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Quoted Micro 29 May 2017

NEX EXCHANGE

Crossword Cybersecurity (CCS) has taken advantage of the high profile of cyber security to raise cash at a premium to the market price. Crossword raised £145,000 at 230p a share. The current mid-price is 195p a share and the most recent trade was at 197p a share last September. Brenlen Jinkens took up 50% of the new shares and he has 5.13% of the company.

Wheelsure Holdings (WHLP) reported a dip in interim revenues due to the lack of funding so the planned £500,000 fundraising should enhance progress. In the six months to February 2017, the loss increased from £126,000 to £159,000 as revenues fell from £133,000 to £94,000.

Mechan Controls (MECP) improved its underlying 2016 operating profit from £518,000 to £594,000 on revenues that were 5% ahead at £4m but there have been significant changes since last year. Nirvana is the only subsidiary left. At the end of 2016, there was £829,000 in the bank and the NAV was £2.41m. Mechan is paying a final dividend of 2.27p a share and the shares go ex-dividend on 1 June. Once all the operations are sold money will be returned to shareholders.

Secured Property Developments (SPD) had cash in the bank of £341,000 and an NAV of £689,000 at the end of 2016. The company is valued at a 47% discount to NAV.

Social housing finance provider Queros Capital Partners (QCP) has raised an additional £875,000 by issuing 8% unsecured bonds 2025. That takes the bonds in issue to £3.5m – from 19 separate placings. So far, short-term bridging loans have generated income to fund the interest payments on the bonds. Longer-term, there are plans to acquire social housing properties.

Blockchain technology company investor Coinsilium Group Ltd (COIN) says that investee company RSK Labs has raised $3.5m. Coinsilium retains the right to 1% of RSK via a convertible. RSK has developed a sidechain to the Bitcoin that enables smart contracts. There could eventually be scope to handle more than 20,000 transactions per second but that requires the additional investment.

NQ Minerals (NQMI) has raised £751,000 at 0.3p a share. Colin Sutherland has been appointed as finance director.

AIM

Enterprise software provider Sanderson (SND) is growing strongly but the cost of investment in the business will hold back short-term profit. The digital retail division is growing fastest but its operating profit was flat as management investors in order to maintain the strong growth rate. In the six months to March 2017, revenues were 10% higher at £10.9m and operating profit was 5% ahead at £1.55m. There was net cash of £4.51m and the dividend was increased by 10% to 1.1p a share.

Software supplier Cerillion (CER) continues to grow its revenues as it starts to build its customer base outside the mobile sector. In the six months to January 2017, revenues were 10% ahead at £7.5m and underlying profit was nearly one-third higher at £900,000. Orders worth £9.4m were won during the period. The interim dividend was 8% higher at 1.4p a share. Directors’ sold 4.2 million shares at 120p each, which could help to improve the liquidity in the shares.

Redx Pharma (REDX) has failed in its attempt to juggle its cash requirements and its debt and administrators have been appointed. Liverpool City Council has previously extended the maturity date of its £2m loan but Redx did not repay the debt when it became due at the end of March. There is also interest due and that could total more than £1m. Redx nominally raised £12m in February – an equity swap agreement meant that not all of this was raised immediately – but does not appear to have raised enough to pay the loan. That is blatant bad management which has ended up destroying the investments of shareholders. Iain Ross recently took up the role of chairman so it would be unfair to blame him but the other directors, including those that have recently departed, were responsible for running the business properly and they knew when this money had to be repaid. The directors are Dr Neil Murray, Norman Molyneux, Dr Bernhard Kirschbaum and David Lawrence, while Dr Frank Armstrong, Peter McPartland, Dr Peter Jackson, Philip Tottey and Dr Derek Lindsay have resigned since Redx joined AIM. Investors’ should be aware of these people if they are or become involved in any other companies.

Lombard Risk Management (LRM) increased its revenues from £23.7m to £34.3m in the year to March 2017. The pre-tax loss was reduced from £2.2m to £1.6m. The year-end order book was worth £10.1m. Management expects the company to be cash profitable this year. Legislation continues to drive demand for reporting and risk software.

Flowgroup (FLOW) could not find a buyer for its energy supply business at an appropriate valuation so it is raising up to £29m in shares (at 1p each) and bonds, including more than £600,000 raised at 1p a share via PrimaryBid, to finance its development. This is highly dilutive even before any conversion of the bonds at the conversion price of 0.95p a share. Flowgroup also requires £1m to market its Flow boiler in Europe and £4m to end the manufacturing contract with Jabil. In 2016, there was a loss of £23.7m on revenues of £99m. Net cash was £3.7m at the end of 2016. An increasing number of smaller competitors are entering the energy supply market and this led to a reduction in customers. The funding will help Flowgroup to compete and build up its customer numbers.

Big data software supplier Fusionex International (FXI) plans to leave AIM and it already has the backing of shareholders owning 41.9% of the company for the general meeting vote on 15 June. Management blames the lack of liquidity in the shares and paucity of independent research. The also blame political uncertainty in Europe. Fusionex had a gravity defying rating in the first year or so of trading on AIM but the share price is currently less than one-fifth of the peak at the beginning of 2014. The company’s growth strategy will remain unchanged. There are plans to arrange a trading facility in the shares.

Safestay (SSTY) has paid €3m in cash for U Hostels, which operates a 226 bed hostel in Madrid. U Hostels also owns an apartment block near the hostel, where managed apartments are expected to be completed during 2018, and a building in Paris that is being converted into a 260 bed hostel, which has a 12 year lease that can be extended by a further 12 years. Safestay will have to invest up to €2.3m in the Paris development, which should be completed in early 2019. In total, including development spending, the acquisition cost will be up to €6.5m. The original Madrid hostel made a small loss on revenues of €1.3m. Earlier this year, Safestay raised £12.6m from the sale and leaseback of the Edinburgh and Elephant & Castle hostels – the leases are for 150 years.

Strategic Minerals (SML) made a maiden pre-tax profit in 2016. The $351,000 profit was after $691,000 of other income – predominantly the settlement of a rail dispute. The Cobre tailings business continues to generate profit and cash.

Thor Mining (THR) says that the Pilot Mountain tungsten resource inventory has risen to 11.73 million tonnes at 0.28% WO3. This does not include the GunMetal and Good Hope deposits.

Greatland Gold (GGP) has granted access to Newmont to the Ernest Giles tenements for a period of six months and it will have first right of refusal for a disposal or joint venture. An airborne survey has identified new structural targets suitable for gold mineralisation. Metal Tiger (MTR) has exercised 15 million warrants at 0.2p a share.

LED lighting systems developer PhotonStar LED (PSL) cut its full year loss from £3.03m to £1.43m on lower revenues. The first quarter of 2017 was tough but there have been orders for its Halcyon devices. R&D has been reduced.

