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Andrew Hore – Quoted Micro 2 March 2020

NEX EXCHANGE

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

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

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

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

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

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

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

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

AIM

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

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

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

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

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

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

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

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

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

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

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

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

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

MAIN MARKET

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

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

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

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

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

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

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

Andrew Hore

Andrew Hore Quoted Micro 25 November 2019

NEX EXCHANGE
National Milk Records (NMRP) says that revenues in the quarter to September 2019 fell to £5.25m. They were £5.54m in the previous quarter and £6.08m last year, although that was boosted by one-off projects. A cyber-attack hit business, but systems have been restored. Canaccord Genuity has been appointed as corporate adviser.
Western Selection (WESP) has acquired nearly 3.64 million shares in the Bilby (BILB) placing. That has more than doubled the number of shares owned by Western Selection and it owns 10.8% of Bilby, up from 6.66%.
Belvedere Leisure Resorts (www.belvedereleisureresortsplc.com) is expected to gain a quotation for £10m of its 6.25% secured bonds on 29 November. The company is a subsidiary of Belvedere Leisure Park, which owns a site in Dumfries & Galloway with planning permission for a lodge park resort of 444 holiday lodges. The park will be built by Landal GreenParks.
Formerly AIM-quoted SAPO (www.sapoinvest.com), which was known as South African Property Opportunities, plans to join the NEX Growth Market on 2 December. The plan is to use the Isle of Man-based company as a shell to invest in the UK rural broadband market, although Labour plans for the broadband market could affect this strategy. Executive chairman Michael Meyer will own 40.55% of SAPO and three shareholders will own 84.8%.
Bracken Trading (BRAC) has decided to withdrawal is preference shares from NEX trading on 18 December. Trading had started on 9 September. There have not been any trades.
Altona Energy (ANR) is acquiring a petroleum exploration licence application within the Arckaringa Basin in South Australia. This is close to the company’s existing exploration licences. There could be potential for a gasification project. Management has decided not to invest in the potential vanadium investment.
Tectonic Gold (TTAU) says that its subsidiary has received a tax refund of $279,275. Drilling at Specimen Hill shows gold bearing mineralisation in all holes. There are targets for follow-up drilling.
BWA Group (BWAP) has not received £80,000 of the £100,000 subscription funds for convertible loan notes issued when Kings of the North Corp was acquired. Alternative funding is being secured. Vilhjamur Thor Vilhjalmsson, chief executive of 23.75% shareholder SX, has resigned as a director of BWA and been replaced by Mark Billings.
Block Commodities (BLCC) has appointed Ian Tordoff as chief executive. He has experience in the healthcare sector and has been involved in assessing the potential cannabis-based compounds.
DXS International (DXSP) chief executive David Immelman’s wife acquired one million shares at 10p each from Ron Rhodes during September. That takes David Immelman’s interests to 13.3%.
The ten-for-one share consolidation has been approved by World High Life (LIFE) shareholders. Dealings in the new share started on 20 November.
AIM
A competing bid approach led Hanover Acquisition to increase its bid for Brady (BRY) from 10p a share to 18p a share, which values the risk management and commodity software company at £15m. Hanover has bought shares owned by Kestrel and Coltrane Master Fund and these stakes have taken its shareholding to 46.1%, so the bid is mandatory.
Feedback (FDBK) has secured its first pilot study for its Bleepa communications platform that can be used to securely access medical grade images via mobiles and PCs. The Pennine Acute Hospitals NHS Trust will use Bleepa for respiratory requests. Bleepa will be the main focus for Feedback and it offers the potential for significant recurring revenues. Less money will be spent on TexRAD.
Keeping up with tradition Immunodiagnostic Systems Holdings (IDH) released its interims at 4.35pm on Friday. This was the same time as the previous trading statement and earlier than the previous interims which were released at 5.04pm on a Friday. Revenues remain flat and there was a pre-tax loss. Cash was £28.1m at the end of September 2019.
Nick Develin is stepping up from chief operating officer of Naked Wine (WINE) to takeover from Rowan Gormley as chief executive. The company has sold its other operations and is purely an online wine retailer. UK trading ahs been weak, but the US is going well.
Kape (KAPE) is almost doubling its earnings per share by acquiring Private Internet Access, which expands the range of security software the group can offer. The acquisition will cost up to $95.5m in cash and shares, plus debt. Kape will have net debt following the acquisition, but this should be paid down over the next two years.
Litigation finance provider Manolete Partners (MANO) is building up its business having raised cash when it floated at the end of last year. Interim revenues rose by 15% to £7.5m, but most of those revenues were unrealised gains. That meant that there was a cash outflow in the period. This is due to the higher number (and higher value) of cases being taken on and many of these will be completed and generate cash in the second half. Manolete focuses on insolvency cases and this means that they tend to be settled much quicker than ones handled by Burford Capital.
Having failed to secure the financing for its proposed acquisition, Stirling Industries (STRL) is cancelling its AIM quotation and management plans to place the company in liquidation.
First Property (FPO) increased like-for-like interim revenues by 10% to £8.1m. The spare space at CH8 in Warsaw is being filled. The interim dividend has been edged up to 0.46p a share. The underlying NAV is 50.7p a share.
Nostra Terra Oil and Gas (NTOG) has sorted out its interest in Egypt at no cash cost. The stake is being transferred to the operator. The deal is expected to be completed by the end of 2019, although it can be terminated if it is not.
Social video company Brave Bison (BBSN) expects to make a full year loss on reduced revenues of £16m. That is worse than expected. Changing Facebook policies have made trading difficult. Management is trying to reduce the dependence on Facebook. There was £3.8m in the bank at the end of October 2019. Costs are being reduced. Robin Miller will step down as chairman at the end of 2019. CIP Merchant Capital (CIP) recently increased its stake in Brave Bison to 11.7%.
Digital TV software developer Mirada (MIRA) increased underlying revenues by 11% to $5.74m, but it is still losing money. However, contracts are being won with potential for more over the next few months. Net debt has fallen to $3.53m following the sale of Mirada Connect for £2.12m ($2.72m).
City of London Group (CIN) says that its subsidiary Recognise Financial Services has applied to become a bank. The plan is to offer financial services to smaller companies and savings products. The company hopes to be authorised later in 2020, but that may prove optimistic. City of London Group will have to raise cash to finance the development of the bank.
Shareholders took up 10.9% of the open offer shares in Xeros Technology Group (XSG) and this raised £217,000.
A general meeting requisition has been lodged with Plutus PowerGen (PPG) and the intention is to remove all the current directors. They would be replaced with Nicholas Lee, David Horner and Dr Nigel Burton.
Mporium (MPM) has appointed an administrator and the business has been sold to management. There is unlikely to be anything for shareholders.

