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Brand Comms CEO Alan Green talks Cadence Minerals #KDNC, Catenae Innovation #CTEA & iGas Energy #IGAS on the Vox Markets podcast
Alan Green CEO of Brand Communications discusses Cadence Minerals #KDNC, Catenae Innovations #CTEA and Igas Energy #IGAS with Justin Waite on the Vox Markets podcast. The interview starts at 18 minutes 34 seconds.
Brand CEO Alan Green talks about iGas Energy #IGAS, Catenae Innovation #CTEA & Ananda Developments #ANA on Vox Markets podcast
Brand CEO Alan Green talks about iGas Energy #IGAS, Catenae Innovation #CTEA & Ananda Developments #ANA with Justin Waite on the Vox Markets podcast. Interview is 17 minutes 21 seconds in.
Buy IGas Energy (IGAS.L) says VectorVest. The stock offers an attractive proposition for the adventurous investor.
IGas Energy (IGAS.L) is a leading British oil and gas explorer and developer, producing 2,500 barrels of oil equivalent per day from over 100 sites across the country. IGAS has played a key role in Britain’s onshore energy production; exploring, developing and producing onshore oil and gas at its various sites for over three decades. Management and technical teams have many years of experience in onshore energy production and most live and work in the communities in which the Company operates. IGAS is extremely well positioned for the future as the UK moves closer to unlocking Britain’s untapped unconventional oil and gas resource.
Examine this trading opportunity and a host of other similar stocks. A single payment of £5.95 gives access to the VectorVest Risk Free 30-day trial. More here
On September 12th 2018, IGAS announced interim results for the six months to 30 June 2018. Net production averaged c.2,300 boepd in H1 2018 (H1 2017: 2,335 boepd) and IGAS expects average net production for the year to be c.2,200 – 2,300 boepd, with operating expenditure anticipated to be on budget at $32.5/boe in 2018. The Company provided a series of updates on its various projects, including the ongoing Stockbridge production recovery programme, and said the Albury gas-to-grid project remains on track for Q4 2018. IGAS reported improved net cash from operating activities of £6.0m (H1 2017: £0.4m) principally due to improved commodity prices, while cash balances at 30 June 2018 were £14.5m (H1 2017: £16.3m) with net debt (excluding capitalised fees) of £7.4m (H1 2017: £7.2m). CEO Stephen Bowler said that momentum in the UK onshore shale industry “continues to build” and looking forward added that IGAS was making good progress on production projects . .”and as cash generation continues to improve, given the higher oil price, we will be able to invest back into the business.”
The VectorVest stock portfolio analysis and management platform flagged a series of positive metrics for IGAS over the summer of 2018. In particular, the RV (Relative Value) metric, (an indicator of long-term price appreciation potential) flagged a sharp move higher in June 2018, and today continues to log IGAS as excellent at 1.43 (on a scale of 0.00 to 2.00), along with an excellent GRT (Earnings Growth Rate) rating of 28%. The GRT metric reflects a company’s one to three year forecasted earnings growth rate in percent per year. The well-documented issues in the UK with shale gas and fracking are reflected in a fair RS (Relative Safety) rating of 0.91 (again on a scale of 0.00 to 2.00). Finally VectorVest records a valuation of 163p per share, indicating that at the current 113.75p the stock is undervalued.
A candlestick chart of IGAS.L over the last year is shown above. The VectorVest valuation is shown by the green line study in the same window as the share price. The share is currently trading within a ascending triangular formation which is regarded by technical analysts as one of the most bullish pattern in a chartists arsenal. The share is on a VectorVest Buy signal. The technical target from a break of the ascending triangle is similar to the VectorVest valuation.
Summary: Some investors may look at our IGAS recommendation and turn away on account of the controversy surrounding fracking and the development of the UK shale gas industry. That would be to ignore a growing, well-managed company that offers a decent spread of risk across a number of UK shale gas projects at various stages of development. From both a fundamental and technical (charting) standpoint, VectorVest rates IGAS as an attractive proposition for the adventurous investor. Buy.
Dr David Paul
October 24th 2018
Readers can examine trading opportunities on IGAS and a host of other similar stocks for a single payment of £5.95. This gives access to the VectorVest Risk Free 30-day trial, where members enjoy unlimited access to VectorVest UK & U.S., plus VectorVest University for on-demand strategies and training. Link here to view.