Fairpoint (FRP) has delayed its full year figures yet again. They are promised at some point in June. If they do not come out then then trading in the shares will be suspended.

Arian Silver Corporation (AGQ) has raised £600,000 has raised at 0.5p a share. The cash will be used for exploration of silver and lithium projects.

Mortice (MORT) has won UK contracts worth £2.25m via its Elite subsidiary that take it into new sectors. Elite has won a three year cleaning and waste contract with Surrey and Sussex police and after securing a place on BMW’s approved supplier list a two year contract with the car maker.

Orogen (ORE) intends to acquire Thread 35, which owns e-commerce womenswear brand Sosandar. Orogen is lending up to £250,000 to Thread 35. Sosandar is targeted at 35-55 year old women. Trading in the shares has been suspended.

Active Energy Group (AEG) has entered into an agreement in principle with the Province of Newfoundland and Labrador which will provide a timber licence and a forest management agreement covering 1.2 million hectares. The licence would enable the harvesting of up to 140,000 cubic metres of wood annually.

MAIN MARKET

Thomas Charlton has further increased his stake in North Midland Construction (NMD) taking it to 7.24%. Finance director Daniel Taylor recently acquired 23,321 shares at 305p each. North Midland says that its first quarter profit has increased from £237,000 to £580,000 on a 5% rise in revenues to £62.2m. The main reason behind the improvement was a swing from loss to profit by the telecoms infrastructure division but the construction and water divisions generated a lower profit. Management still believes that margins can be improved. The order book is worth £254m helped by the AMP6 water investment cycle getting going. There is the promise of growing dividends.

Shareholders have agreed to the proposed bonus issue by Sealand Capital Galaxy Ltd (SCGL). On 1 June, existing shareholders will receive nine bonus shares for each one they own, leaving them with ten times the number of shares and the share price would be adjusted from 28.5p to 2.85p. The November 2015 flotation price was 10p (1p adjusted) and earlier this year a further £1.4m was raised at 20p (2p adjusted) a share.

Dukemount Capital (DKE) has signed a binding letter of intent for its first deal with a housing association to develop supported living accommodation. The plan is identify properties worth up to £5m which will be leased to Larch Housing Association on a 50 year lease at 6.5% a year plus inflation. Dukemount floated on 29 March.

Health food products supplier World Trade Systems (WTS) has entered into memoranda of understanding with Germany-based Naturemed and Germany-based Biestmilch, which will help it to widen its product range. Naturemed is a new company but Biestmilch was formed in 1999. Trading in the shares has been suspended for years and it is approaching ten years since there was a trade in WTS shares.

CIC Gold Group Ltd (CICG) left the standard list on 25 May. Management believes it will get a better valuation on another designated exchange.

Andrew Hore

Quoted Micro 8 May 2017

NEX EXCHANGE

Mechan Controls (MECP) is selling its main subsidiary to its technical director and intends to sell its other business and return cash to shareholders. The core business is being sold for up to £2m, with a minimum of £1.64m, including £1.24m initially, payable. The final £360,000 is dependent on the buyers selling the 142,300 shares they own in Mechan Controls. This leaves the group with Nirvana Engineering, which made a pre-tax profit of £352,000 last year. The company is changing its name to Mandicon.

Wine maker Chapel Down Group (CDGP) is putting a brave face on the frosts at the end of April. These were the worst frosts in April for two decades. There was a patchy impact with some vineyards impacted and some not. The company says that it mitigates risk by sourcing fruit from a wider area. The potential crop will become clearer in June. A further 129 acres of vineyard will be planted in the rest of this year.

Bulgaria property investment company Black Sea Property (BSP) is still negotiating a loan from UniCredit Bulbank to finance the acquisition of the UniCredit Building. Black Sea Property is paying €10.52m for the building – a deposit of €1.04m has been paid – and €7.6m of this will come from a loan. Once this loan is secured then a share issue can be undertaken. It appears that the deal may not be completed in May as originally envisaged. Unicredit can remain in the building for six months after completion and does not have to pay rent. The deposit will be forfeited if the deal does not go ahead. Black Sea Property has extended the repayment date of £100,000 of the unsecured loan facility from Phoenix Capital to the end of July. Discussions continue about the assignment to Phoenix of the investment advisory agreement from AG Asset Management. Anthony Gardner-Hillman is stepping down from the board and a replacement should be appointed in the near future.

Ace Liberty and Stone (ALSP) has acquired the Grosvenor Casino site in George Street, Manchester for £4m. The annual rental is £300,000. Ace has also bought the company that owns Willow House in Aldershot for £1.05m.

Angelfish Investments (ANGP) says that the loan of £497,500 has been repaid with interest by 4 Navitas. The talks about a joint venture have ended and Angelfish is trying to recover professional fees and expenses. This means that Angelfish has £1.1m in the bank and a loan to One Media Enterprises of $425,500 and it is seeking pre-IPO investments. It should be remembered that Angelfish has £2.3m of preference shares in issue.

Early stage investor Primorus Investments (PRIM) says that cloud-based food service business Fresho has announced that annualised revenues through its platform is nearly A$100m. The platform connects wholesalers and suppliers to restaurants, hotels, independent supermarkets, hospitals, pubs and other retailers. Additional automation will help to boost margins. Primorus, which is also quoted on AIM, invested £175,000 in Fresho in September 2016. Another round of funding is expected early next year. That will provide an opportunity to revalue the existing investment.

Etaireia Investments (ETIP) is buying two office buildings at Whitehouse Office Park in Peterlee, County Durham, with 113 out of the 125 year lease left unexpired. The purchase price of £1.125m will be paid through a combination of 600 million shares at 0.1p a share, giving Taxspecialefx (Peterlee) LLP a 24.3% stake, and cash payment of £525,000 deferred for 12 months. Completion is expected within three months. The annual rental income is £99,500. The seller is entitled to 75% of rental income until the deferred payment is made.

Adnams (ADB) non-executive director Guy Heald has sold 310 B shares at £114 each, raising £35,340. He retains 15.9% of the B shares.

All Star Minerals (ASMO) has raised £40,500 at 0.075p a share. Equatorial Mining & Exploration (EM.P) has raised £14,000 via the exercising of warrants at 0.01p each and it has also issued 110 million irredeemable 0.01p convertible loan notes.

AIM

The new management team has spent 2016 restructuring Quantum Pharma (QP.). One part of the business has been closed and another may be divested. The focus is niche pharmaceuticals and specials. In the year to January 2017, pre-tax profit dropped from £10.1m £6.2m. There will be a recovery in profit this year but it will take another year for profit to get back to £10m.

