

Vox has ended merger discussions with PCG Entertainment (PCGE) and Align Research saying that it is difficult to raise money for any business involving Align Research. Vox is concerned that this will hamper fundraisings for future deals, and it believes it could have a negative effect on its main business.

VI Mining (VIM) has acquired rights to near-surface oxide gold at the Aripuana project in Brazil. The company’s other assets are in Peru.

Reyker Securities has been suspended as a broker on NEX Exchange.

AIM  

PCI-compliant payment services provider PCI PAL (PCIP) is making progress in winning new contracts in North America. Recurring annual contract value is £1.9m, compared with forecast revenues of £4.8m in the year to June 2020, up from £2.8m. PCI Pal will continue to lose money as it builds up revenues. Net cash was £1.5m at the end of June 2019. A new £2.75m facility will provide the working capital required to cover losses until the company starts to generate cash. Net debt of £1.5m is forecast at the end of June 2021, so this is well within the funding available.

Uhuru Corporation is a Japanese Internet of Things technology company planning to join AIM this month. Tokyo-based Uhuru (www.uhuru.co.jp/en) is involved in consultancy and engineering, as well as providing creative content and data analysis. Customers include NEC, Dentsu, Honda, Komatsu, Yamaha and Mitsubishi Heavy Industries.

Duke Royalty (DUKE) raised £461,500 at 44p a share via PrimaryBid.com, which takes the total raised to £16.55m. A two-for-51 open offer has been launched to raise a further £3.45m.

AIM shell Wilmcote Holdings (WCH) had discussions about the participation in the purchase of US-based speciality chemicals company Arclin Inc, but these have ended. The costs of the work done on this potential transaction have reduced the cash pile to £900,000. Wilmcote is holding talks with investors about how to fund expenses while it seeks another speciality chemicals acquisition. Trading in the shares has recommenced and the share price slumped from 97p to 65p.

Oil and gas producer Amerisur Resources (AMER) has issued revised bidding instructions to the potential acquirers that were provided data as part of the strategic review and formal sale process. The process will hopefully conclude before the end of the year.

Applied Graphene Materials (AGM) is focusing on the customers that are utilising its dispersion know-how and provide the best near-term revenue potential. That will enable the graphene producer to cut its operating costs and make the cash in the bank last at least another two years. Net cash was £6.1m at the end of July 2019 and a tax credit of £600,000 has since been received. Manufacturing will be streamlined, and the annual cost base could fall from £4.3m to £3.2m. Revenues remain modest.

Pawnbroker Ramsdens Holdings (RFX) will make a one-off gross profit of £600,000 from scrapping slow moving jewellery in order to take advantage of the rise in the gold price. Trading is in line with expectations. The interims will be published on 3 December.

United Oil and Gas (UOG) is on course to acquire Rockhopper Egypt for $16m before the end of 2019. A share issue is required in order to fund the initial cash payment of at least $11m. The rest of the payment will be in shares issued at the placing price. The main asset being acquired is a 22% interest in the Abu Sennan concession.

Time Out Group (TMO) has raised £17.1m at 127p a share. The June 2016 flotation price was 150p. The cash will be used to cut debt and roll-out more Time Out Market sites, with Chicago and Montreal due to open later this year and more contracted sites for the future. Net debt was £34.4m at the end of June 2019.

Investors give no quarter when it comes to profit warnings these days. Public housing software provider Castleton Technology (CTP) says recurring revenues are still going well, but there is a shortage of one-off revenues. This has led to a 15% cut in forecast revenues for the year to March 2020. That leads to a cut in pre-tax profit forecast from £6.4m to £5.3m. A similar reduction has been made in the forecast for 2020-21, which is £5.8m. The share price fell by more than one-third to 57p, which is less than ten times prospective earnings.

Trading in the shares of Solo Energy (SOLO) has been suspended ahead of a proposed acquisition of assets from ONE-Dyas for an initial €30.1m. That will be funded by debt and a share issue raising £20m, which will involve an open offer. The 14 gas fields are in the Dutch sector of the North Sea. Tom Reynolds is moving from non-executive to chief executive. The admission document should be published in November and the name will be changed to Scirocco Energy.

Dekeloil (DKL) is still being hampered by a low crude palm oil price but it is optimistic that the price will improve. There was a 11% decrease in third quarter crude palm oil production to 4,803 tonnes. However, there was a 30% increase in sales to 7,138 tonnes. The average price achieved was 16% lower at €456/tonne. The cashew processing project is on course for first production in 2020. The company is changing its name to Dekel Agri-Vision Ltd.

Managed services provider Redcentric (RCN) says that first half trading was on track. It is on course to improve pre-tax profit from £7.2m to £9.8m.