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Health and care properties developer Ashley House (ASH) is widening its area of operations through the acquisition of a modular off-site construction business by its subsidiary F1 Modular, which already works with the company. The acquired business was in administration and assets have been acquired for £113,500 and a lease taken out on its premises – there is an option to acquire the premises. Ashley’s stake in F1 Modular has been raised from 52% to 76% for up to £250,000 depending on performance and the repayment of a previous loan. If F1 Modular makes more than £4m in profit over the next three years then the additional stake will be transferred to the minority shareholders. F1 Modular could win housing business and there are already potential housing deals with two local authorities, as well as a prospective customer for retail pods. Other potential markets are schools and student accommodation. There are also opportunities in Ashley’s core business. Ashley has reiterated it warning that the figures for the year to April 2017 because of contract delays due to a consultation on supported housing. This means a small full year profit is likely. Non-executive director John Moy acquired 2.4 million shares at 7.5p each from his son and then transferred his entire holding of 6.9millionshares to his wife, although he is still deemed to have an interest in this 11.6% stake.
Bulgaria property investment company Black Sea Property (BSP) has successfully tendered for a Sofia office building called the UniCredit Building. UniCredit is the current occupier and owner. Black Sea Property bid €10.52m and €7.6m of this will come from a loan, while the rest will have to be raised from shareholders. A deposit of €1.04m has been paid. That deposit will be forfeited if the deal does not go ahead. UniCredit can remain in the building for six months after the transaction is completed, expected to be May assuming the fundraising is successful, and will not have to pay rent. The property is more than 100 years old, has five floors and covers 98,000 square feet.
Capital for Colleagues (CFCP) has been taken on by cosmetics firm LUSH to help it introduce employee ownership. An initial stake of 10% will be held by the employee benefits trust.
There could be a bid battle for FIH (FIH), formerly known as Falkland Islands Holdings. Staunton, which is backed by the Rowland family, has bid 300p a share and has acceptances of just over one-third of the shares in issue – it owned 25% prior to the bid. Eduardo Elsztain has entered the fray via Dolphin Fund, which says it is willing to offer even more. Elsztain is an Argentinian who has built up significant property and agricultural interests having initially been backed by George Soros in 1990. FIH has refused requests for further information because it was not provided with answers to its request about ownership and control of Dolphin. There has been a change to the current bid which no longer require 90% acceptances to go unconditional. The figure has been reduced to 50%.
Audio visual products distributor Midwich Group (MIDW) grew its 2016 revenues by 18% to £370.1m via a combination of acquisitions, currency movements and organic growth. Gross margins are strong for a distribution business but they still edged up from 14.9% to 15.3%. Underlying pre-tax profit was 23% higher at £17.9m. Net debt was £15m at the end of 2016, while the dividend for the eight months that Midwich was quoted on AIM was 8.62p share. Displays and technical products are becoming more important and there was also growth in projection products sales although not as fast as the main parts of the business. Sales of scanners and other document-related products fell. France, Germany and Australasia made significantly better contributions. Further acquisitions are likely to supplement continued organic growth.
Crossrider (CROS) has refocused its business on apps and a mobile security acquisition further boosts this side of the business. CyberGhost will cost an initial €6.2m in cash and shares with up to €3m more payable dependent on performance. The acquisition should be earnings enhancing in 2017. Last year, Crossrider group revenues fell from $84.6m to $56.5m but the core apps business grew both its revenues and its profit contribution. Net cash was $72.1m at the end of 2016. Next year, revenues and profit should start to grow again and Crossrider may even pay a dividend.
University technology commercialisation business Frontier IP (FIPP) has raised £3m at 40p a share in order to finance existing investments and make new ones.
Igas Energy (IGAS) wants to raise £45.2m via a placing and up to €5m through an open offer as part of its financial restructuring. There is also a proposed debt for equity swap and the majority of these bondholders have indicated that they will accept this proposal.
Software provider Cerillion (CER) has won a €2.4m (£2.1m) with a European wholesale telecoms company. So far this financial year, £13.2m of work has been won. That will not necessarily all be delivered this year but, along with the year-end order book, this provides backing for the £16m revenues forecast for 2016-17.
Trading and risk management systems provider Brady (BRY) is restructuring its business but the 2016 figures do not show the benefits. The company has grown by acquisition and the strategy is to fully integrate them all into one platform. Revenues increased 11% to £30.3m, mainly due to currency changes, and Brady returned to profit before exceptional charges.