Podcasts supplier Audioboom (BOOM) has increased its revenues from £192,000 to £1.31m although it continues to lose money. There is already more than £3m of recognised or pre-booked advertising for 2017. Audioboom has built up its user base and it has started to generate revenues on the back of that. The acquisition of advertising technology firm SONR should help to further target advertising. Audioboom will make a further loss this year and, even after raising around £5m, the net cash is expected to be less than £1m at the end of 2017.

Management spent a significant amount of time last year sorting out the operations that Inspiration Healthcare (IHC) inherited when it reversed into the AIM-quoted business. This meant that underlying profit was flat at £1.1m. Demand for pre-natal care equipment and services is rising. There is scope for further organic growth and for acquisitions.

Pennant International Group (PEN) says that Lockheed Martin has increased the size of a contract from £200,000 to £2.2m, with potential for me. The total order book is worth more than £35m.

A concept study for the CS pozzolan-perlite project has persuaded Sunrise Resources (SRES) to focus on the project. It is thought that the 100%-owned project should have low caped and operating expenses thanks to surface mining and simple production processes. The pozzolan mined can be used as a greener alternative to Portland cement. There are no defined resources yet.

Onshore oil and gas explorer Egdon Resources (EDR) has submitted a new planning application for the Wressle field development. This follows the rejection of the previous planning application by North Lincolnshire Council. Egdon is also appealing the original decision.

Verona Pharma (VRP) raised $80m at the time of its flotation on Nasdaq. The shares were issued at 132p each and the ADSs issued in the US at $13.50 each – one ADS represents eight shares. The ADSs are trading on the Nasdaq Global Market. Last month, respiratory disease treatment developer has received authorisation from the FDA to proceed with a clinical trial for RPL554.

Manufacturer of professional audio equipment Focusrite (TUNE) produced good interim figures thanks to strong sales in North America. Interim revenues were 24% higher at £32m with pre-tax profit 89% ahead at £4.6m. Net cash is £9.4m and the interim dividend was raised by 15% to 0.75p a share. . Edison has upgraded its 2016-17 pre-tax profit forecast from £8m to £8.5m.

The Article 6 Marital Trust has become the largest shareholder in FIH Group (FIH), with 28.9%, following the sale of shares by Blackfish Capital Alpha Fund and former bidder Staunton Holdings at 300p each. Edmund Rowland has stepped down as chairman.

PowerHouse Energy (PHE) has moved its ultra high temperature gasification waste to energy G3-UHt unit to the Thornton Science Park, operated by the University of Cheshire. This will enable further development and opportunities for demonstrating the technology.

LED lighting products developer Photonstar LED (PSL) has taken advantage of a sharp share price recovery to raise £465,000 at 1.25p. The cash will be used to roll-out new product ranges.

Sanderson Group (SND) says that interim figures are in line with expectations. The retail and manufacturing software provider increased interim revenues from £9.86m to £10.9m – just under 50% is recurring revenues. Digital retail revenues were one-fifth higher. Net cash was £4.51m at the end of March 2017. Full year pre-tax profit is expected to rise from £3.44m to £3.72m. The interims will be published on 24 May.

Strategic Minerals (SML) is acquiring its joint venture partner’s stake in Central Australia Rare Earths for £522,500. Larger amounts of funding will be required to explore the resource than originally thought. Cash generated from Cobre in New Mexico will be used to finance this investment.

Digital audio technology developer Frontier Smart Technologies (FST) says that its first half revenues is significantly ahead of last year and full year EBITDA is set to be well ahead of expectations with margins higher than anticipated. Analogue radio has been switched off in Norway and there is strong demand for digital radio across Europe. Smart audio contracts have been won and there will be a better indication of progress in the second half.

Gas producer Ascent Resources (AST) has re-entered the second well at the Petisovci gas field in Slovenia. The well is being prepared for production, which should take four weeks. There has been a further objection to the Integrated Pollution Prevention and Control permit, which it requires to build a gas processing plant so more gas can be produced.

DP Poland (DPP) says that system sales grew by 21% in the first quarter of 2017. There have been eight stores added this year and a new commissary is under construction.

Accident prone Redcentric (RCN) appears to be sorting itself out but it is not out of the woods yet. Net debt is estimated at £39.5m at the end of March 2017 and the bank appears to support the company. Waivers have been received for covenant breaches and there were large exceptional charges. The underlying pre-tax profit is forecast to rise from £6.3m to £9.1m.

MAIN MARKET

Personal care products supplier InnovaDerma (IDP) has acquired the owner of the IP for Prolong, the only FDA-approved medical device for the treatment of premature ejaculation, a market valued at more than $1bn a year. This is part of a strategy to build up a life sciences division. Prolong is a non-prescription, vibrating medical device that is used in training in order to increase time between arousal and ejaculation. The device could cost between £250 and £300. InnovaDerma is paying £1m in shares, issued at a 25% discount to the market price minus the settlement of current liabilities at the current share price – estimated at £323,600. On top of this, a royalty of £11 per unit sold will be paid until the patent runs out in 2031 and if Prolong generates an operating margin of 20% in any year a bonus of £150,000 is payable. Prolong will be launched in North America in the second half of 2017 and Europe and Australia next year. InnovaDerma also announced that its self-tanning Skinny Tan products will be available on the ASOS website.

Opera Investments (OPRA) is going ahead with its acquisition of Kibo Gold from AIM-quoted Kibo Mining (KIBO) for £3.66m in shares at 6p each and moving from the standard list to AIM. The acquisition has the Imweru and Lubando gold projects in Tanzania. Opera is also raising £1.5m at 6p a share – it already had £486,000 in the bank. The Imweru project could be producing 50,000 ounces of gold a year within two years. Opera is changing its name to Katoro Gold.

Andrew Hore

Quoted Micro 30 January 2017

NEX / ISDX

There was a sharp improvement in operating profit from £120,006 to £213,657 at Hydro Hotel, Eastbourne (HYDP) in the year to October 2016. Revenues improved from £3.13m to £3.21m, while gross margin jumped from 9.9% to 13.6%. Pre-tax profit rose from £133,576 to £224,352. Improved marketing has helped to boost trade but the hotel will be hit by increases in the national living wage. Further refurbishment is panned at the hotel. Strong cash generation has increased the cash position from £651,000 to £1.39m. The second interim dividend is being raised from 12p a share to 14p a share, taking the total to 21p a share, up from 18p a share.

Rail track technology supplier Wheelsure Holdings (WHLP) reported an increased loss in the year to August 2016 because of higher admin expenses. Pre-tax loss moved from £228,000 to £262,000. Revenues increased by 21% to £290,000 even though London Underground orders have been delayed by budget restrictions. Orders have been received since the year end. Wheelsure has issued shares at 1p in lieu of £14,000 of commission owed to the company’s Italian agent, which has generated the first order for track equipment incorporating Tracksure.