MAIN MARKET
Semiconductors supplier CML Microsystems (CML) reported a decline in revenues and profit in the six months to September 2019. The storage products revenues fell by nearly one-quarter, while there was a 4% decline in communications revenues. However, an overall improvement on the first half is expected in the second half. Interim pre-tax profit fell from £2.4m to £900,000. A full year pre-tax profit of £2.6m, down from £3m is forecast.
Macfarlane Group (MACF) has increased revenues by 4% in the four months to October 2019. The packaging supplier has reduced overheads to offset price deflation. Full year performance is expected to be better than last year.
Fasteners supplier Trifast (TRI) has increased market share, but that has only partly offset the tough underlying markets. Interim revenues were 2% lower at £103.1m, while underlying pre-tax profit was 8.5% down at £10.6m.
Rainbow Rare Earths (RBW) has acquired ten mining claims in northern Zimbabwe and they cover carbonatite type bodies. The properties were previously explored for phosphates.
Kin + Carta (KCT) has made its first digital transformation acquisition in the form of Colorado-based Spire. The initial payment is $14.8m with a further performance-based payment next February and another after that. The company has raised £13.6m at 89p a share.
Specialist Fund Market-quoted Marwyn Value Investors Ltd (MVI) is returning £5.31m to realisation shareholders. That includes £5.28m from the takeover of BCA Marketplace and a small amount of liquidation proceeds from Gloo Networks. There will be a pro rata redemption of realisation shares. The shares will go ex-redemption on 6 December.
Andrew Hore

Andrew Hore Quoted Micro 9 September 2019

NEX EXCHANGE

BWA Group (BWAP) is acquiring Kings of the North Corp, which owns five groups of exploration licences in Canada. BWA will pay £4.66m for the business, which is owned by a Canadian Stock Exchange listed company. Management believes that there is significant upside in the licences. Nearly $C1m needs to be spent for the licences to be renewed.

World High Life plans to join NEX on 12 September. This is an investment company that intends to acquire businesses involved in medicinal cannabis. The company (www.worldhighlife.uk) has already raised £2.4m from subscribers and no additional cash will be raised on flotation.

Adnams (ADB) director Guy Heald has purchased 3,000 B shares at £95.21 each. That takes his shareholding to 15.1%. The shares were sold by Sidney Sussex College in Cambridge, whose interest has been reduced to 6.32%.

Better news from Ashley House (LSE: ASH) because a scheme in Romsey has reached financial close. There are still two other delayed schemes that have not completed. Funding sources are being explored.

Tectonic Gold (TTAU) is selling its 2.5% royalty interest in the Graphmada graphite mine in Madagascar for up to A$550,000 in cash and convertible notes in royalty business SilverStream.

Primorus Investments (PRIM) reported a decline in net assets from £5.16m to £4.74m in the six months to June 2019. Management believes there are plenty of opportunities in the pre-IPO market.

Capital for Colleagues (CFCP) has agreed the terms for a realisation of its investment in Cotswold Valves, because it no longer wants to focus on employee ownership. The equity interest is being sold for its £220,000 cost and loans totalling £450,000 have been rescheduled. The cash will be received over a three year period.

KR1 (KR1) has made investments in the Nym Protocol project, Alice Si, a blockchain-based social funding platform developer, and Nexus Mutual, which is a follow-on investment.

Resources-focused investment company Hot Rocks Investments (HRIP) increased its cash position from £17,000 to £47,000 in the year to March 2019, but net assets fell from £722,000 to £687,000.

AIM  

Good news from car dealers Cambria Automobiles (CAMB) and Vertu Motors (VTU). Cambria says that trading in the eleven months to July 2019 has been well ahead of the same period last year and the full year profit will be higher than market estimates. New car sales are lower but Cambria is making more profit on each sale because of the mix of franchises and greater exposure to the luxury end of the market. More profit was made on each used car sold as well. Vertu says that its trading is in line with expectations, helped by price stability in the used vehicle market since July.

Mirada (MIRA) has won a new contract for the deployment of its Iris multiscreen digital TV product with a new Spanish interactive TV services provider Plataforma Multimedia de Operadores. Mirada’s technology will be used to deliver content to Android set-top boxes, smartphones, laptops and other devices. The commercial launch will be early next year and the plan is to build up a subscriber base of 600,000.

Adamas Finance Asia (ADAM) says that its consolidated NAV increased by 3.5% to $96.3m (£78.4m) in the six months to June 2019. That includes cash of $5.4m. There was interest income of $677,000 in the period. Production at Future Metal Holdings’ dolomite magnesium limestone mine in China should restart before the end of the year.

A secured creditor has appointed voluntary administrators to five subsidiaries of Management Resource Solutions (MRS) but the businesses continue to trade. A creditors meeting is set for 16 September. The businesses will need to be recapitalised.

Filtronic (FTC) has decided to sell its antenna division.

Colin Harrington has switched from executive chairman to chief executive of Rose Petroleum (ROSE) following the departure of its previous chief executive Matthew Idiens. Rick Grant will become chairman. Gordon Stein is a new independent non-executive.

MAIN MARKET 

Avation (AVAP) reported full year results that were ahead of expectations. The commercial aircraft leasing company’s pre-tax profit was 15% ahead of forecasts and there was also a tax credit which further boosted earnings per share. The dividend was raised by 45% to 10.5 cents a share.

Packaging manufacturer and distributor Macfarlane (MACF) has acquired the Leyland Packaging Company for up to £3.25m, with up to £1m in the form of an earn-out based on performance of the distributor in the year to August 2020, in cash and shares. In 2018, Leyland made a pre-tax profit of £550,000 on revenues of £4.06m.

Fully listed shell Highway Capital (HWC) has published its accounts for the year to February 2019. They showed net liabilities rising to £781,000. There was cash of £245,000 in the balance sheet following the repayment of loans. Trading in the shares has been suspended for three years.

Standard list shell Boston International Holdings (BIH) is considering potential acquisitions outside of the foreign exchange sector.       

Argo Blockchain (ARB) has ended discussions about a partnership with Hive Blockchain Technologies. Argo believes that its investment in additional crypto mining capacity has provided it with the scale it needs.

Sure Ventures (SURE) is investing a further €2.5m in Sure Valley Ventures Fund.

Andrew Hore

Andrew Hore – Quoted Micro 20 May 2019

NEX EXCHANGE

Fuel emulsification technology developer SulNOx Group (www.sulnoxgroup.com) plans to join NEX. SulNOx has developed an emulsification and condition process for hydrocarbon fuels. This process makes the fuel more efficient and thereby reduces fuel usage and emissions. Nouryon AB will manufacture and distribute the company’s products under the Berol brand. SulNOx will do the sales and marketing. The directors are applying for approval of eligibility of the company for EIS relief.