Recurring revenues continue to grow at performance measurement software provider Statpro (SOG) and they were running at a rate of £39.7m at the end of 2016. House broker Panmure Gordon expects an increase in underlying pre-tax profit from £2.7m to £3.3m in 2017. The dividend is being maintained at 2.9p a share in order to build up earnings cover and invest in software development.
Training technology and services provider Pennant International (PEN) has already secured orders that underpin the 2017 revenues forecast by house broker WH Ireland, although the timing of orders can be delayed. Revenues are expected to grow from £17.2m to £18m and pre-tax profit should edge up from £2.2m to £2.4m. There was £3.5m in the bank at the end of 2016. Two additional facilities have been secured to help cope with demand for the group’s services. Defence clients dominate the business but there are plans to increase exposure to other markets. Phil Walker has taken over permanently as chief executive.film Sandy Wexler 2017
Wealth adviser Brooks Macdonald (BRK) has increased its discretionary funds under management by 19% to £9.33bn. Underlying interim pre-tax profit were one-quarter higher at £8.87m. New chief executive Caroline Connellan will start work in April.
Investment manager Miton (MGR) has grown its funds under management despite a large decline in its value fund due to the departure of its manager. The funds under management increased from £2.78bn to £2.91bn with a recovery in multi-asset funds and growth in other funds covering the loss of value investment funds and growth coming from market improvements. Miton is seeking a new chairman and it will then find a permanent chief executive. On 23 March, Miton is launching its new global infrastructure fund, which is aiming for a 4% yield.
C4X Discovery (C4XD) has raised £7m from a placing at 85p a share. The cash will be used to strengthen the balance sheet while c4X is negotiating with potential partners and strategic collaborators.
EMIS (EMIS) has managed to grow its business even though there is continued uncertainty in the NHS. The GP, pharmacy and health-related administrative software provider reported a 2% increase in 2016 revenues to £158.7m, while operating profit was 6% higher at £38.8m. Net debt fell to £400,000. The total dividend was increased by 10% to 11.7p a share, which is covered more than four times by earnings.
Somero Enterprises Inc (SOM) continues to benefit from the global upturn in construction activity, particularly in North America and Europe, although the revenues from the latter are still not back to their peak levels. The dividend payout level has been raised from 30% of earnings to 40% of earnings but there is still more than $20m in the bank so a special dividend is possible later in the year.
Ilika (ILK) admits that it is unlikely to generate any licence income until the next financial year. The advanced materials developer still has plenty of cash in the bank. Development deal revenues should still double revenues to £1.2m in the year to April 2017. A £1m bioelectronics deal and an additional agreement with Toyota mean that there is a good revenue base going into the new financial year, which should reduce the annual loss even without licence deals.
Active Energy (AEG) has raised £11.6m via a convertible loan note issue. The five-year convertibles will be quoted on the Channel Islands Securities Exchange. The yield is 8% and the conversion price is 3.3p a share. The cash is required to build a commercial scale plant to produce CoalSwitch biomass fuel for use in coal-fired power stations.
Sunrise Resources (SRES) has identified additional potential for the CS project in Nevada. New zones of pozzolan and perlite have been discovered in the Tuff zone and another zone. A project development concept study is due in the next few months.
Haydale Graphene Industries (HAYD) has secured a four year deal to supply silicon carbide micro-fibre to a manufacturer of tooling and wear-resistant parts. The deal has been won by the US subsidiary acquired last September. The minimum annual order quantity should generate revenues of $600,000 a year.
Sportech (SPO) is investing £100,000 in 123gaming Ltd as part of a £1m fundraising via crowdfunding platform Seedrs (www.seedrs.com/123bet). The offer is eligible for EIS relief. The cash will be used to update the US betting platform and to launch an online site in the UK. Sportech already provides technology for the US online wagering site and the pari-mutuel-type offering, which combines traditional wagers and fantasy elements as part of the game. Several US racecourses licence 123gaming’s free-to-play contests as a marketing tool. Sportech is selling its football pools business for £83m – that is lower than the £97.25m offer that fell through last year. Sportech plans to return £20m to shareholders via a tender offer. The result of the tender will be announced on 21 March. There could be a further tender offer after the disposal proceeds are received.
Avation (AVAP) has decided to sell six of its turboprop aircraft at a price above book value. This could generate $31m after related debt repayments. A deposit of $3m has been received and the deal should be completed by the end of June. A further 16 turboprop aircraft are being retained and the additional cash can be used to widen the portfolio of aircraft. House broker WH Ireland estimates an underlying value for Avation of 270p a share.