Ashley House (ASH) remained profitable in the six months to October 2016 even though trading conditions were tough and there remains uncertainty about government funding for supported housing. It does appear likely though that there will be increasing demand for extra care housing schemes. Interim revenues were flat at £10.7m and the gross margin was much lower. The underlying pre-tax profit was halved to £200,000. Full year profit is still forecast to rise from £1.2m to £1.5m but this depends on three schemes reaching financial close by April.

Building projects manager and developer Formation Group (FRM) maintained its pre-tax profit at £2.2m in the year to August 2016, even though the recognised profit share from the development at Norwich House in Streatham fell from £2.42m to £1.42m. Group revenues were one-quarter higher at £29.4m helped by sales of apartments at Iverson Road, London N6. There was also a £1.02m post-tax write back relating to past properties. NAV increased from £7.6m to £10.4m. Since the year end, cash has been received from disposal proceeds, which will reduce net debt from £3m.

Mechan Controls (MECP) has appointed administrators from Leonard Curtis to its subsidiary PJO Industrial, following a deterioration in its prospects. PJO supplies mining and pipe laying equipment. Mining demand has been weak. PJO was hit by a bad debt in 2015 and lost £206,000, while net liabilities were £514,000.

Forbes Ventures (FOR) has raised £530,000 from Gravity Investment Group at 0.3p a share. Gravity has a 60.8% shareholding in Forbes. The bulk of the cash will be invested in £500,000 worth of 12%, two-year convertible loan notes in residential care provider Primus Care, where Gravity director Chris Bateman is on the board. The conversion price will be 80% of the fair market value of an ordinary share.

There was further fundraising activity last week. NQ Minerals (NQMI) has raised £125,000 at 7p a share in order to finance working capital. Energy efficiency products supplier Sandal (SAND) has raised £52,000 at 28p a share. Milamber Ventures (MLVP) executive chairman Andy Hasoon has invested a further £16,300 in the technology investment company at 13.55p a share. Property investor Etaireia (ETIP) has generated £10,000 from the issue of shares at 0.09p each.

United Cacao (UCL) has raised further concerns about former chairman Dennis Melka. This involves a number of loans which were not previously disclosed. It also turns out that the small farmer programme has planted 70 hectares and not 194 hectares as said in the interim figures. The Peru-based cacao plantation operator has extended the exclusivity agreement with existing investors, in order to try to secure the long-term financial viability of the business, to 31 March. Cash is being raised from bond issues at large discounts. Just over $515,000 has been raised from the issue of $3.45m of nominal value bonds with a 7% coupon. One of the company’s directors will invest a further $40,000 at 18 cents per $1 bond.

AIM

Scientific instruments manufacturer Judges Scientific (JDG) had a strong end to 2016 and order intake grew organically by 3% during the year. This was too late to benefit the 2016 figures where slow orders and manufacturing problems had led to disappointment and pre-tax profit is expected to fall to £7.1m. Earnings per share will fall by nearly one-quarter to 82.8p a share. That is line with previously downgraded expectations. The year has started with an order book lasting 13.9 weeks and there are positive foreign exchange movements that will help in the recovery. A 2017 pre-tax profit of £8.6m and earnings per share of 102p are forecast, which is still below the level in 2015.

Imaging and radiation detection products developer Kromek Group (KMK) is raising up to £21m via a placing and one-for-30 open offer at 20p a share. Net cash was £2.3m at the end of October 2016 and the additional cash will provide a significant cushion for the company. Kromek is still a couple of years away from making a pre-tax profit but the cash outflow should decline.

Taptica Ltd (TAP) has issued a positive trading statement and this has led to a forecast upgrade for 2016. Earnings per share have been upgraded by 12% to 29.3 cents, which is 150% higher than the forecast was one year ago. Increasing mobile marketing spend by customers means that there should continue to be significant growth.

Beximco Pharmaceuticals (BXP) has formed a joint venture with BioCare Manufacturing in Malaysia. Beximco will own 30% of the joint venture and will provide technical support. The initial product is a metered dose inhaler. Beximco reported a 14% local currency increase in interim revenues but in sterling they rose from £58m to £79.7m, while the growth rate in pre-tax profit was slightly higher with the sterling equivalent rising from £8.2m to £11.6m. The first product is being sold in the US and approvals have been gained for two other products.

Walker Greenbank (WGB) has received a further £1m insurance payment relating to flooding at Standfast & Barracks at the end of 2015. This takes the total insurance payments for the Lancaster fabric printing factory to £14.3m and there could be more to come. The Milton Keynes warehouse has been restocked. Octopus has increased its stake to 13.1%.

Ultrasound training simulators developer MedaPhor (MED) says it still had cash of £1.4m, net of the litigation settlement, which has been formalised with SonoSim Inc. In 2016, revenues grew by 50% to £3.3m, partly thanks to an initial contribution of £850,000 from the acquisition of Inventive Medical. The loss has increased from £1.5m to £2.5m, after settlement costs.

ImmuPharma (IMM) has recruited the 200 patients it requires for its phase III trial for the Lupuzor potential treatment for Lupus. By the end of January, more than 80% of the patients will have been treated for three months. Patients have to be monitored for 12 months so the full trial will not be completed until the first quarter of 2018. So far, there have been no indications that the drug is not safe.

Headway Investment Partners has increased its offer for Ludgate Environmental (LEF) from 16p a share to 16.3p a share, which compares with the latest NAV of 21.7p a share. The bid, though, provides cash up front rather than having to wait for the portfolio to be sold off.

Ascent Resources (AST) has started a well test at Pg-10 at the Petisovci project in Slovenia and an announcement about the results of the test should be published later this week. Henderson took advantage of a share price rise to sell one-fifth of their stake taking it to just below 10% but then almost doubled the number of shares it owns by converting £1m of convertible loan notes into 100 million shares. There are still £8.14m of convertibles in issue.

Ramblers Metals & Mining (RMM) expects to achieve the milling of 1,250 metric tonnes a day by the middle of 2017. Saleable copper of between 5,100 and 5,800 tonnes is forecast to be produced in 2017, along with 4,400 to 5,100 ounces of gold. In 2016, there was 4,174 tonnes of copper and 6,132 ounces of gold produced.

Keras Resources (KRS) has raised £600,000 at 0.35p a share in order to finance exploration at the Klondyke gold project in Australia. Some of the cash will be used to repay a £265,000 loan.

A concept study for the development of the CS natural pozzolan project in Nevada should be completed by the end of the first quarter of 2017. Sunrise Resources (SRES) should have information about the potential timeline for commercial production for the pozzolan, which is more environmentally friendly alternative to Portland cement.

