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Andrew Hore – Quoted Micro 20 August 2018

NEX EXCHANGE        

Health and community care properties developer Ashley House (ASH) reported a much-improved profit for the year to April 2018. There was a strong second half performance because of the completion of four schemes. Full year revenues were flat at £18.5m, while pre-tax profit jumped from less than £100,000 to £1.8m, although that includes a £500,000 write back of a previous impairment charge. Net debt was reduced from £2.5m to £1.5m. The housing and health property pipeline is valued at £206m, covering 22 schemes. The F1 Modular business lost money last year but trading appears likely to improve.

Ananda Developments (ANA) has acquired $200,000 of convertible loan notes in iCAN Israel-Cannabis Ltd, which focuses on medicinal cannabis. This is the first investment for Ananda and the convertibles have an annual interest rate of 6%. The interests of Ananda director Charles Morgan have assigned $100,000 of the convertibles to the company. iCan has subsidiaries involved in organising cannabis symposiums and cannabis-based research services, plus a 5% stake in CannRx Technology Inc, which has developed liquid soluble cannabinoids for use in treatments, and a 20% stake in CMTREX, which is developing a trading platform for cannabis.

Nigel Wray has reduced his stake in High Growth Capital (HASH) from 5.99% to 4.72%. Healthperm Resourcing Ltd (HPR) non-executive chairman David Sumner has bought 29,230 shares at 190p each, taking his stake to 84.7%.

Early Equity (EEQP) says trading in the company shares will resume on 28 August. Trading had been suspended on 16 May. The resumption follows an agreement with NEX Exchange that will change how shares are distributed to related parties. Early Infinity Holdings (EI) is the exclusive distributor for Yicom Global, where Early Equity is a 47. 1% shareholder. EI’s agents sell the products in Malaysia and elsewhere in south east Asia. EI incentivises its agents by gifting them shares in Early Equity. These were deemed to be a gift rather than a trade, so they were not reported. A new nominee company with two trustees that are not shareholders in Early Equity has been set up. This will hold shares for the benefit of agents of EI. Agents will receive a warrant certificate. These agents own 46.7% of Early Equity and shares equivalent to 6.29% of the company will be transferred to the nominee company. Early Equity previously announced that it wants to move to a standard listing. The company’s NAV was £1.54m, including £429,000, at the end of 2017.

Coinsilium Group Ltd (COIN) is investing $125,000 in Bundle Network Ltd, which is developing an online platform that enables the trading of cryptocurrencies. Coinsilium will also receive Bundle Network crypto tokens.

MetalNRG (MNRG) has paid a $50,000 option fee, which could lead to the company gaining a 51% stake in a new company that holds the rights to the Kamyshanovskoye uranium project in the Kyrgyz Republic. The project has an inferred uranium resource that could be worth $144m at $26/lb, plus exploration upside. International Mining Company owns 100% of the project and it would be put into a new vehicle, where MetalNRG would inject cash to gain its majority stake. MetalNRG has 90 days to undertake due diligence and review data. If the option is not taken up the option fee would be converted into a 2.5% stake in the new vehicle.

VI Mining (VIM) is starting its drilling campaigns at minas Pampa and Rosario de Belen, while the vendors are in discussions about changes in the terms of the deals. The timing of the due payment has been extended while the talks continue.

Panther Metals (PALM) has appointed Ariana Resources (AAU) boss Dr Kerim Sener as a non-executive director.

Ecovista (EVTP) is asking for shareholder approval for a resolution that will enable it to issue up to 3.486 billion shares so that management can continue with its strategy.

AIM   

Gatemore Investments has increased its stake in TLA Worldwide (TLA), the company famous for issuing a profit warning after the market closed prior to Christmas 2016, from 7.4% to 12.2%. Bart Campbell has stepped down as executive chairman of TLA, but he will continue to receive his monthly salary until the end of the year.