PRE-IPO / OTHER TRADING FACILITIES
Former ISDX and GXG company US OIL & Gas (USOP) has raised £1.18m at 27p a share via a ten-for-63 open offer to existing shareholders. That is 54% of the amount that the oil and gas company was seeking. A placing had already raised £470,000.
Business incubator Milamber Ventures (MLVP) is acquiring The League of Angels, an angel network set up by Barney Battles, a Milamber director. There is a subsidiary called The China 68 Club that offers access to Chinese family offices. The business made a small profit last year and since April it has referred work to Milamber worth £200,000. Milamber is paying £150,000 in shares at 15p each. Battles will own 21.6% of Milamber. In the six months to September 2016, Milamber increased its revenues from £34,000 to £224,000, while the loss rose from £54,000 to £196,000.
Residential property developer Via Developments (VIA1) has found buyers for all eight apartments in its Canal Street development in Manchester and non-refundable deposits of £375,000 have been received. The apartments should be completed in the second quarter of 2017. The gross development value of the project is £2.2m. Revised plans have been submitted for the Plymouth Grove development in Manchester and planning applications for the Napier Street site in Luton, the place in the UK where house prices have been strongest over the past year, should be determined in the next few months.
African Potash (AFPO) has revised its bridge loan agreement with Katrina Clayton, the wife of the company‘s finance director. This agreement provided finance of £150,000 and this will be increased to £900,000, in return for a fee of £7,500, because it failed to raise additional cash through share issues. If the shares cease to be traded on ISDX/NEX or a regulated market then African Potash will be in default. The lender can also appoint a director to the company. There was a $2m cash outflow from operating activities in the year to June 2016, plus $873,000 of capital investment. There were limited revenues from fertiliser trading. Net debt was $706,000 at the end of June 2016.
Globe Capital Ltd (GCAP) had £5,000 left in the bank at the end of September 2016. There was a cash outflow of £91,000 over the previous nine months, while £100,000 was raised from issuing shares. The only investment is a 25% stake in online menswear retailer Sterling Craig.
It is not just TLA Worldwide (TLA) that has used the Christmas and New Year period to put out bad news, although none was quite as blatant and late in the day as TLA. Legal and debt management services provider Fairpoint (FRP) used the period between Christmas and New Year to report the departure of chief executive Chris Moat, although he will continue to assist in the closure of the debt management business. The share price has fallen by two-thirds since its profit warning on 9 December. Hargreave Hale has been trimming its stake from above 14% to 12.2%. 1Spatial (SPA) has parted company with its chief executive Marcus Hanke. This follows the disposal of the Avisen and Storage Fusion businesses. 1Spatial had warned that contracts were going to fall into 2017 and therefore it will make a 2016 loss.
Intercede (IGP) is raising around £5m from the issue of £4.5m of convertible loan notes and a £500,000 subscription at 57p a share – although this requires shareholder approval – compared with a market price of 57.5p. The identity and digital security services provider is not generating enough cash to make the required investment in its products and a move into the consumer market. Full year revenues will be less than the £11m reported for 2015-16. Interim revenues halved to £2.8m and the pre-tax loss soared from £432,000 to £3.67m. The cash pile fell from £5.29m to £1.38m in the six months to September 2016 so most of this cash has probably already gone. The convertibles last for five years and have an annual interest charge of 8%. The conversion price is just over 68.8p a share.
B2B gaming services provider Nektan (NKTN) has raised £2.275m at 27.5p a share and is offering shareholders the chance to subscribe for £500,000 at the same share price. That was a 15% discount to the market price but it has since fallen to 27p – compared with the November 2014 flotation price of 236p. In the year to June 2016, revenues jumped from £528,000 to £5.78m but the loss still increased from £8.12m to £10.5m. The cash outflow, before a rise in trade payables, was £6.18m. Conversion of loans means that Nektan’s stake in US business ReSpin has been raised from 50% to 85%.
It has not just been bad news between Christmas and New Year. Windar Photonics (WPHO) has revealed a number of new orders for its LiDAR wind sensors for use on wind turbines. An Indian power producer and the Indian National Institute of Wind Energy have ordered sensors, with the power producer ordering an initial five units with an option for a further 35 units. On top of this there are orders for seven units from Canada – a repeat order – and South Korea – the first order in that country. Windar has already said that its 2016 revenues will be between €1.5m and €2m – slightly below expectations. Before Christmas, Windar raised £491,000 at 94p a share. The share price has since fallen back to 77p.