MAIN MARKET

East Africa-focused Rainbow Rare Earths has raised $8m at 10p a share ahead of its standard listing. Demand for the shares was strong. This cash will be invested in the Gakara rare earths project in Burundi. Rainbow requires $2.23m to enable it to commence production in nine months. The main rare earths will be neodymium and praseodymium, which are used in generators, electric vehicles and wind turbines. Rainbow has secured a ten year offtake agreement with thyssenkrupp Raw Materials, which covers the sale of 5,000 tpa of concentrate. Petra Diamonds founder Adonis Pouroulis is chairman of Rainbow, which could move into profit in the year to June 2018.

Andrew Hore

 

Quoted Micro 24 October 2016

ISDX

House broker Daniel Stewart expects energy efficiency and home automation products supplier Sandal (SAND) to move into profit this year. In the year to May 2016, Sandal made a loss of £268,000 on revenues of £3.3m and this year the profit is forecast to be £105,000. The Energenie energy efficiency and home control products are expected to nearly double their sales to £1.4m this year and then double them again next year. The revenues of connectors business PowerConnections are expected to be flat.

Rail safety products developer Wheelsure Holdings (WHLP) plans to raise £106,000 at 1p a share and chief executive Gerhard Dodl says he will acquire some of the shares. The cash will be used for working capital.

Mechan Controls (MECP) says that it is still investigating the possible disposal of some of its business and it has received further approaches from potential buyers, including approaches from management teams of some of the subsidiaries. The offers do not appear to be high enough to provide the exit price wanted by the Mechan board. Mechan has gained shareholder approval to buy back up to 10% of its share capital.

Wealth management adviser Asia Wealth Group Holdings (AWLP) is talking to a number of potential acquisitions. In the six months to August 2016, revenues improved from $578,000 to $601,000 and the loss was halved to $11,000, helped by lower expenses. There was a $91,000 cash inflow in the six month period. There is nearly $1.4m in the bank.

EPE Special Opportunities (ESO/EO.P) will be left with a 24.3% stake in LED lighting products and wiring accessories supplier Luceco following its flotation on the Main Market. EPE sold shares worth £38m and had £10m of loans repaid. The cash will be The share price has risen from 130p to 148p. The stake is valued at £57.8m and this is still more than two-fifths of EPE‘s gross asset value.

AIM

Vislink (VLK) is selling its original core business to a former AIM-quoted company with an even worse track record. Vislink hopes to complete the $16m sale of the loss-making broadcast and surveillance hardware business to xG Technology Inc by the end of the year. It appears that xG Technology will have to raise cash in order to fund the acquisition. xG Technology left AIM at the end of 2013 after seven years on the junior market when it failed to build up significant revenues from the technology it had developed. The buyer has recently bought another business, which is much smaller than the Vislink business but the acquisition will undoubtedly form the core of the enlarged business. The Vislink hardware business was in the books at £22.7m, before central net liabilities, at the end of June 2016 – nearly £30m lower than six months before thanks to losses and write-downs. That is still well below the stated disposal price. Vislink had net assets of £22.9m at the end of June 2016. Executive chairman John Hawkins was appointed to the board on 1 April 2011 and net assets were £47m at the end of June 2011. There have been further share issues since then. If the disposal does go ahead then Vislink will be left with its profitable broadcast software business and have minimal debt.

Lok’nStore (LOK) has grown its underlying NAV by 28% to 386p a share thanks to the continued investment in the portfolio of self storage sites and strong trading. This year the valuer was changed to Jones Lang LaSalle. Supply is limited compared with the demand for self storage. Occupancy rates increased by 2% last year and prices also increased. There are plans for a further four sites – two managed stores and two owned in Gillingham and Wellingborough – over the next year or so, at a cost of £10m, while the recently opened Chichester, Bristol and Southampton sites are still building up their occupancy. There was also a much better contribution from document storage after a few years of flat performances.

Trading continues to improve at security and facilities management services provider Mortice (MORT). Interim revenues are expected to be 57% ahead at around $80m through a combination of acquisitive and organic growth. The fastest growth has been in facilities management where revenues have more than doubled thanks to the UK business with more to come due to recent contract wins. The Indian operations also continue to grow. This means that Mortice is on course to grow full year revenues from $133.5m to $170m, which should enable pre-tax profit to rise from $2.4m to $4.2m.

Core infection control products have grown fast enough to more than offset a continued decline in older product sales by Tristel (TSTL). In the year to June 2016, revenues grew 12% to £17.1m. Overseas revenues grew by more than one-fifth and they account for nearly two-fifths of group revenues. North America remains a major potential market and the first FDA approvals for products should be next year. There will be additional regulatory costs this year. House broker finnCap forecasts a rise in pre-tax profit from £3.3m to £3.6m.

BP Marsh & Partners (BPM) increased its NAV from 243p a share to 253p a share in the six months to July 2016. There is £7.9m of cash available for new investments after taking account of commitments to existing investee companies. The investment company has plenty of opportunities in the insurance broking and related markets but it is very careful when making a new investment.

Gold producer Orosur Mining Inc (OMI) has reduced its cash operating costs to $693/ounce in the three months to August 2016, which is well below expectations and the figure of $954/ounce in the corresponding period in the previous financial year. This cost reduction was helped by the mining of higher grades and costs will rise in the second quarter. The price received for gold sold was also higher but year-on-year production fell from 12,471 ounces to 9,950 ounces so revenues fell from $14.5m to $12.7m. Even so, Orosur moved from a loss to a profit of $2.76m and there was a $4.8m cash inflow from operations. Net cash was $4.7m at the end of August 2016. Orosur expects to produce between 35,000 and 40,000 ounces of gold and cash operating costs are expected to be between $800/ounce and $900/ounce. Orosur is capitalised at less than £19m.

Kyrgyz Republic-focused Chaarat Gold Holdings Ltd (CGH) has rejected a bid approach, which was at a 30% premium to the then market price. That suggests a bid of 11p a share or more. The bankable feasibility study for the Tulkubash heap leach project.

Prospex Oil and Gas (PXOG) has received government approval to drill the Boleslaw-1 well in the Kolo licence area in Poland and this should happen before the end of the year. The final application for the drilling permit has to be submitted. Well pad construction should begin early in November. The intial target has been identified as having potential for near-term production. Prospex owns 49% of the company that owns the Kolo licence.

Premier African Minerals (PREM) has bought a 4.5% stake in Casa Mining, which in turn owns 71.25% of the Misisi gold project in the Democratic Republic of Congo. For $250,000. This was funded by a £300,000 placing at 0.32p a share. Premier could add a further 30% stake. Premier also owns 2% of Circum Minerals, which expects to be awarded a mining licence for its Danakil potash project in Ethiopia by the end of this year. Morgan Stanley is assessing ways of moving the project forward, including a strategic partner or flotation.