Last year, revenues fell by nearly one-third to £24m at microwave electronic products supplier Filtronic (FTC) but it had already been flagged. The ending of a low margin contract meant that pre-tax profit fell from £2.16m to £1.23m, although that includes exceptional finance charges of £486,000 due to exchange rate movements. The broadband and wireless divisions are being merged because they have similar customer bases. There is net cash of £3.6m plus available bank facilities. Investment in new products continues and there is long-term demand from investment in 5G networks and security-related areas.

Marshall Motor (MMH) reported a decent set of figures given the tough new car market, which is exacerbated by the decline in diesel car sales. There was a small dip in continuing revenues but underlying pre-tax profit edged up to £16.4m. Used vehicle profit improved. The dividend is maintained at 2.15p a share. Trading will be even tougher in the second half, partly due to testing regulation changes, and full year profit is expected to decline from £29.1m to £24.2m. There is a strong balance sheet with a NAV of £201m.

Zamano (ZMNO) has ended discussions with its potential reverse takeover target. This means that cash is likely to be returned to shareholders.

Condor Gold (CNR) has been granted an environmental permit for developing a processing plant for the La India project by the Nicaragua authorities. Gold production could be 80,000 ounces a year from a single open pit. Accounts for the six months to June 2018, show cash of £1.57m.

Abzena (ABZA) is recommending a 16p a share cash bid from Astro Bidco, which values it at £34.4m. The life sciences company joined AIM four years ago when it raised £20m at 80p a share. It needs additional finance pumped into the business.

Oil and gas producer Empyrean Energy (EME) has received a $906,000 tax refund from the IRS from the 2016-17 tax year.

SalvaRx Group (SALV) is selling its business to a Toronto-quoted company in return for shares, most of which will be distributed to shareholders. The 94.2% stake in cancer drugs developer SalvaRx Ltd is being swapped for 757.9million shares in Portage Biotech Inc, which are deemed to have a value of $67.5m. SalvaRx shareholders will receive 18 Portage shares for each SalvaRx share they own if they approve the disposal. SalvaRx will retain around 100 million Portage shares and become a shell.

ClearStar (CLSU) has been named as preferred contract labour screening provider for Gulfstream Aerospace. This should contribute to a reduction in loss this year.

Premier African Minerals (PREM) has raised £750,000 at 0.18p a share. Premier plans a drilling programme of up to 2,750 metres to expand the resource base at the RHA Tungsten mine. The cash should last until the end of 2018.

MAIN MARKET  

Tex Holdings (TXH) reported a slump in interim pre-tax profit from £423,000 to £96,000 even though there was a small reduction in admin expenses. There was a much better contribution from the plastics division but that was more than offset by the slump in profit by the engineering division due to delays in orders. Metal fabrication and powder coating business Argento UK has recently been bought. The interim dividend is unchanged at 2.5p a share.

Nanoco (NANO) expects the first displays using its cadmium-free quantum dots to be launched before Christmas. Volume production is expected at the new Runcorn plant before the end of 2019. The 2017-18 revenues were lower than expected because it could not recognise a payment from a large customer. Net cash is estimated at £7.9m at the end of July 2018.

Dukemount Capital (DKE) reported an increase in full year loss from £177,000 to £286,000. The NAV was £379,000 at the end of April 2018. There is £148,000 in the bank. Dukemount is on the brink of moving forward with its first two supported living developments.

PV Crystalox Solar (PVCS) has settled its claim with a customer. The customer will pay a total of €28.8m, of which the outstanding payment of €14.3m will be paid at the end of November. The customer has also waived the delivery of the solar wafers that were supposed to be supplied.

Andrew Hore

Andrew Hore – Quoted Micro 14 May 2018

NEX EXCHANGE   

Ashley House (ASH) is expected to achieve its full year profit target of £1.8m, although that includes a non-cash write back. The health and community care property developer had year-end net debt of £1.5m. The Morgan Sindall joint venture has reached financial close on its first extra care apartments and bungalows scheme in the Isle of Wight with a further scheme expected to reach financial close in the next few weeks. Modular building business F1 Modular lost money last year. There is work manufacturing classrooms for schools and projects in the retail sector so it is not dependent on residential and health development. Maureen Moy has taken her stake to 10% after buying 1.9 million shares at 13.23p a share.