Arbuthnot Banking (ARBB) has obtained a NEX Growth Market quotation. The shares continue to be traded on AIM.

AfriAg Global (AFRI) has agreed to subscribe for four million shares in Apollon at 25p each, although part of the investment requires shareholder approval. This is equivalent to a 2.34% stake. However, AfriAg needs to raise this £1m in order to make the investment. It had £101,000 in the bank at the end of 2018 and NAV was £1.9m. The plan is to obtain an option to acquire the rest of the company. Apollon is a medicinal cannabis company and it has an affiliate in Jamaica that has a licence to cultivate, process and sell hemp and medicinal cannabis. Specific strains of medicinal cannabis have been developed.

KR1 (KR1) is generating staking yield revenues on the Cosmos Network, which launched on 14 March. The yields will be a minimum 5.6% yield and it could be much higher. This type of revenues could be generated by other networks where KR1 has an investment.

Sativa Investments (SATI) had £3.74m of cash at the end of 2018. This will be used to develop operations in the UK and Germany. Last year’s revenues were £260,000.

Tectonic Gold (TTAU) has taken operational control of the Vast Mineral Sands diamond mining contract. Cash generated will finance gold exploration.

High Growth Capital (HASH) has consolidated 20 shares into one new share. Dealings commenced on 16 May.

Primorus Investors (PRIM) increased its NAV from £4.95m to £5.16m at the end of 2018. This has been achieved even though pre-IPO investments have had their flotations delayed by poor market conditions. There was £408,000 in cash in the balance sheet.

Proton Partners International Ltd (PPI) has raised £10m at 176p a share by issuing shares to Woodford as part of the agreement in the flotation prospectus. NQ Minerals (NQMI) has issued 1.37 million shares at 6.5p each to satisfy a payment for the three month extension of maturing debt.

Gowin New Energy (GWIN) has extended the loan agreements with four shareholders so that the repayment dates are all around the beginning of November. The loans total £500,000.

AIM 

Software provider Sanderson (SND) prospered in the first half. Revenues improved by 18% to £17.2m and operating profit was one-third higher at £2.8m. Recurring revenues grew by 18% and they are 55% of total revenues. Sanderson has already secured most of the revenues it requires to make the full year revenues forecast of £35.3m, which is expected to generate pre-tax profit of £5.4m.

Block Energy (BLOE) has raised £12m at 11p a share. This comes less than one year after Block joined AIM when the oil and gas company was valued at £10.3m at the placing price of 4p. The cash will be invested in the West Rustavi PSA in the Republic of Georgia. Up to four horizontal sidetracks will be drilled in order to scale up existing production, as ell as drilling one new well. There will also be funds for 3D seismic, appraisal of two existing gas discoveries and increase the capacity of production facilities to up to 5,000 barrels per day. This will all be done over the next 12 months.

Investment and new store opening costs have pushed fishing equipment retailer Angling Direct (ANG) into loss. In the year to January 2019, revenues grew from £30.2m to £42m. International sales more than doubled to £4.7m. IT investment is improving efficiency. Angling Direct will continue to lose money this year as the number of stores is set to be increased from 24 to 34. It takes more than a couple of years for a store to start to mature so the benefits of the current investment will take time to show through in profit terms.

Live events agency Aeorema Communications (AEO) says its revenues reached a new high in the second half and full year revenues will be better than expected. New business has been won but it is lower margin than previous contracts so profit will be in line with expectations. There should be a full year dividend. Last year’s dividend was 0.75p a share, which was an increase of 50%.

TruFin (TRU) is launching a tender offer for up to £5m of shares at 92p each. The tender offer closes on 4 June. TruFin recently £44.5m raised from the sale of its stake in Zopa and demerged Distribution Finance Capital (DFCH). There are plans to return a further £5m by the end of 2019.

Churchill China (CHH) is continuing to trade strongly so far this year. The opening of the Rotterdam distribution facility is supporting European growth. Sales of added value products are growing. The integration of the Dudson brand and products is progressing well.

Online retailer MySale (MYSL) has sold the cocosa.co.uk website. This is part of the plan to exit the UK and concentrate on Australia and New Zealand.

Film completion contracts provider FFI Holdings (FFI) says operating profit will be at the lower end of the range of $7.5m to $11.5m previously reported.

Maistro (MAIS) has decided to leave AIM. The company has gone from a hyped-up online business called blur to cash strapped operation that needs to save as much money as possible. Maistro has raised plenty of cash in its time as a quoted company.

Veltyco Group (VLTY) has generated flat revenues from sportsbook and casino marketing business in the year to April 2019. The revenue mix has changed, and lower margin activities have grown in importance. The company is loss-making and more investment will be required.

The recovery at Safestay UK (SFE) appears to be stalling, even though it is growing revenues faster than the market is growing. The problem is that margins are not improving as quickly as expected.

Ten Lifestyle (TENG) increased revenues by 24% to £21.5m but the loss has risen due to greater investment in the business. The lifestyle and travel platform still has £13.2m in the bank. New contracts are being won and existing ones increased in size.

MAIN MARKET 

Blencowe Resources (BRES) has wasted little time in securing a takeover target. It plans to acquire a company which is the owner of the Oram graphite project in Uganda for £2m in shares at 6p each.

nmcn (NMCN), which formerly North Midlands Construction, says first quarter revenues increased by 27% to £94.4m and improved margin meant that profitability increased by 170% to £1.75m. The built environment division moved back into profit and the water division doubled its profit. There is £22m in the bank. The secured workload for the year is £342m.

Packaging manufacturer and distributor Macfarlane Group (MACF) says profit is ahead of last year and in line with expectations. Sales have grown by 7% so far this year and organic growth is 3%. The manufacturing operations have grown fastest.

Highway Capital (HWC) is catching up with its figures having published more than one set this week. The interims to August 2018 show a cash outflow from operations of £9,000. Net liabilities were £614,000.

There was a £949,000 cash outflow from operations at Toople (TOOP) in the six months to March 2019. There is net cash of £546,000.

Flavours supplier Creightons (CRL) says second half sales will be similar to those in the first half. There will be a £350,000 benefit from research and development tax credits.

Argo Blockchain (ARB) has adjourned its general meeting following the resignation of Jonathan Bixby. Mike Edwards become chairman. Another director will be appointed in consultation with First Investments, which requisitioned the general meeting. First Investments is backing the existing business by investing up to $1m as a cryptomining-as-a-service customer.