More good news for Thor Mining (THOR) about the Molyhil project. The assay results have confirmed elevated levels of tungsten. More drilling is planned on the three targets that have been identified.

Starcom (STAR) has raised £300,000 for working capital after a $100,000 loan facility failed to be secured. The share placing was at 2.5p a share. The previous placing in March raised £450,000 at 1.5p a share. The cash is needed because some payments will not be received until early next year. There was recently a judgement against a subsidiary and two of the Starcom directors in the ongoing litigation brought by Top-Alpha Capital, although Starcom believes this could be overturned by a higher court. Starcom should at least meet the expectation of improved revenues in 2016.

Investment company Mercom Capital (MCC) is pending £600,000 on a 16% stake in Mexican fintech company Mobile Wireless and Satellite SAPI (MOWISAT). The strategy is to offer lending, payments and e-commerce services to unbanked people as a mobile virtual network operator. There are 109 million mobile users in Mexico and the vast majority are on prepay packages. Meanwhile, Mercom’s 10.2% shareholder Calvet International plans to requisition a general meeting at Mercom to propose board changes and a change in strategy.

MAIN MARKET

Standard list shell Mila Resources (MILA) is seeking to acquire an interest in a resources project, most likely in emerging markets. The ideal target would involve a project that is already well down the line and would benefit from a cash injection to move it towards production. Mila has around £1m in the bank after the costs of the flotation. The share price has risen from 5p to 8.25p in the fortnight since it floated.

Andrew Hore

 

Quoted Micro 3 October 2016

ISDX

Newbury Racecourse (NYR) reported flat interim revenues of £5.56m and a higher underlying loss because of the loss of three race days to bad weather. There was a cash outflow from operations of £1.51m. The sale of a final tranche of land to David Wilson Homes has generated a disposal profit of £20.1m but the cash has not been received yet. There is £7.56m of cash in the balance sheet but the disposal proceeds will be received as homes are sold. The current market capitalisation is £17.6m, whereas shareholders funds are £44.9m.

Chapel Down Group (CDGP) says that interim revenues were 26% higher at £4.09m with the fastest growth coming in the Curious Drinks business, although the wine operations increased revenues by 14% and still remain the core activities. Curious Drinks raised £1.74m during the period and that led to a notional gain on disposal of £467,000. The cash outflow from group operations reduced from £713,000 to £441,000.

Halal verification business DagangHalal (DGHL) reported higher revenues in the six months to June 2016 but the costs of raising £3.6m and joining ISDX helped push the company into loss. Revenues grew from MYR2.96m to MYR3.34m but MYR3.54m of flotation costs and nearly trebled overheads meant that a pre-tax profit of MYR1.18m was turned into a loss of MYR4.49m. DagangHalal has not had time to invest the funds it raised, there was MYR14.9m in the bank at the end of June 2016, so this should help revenues to grow to offset he higher overheads. Management was also distracted by the flotation in the first half. The company has developed a global e-marketplace and two more certification bodies have signed up for the Halal verification engine, taking the total to 40, and two say that they will sign up for the Halal certificate management system, which has eight users. The number of merchants using the system has also increased.

In the six months to June 2016, WMC Retail Partners (WELL) reduced its loss helped by the release of £42,000 of past provisions. Revenues dipped from £2.15m to £2.05m but the loss fell from £226,000 to £78,000. No interim dividend has been declared. Management expects to make an announcement about loss-making Cornish Market World in the near future.

Diversified Oil & Gas (DOIL) has almost trebled its first half revenues from $2.9m to $7.6m. One-off books gains meant that the reported pre-tax profit was $36.5m but in reality there was an underlying loss. There was a $381,000 cash outflow from operations. The company continues to make acquisitions.

Mechan Controls (MECP) is holding a general meeting to gain shareholder approval to buy back up to 200,000 shares – equivalent to 10% of the shares in issue. This is part of the board’s plan to enable shareholders to realise part of their investment following the termination of bid talk earlier in the year.

Ecovista (EVTP) says that planning permission has been granted by East Herts Council for 100 Rye Street.The building will be demolished and a six bedroom home will be built on the site. In the six months to June 2016, the loss increased from £92,000 to £168,000. Ecovista is seeking additional finance in order to acquire the 85% of Cingella Srl it does not already own. The company has until the end of 2017 to pay €4m for this stake. Ecovista’s interim loss increased from £36,000 to £168,000.

AIM

Conference call technology and services provider LoopUp (LOOP) has reported its interims one month after joining AIM. In the six months to June 2016, revenues grew from £4.81m to £6.38m. That includes revenues from a BT contract which is almost at an end and underlying growth was 38%. There was a pre-tax profit of £72,000, compared with a £619,000 loss. The cash raised in the flotation and the conversion of debt into shares means that pro forma net cash is £3.16m.The US is the biggest generator of revenues with the UK not far behind. The cash will be invested in further development spending and marketing. Non-executive chairman Lady Judge bought 15,754 shares at 126p each, compared with the flotation price of 100p. This is her total shareholding.

Gold recovery firm Goldplat (GDP) moved back into profit in the year to June 2016 as the performance of the gold recovery activities in South Africa and Ghana improved with more to come from capital investment in these operations. Revenues grew from £16.6m to £20.2m with a loss of £796,000 turning into a profit of £1.94m. Strong cash generation meant that there was net cash of £2.06m. There was a 23% increase in gold production, which included a toll processing contract with Rand Refinery. In contrast to the growth in output from the recovery operations, there was less produced by the Kilimapesa mine in Kenya . A new processing plant should come into action by the end of this year which will increase capacity; at Kilimepesa. There is scope to expand recovered gold production by sourcing material from South America.

Training systems supplier Pennant International (PEN) returned to profit in the first half of 2016 even though a number of major orders have not yet made a significant contribution. Revenues grew from £5.78m to £6.65m, while a loss of £755,000 was turned into a profit of £11,000. Four new contracts have been secured, including one with new client Lockheed Martin. Net cash was £2.6m at the end of the period, with £3.56m raised at 55p a share since June, but there is no dividend. The order book is worth £46m. There are tax losses of £4.7m so there should be no significant tax charge for up to three years depending on how fast profitability improves. A full year profit of £2.2m is forecast. Management wants to supplement organic growth with acquisitions, which are most likely to be in the core defence sector.

Shares in Sareum (SAR) doubled on the back of a licence agreement for its Chk1 inhibitor CCT245737 with ProNAi Therapeutics. Sareum and co-investment partner CRT Pioneer Fund will receive an initial payment of $7m with up to $2m payable on the successful transfer of two ongoing phase I clinical trials for the cancer drug. Sareum will receive 27.5% of these payments and it will have £300,000 of funding commitment returned. There could be additional payments totalling up to $319.5m depending on the achievement of milestones. There could be low single digit or high double digit royalties on a commercial product.