Dairy and livestock services provider National Milk Records (NMR) generated revenues of £5.32m in the three months to March 2018. This means that revenues are £1.51m ahead so far this year, although the comparatives are weak. Herdwise, the screening service for Johne’s disease and other testing services are providing growth with a small improvement from milk recording services. Rising milk supply has started to hold back milk prices. There will be a one-off benefit in the fourth quarter and the first quarter of next year from a contract to supply 10,000 genomic tests that should help to provide information to improve resistance to bovine TB. NMR is one of the nominees for NEX Exchange company of the year at the 2018 Small Cap Awards.

Forbes Ventures (FOR) says that the majority shareholder in challenger bank Civilised Investments Ltd has exercised warrants that increased its shareholding to 95.7. Warwick Capital Partners is also underwriting a £12m subscription, although £4.65m of this can be subscribed by minority shareholders. This would increase the overall valuation of the bank to £20m. Forbes owns 0.05% of Civilised Investments prior to the subscription and it has not said if it will be investing any more cash.

Gledhow Investments (GDH) had £172,000 in cash at the end of March 2018 but £20,000 is trapped in a Beaufort Securities account. NAV has increased from £510,000 to £869,000.

Gunsynd (GUN) says that Brazil Tungsten Holdings, the company it owns a 6.18% stake in, has restarted mining operations after a government suspension was lifted.

Coinsilium Group Ltd (COIN) will advise FANTOM Foundation on the $39.8m token generation event due to start on 15 June. FANTOM is using Directed Acyclic Graph (DAG) as a smart contract platform. This is an alternative to blockchain, which should be faster and have lower fees.

IMC Exploration Group (IMCP) is focusing on the completion of works programmes in its three principal projects. The joint venture with Trove Rehabilitation only requires ministerial approval to complete. Eamon O’Brien has been appointed as a director and he will become chairman. Kathrine Byrne is also joining the board. Nial Ring and Liam McGrattan will step down from the board.

AIM   

A strong performance in the used vehicles market and continued growth in aftersales helped to offset the downturn in the new vehicles contribution at Cambria Automobiles (CAMB) in the six months to February 2018. Underlying operating profit still fell from £5.8m to £5.3m. Interim pre-tax profit was £4.8m. Full year pre-tax profit is expected to decline from £11.3m to £9.5m. The significant capital investment programme continues but net debt is minimal.

Vertu Motors (VTU) also performed well despite the tough background in the motor dealer sector. In the year to February 2018, adjusted pre-tax profit fell from £31.5m to £28.6m on flat revenues. The full year dividend was increased by 7% to 1.5p a share. It appears that trading may be starting to improve and the benefits of the current investment programme are yet to show through. Net cash is £19.3m. A further dip in profit to £25m is expected this year.

CEPS (CEPS) reported flat 2017 revenues but the underlying pre-tax profit jumped from £146,000 to £902,000. The biggest improvement in profit came from Friedman’s and Aford Awards, while CEM Press made a larger loss.

TyraTech Inc (TYR) says sales of the PureScience poultry mite treatment are building in the US and a launch is planned in Europe. Trials of a treatment for intestinal worms in pigs have shown a 70% reduction in the worms. TyraTech has shown that it can develop effective products and the remaining cash from the sale of Vamousse will finance further product development and trials.

Deltex Medical (DMG) had a tough 2017 but lower cost meant that the loss was reduced. The medical monitoring equipment and consumables supplier has won significant contracts in the US and France. Revenues dipped from £6.3m to £5.9m, while the loss was down from £2.4m to £2m. Annualised cost reductions of £1m will partly show through in 2018. The UK remains tough with potential recovery later in the year. International business should grow. A £2m fundraising should provide enough cash to invest in the technology and cover a reduced loss.