Andrew Hore

Andrew Hore Quoted Micro 13 May 2019

NEX EXCHANGE

National Milk Records (NMR) improved revenues from £5.32m to £5.56m in the three months to March 2019. Disease testing revenues grew at the fastest rate. This quarter did not benefit from one-off revenues like the first two quarters of the financial year.

Gledhow Investments (GDH) reported a reduction in net assets to £735,000 at the end of March 2019. Gledhow has trebled its money in Block Energy and sold the stake, but most of the proceeds came after the end of March.

Primorus Investments (PRIM) believes that Sport:80 has missed the chance to float, but TruSpine still has a chance to become quoted. International payments and lifecycle software provider Zuuse could be ready for a flotation within 18 months.

Wheelsure Holdings (WHLP) has finally published its results for the year to August 2018. They show revenues falling from £226,000 to £96,000, although the loss was similar at £336,000. UK and Netherlands demand were weaker than expected.

Health and community care properties developer and modular buildings supplier Ashley House (ASH) says its joint venture Morgan Ashley has achieved financial close on two more projects. A further three could be closed in the current quarter. Even so, group pre-tax profit will be lower. There will be an update in July.

Sativa Investments (SATI) is changing its name to Sativa Group to reflect that it is a trading company with a greater focus on UK operations. The application for a Home Office research and development licence to grow medicinal cannabis is proceeding well. This is for its own requirements as well as growing some varieties for order.

Ace Liberty and Stone (ALSP) has acquired properties in Warrington and Middlesbrough for more than £10m. The Communities and Local Government department is the long-term tenant of both properties. The Warrington property cost £2.9m and the Middlesbrough property £7.125m.

In the first four months of 2019, NQ Minerals (NQMI) has produced 6,857 DMT of lead concentrate, 4,763 DMT of zinc concentrate and 29,389 DMT of pyrite concentrate.

Giles Brand has increased his stake in EPE Special Opportunities (ESO) from 23.1% to 30.5%. EPE has a NAV of 241.3p a share. Almon I Holding SA has a 3.16% stake in Coinsilium Ltd (COIN).

MetalNRG (MNRG) is delaying a move to the Main Market because of the uranium exploration ban in The Kyrgyz Republic, which means that the proposed farm-in agreement for the Kamushanovskoye uranium deposit has been suspended. Due diligence is progressing on the Thambani licence and the transaction agreement with Mkango Resources by the end of June. Once it has funding, MetalNRG will make progress with the Gold Ridge project.

Panther Metals (PALM) reported a doubled cash outflow from operating activities of £309,000 last year. There was £1,247 in the bank at the end of 2018.

AIM   

Begbies Traynor (BEG) says that trading was ahead of expectations. The business recovery and property services provider says both divisions performed well. Shore has upped its pre-tax profit forecast for the year to April 2019 by 6% to £7.1m, compared with £5.6m the year before. The full year figures will be published on 9 July.

Interactive Investor has decided not to make a bid for Share (SHRE).

RA International (RAI) has won two new contracts. A five year contract worth $9.8m has been awarded by the United Nations Support Office for vehicle and equipment fleet services in Somalia. This is for ten locations compared to one previously. There is also a contract for construction services relating to the US Embassy in Denmark.

Immupharma (IMM) intends to merge its two French subsidiaries and either get private equity backing or float the combined business on a European stockmarket. The business is developing the Nucant cancer programme (Elro) and the peptide platform (Ureka). Immupharma will concentrate on Lupus treatment Lupuzor and it is talking to potential corporate partners.

India-focused online fashion retail investment company Koovs (KOOV) has agreed a £10.5m cash injection at 15p a share by a subsidiary of Indian retailer Future Group.

Bidstack (BIDS) is raising £5m at 12.5p a share. This will finance the growth of the in-game advertising business. Bidstack reversed into Kin Group nine months ago and that that time raised cash at 6p a share.

Trading in contract research organisation Venn Life Sciences (VENN) shares is suspended ahead of the reverse takeover of Open Orphan DAC for £5.7m in shares. The strategy is to gain approval for and provide orphan drugs for the European market. Cash will be raised to fund the new strategy.

Keystone Law (KEYS) increased full year revenues from £31.6m to £42.7m and pre-flotation costs profit jumped from £2.54m to £4.75m. This year’s profit forecast had already been upgraded at the time of the trading statement and the figure is maintained at £5.6m. This year’s dividend is set to rise from 9p a share to 10.3p a share. The cash pile is expected to rise from £6.3m to £7m.

N+1 Singer has upgraded its profit forecasts for Cambria Automobiles (CAMB) following its interims. The pre-tax profit forecast for the year to August 2019 has been increased by 13% to £11m, up from £9.8m last year and not far off the figure for 2016-17. Capital investment is peaking and net debt is expected to rise to £9.1m by the end of August 2019. NAV is set to rise to 68p a share.

Vertu Motors (VTU) reported strong full year figures with growth in used cars and aftersales offsetting the downturn in new car sales. Pre-tax profit of £23.7m was higher than forecast but lower than the £28.6m reported for the previous year. Cash generation is also better than expected. This year’s forecast has been trimmed to £25.7m. The share price remains below its NAV of 44.9p a share.

Osirium Technologies (OSI) is considering raising additional funds in order to fully exploit its new product. Opus is a cyber security product for IT process automation. Additional business development managers and distribution partners have been taken on and additional cash would enable further geographic expansion. Osirium is good at retaining clients and Opus provides an additional product to sell to them.

Packaging manufacturer Robinson (RBN) has increased its revenues by 15% in the first four months of the year and most of that is due to higher volumes. This means that it is well on its way to growing full year revenues from £32.8m to £36.1m even though second quarter revenues may be lower due to destocking. Further capital spending has been funded by cash from operations.

MAIN MARKET 

Ingredients supplier Treatt (TET) increased interim revenues by 6% to £56.6m and pre-tax profit was 7% higher at £6.2m. Additional shares in issue mean that earnings per share were slightly lower. The core citrus business revenues fell slightly but other areas grew. Net cash was £9.4m at the end of March 2019. This will be spent on the relocation of UK operations and there will be net debt by the end of September 2019.

Air Partner (AIR) slipped out its figures for the year to January 2019 well after the market closed on Thursday. Even so, there was a positive share price reaction and there were no real disappointments. Underlying pre-tax profit was flat at £5.8m. The total dividend was edged up to 5.6p a share.

Macfarlane (MACF) has acquired protective packaging distributor Ecopac for £3.9m. A pre-tax profit of £500,000 was generated in 2017-18. Macfarlane will provide additional products for Ecopac to distribute.