MAIN MARKET

Nottinghamshire-based nmcn (NMCN) is acquiring Lintott Control Systems (LCS), which designs and manufactures water and wastewater treatment systems and process software. The total cost of LCS could be as high as £3.76m. The initial payment is £1, plus up to £676,000 dependent on the receipt of payment for certain invoices. The rest is dependent on profit levels over the three years to the end of 2021.

Argo Blockchain (ARB) has increased third quarter revenues by 75%, compared with the second quarter. Revenues were £3.63m and the cryptocurrency mining margin is 73%, even though the bitcoin price has dropped. The number o machines in production should double to 12,000 by the end of the year.

Rainbow Rare Earths (RBW) used cash of £2.31m in operations in the year to June 2019. Rainbow generated revenues of £1.54m from trial rare earths mining at Gakara in Burundi, but production costs were double that level. Write downs mean that net assets were £3.37m at the end of June 2019. More exploration activity is required before production levels are increased.

Stranger Holdings (STHP) has agreed terms to acquire two mineral companies. One has assets in Cameroon and the other is in Idaho. Minerals include cobalt and nickel. Previous potential transactions have been terminated.

Standard list shell Auctus Growth (AUCT) is still seeking an acquisition. There is still £912,000 in the bank.

Andrew Hore

Andrew Hore Quoted Micro 17 June 2019

NEX EXCHANGE

Renewable energy supplier Good Energy (GOOD) says that holding back on operating expenditure has offset the downturn in demand due to warmer weather. Profit will be weighted to the first half. Good is investing in electric vehicle platform Zap-Map.

Brewer Daniel Thwaites (THW) reported a more than halved pre-tax profit from £9.8m to £4.5m. Turnover improved from £92.2m to £96.9m and the profit decline was mainly due to a non-cash swing from gain to loss on swaps and a pension adjustment. Operating profit was flat at £12.9m. The Inns business improved its profit and individual pubs are making a higher profit contribution, but hotels profit declined. The total dividend was maintained at 3.36p a share. Net debt was £69.7m at the end of March 2019, while NAV was £180.7m. The pension liability has fallen from £34.9m to £24.8m.

KR1 (KR1) has sold 70,079 tokens in the Cosmos Network for $361,000. The average cost of the tokens was $0.10 each and they were sold for $5.14 each. KR1 has also generate a further 7,008 tokens from staking activities and these were sold for $6.93 each.

There was a sharp rise in the share price of TechFinancials Inc (TECH) but much of this gain was lost by the end of the week. There does not appear to be a reason for the rise. Full year results should be published this week. There will be an operating loss. There was $1.1m in the bank at the end of May 2019. The company is still waiting for approval from the Seychelles authorities for the €100,000 disposal of MarketFinancials. There will be write-downs of the value of diamond trading blockchain developer CEDEX and MarketFinancials.

EPE Special Opportunities Ltd (ESO) had a NAV of 272.02p a share at the end of May 2019. The company intends to start buying back shares and these purchases could exceed 25% of the average daily volume of ordinary shares.

Shareholders have approved the plan of Oyster Oil and Gas to distribute the shares of its main subsidiary to settle indebtedness and certain creditors. These include Gunsynd (GUN) although the exact shareholding has yet to be announced. Production sharing contracts in Madagascar and Djibouti are owned by the subsidiary. Gunsynd has raised £500,000 at 0.037p a share.

Trading in Via Developments (VIA1) debentures has recommenced following the publication of figures for 18 months to September 2018. The company has net liabilities of £329,000 with long-term debt of £5.68m offset by cash of £91,000. A subsidiary is securing debt and equity for a project that will generate management fees fir Via, but that won’t happen until September.

Clean Invest Africa (CIA) is holding a general meeting on 3 July in order to gain shareholder approval for the acquisition of the 97.5% of Coal Tech and its related business that it does not own for £27.2m in shares at 2.75p each. CoalTech transforms discarded coal into coal pellets.

Lombard Odier sold 1.65 million shares in Chapel Down Group (CDGP) at 75p a share, reducing its stake to 11.5%. Chief executive Frazer Thompson exercised 2.39 million options at 12.5p a share and finance director Richard Woodhouse exercised 200,000 options at 10p a share and all these shares were sold at 75p each.

AIM 

Frontier Smart Technologies (FST) has received another bid approach. Previous potential bidder Science Group (SAG) has built up a 28.3% stake in Frontier so it is in a strong position. It says that it does not intend to sell the shares to another bidder and could block any move to cancel the AIM quotation.