HaloSource Inc (HALO) has disappointed the market again. This time the auditors have not allowed some of the sales shipped at the end of 2017 to be included in revenues. Cantor Fitzgerald has maintained its 2018 loss forecast at $3.4m, down from $5.7m. The cash outflow should be lower.

Sprue Aegis (SPRP) has come to an agreement with BRK over the termination of their distribution and manufacturing agreements. Sprue Aegis will have to pay £11m in instalments up until December. There will be a £3.8m exceptional charge in the 2017 accounts. The full year results will be published on 15 March.

Wey Education (WEY) reported interim revenues 44% ahead at £1.74m and an improvement in underlying pre-tax profit from £75,000 to £145,000. An initial contribution from Academy 21 accounted for part of the improvement. A 2017-18 profit of £500,000 is forecast, rising to £2.5m the following year.

Trading in the shares of Lionsgold Ltd (LION) has been suspended following the completion of the acquisition of Goldbloc, which has developed a digital gold currency. This is deemed as a change of business. The suspension could last up to four months.

Fox Marble (FOX) increased revenues by 50% to €1.2m in 2017 and lost €3.4m. This year will be more significant with the processing factory up and running and capital investment made in machinery. There was €440,000 in the bank at the end of April 2018.

Out-of-hospital care services provider Totally (TLY) has secured the renewal of an urgent care services contract worth €1.2m with the Northumbria Healthcare NHS Foundation Trust.

Westminster Group (WSG) has admitted that a previously announced Middle East contract is in Iran and it has still to become effective. The current political situation could scupper the deal or at least delay it.

Microsaic Systems (MSYS) has signed a distribution agreement with Rightek, which will distribute the Microsaic 4500 MiD mass spectrometry detector in Taiwan.

MAIN MARKET    

Stem cell services provider WideCells Group (WDC) has commitments to invest £1.47m at 3p a share and is offering the chance of additional investment of up to £450,000, via a bookbuild using the Teathers app and that closes on 21 May. WideCells has still not been able to publish its 2017 accounts so trading in the shares remains suspended. Directors have loaned the company £215,000. At the end of June 2017, there was cash of £869,000 and debt of £634,000, before any of the director loans. WideCells intends to repay £120,000 of debt, spend £150,000 on product development, £110,000 on the CellPlan platform and £33,000 on WideAcademy. The other £1m plus will pay expenses and provide working capital.

Nanoco (NANO) will receive a £1.8m milestone payment from its unnamed US-listed partner. This is the second of three milestone payments.

Falcon Media House (FAL) has raised a further £200,000 from a convertible loan note issue, taking the total to £3.14m. The conversion price is 2.5p a share.

Treatt (TET) has sold pressed vegetable seed oils supplier Earthoil Plantations for £11m. That takes pro forma net cash to £17.5m. In the six months to March 2018, Treatt increased revenues by 14% to £53.6m and underlying pre-tax profit improved from £4.79m to £5.77m.

Andrew Hore

Andrew Hore – Quoted Micro 7 May 2018

NEX EXCHANGE   

Forbes Ventures (FOR) has sold its stake in KCR Residential REIT (KCR) for £145,000. The remaining investment is in challenger bank Civilised Investments Ltd. Nigel Quinton, who has run two building societies, has been appointed as finance director of Forbes. Igor Zjali has become a non-executive director. The investment strategy covers disruptive technology in the property and fintech sectors.

KR1 (KR1) has been raising cash from partially disposing of token holdings. Cash has been generated from sales of tokens issued by six projects and this will be available for re-investment. KR1 has already acquired 30,587 tokens in the Waves project at $6.41 each.

Angelfish Investments (ANGP) says that there has been a further delay in its investee company Rapid Nutrition’s plans to gain a quotation in London. Rapid, which is already quoted on the SIX Swiss Exchange, has developed a nutraceutical product range. One of the terms of a £150,000 loan to Rapid was that it should be admitted to the London market by the end of February, but this date was extended to the end of April and has been extended again to the end of July. The principal and interest, up until the end of February, will convert into Rapid shares. Interest has been payable in cash since the end of February.