Savannah Resources (SAV) has raised £1.42m at 3.5p a share and directors and related investors have agreed to provide a further £830,000 at the same share price. The rest of the cash will come in after the closed period has ended. The funds will be used to develop copper projects in Oman and finance other projects in Mozambique and Finland. Joint venture partner Rio Tinto has extended the long stop date for the agreement over the combined Mutamba/Jangamo project in Mozambique until 10 October or a later agreed date. The interim loss was reduced from £1m to £800,000.

Premier African Minerals (PREM) made an increased interim loss because of operational issues at the RHA tungsten mine. The plant has been upgraded so these problems should be at an end and processing rates should improve. A further expansion to 16,000t a year is planned for next year and that investment could have an impact on production levels. Net debt was $3.8m at the end of June 2016.

Thor Mining (THR) is awaiting confirmation of assay results for its Molyhill tungsten project in Australia. The initial indications are that there is anomalous tungsten. Thor may start more closely spaced drilling after the results are received. A £1m impairment on the disposal of the Spring Hill project in February meant that the interim loss before tax increased from £880,000 to £1.75m. The initial proceeds of the disposal helped to reduce net debt to £445,000.

ValiRx (VAL) is on course to start dosing patients with lung cancer with its VAL401 treatment in the phase IIb trial. Higher R&D spending meant that the interim loss increased from £1.37m to £2.12m. There was £569,000 left in the bank at the end of June 2016 and since then £1.2m has been raised and a convertible loan facility of up to $3.75m has been agreed with Yorkville.

Cloud services provider Nasstar (NASA) increased its monthy recurring revenues to £1.23m even before the recent acquisition of Modrus which took the figure to £1.7m. In the first half of 2016, revenues were 14% higher at £8.1m. Underlying pre-tax profit improved from £860,000 to £981,000. Pro forma net debt is £3.5m and cash flow should be strong enough to wipe this out by the end of 2017. Full year profit is expected to rise from £1.6m to £2m. The benefits of the Modrus acquisition should help the profit to rise to £3.5m in 2017.

Digital audio visual agency MediaZest (MDZ) has won £250,000 of contracts in the past six weeks. The company has also said that the previously announced project with Rockar is for Jaguar Land Rover at Westfield Stratford.

MAIN MARKET

Standard list shell Auctus Growth (AUCT) is still seeking an acquisition and it has just over £1m left in the bank. The directors’ are not taking any salaries yet and costs are running at £35,000 a year.

Andrew Hore

 

Quoted Micro 12 September 2016

ISDX

Mechan Controls (MECP) reported a rise in pre-tax profit from £180,000 to £271,000 on flat revenues of £1.9m in the six months to June 2016. There was £1.08m in the bank. Mechan has declared an interim dividend of 1.1725pa share and the ex-dividend date is 15 September. Trading conditions are better than one year ago and the improvement in the first half is expected to continue in the second half.

 

Capital for Colleagues (CFCP) has invested £50,000 in return for A shares in IT services provider 2C Services. The A shares have preferential rights to capital in the event of certain exits. Capital for Colleagues has also subscribed for ordinary shares equivalent to 20% of the share capital in return for a nominal sum. The existing investment in The Homebuilding Centre has been converted from £250,000 in loan notes into 250,000 A shares, while further loans of £97,000 have been combined into a three year loan.

 

Crossword Cybersecurity (CCS) has linked up with AIM-quoted Iomart to work on a machine learning-based way of stopping Distributed Denial of Service (DDoS) attacks.  The hosting and managed services business wants to offer the service to its clients so it could be lucrative for Crossword.

 

Oil and gas explorer Doriemus (DOR), which is also quoted on AIM, has launched a three-for-15 open offer at 0.035p a share to raise up to £865,000. The open offer price is at a 22% discount to the previous closing mid price. The open offer closes on 18 October. The cash will pay for cost overruns of the Brockham drilling and testing programme – Doriemus has a 10% interest – and for further funding of other interests. The directors will be taking up their entitlement.

 

ISDX is hosting an event called Cyber Security Risks: Threats to Publicly-Traded Companies and the Capital Markets on 21 September. The networking and panel session will be led by a team of experts and cover the current cyber security landscape and how public companies can prepare themselves for potential cyber attacks. The event starts at 8.30am and will be held at 2 Broadgate in London.

 

AIM

SQS Software Quality Systems AG (SQS) is reaping the benefits of its strategy to increase higher margin managed services business. In the six months to June 2016, revenues were 11% higher at €166.6m but underlying pre-tax profit was one-third higher at €11.9m. Net debt was €32.9m, following the acquisition of the remaining 25% of the company’s Indian business, but the second half is always highly cash generative. New sectors are starting to increase their use of software testing services, particularly in the digital area, including mobile payments and smart grids businesses. The US is becoming an increasingly important market and it is expected to overtake Germany as the biggest market.

 

Belvoir Lettings (BLV) reported a three-fifths increase in revenues to £4.3m in the first half of 2016 tanks to contributions from acquisitions made in the past year. The Northwood acquisition was made at the end of the period so it will not make a significant contribution until the second half. Like-for-like revenues were 10% higher. Pre-tax profit was 69% higher at £1.3m. The unchanged interim dividend of 3.4p a share is nearly covered by underlying earnings per share.

 

Motif Bio (MTFB) says that patient enrolment for the phase III clinical trial for the use of antibiotic iclaprim for acute bacterial skin and skin structure infections is ahead of schedule. This means that data should be available in the second quarter of 2017. The results of the second iclaprim trial should be available in the second half of 2017. The convertible promissory notes held by Amphion Innovations have been renegotiated. Instead of converting the accrued interest of $441,000 on the $3.55m of loan notes (maturing at the end of 2016) into shares at 24.47 cents a share, Motif will issue 409,000 shares and pay cash of $314,000. Amphion will also provide $15,500 a month of corporate services if Motif floats on Nasdaq.

 

Sutton Harbour (SUH) says that it expects the government report on the viability of the reopening of the Plymouth City Airport site to be published in the next few months. This will be followed by an independent government inspector making a decision on whether “safeguarding of the former airport site from redevelopment is sound planning policy following the Examination in Public, currently timetabled for March 2017“. The company’s strategic review is continuing.

 

Minoan (MIN) is one of the first companies to admit that the vote to leave the EU has hit its business. Along with the political problems in Turkey, the EU vote has knocked £100,000 a month from gross profit. Management does believe that this could be a temporary phenomenon. The latest court action over Minoan’s proposed Greek development is due to happen on 16 September. The judges will determine the arguments against the development after the hearing.

 

MedaPhor (MED) says that the American Board of Obstetrics and Gynecology has given notice that it will terminate its ultrasound skills training contract because of ongoing litigation over some of MedaPhor’s patents. If the litigation is sorted out then the relationship can be resurrected.