Argo Blockchain (ARB) will hold the requisitioned general meeting on 16 May. Frank Timis is hoping to change the strategy of the company and conserve the cash pile for other uses. He wants Jonathan Bixby and Mike Edwards removed from the board. Argo expected to generate £220,000 in cryptoassets in April, which is similar to cash operating costs. These costs are expected to rise to £300,000 in May but the month should still be cash neutral.

Cardiff Property (CDFF) increased its NAV from 21.78p a share to 21.84p a share in the six months to March 2019. The interim dividend has been raised by 5% to 4.6p a share. Activity in the Thames Valley area has slowed in the first half.

Andrew Hore

Andrew Hore – Quoted Micro 26 November 2018

NEX EXCHANGE        

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

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

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

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

AIM    

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

MAIN MARKET  

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

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

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

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

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

Andrew Hore

How to find swing trading opportunities. David Paul from VectorVest discusses on Core Finance

Precision Swing Trading is a proprietary swing trading technique to find shares with good fundamentals, on a good support level that are on a strong up trend.

Inside VectorVest you can find a search called Precision Swing Trading that allows you to find new swing trade opportunities each and every day.

David Paul shows you to trade shares such as Craneware (CRW.L), Macfarlane (MACF.L), GB Group (GBG.L) and Softcat (SCT.L)

Andrew Hore – Quoted Micro 27 August 2018

NEX EXCHANGE        

Crossword Cybersecurity (CCS) has signed a memorandum of understanding with IP Group, covering the commercialising of cybersecurity intellectual property from universities.

Ananda Developments (ANA) says that investee company iCAN Israel-Cannabis Ltd has signed a memorandum of understanding with Yom Chai. The deal involves the development and validation of a cannabis-based treatment for Crohn’s Disease, Autism and other neurological and gastrointestinal diseases. The agreement will generate revenues for iCAN, as well as obtaining a stake and potential future royalties.

Supported housing developer Walls and Futures REIT (WAFR) ended March 2018 with a NAV of 92p a share. Full year revenues were 127% higher at £103,000 and the company moved into profit. The first supported housing property was completed during the period. The board wants shareholders to approve a new management incentive plan at the company’s AGM.

There was a £88,000 cash outflow for Lombard Capital (LCAP) in the year to March 2018, but the investment company has moved from net assets to net liabilities. There is £2,154 in the bank plus £112,500 in investments. Since the year end, £320,000 has been raised from subscriptions for 7.5% 2020 unsecured loan notes.

Primorus Investments (PRIM) and Gunsynd (GUN) are selling their direct interests in the Horse Hill prospect to UK Oil and Gas (UKOG) for cash and shares.  Primorus will receive £375,000 in cash and £1m in UK Oil and Gas shares at 1.75p each for its 5% stake in Horse Hill Developments Ltd (HHDL), while Gunsynd will receive £50,000 in cash and £500,000 in shares for its 2% stake.

AIM     

Tracsis (TRCS) says that full year revenues were ahead of expectations at around £40m and profit will be better than expected. There was £22m in the bank at the end of July 2018. The margins of the traffic and data division are improving.

Audio visual equipment distributor Midwich Group (MIDW) is acquiring Nuremberg-based Bauer und Trummer, which has annual revenues of €21m.

A potential partner has ended its interest in the Bahamas-based oil and gas prospects of Bahamas Petroleum (BPC) and that knocked two-thirds off the share price. BPC received $1m in exclusivity payments from the international oil and company and it has started talks with other third parties.

KEFI Minerals (KEFI) has signed heads of agreement with Ethiopian investors which are setting up a vehicle to make a $35m investment to finance the Tulu Kapi gold project. The first investment of $9m should be made in the current quarter.

Caledonia Mining Corp (CMCL) has agreed to acquire a further 15% of the Blanket gold mine in return for the cancellation of a $11.5m loan and 730,000 shares. That takes the Caledonia stake in Blanket to 64%. The dividend will be kept at 27.5 cents/share.

Waste gasification to energy technology provider EQTEC (EQT) has finished a strategic review following the appointment of a new chief executive. The focus will change to the delivery of customer requirements. Additional technological expertise will come from an alliance with CT3 Ingenieria.

AdEPT Telecom (ADT) is a paying an initial £5m for Shift F7 and this should be earnings enhancing. The two companies have worked together for more than a decade. AdEPT chief executive Ian Fishwick has bought 10,196 shares at 373p each.

Thor Mining (THR) has completed the definitive feasibility study for the Molyhil open pit tungsten project. The post-tax NPV is A$101 and project payback would be less than 18 months. Molyhil has opex costs of tungsten of $90/mtu, compared to an average of $157/mtu for other tungsten projects.

Data and analytics services provider D4T4 (D4T4) says that it has received the £19.5m of trade debtors in the balance sheet at the end of March 2018.

Restaurants operator Fulham Shore (FUL) says revenues generated by The Real Greek and Franco Manca have increased. New openings will be financed out of cash flow. Chief executive Nabil Mankarious has acquired 127,000 shares at 12p each, taking his stake to 19.9%.

Versarien (VRS) has signed two collaborations. A deal with AXIA Materials will lead to the development of graphene enhanced composite materials and smart graphene devices. The first two projects will be for smart buildings and electric vehicles. An agreement with AECOM will be focused on developing large-scale polymer structures for civil engineering infrastructure projects.

Broadcast software provider Pebble Beach Systems (PEB) has moved back into profit at the adjusted level in the first half of 2018, but that is after adjusting for £400,000 of amortisation of capitalised development costs. If that amortisation charge is not excluded the company would have been around breakeven. Net cash generated from operating activities was £126,000, but there is an outflow of £254,000 after capitalised investment. Most importantly, net debt is £10.5m. Debt repayments have started with £850,000 due to be repaid in the second half.

Facilities management services provider Mortice Ltd (MORT) reported a 29% decline in pre-tax profit to $3.9m. Net debt was $18.4m at the end of March 2018. The minority interest in Singapore-based Frontline Security has been acquired for $3.5m.

Wey Education (WEY) says it is planning for significant growth next year, having exceeded market expectations of revenues of £4.1m in the year to August 2018. The first sales from the Chinese joint venture should be in September. A general meeting is being held to enable the issue of more shares and to create distributable reserves to allow a dividend to be paid.

Tekmar Group (TGP) intends to acquire Subsea Innovations for up to £4m. Subsea is focused on the oil and gas sector and it is involved in back deck equipment and subsea pipeline repair clamps. The deal includes £3m of fixed assets.

Veltyco (VLTY) has trade receivables of €8.9m, higher than in July, with €5.4m owed by Celestial, €1.5m of which relates to 2017. The current cash balance is €1.3m. Veltyco will launch its own regulated online trading brand. Betsson Services has renewed its contract until May 2021.