Park Group (PARK) increased investment in the business last year and this knocked underlying pre-tax profit progress which was flat at £12.5m, before asset write-downs. The dividend was increased by 5% to 3.2p a share. There was a smaller contribution from Christmas savings, but growth from corporate promotions and incentives offset that. Increasingly, business is card-based. There was £36.9m of the company’s own cash at the end of March 2019. There will be a dip in profit this year due to higher overheads and profit growth should resume in 2020-21. Chief executive Ian O’Doherty has bought 30,000 shares at 69.5p each.

Stanley Gibbons (SGB) has resolved claims against former management at antique dealer Mallett and this will result in a cash inflow of £850,000 over 12 months.

Safestyle (SSTY) has acquired the freehold of a 161 bed hostel in Pisa for €3.25m. This takes the company’s portfolio to 14 hostels, including the Paris site that is under construction.

Last year was about OnTheMarket (OTMP) building up the number of agencies on its property portal and increasing the number of homebuyers looking at the properties advertised. The rival to Rightmove and Zoopla needs to convert these agencies into fee payers and that process has just started. OnTheMarket will continue to be loss-making this year with higher marketing spending likely to offset higher revenues. Cash is expected to fall from £15.7m to £6.6m at the end of January 2019.

NWF (NWF) did better than expected in the year to May 2019. The feeds business was slightly behind the previous year, but new business helped the food warehouse business to significantly improve its performance and fuels did better than expected despite the milder winter, although behind the previous year. The results will be published on 30 July.

Industrial equipment distributor HC Slingsby (SLNG) says that pressure on margin means that operating profit in the four months to April 2019 is lower, even though revenues are slightly higher. Uncertainty over Brexit is affecting levels of demand in the first half of 2019. Net debt was £1.3m at the end of May 2019.

The actuarial deficit on the Molins UK Pension Fund has been cut from £69.9m to £35.2m over a three-year period. Mpac (MPAC) believes the deficit should be eliminated by July 2024. That is based on maintained payments into the scheme.

Filta (FLTA) says that its figures will be more skewed towards the second half. This is partly down to the integration of the Watbio grease management business. There has been growth in the FiltaSeal business and the North American FiltaFry fryer management franchise business.

Avingtrans (AVG) has acquired the Booth Industries specialist door manufacturing business from the administrator of Redhall (RHL) for £1.8m in cash. Booth made a pre-tax profit of £300,000 last year.

MAIN MARKET 

Full year results from fasteners supplier Trifast (TRI) were slightly better than expected. Revenues were 6% ahead at £209m, while re-tax profit was a similar percentage higher at £23.5m. The dividend was increased by 10% to 4.25p a share. Trading remains tough.

Aquila Services (AQSG) has acquired education and sports consultancy Oaks Consultancy for up to £1.7m in cash and shares. In the year to March 2019, Oaks made a pre-tax profit of £254,000 on revenues of £909,000.

Bluebird Merchant Ventures Ltd (BMV) is converting $2.89m of loans into 121.5 million shares. Management made most of the loans and chief executive Colin Patterson will end up with 19.1% of Bluebird. Bluebird is debt-free.

Standard list shell Safe Harbour Holdings (SHH) lost £2.3m in 2018 due to overheads and due diligence costs. There is still £26.9m in the bank.

Andrew Hore

Andrew Hore – Quoted Micro 27 May 2019

NEX EXCHANGE

Ananda Developments (ANA) is amending its investing strategy and acquiring Tiamat Agriculture, which is applying for a UK controlled drug cannabis cultivation and supply licence.  Anglia Salads and JEPCO will provide cannabis growing expertise. The new investing strategy will include the cultivation of medicinal cannabis. URA Holdings will subscribe £400,000 for shares at 0.45p each.

AfriAg Global (AFRI) has raised £1m at 0.1p a share and the cash will be used to acquire a 2.34% stake in Apollon Formularies Ltd. AfriAg hopes to gain first refusal to acquire the rest of Apollon in a transaction that would value the company at £40m.

Good Energy (GOOD) will redeem the first Good Energy Bond, which was launched in 2013, before the end of June. The outstanding principal is £3.6m and the cash for repayment will come from the disposals of Newton Downs and Brynwhilach solar farms to the local communities. The cash helped to develop nearly 150MW of renewable generation projects.

Wishbone Gold (WSBN) says that gold recoveries in Honduras have been low and it is considering whether to sell to the joint venture partner or take full control of the operations. Gold trading volumes are increasing but the contribution to overheads is modest.

Panther Minerals (PALM) has applied for an exploration licence for the Marrakai gold project in Northern Territory, Australia. Panther has also acquired additional ground surrounding the former Little Bear mine in Ontario, Canada.

Formation Group (FORM) reported a reduced loss in the six months to February 2019. There is £3.05m in cash in the balance sheet.