EPE Special Opportunities (ESO) reported a 35.6% decrease in NAV to 234.4p a share at the end of January 2018. That was mainly down to the poor performance of fully listed LED lighting company Luceco (LUCE) after sales growth did not turn into higher profit. EPE is considering exercising the option to redeem up to 50% of the outstanding unsecured loan notes. Redeeming £4m of loan notes would save £300,000 in interest. There is £28m in the bank.

Middle East-focused investment company Indigo Holdings (INGO) has lost €165,300 on an Iran-based car ride-sharing app. This will be mainly offset by a book gain of around €160,000 on its investment in Sheypoor following another fundraising round.

NQ Minerals (NQMI) has started to refurbish the Hellyer flotation plant in Tasmania. The mill should be commissioned in the third quarter of 2018.

First Sentinel (FSBN) has invested in AIM-quoted Amur Minerals and unquoted Titan FM Ltd in April. An investment of $250,000 has been made in the form of a contribution to a $10m loan facility made available to Amur. Titan FM is an acquisition vehicle in the facilities management sector with a focus on areas covered by strict regulation. The £50,000 pre-IPO investment helped to finance the first acquisition of a provider of air conditioning and refrigeration services. Two more acquisitions are planned this year as is a quotation on NEX. The latest tranche of First Sentinel bonds has raised a further £1m.

Valiant Investments (VALP) reported a flat full year loss of £216,000 and this would have been higher if there had not been a swing from a £3,000 loss on listed investment movements to a £25,000 gain. Valiant has invested some of its cash in five AIM-quoted, dividend paying companies. Valiant had a NAV of £197,000.

Sandal (SAND) has appointed David Munting as finance director and Richard Green as a non-executive.

AIM   

Minds + Machines (MMX) swung from loss to profit in 2017 and it is acquiring four top level domains. Minds + Machines is paying $10m in cash and $31m in shares in two tranches for the membership interests of Florida-based ICM Registry, which owns .xxx, .sex, .adult and .porn. In 2017, revenues were $7.27m (78% recurring) and net income was $3.5m. The recurring nature of the revenues and the reduced dependence on China should help the group to start paying dividends in the next couple of years. Multinational brands buy related domain names with these suffixes so that nobody else can. This helps to boost recurring revenues. Not all of the other purchasers are sex-related, either. The main uncertainty concerns whether the group will get a lower rating because of the association with sex-related businesses.

Sanderson Group (SND) says that its interim results are slightly ahead of expectations and the positive momentum is continuing. The enterprise software supplier’s operating profit has increased from £1.55m to £2m.  Two-thirds of the improvement has come from recent acquisition Anisa and the rest is organic.

DX (Group) (DX.) has raised £4.76m at 8.5p a share, which is much higher than the indicated minimum price of 7.41p that is being used to capitalise the company’s loan notes. These additional shares will heavily dilute existing shareholders. The cash will be used to restructure the parcel delivery networks, open new depots and finance IT investment.

Wynnstay Group (WYN) is acquiring eight country stores previously operated by Countrywide Farmers, which has gone into administration. Five of the stores take Wynnstay into Devon and Cornwall. The stores have annual sales of £16.4m.

Berkeley Energia (BKY) has announced plans to move to the standard list and the Spanish Stock Exchanges in Madrid, Barcelona, Valencia and Bilbao. The admissions should happen by the end of May. No money will be raised because the cash injected by the Oman sovereign wealth fund covers the upfront capital costs of developing the Salamanca project in Spain.

A combination of lower costs and higher iodine prices meant that Iofina (IOF) reduced its underlying loss from $5.4m to $3.4m in 2017. There was also a $5.3m impairment charge. There was a cash inflow before working capital movements. The new IO#7 plant started up in February and there could be another plant in the next year. Iofina is on course to be profitable in 2019.

Sinclair Pharma (SPH) has secured a €23m loan facility. This will replace bank debt and help to finance the aesthetics company’s new strategy in the US following the decision to terminate the Silhouette InstaLift distribution agreement with Thermi when reorder rates were disappointing. Negotiations are ongoing with potential distribution partners in the US. There was growth in other markets, including Brazil, and the 2017 loss was lower.