MAIN MARKET    

Packaging manufacturer and distributor Macfarlane Group (MACF) increased its interim pre-tax profit by 39% to £3.53m. The growth in profit came from the distribution division on the back of higher sales to internet retailers. Net debt was £11.1m at the end of June 2018. The interim dividend is increased by 8% to 0.65p a share.

London and Associated Properties (LAS) is broadening its investment remit to areas other than retail property. Diluted NAV was 54.5p a share at the end of June 2018.

Bisichi Mining (BISI) increased its pre-tax profit from £243,000 to £3.97m on the back of strong demand for coal.

Standard list shell daVictus (DVT) still has £431,000 in the bank. The board continues to look at food and beverage businesses.

Andrew Hore

Andrew Hore – Quoted Micro 26 February 2018

NEX EXCHANGE   

Blockchain technology investor Coinsilium Group Ltd (COIN) is advising Tutellus Technologies on its upcoming token generation event. Tutellus matches students with teachers in the Spanish-speaking world. The Tutellus token will be used as a medium of exchange for the new blockchain-based platform. Richard Lloyd has been appointed as adviser to Coinsilium’s Gibraltar-based subsidiary TerraStream, which is developing a token offering platform. TerraStream intends to raise cash via a token offer but it is waiting for a more specific set of regulations from the Gibraltar Financial Services Commission that should be published in the second quarter.

IMC Exploration Group (IMCP) has decided to focus on the flagship project in gold project at Avoca, Wicklow and the Kilbricken zinc deposit in County Clare. IMC plans to relinquish five licences.

Natural resources investing company MetalNRG (MNRG) has appointed Rolf Gerritsen as chief executive and he is subscribing for 2.5 million shares at 2p each, combined with 2.5 million warrants exercisable at 3p each. The former chief executive Paul Johnson is acquiring the same number of shares on the same terms. MetalNRG is progressing the potential standard listings of a number of resources businesses and it will retain stakes. MetalNRG is also seeking to move to the standard list.

Health staff recruiter Healthperm Resourcing Ltd (HPR) generated revenues of £250,000 in 2017. There were 130 candidates deployed. The company intends to double its number of employees by the end of June 2018. New contracts have been won in the Middle East and with Walsall Healthcare NHS Trust and these candidates will be found this year. The 2017 figures should be published in May.

AIM  

Gooch and Housego (GHH) says that it is experiencing exceptional demand for critical components for microelectronic manufacturing and this has offset any slowing in demand for high reliability fibre couplers. Trading is in line with expectations and there will be a second half weighting to the year’s figures. US tax changes will reduce the deferred tax in the balance sheet by £500,000 and cut the effective rate of tax to around 23%.

Lighthouse Group (LGT) is doing particularly well at the moment. The IFA significantly increased its business from affinity groups and average revenues per adviser rose by nearly one-quarter to £122,000. Assets under management are starting to build up and the fees from these will begin to become more important. In 2017, pre-tax profit improved from £1.9m to £2.5m and net cash was £8.7m. The dividend was raised from 0.27p a share to 0.42p a share.

Scotland-based Springfield Properties (SPR) reported maiden interim results. Revenues were 10% higher at £54.8m and pre-tax profit was £3.1m, up from £2.6m. The fastest growth came from the affordable homes division. The private housing side is waiting for planning permissions for planned villages in Scotland but existing permissions mean that the second half has significant contracted revenues. Even though Springfield was quoted for a few weeks of the period it is paying a 1p a share interim dividend.

Saffron Energy (SRON) has asked for trading in its shares to be suspended because there have been changes to the proposed acquisition of south east Asian oil and gas assets. A supplementary admission document is likely to be required.

Gas and electricity supplier Flowgroup (FLOW) has secured £5m of additional funding from Palm Ventures and Lombard Odier Asset Management to provide seasonal working capital. Cost savings are on track but the market remains competitive.

Ultimate Sports Group (USG) has decided to stop marketing spending on the UltimatePlayer.me children’s sport platform due to disappointing take-up. There will be a £521,000 write-off relating to this platform. There was £130,000 in the bank at the end of 2017 and Ultimate has raised £537,500 at 5p a share, although this will require a capital reduction. Richard Bernstein is acquiring nine million shares and David Kyte the other 1.75 million shares. Eurovestech-boss Bernstein has been engaged to find a suitable business to acquire and a successful transaction would net him a fee of 1% of the value of the acquisition.

Fintech business TruFin (TRU) joined AIM on 21 February, when it raised £70m at 190p a share. The share price ended the week at 214p.

Stanley Gibbons (SGI) has secured a £19.4m investment from Phoenix UK Fund to shore up its poor balance sheet. This will leave Phoenix with a majority stake, but it will take out the RBS debt.

CCTV technology business Synectics (SNX) improved its pre-tax profit from £2.6m to £3m last year, despite strong comparatives in the key gaming sector in the previous year. Oil and gas improved its contribution but trading in transport was hit by the lack of new buses being bought by companies. Synectics expects flat pre-tax profit of £3m for the year to November 2018, due to additional development spending, but a sharp jump to £4m is forecast for next year.

Tristel (TSTL) has been hit by tough trading conditions in surface cleaners in the NHS and investment in gaining approvals have also held back profit. The international business goes from strength to strength and this helped interim pre-tax profit to grow to £2m. US EPA approvals for surface cleaners could be gained by May but then state by state approvals are required so revenues will not flow through until 2019. Approvals for endoscope cleaning products require FDA approval and will take longer.

Drilling results from the APTA deposit at the Anza project in Colombia that is 100%-owned by Orosur Mining Inc (OMI) have been positive. High grade gold mineralised intercepts currently cover a strike extent of 1.5km and a depth of 275 metres. Results are awaited on five more holes and six holes will be drilled on Charrascala deposit.

Kin Group (KIN) says it will not make an acquisition by 28 February so trading in the shares will be suspended. There are talks with potential acquisitions and £800,000 remains in the bank.

MAIN MARKET    

London and Associated Properties (LAS) is selling the Brixton markets to Market Village for £37.25m in cash. This compares to book value of £24.5m. The net income is £1.2m a year. London and Associate Properties had net assets of £38m, which is equivalent to 44.5p a share, at the end of June 2017. The share price is at a one-third discount to the June 2017 even without any profit on the disposal and gearing should fall to below 100%.

Macfarlane Group (MACF) increased pre-tax profit by 19% to £9.3m on the back of a 9% increase in revenues. The profit growth came from the packaging distribution division with the manufacturing division making a lower contribution. The full year dividend was raised from 1.95p a share to 2.1p a share. The pension deficit has been cut from £14.5m to £11.8m.