 

Fishing Republic (FISH) has acquired the Fantackletastic store in Lincolnshire for £150,000 in cash. The 4,000 square feet store is the group’s first in the east Midlands and takes the number of stores owned to 11. In the year to March 2016, the store made an operating profit of £40,000 on revenues of £425,000.

 

Starcom (STAR) has launched the new version of its Watchlock product but this was too late to benefit the first half figures. Interim revenues slipped from £2.64m to £2.51m, while cost savings meant that the loss was reduced. Starcom has recruited an installation and services company for its Tetis cargo security product.

 

IPPlus (IPP) is selling its original contact centre business for £6.7m in order to concentrate on its secure payments business. The company’s name will change to PCI-PAL. The sale and leaseback of a property will raise a further £800,000 leaving net cash of £4.8m. A £1m special dividend will be proposed.

 

MAIN MARKET

New standard-listed shell Vale International Group Ltd (VIG) commenced trading on 5 September. The strategy is to acquire a financial services-focused technology business in Europe or Asia. A placing raised £550,000 at 3.5p a share and the shares have traded at 5p (4.5p/5.5p).

 

Standard-listed Anglo African Agricultural (AAAP) is raising £475,000 at 0.67p a share in order to pay creditors and finance the growth of food manufacturer Dynamic Intertrade. Cape Town-based Dynamic supplies herbs, spices and seasonings to food manufacturers and the cash will be used to build stock levels and increase production. David Lenigas has been appointed as non-executive chairman and he has subscribed for 22.39 million shares giving him a 12.4% stake. No bids were made during the recent offer period and the strategic review has come to an end.

Andrew Hore

 

Quoted Micro 25 April 2016

ISDX

Wine and beer maker Chapel Down (CDGP) reported a one-third increase in 2015 revenues but a smaller increase in profit. The investment in an additional 90 acres of vineyards should provide further impetus in the coming years. Wine sales were 27% higher last year. Revenues increased from £6.11m to £8.18m and underlying profit improved from £133,000 to £141,000. Brewing subsidiary Curious Drinks has raised £1.71m to invest in a new brewery and last year its sales rose by 50%. At 33.5p (32p/35p) a share, Chapel Down is valued at £33.8m.

 

Electronics and engineering group Mechan Controls (MECP) failed to find a bidder that was willing to meet its board’s valuation for the business. Bids for parts of the group were also too low but there is still potential to sell individual subsidiaries. This means that the formal sales process has ended. At 248p (243p/253p) a share, Mechan is valued at £5m.

 

Diversified Gas & Oil Corp (DOIL) has completed the purchase of assets in Ohio for $4.8m. These assets are producing 250 barrels of oil per day and 3,000 mcf of gas a day. Diversified operates more than 5,000 producing wells in Ohio, West Virginia and Pennsylvania producing 450 barrels of per day and 13,000 mcf gas a day. So far £6.9m has been raised from bond issues. There are further acquisition opportunities.

 

Queros Capital Partners (QCP) has issued a further £390,000 of 8% unsecured bonds. The company’s focus is investment in social housing portfolios and property asset-backed lending in the UK and Europe. Queros originally raised £500,000 last July and the latest issue takes the bonds in issue to £972,000.

 

AIM

Electrical testing and oil and gas equipment rental and sales company Northbridge Industrial Services (NBI) is raising £5.5m through a placing and open offer at 75p a share and management will contribute around one-fifth of this cash. Northbridge fell into loss last year as demand from the oil sector weakened. Costs have been reduced but Northbridge is not expected to return to profit until 2017. Debt covenants have been a concern and the additional cash will help net debt to fall from £14.3m, while capex should be lower than depreciation this year.

 

SalvaRx Group (SALV) has made its first investment since it reversed into 3Legs Resources. A $2m investment will give SavaRx a 9.2% interest in Intensity Therapeutics, which is developing a treatment for solid tumours. Intensity has a platform called DfuseRx that can identify formulations based on existing treatments that could be injected into solid tumours. The lead treatment is INT230-6, which could enter human trials by the end of this year. SalvaRx chief executive Dr Ian Walters has been working with Intensity for nearly two years so he knows about the technology. Jim Mellon and a fellow SalvaRx non-exec are subscribing for $1m of convertible loan notes in SalvaRx. The conversion price is 35.5p a share.

 

Healthcare services provider Totally (TLY) has been adding new clients to its services, including new prison contracts. The nine new contracts cover 21 locations and are worth £300,000 a year over the five years of the contracts. The services provided include physiotherapy. Totally is also integrating health education services and products provided by US business Healthwise into its self-care services. Totally has a three year agreement with Healthwise.

 

Investment company BP Marsh (BPM) has sold its 49% stake in small business sales adviser Broucour Group to its founder for up to £341,000. A £330,000 loan will also be repaid. BP Marsh has also invested S$2.4m for a 20% stake in Asia Reinsurance Brokers. An additional investment of S$500,000 could increase the stake to 25%. The Singapore-based reinsurance and insurance risk services provider is well-established and profitable.

 

CEII Roma is investing £10.45m in copper and gold miner Rambler Metals & Mining (RMM) at 4p a share – a small discount to the market price. Canada-based Rambler has also issued 200 million warrants with an exercise price of 5p a share. The initial cash should enable production at the Ming copper-gold mine to increase to 1,250 metric tonnes per day over the next few years. Rambler will assess the potential for further investment in the mine. Last month, Rambler said that it is exploring the potential for toll mining gold concentrate from the Cap Ray deposit at its Nugget Pond mill.

 

MAIN MARKET

Standard list cash shell Vertu Capital Ltd (VCBC) has identified a potential acquisition. The financial services-focused investment company intends to acquire corporate finance consultancy VCB Malaysia for £350,000. VCB is profitable and offers capital market, investor relations, fundraising and wealth management services. Vertu believes that VCB can be used as a base to grow a consultancy and wealth management business. Due diligence is still being undertaken. The deal will require a document for the readmission of the company to the standard list because it is a reverse takeover but it does not require shareholder approval because the company is on the standard list.

 

Standard list cash shell Falcon Acquisitions (FAL) has raised £2m at 20p a share to add to its cash pile. Falcon, which is seeking online television and broadcasting businesses to acquire, previously raised £1.73m, mainly at 10p a share when Falcon floated in January. At the time of flotation, Falcon said that it wanted to raise additional funds of up to £2m at a share price to be set between 10p and 30p.

 

Investment company Athelney Trust (ATY) has raised £390,000 after expenses at 233.2p a share, the NAV at the end of March, and the shares were admitted to the market on 21 April. The placing price was at a premium to the market price. Managing director Robin Boyle believes that there are a number of mis-priced shares that the cash can be used to buy.

ANDREW HORE

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