Pelatro (PTRO) provides precision marketing services to telecoms companies that helps them to retain subscribers and generate more income from each of them. Maiden results for Pelatro show a jump in underlying profit to $1.8m but the trade receivables are the most significant number in the accounts. Despite the profit there was a small cash outflow after tax payments. That is because trade receivables were $1.78m and $756,000 of that figure is for more than 121 days. That is because the company used extended payment terms to help to attract a customer. There is $3.1m in the bank so Pelatro has the cash to finance additional working capital for that and future deals. It is best to keep an eye on the trade receivables.

Rose Petroleum (ROSE) has raised £1m at 3.25p a share. The cash will be used to finance progress with the Paradox project towards being drill-ready. There are also other partnership and investment opportunities in the region.

Gloo Networks (GLOO) cannot find a suitable acquisition and it is winding itself up. Shareholders should receive at least 47p a share. The original placing price was 120p, so three-fifths of the cash has gone in less than three years without doing a deal.

Braime (TF and JH) (BMTO) reported a jump in pre-tax profit from £1.3m to £2.2m in 2017. The total dividend has been increased from 9.3p a share to 10.2p a share. Pressings profit was flat and the improvement came from the materials handling division.

Safestyle UK (SFE) says Steve Bermingham will retire as chief executive at the end of this year and he is being replaced by Mike Gallacher, who until recently ran First Milk, the farmer-owned milk business, which he restructured.

Trading in Green and Smart Holdings (GSH) shares was suspended because it did not publish its 2016-17 accounts by the end of March. The audit was expected to be completed by the end of April, but it is still going on and the accounts are not expected before June. Discussions continue with a potential investor.

MAIN MARKET    

Stem cell services provider WideCells Group (WDC) is running out of cash and has not been able to publish its 2017 accounts so trading in the shares has been suspended. Directors have loaned the company a further £115,000, on top of a previous £100,000. At the end of June 2017, there was cash of £869,000 and debt of £634,000. That was before any of the director loans. It appears that management has taken too long to sort out the funding it requires and the potential share issue, if it is arranged, could be significantly dilutive.

Nanoco (NANO) has launched Nanoco 2D Materials Ltd in order to develop nanomaterials. The University of Manchester has invested £400,000 via a convertible.

Symphony International Holdings (SIHL) is paying an ordinary and special dividend of 12 cents in total. That will cost $71.5m. The Asian healthcare and hospitality businesses investor has sold investments and realised gains have helped to fund the payment.

St Ives (SIV) has completely exited book printing with the sale of Clays for £20m. The pension liabilities will stay with St Ives and it will contribute £2.5m to the pension fund. Net debt was £42.2m on 2 February 2018.

Trading in Sealand Capital (SCGL) shares has been suspended because it could not publish its 2017 accounts by the end of April.