Angelfish Investments (ANGP) is investing up to £150,000 in convertible loan notes in ASSIF, which is developing a digital product to improve mental health. The first tranche has been drawn down and the rest will be invested when design work is completed. The loan notes are convertible into up to 35% of ASSIF, depending on the milestones achieved prior to conversion.

NQ Minerals (NQMI) has shipped 34,500 tonnes of precious metal pyrite concentrate from the Hellyer gold mine in Tasmania.

Proton Partners International Ltd (PPI) has started offering high energy proton beam therapy in Bomarsund in Northumberland.

Newbury Racecourse (NYR) non-executive director Dominic Burke has nearly doubled his shareholding to 2.8%. Tim Syder increased his stake to 3.1%.

V22 (V22O) will leave NEX at the close of business on 31 May.

AIM  

SafeCharge International (SCH) is recommending a $5.55 (436p) a share cash offer from a subsidiary of fellow payment services provider Nuvei Corporation, valuing the company at £699m. The final dividend of 7.22p a share will be paid. The international payments processor joined AIM five years ago at 162p a share. Nuvei has a strong market position in North America and SafeCharge provides scale in Europe.

Trading in the shares of LXB Retail Properties (LXB) has been suspended following court approval of the dissolution of the company and a return of capital of 1.2p a share. The cancellation of the quotation will happen on 31 May.

Volvere (VLE) has sold its oldest subsidiary Sira Defence and Security for £3m, although management bonuses of £320,000 will be paid out of the proceeds. Sira cost a nominal amount and has contributed cash to the group. This leaves 80%-owned frozen pies maker Shire Foods, which increased its full year pre-tax profit from £635,000 to £854,000. Even stripping out incentive payments relating to the sale of the Impetus business, Shire hardly makes enough profit to cover central overheads.

Lawyer Gateley (GTLY) has confirmed that its full year revenues will be at least £102m and EBITDA at least £19m, an increase of 15%. The growth is a combination of acquisitive and organic. Knights Group (KGH) says that its full year revenues will be not less than £52.4m and underlying pre-tax profit will be ahead of expectations at £9.7m.

Argentina-focused oil and gas producer President Energy (PPC) increased revenues by 160% to $47.2m in 2018 and this enabled it to move into profit. This year pre-tax profit is set to improve from $3.5m to $17.3m as last year’s acquisition makes a more significant contribution and capital investment starts to pay back. Average production is expected to be 3,800 barrels of oil equivalent per day in 2019.

Science Group (SAG) has taken a 9% stake in digital radio technology developer Frontier Smart Technologies (FST) at 12.5p a share. Science offered to acquire the whole company via a cash bid of 30p a share but the proposal met with a negative response from the target’s board and the offer has been withdrawn.

Caledonian Trust (CNN) has renegotiated the conditions of the proposed sale of St Margaret’s House in Edinburgh, which was announced in February 2018. The buyer is still in the process of applying for planning consent and it has three months in which to submit the application, plus 12 months to secure consent. A further three months will be allowed to find a pre-let and Caledonia will vacate the property six months after that. This means that it could be two years before the transaction is completed. The consideration is still £15m, compared with a book value of £8m.

Rose Petroleum (ROSE) has received a £300,000 investment at 1.2p a share and appointed Colin Harrington to the board as executive chairman. Origin Creek Energy has a 14.8% shareholding following the share issue. This replaces the previously announced subscription at a lower share price and Robert Bensh has left the board because of that.

Kibo Energy (KIBO) says that 60%-owned flexible power generation development subsidiary MAST Energy Developments is acquiring Bordersley Power Ltd, which is developing a 5MW gas-fuelled power generation plant and relevant grid connections. The deal is dependent on certain conditions.

Cellcast (CLTV) is owed £453,000 by a Kenyan client of its gaming and lottery consultancy activities, which generated revenues of £395,000 in 2018. The government in Kenya is cracking down on advertising of gambling and it had previously raised taxation rates. Cellcast had £698,000 in the bank at the end of 2018.

Trading in the shares of Dublin-based Amryt Pharma (AMYT) has been suspended ahead of the proposed all share acquisition of the larger Aegerion Pharmaceuticals, which is a subsidiary of Nasdaq-listed Novelion Therapeutics Inc. Amryt plans to raise $60m from a share issue.

MAIN MARKET 

Blockchain Worldwide (BLOC) has made a non-binding offer for Entertainment AI Inc although it is still subject to due diligence on the artificial intelligence and machine learning company. Trading in the shares has been suspended.

LED lighting supplier Luceco (LUCE) says trading continues to improve even though sales to UK professional customers are subdued. The overseas market is stronger. Margins are improving.

Motor finance provider S and U (SUS) says that profit from its core business has improved so far this year. The property bridging lending business has increased its loan book to £22m.

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 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

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