BATM Advanced Communications (BVC) had a strong second half and 2017 revenues were much better than expected. EBITDA is expected to jump from $2.8m to $7m. The growth is coming from both the networking and biomedical divisions.

Precious stones explorer Shefa Yamim (SEFA) says that Macquarie University has confirmed the existence of moissanite coupled with titanium-rich corundum in its licence area volcanic rocks and this augurs well for the potential of the Kishon Mid-Reach project.

Andrew Hore

Andrew Hore – Quoted Micro 20 November 2017

NEX EXCHANGE

Clean Invest Africa (CIA) raised £530,000 at 0.4p a share and joined the NEX Exchange Growth Market on 14 November. The founders subscribed for shares at 0.25p each during September and October. The expected admission price was 1p and the share price ended the week at 1.45p (1.3p/1.6p). That values the company at £2.26m. There is £512,000 in the bank after expenses of £63,800. Clean Invest Africa is focused on renewable and clean energy projects and technologies that will aid the development of Africa. Executive coach Rene Carayol has a 6.28% stake.

Brewer Daniel Thwaites (THW) reported an improvement in interim revenues from £44m to £48m but pre-tax profit was flat at £5.4m, excluding movements on interest rate swaps. The interim dividend is unchanged at 1.1p a share. Net debt rose to £60.9m due to hotel acquisitions and capital investment. Most of the growth in revenues has come from the hotels and inns businesses. Management says that it is aware of some weakening in its consumer markets.

Metal NRG (MNRG) lost £59,000 in the six months to August 2017 but there was still £273,000 in the bank. The focus is cobalt and investments have been made in Western Australia and Nevada. There are further potential investments in Australia and North America. Management plans to announce how it will increase its profile and the liquidity of its shares.

African Potash Ltd (AFPO) is raising £400,000 at 0.025p a share and the cash will finance the development of the African fertiliser trading business and an eVoucher payment system using blockchain.

AIM

Science in Sport (SIS) has secured £14m via a placing at 70p a share in order to expand geographically and in terms of sports. A further £1m could be raised through a one-for-32 open offer at the same share price. The cash will be used to expand the company’s online presence in the US and new product development. The US expansion will be predominantly via Amazon initially and this will require additional stock levels. The SIS.com ecommerce platform will also grow. A move into football will increase the addressable market. Losses are expected to continue for at least two more years.

Zoo Digital (ZOO) is already getting the initial benefits from its film and video dubbing service ZOOdubs. This has widened the scope of the business and helped interim revenues to grow by 63% to $12.7m. A full second half from ZOOdubs will help achieve full year revenues of $26m and that should move Zoo digital into profit in the year to March 2018 even though costs are being increased ahead of expansion in revenues. Localisation services are generating more than two-thirds of revenues with subtitling service ZOOsubs also growing its revenues. ZOOscripts is being developed to provide scripts and metadata that can be used by the other services.

Floorcoverings manufacturer Victoria (VCP) has agreed to acquire floor and wall ceramic tiles manufacturer Keraben Grupo for £246.5m. A placing is raising £180m at 783p a share.

Meat and dairy products supplier Zambeef (ZAM) achieved its downgraded forecast for last year but there has been a further downgrade for 2017-18. Revenues were 17% higher at $255.8m but profit slumped to £200,000. Sales are expected to be flat this year but a recovery in pre-tax profit to $4.2m is anticipated. Non-executive director Tim Pollock, who is investment director for food and agriculture at CDC Group, will take over as joint chief executive from Carl Irwin at the end of March.

President Energy (PPC) is beginning the workover programme of four wells on Puesto Flores, which will cost $2.2m. The payback should be less than 12 months, assuming an oil price of $55/barrel. This is one of the reasons behind the expected increase in forecasts sales from $20.6m in 2017 to $69.5m in 2018, which will enable a 2018 pre-tax profit of $10m.

SRT Marine Systems (SRT) expects a strong second half following a 10% rose interim revenues to £2.9m but a higher loss of £1.6m. That excludes a £1.5m impairment charge for a large Asian contract that has been delayed until 2018-19. finnCap expects the maritime awareness technology developer to report flat full year pre-profit of £1.5m but that requires £12m of revenues in the second half. That requires project milestones to be achieved.

AB Dynamics (ABDP) continued to grow its business at the same time as starting to move into new premises. In the year to August 2017, the automotive testing systems and measurement products supplier increased revenues by one-fifth to £24.6m. Underlying pre-tax profit improved from £4.72m to £5.94m. The total dividend has been raised by 10% to 3.331p a share. Net cash was £9.6m.

Versarien (VRS) wanted to raise £1.2m via institutions and PrimaryBid.com at 18p a share and it ended up accepting £2.9m. Back in March, £1.5m was raised at 15p a share in the same way. The advanced materials company has announced a collaboration with a global consumer goods company on the development of the Nanene graphene nano-platelets in polymer structures. The first purchase order has been made.

GCM Resources (GCM) has completed the appointment of Northland as nominated adviser and joint broker. GCM wants to raise £2m via an offer at 34.4p a share through PrimaryBid. The cash will be used to provide further funding for the development of a mine mouth power plant proposal and for working capital.

Serabi Gold (SRB) has announced the conditional acquisition of Chapleau Resources Ltd for an initial $5m, with a further $5m payable in three months and the final $12m when first gold is produced from the Coringa project in Brazil or 24 months from the initial payment. Coringa is relatively near to Serabi’s existing producing gold mine at Palito. Running the two together should reduce the costs of production. The initial payment can come out of existing facilities. Serabi generated revenues of $36.2m and a cash inflow from operations of nearly $7m.

InterQuest Group (ITQ) appears to have set in motion the first stage of plans to leave AIM. That is because it wants shareholder approval to allow it to issue additional shares equivalent to 75% of the issued share capital. The management behind the recent bid for the company own a majority of the shares but need the backing of 75% of the shares voted in order to cancel the quotation. By issuing additional shares InterQuest can dilute the stake of the shareholders that oppose the cancellation of the AIM quotation and management can get what it wants.

AdEPT Telecom (ADT) reported a 36% increase in interim revenues to £22.6m with managed services contributing more than two-thirds of the total. Pre-tax profit increased by 29% to £3.9m. The interim dividend was raised by 13% to 4.25p a share. Full year profit is expected to rise from £6.9m to £8.3m.

Boku Inc develops technology which enables people to pay for services via their mobile. The company is loss-making but it is highly operationally geared so after it covers its costs the profit should grow rapidly. At 59p a share, Boku will be valued at £125.9m. Existing shareholders will raise £30m and the company will raise £15m.