Small Cap Awards (14 June, Montcalm Hotel, Marble Arch, London) Nominees

IPO of the Year

Alpha FX Group

Appscatter Group

Boku

Keystone Law Group PLC

K3 Capital Group

Rainbow Rare Earths Ltd

Ramsdens Holdings

Xpediator

Company of the Year

Bilby

Bioventix

Faron Pharmaceuticals

Frontier Developments

LoopUp Group

Nostra Terra Oil and Gas Company

TMT Investments

Water Intelligence

Wey Education

ZOO Digital Group

NEX Exchange Company of the Year

Chapel Down

Crossword CyberSecurity

Field Systems Designs

KR1

National Milk Records

Sandal

Daniel Thwaites

Walls & Futures

Executive Director of the Year

Zillah Byng-Thorne (CEO) and Penny Ladkin-Brand (CFO) – Future plc

Dr. Stuart Green, CEO – Zoo Digital Group PLC

Chris Gurry, Group Managing Director – CML MicroSystems PLC

Tom Ilube, CEO – Crossword Cybersecurity PLC

Dr Markku Jalkanen, CEO – Faron Pharmaceuticals

Bobby Kalar, CEO – Yu Group PLC

Dr. James Millen, CEO – Physiomics PLC

Ian Simm, CEO – Impax Asset Management Group PLC

Frazer Thompson, CEO – Chapel Down Group PLC

Andrew Wass, CEO – Gear4Music Holdings PLC

Impact Company of the Year Sponsored by Impact Investment Network

Ashley House

HaloSource

Walls & Future

Fintech Company of the Year

FairFX Group

FreeAgent Holdings

Proactis Holdings

ULS Technology

Transaction of the Year 

Proactis Holdings PLC – Acquisition of Perfect Commerce

Work Group PLC / Gordon Dadds Group PLC – Reverse takeover

Atlantis Resources Limited – Uksmouth power stations deal (SUSPENDED)

Frontier IP Group PLC – Transactions FairFX Group PLC – Acquisition of CardOne

7digital Group PLC – Acquisition of 24-7

Impax Asset Management Group PLC – Acquisition of Pax World Management LLC

Analyst of the Year

Vadim Alexandre, Head of Research – Northland Capital Partners

Kevin Ashton, TMT Analyst – Cantor Fitzgerald

Eric Burns, Deputy Head of Institutional Research – WH Ireland Limited

David Johnson, Research Director – Allenby Capital Limited

Rob Sanders, Head of Growth Companies Research – Stockdale Securities Limited

Simon Strong, Head of Research Growth Companies – Cenkos Securities PLC

Journalist of the Year

Smit Berry – Small Company Sharewatch

Joanne Hart – Midas

Jamie Nimmo – Mail on Sunday

Paul Scott – Stockopedia

Mark Shapland – Evening Standard

Merryn Somerset Webb – Financial Times

Simon Thompson – Investors Chronicle

Fund Manager of the Year

Daniel Nickols – Old Mutual UK Smaller Companies

James Thorne – Threadneedle UK Smaller Companies

Nick Williamson – Old Mutual UK Smaller Companies

James Zimmerman – Jupiter UK Smaller Companies

Microcap Fund Manager of the Year

Guy Feld – Cannaccord (Hargreave Hale Limited)

David Horner – Chelverton Small Companies Dividend Trust PLC

Judith MacKenzie – Downing LLP

Katie Potts – Herald Investment Management

Gervais Williams – Miton Group PLC

Lifetime Achievement Award To be announced on the evening

Special Services to Small Caps To be announced on the evening.
Andrew Hore

Andrew Hore – Quoted Micro 16 April 2018

NEX EXCHANGE   

London Nusantara Plantations has become Panther Metals (PALM) and it has sent out notice of a general meeting on 1 May to enable directors to issue up to one billion shares. This power will expire after 15 months. The company is issuing 17 million shares at 0.1p a share to pay a £17,000 bill from an adviser.

Early Equity (EEQP) had £429,000 in the bank at the end of February 2018. The company raised £705,000 during the year and this has helped to increase the value of the investment portfolio from £594,000 to £1.01m. The NAV has increased from £639,000 to £1.54m. There are plans to raise more cash if its is required for additional investments.

Forbes Ventures (FOR) says that investee company Civilised Bank Ltd has released the banking licence it was granted by the Bank of England because it will not meet the mobilisation deadline. There have been delays in developing the IT needed by the bank so the intention is to reapply when the IT development is further advanced.

AIM

Oil palm plantations operator MP Evans (MPE) is starting to enjoy the benefits of its investment in planting oil palm but there is plenty more to come. The 2017 profit was boosted by a gain on discontinued operations of $68m. The underlying dividend improved from 15p a share to 17.75p a share and there should be continued growth as the plantations mature. The value of the business is estimated at £11 a share.

The Property Franchise Group (TPFG) increased revenues by 23% to £10.2m and this led to a one-third improvement in pre-tax profit to £4.3m. This was despite the loss by online estate agency EweMove, where new management has been put in place. The total dividend is 7.5p a share and there was a modest year-end net cash position. The tenant fee ban could hit the business in 2019 but there is time to mitigate the impact.