Commercial property investor Summit Germany Ltd (SMTG) is paying a third interim dividend of 1.02 cents a share – the same as the previous quarterly dividend. The ex-dividend date is 5 January and forms to receive the dividend in pence need to be completed by 4 January. The exchange rate for the previous quarterly dividend was 0.8815p to one Euro, so the current exchange rate suggests that the sterling equivalent will be lower in this quarter. Summit has sold an empty office building in Hamburg for €14m.
Facilities management and security services provider Mortice Ltd (MORT) is generating more than three-quarters of its revenues from repeat business. In the six months to September 2016, revenues were 79% ahead at $91.1m. Much of that growth comes from a full contribution from the UK operations but the Indian business grew 22% and still accounts for 63% of revenues. Underlying pre-tax profit has jumped from $300,000 to $2/6m. Net debt was $14.6m but since then £2.3m has been raised at 75p a share. Trading continues to be strong.
Kodal Minerals (KOD) says that the latest samples at the Bougouni lithium project show high grade lithium mineralization of up to 2.03% lithium oxide. A total of 18 holes have been drilled and the results of analysis are expected by the end of January.
Stanley Gibbons (SGB) lost £6.18m in the first half, compared with a £1.11m profit in the comparative period after revenues slumped from £29.4m to £20.2m. Net debt was £16.5m at the end of September 2016. The US-based ecommerce business has been closed after an investment of £10m. A new coin joint venture has been set up by Baldwin with coin auctioneer St James’s, following a number of management departures.
Redcentric (RCN) has issued options to finance director Peter Brotherton and chief operating officer Mo Siddiqi. Brotherton has 161,905 options at nil cost and Siddiqi has 257,143 options at no cost, while Siddiqi has 250,000 at 84p each. These options are dependent on diluted earnings per share growth between March 2016 and March 2019. The compound annual growth rate required is not specified but the figures for the year to March 2016 have already been restated downwards. Siddiqi also has 250,000 options at 84p each that have no performance criteria. The current share price is 91p.
Grapheme NanoChem (GRPH) has gained its first commercial order for PlatDrill synthetic-based drilling mud in China. The initial order of 4,000 barrels of PlatDrill will be used for two shale gas wells in south west China and will generate revenues of $360,000. There could be more than 300 wells drilled in China each year over a five year period.
Mobile financial services provider Vipera (VIP) is increasing its stake in Codd & Date, which deploys Vipera’s technology services with customers, from 51% to 80.7%. In fact, the part of the business that focuses on Vipera’s Motif software will be split out and become a wholly-owned business. The enlarged group will move into larger premises in Milan More Info. Vipera is issuing 21.4 million shares and six million warrants exercisable at 5p each to pay for the additional stake.
CPP Group (CPP) is paying SSP £2.5m for terminating the contract to build an IT platform.
Fire and emergency services resource manager AssetCo (ASTO) is still attempting to renew its main contract in Abu Dhabi, which was due for renewal on 17 November. The contract will continue on existing terms until the new one is agreed. There should be further news concerning a one year extension at the end of January. Trading is in line with expectations.
Positive news from Providence Resources (PANR) concerning its VOBM4 well. Drilling of the Wilcox sandstone suggests that there is a potentially highly productive hydrocarbon zone at shallower depths.
Igas Energy (IGAS) is still trying to negotiate a capital restructuring and a strategic investor is interested in injecting funds into the business. There is around $32m left in the bank but net debt is significant enough for IGas to be on the verge of breaking its leverage covenant.
Circle Oil (COP) has lost its AIM quotation because trading in the shares had been suspended for six months and management says that the shares are unlikely to have any value. The International Finance Corporation and associates have waived debt repayments and deferred interest payments until 26 January.
Derriston Capital (DERR) joined the standard list on 29 September. Medical products and devices are the proposed areas where an acquisition is likely to come from. Derriston (www.derristoncapital.co.uk), whose investors include Nigel Wray, former Domino’s Pizza boss Stephen Hemsley and Primary Health Properties boss Harry Hyman, raised £2.275m at 10p a share to go with the £56,000 previously raised. Derriston was valued at £2.5m when it floated. The standard list shell more than doubled in value in the first couple of days of trading but ended the week at 17.5p.