Belluscura has announced details of its plans to join its parent company Tekcapital (TEK) on AIM in early December. Tekcapital’s 47.5% stake in Belluscura will be diluted by a fundraising to generate between £7.5m and £10m. Belluscura has acquired non-core product lines from large medical device companies as well as new IP and technologies.

Keystone Law Group is the latest legal firm to come to AIM. A placing at 160p a share will raise £10m and value the company at £50m. The flotation is due to be completed on 27 November.

Beeks Financial Cloud Group is raising £7m at 50p a share, which values the company at £24.5m. The flotation date is 27 November. Beeks is a cloud-based provider of automated foreign exchange and futures trading.

Ten Lifestyle Group is a lifestyle and travel platform providing concierge services. Corporate clients provide Ten’s services to individual customers. It also expects to join AIM on 27 November.

Mirriad Advertising has developed native in-video advertising technology, which can insert branded advertising into existing content. Revenues are modest and Miriad is still heavily loss-making. IP Group currently owns 38.2%. The flotation is expected on 29 November.

Concepta (CPT) has confirmed a £600,000 order from China for its MyLotus product which provides measurements to help improve the chances of conception. On the back of this, Concepta raised £2m at 7p a share.

Amryt Pharma (AMYT) has signed an exclusive distribution agreement with El Seif in Saudi Arabia for its products.

Africa Oil Corp is subscribing for £8.46m worth of shares in Eco (Atlantic) Oil and Gas (ECO) and this will give it a 19.8% stake. The subscription price of 22.25p a share was at a 28% premium to the closing price on the previous day’s trading. The cash will be used to identify and acquire new oil and gas exploration assets.

MTI Wireless Edge (MWE) has won a $1m contract for military antennas. Along with previous contracts, the revenues will be recognised over the period until the end of 2019. There is potential for larger orders to come.

TLA Worldwide (TLA) reported its 2016 results at 7am on 15 November and the 2017 interims at 7.01am on the same day. That is much better than releasing the profit warning concerning the 2016 figures at 6.26pm on the last day of trading prior to Christmas 2016. Trading in the shares resumed at 2pm on 16 November after the 2016 accounts were posted. The 2017 loss was $9.26m. The interim loss was $3.86m and net debt was $25m with further contingent consideration of $12.2m. The share price slumped to 12p and then recovered to 14p.

Former chairman Michael Ellis has requisitioned a general meeting at Van Elle Holdings (VANL) so that he and his son-in-law Thomas Lindup can be returned to the board. Both men had left the board of the ground engineering services provider prior to its profit warning in March, which was five months after floating. Ellis also wants to remove chief executive Jon Fenton and senior independent director Robin Williams.

Utilitywise (UTW) has delayed publication of its results because of the requirements for further auditing.

Integumen (SKIN) has acquired the Stoer skincare range for men and its ecommerce platform. This brand complements the Visible Youth brand aimed at women. Integumen is issuing 12.6% of its enlarged share capital in payment for Stoer, which values it at £510,000 at a share price of 2.45p.

Interim revenues fell from £21.9m to £17m at Hornby (HRN) and the loss increased to £5.7m. Net debt was £4.7m at the end of September 2017. A £12m placing and open offer at 29.5p a share will provide cash for investment and to buy a 49% stake in the holding company of Oxford Diecast Ltd, which is controlled by Hornby chief executive Lyndon Davies.

Blue Prism Group (PRSM) has sparked another upgrade with its latest trading statement. The robotic process automation supplier has added more customers and has a 100% renewal rate so full year figures will be comfortably ahead of expectations but the loss will be in line with forecasts. The annual figures will be published on 25 January.

Fishing Republic (FISH) has been hit by increased competition in the fishing market, which has knocked profit margins. There was a decline in like-for-like store sales in October. That means that there will be a loss this year. This has led to the departure of the chief executive and other board members. Chris Griffin becomes acting chief executive and he will conduct a strategic review. His experience should be helpful with online sales, which continue to grow.

Angling Direct (ANG) has acquired North West Angling Centre and Tacklesaver for £450,000 in cash plus stock. They have annual revenues of £1.8m. That takes the number of stores to 20. Angling Direct has reassured the market that trading is in line with expectations.

Oracle Power (ORCP) and its partners have submitted plans to the Pakistan authorities for a 660MW power plant which would eventually become a 1,320MW plant. The coal for the power plant will come from Thar Block VI. If the regulator issues a letter of intent then the partners will have to submit an electricity tariff application and apply for a generation licence.

Film finance provider FFI Holdings (FFI) has acquired digital, post-editing machine rental business EPS-Cineworks for $9.54m. This business fits well with the Pivotal Post post-production business acquired earlier this year prior to flotation.

BOS Global Holdings (BOS) says that Innovation Corporation has asked for security to be provided against its convertible note. Innovation has converted £217,000 of convertibles at 16p a share. That left £1.06m available from the note. Former managing director Michael Travia, who has requisitioned a general meeting to change the BOS board, is associated with Innovation and they have a total stake of 18.9%. BOS admits that its cash position is tight.

MAIN MARKET

Packaging supplier Macfarlane Group (MACF) says it expects full year expectations to be met as the momentum of the first half has continued into the second half. The distribution division increased revenues by 11% in the four months to October 2017 which more than offset a small dip in manufacturing sales. Manufacturing profit will be flat this year but distribution profit will be much higher.

Standard list shell Spinnaker Opportunities (SOP) has viewed potential acquisitions but has yet to find one that fits with its criteria. It is seeking an energy or industrial acquisition valued at between £5m and £30m. There was still £1.1m in cash at the end of October 2017 and the NAV was 4.23p a share.

Telecoms business Toople (TOOP) has more than 1,300 small business customers and it says that “monthly revenues have consistently exceeded £100,000” between June and October 2017. Toople has decided to end its relationship with a third party sales agency and bring sales in-house. The current customer acquisition cost is said to be “within the range previously announced of £40 to £91 per customer” and that is the same as 12 months ago. In the first half, admin expenses were £662,000. There was a £82,000 gross profit on sales of £655,000. Management has tried to keep costs down but revenues do not appear to be significantly higher in the second half based on the above statement. The first half cash outflow from operating activities was £552,000. This may have been reduced in the second half but the outflow is still likely to be significant. There was net debt of just over £300,000 at the end of March 2017 but since then £1.26m net from a fundraising in June. The share price is 1.18p, compared with the 2p fundraising price.

Simian Global (SMG) says that the exclusivity period for the acquisition of media and advertising company GVC Holdings has been extended to the end of March 2018. A further £50,000, on top of £200,000 already lent, will be provided to GVC at an interest rate of 15%.

Andrew Hore

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