Parity (PTY) has completed its turnaround and from now on profit growth will come from growing the revenues. The IT recruitment side was hit by changes in tax treatment for freelancers working for government departments but underlying pre-tax profit was still improved from £1.4m to £1.7m. The recently announced Primark contract will help this year. The higher margin consultancy business continues to grow. Cash generation was better than expected with net debt falling from £4.4m to £1.6m. There should be net cash at the end of 2018. There is also the prospect of a dividend in the medium-term.

D4T4 Solutions (D4T4) had a strong fourth quarter and this strength is set to continue into the first few months of this financial year.

Rose Petroleum (ROSE) boss Matthew Idiens has nearly doubled his stake in the oil and gas company through the acquisition of 800,000 shares at an average price of 2.5p each. Finance director Christopher Eadie has bought 424,715 shares at an average of 2.35p each. Rose recently added to its land position in the Paradox Basin in Utah. Rose acquired a 75% working interest in 3,320 gross acres for $120,000. There has already been a 3D seismic survey of the acreage.

Frontier IP (FIPP) has increased its stake in Fieldwork Robotics by offering additional engineering and development support. That will help to develop a prototype for harvesting vegetables. The stake will rise from 21% to 27.5%.

Boku Inc (BOKU) is growing its revenues and the relatively stable cost base means that it could be on course for a profit in 2018. The direct mobile carrier billing company is expected to grow revenues from $24.4m to $32.7m in 2018 and that would be enough to make a profit. Additional services could further boost long-term revenues.

Starcom (STAR) published a positive AGM statement. First quarter revenues were much higher than expected at $1.5m, which is nearly double the first quarter of 2017. This should help to reduce the loss this year.

RedT Energy (RED) is raising £3.85m at 5.9p a share and this will be invested in growing its energy storage technology business.

MAIN MARKET    

Cadmium-free quantum dots developer Nanoco (NANO) had £8.7m in the bank at the end of January 2018, thanks to the £8m raised in November. The reported interim loss declined from £6.4m to £4.8m. There could be additional revenues in the second half from initial payments by the US partner funding the development of nano-particles for electronic devices. There should also be product revenues from the launch of gaming-focused computer displays in the second half. There should be £5.7m in the bank at the end of July 2018.

Dukemount Capital (DKE) says that it intends to increase the number of rooms and add office space in its second development. This will increase the rental income. These changes have been sparked by the potential housing association buyer of the assisted housing development. The architect will have to make changes to the plans and a two-month extension to the option period for the purchase from the current owner of the building.

China-focused health food products supplier World Trade Systems (WTS) increased its revenues from £8.7m to £19.6m in 2017. There reported profit more than doubled from £906,000 to £1.98m. There is £2.17m in the bank offset by £1.26m of borrowings.

Standard list shell AIQ Ltd (AIQ) has raised £115,000 at 20p a share. This should help to improve the limited liquidity of the shares. A one-for-40 open offer at the same share price could raise up to £253,000 more. The suspension of trading in the shares should be lifted on 19 April. The suspension price was 125p a share. In January, £4m was raised at 8p a share and the limited liquidity led to a ridiculous rise in the share price.

Andrew Hore

Andrew Hore – Quoted Micro 12 February 2018

NEX EXCHANGE   

Western Selection (WESP) maintained its NAV at 95p a share at the end of the six month period of December 2017. Net debt was £1.13m. A sharp upturn in the value of the stake in Bilby (BILB) and offset declines in other investments. The interim dividend is unchanged at 1.1p a share. The shares go ex-dividend on 8 March.

Gledhow Investments (GDH) has granted six million options to its directors and company secretary. Guy Miller and Brett Miller will receive 2.5 million options each and Geoffrey Melamet receives 1 million. The exercise price is 1p a share. They last for five years and would equate to 10.9% of the enlarged share capital if taken up. The current share price is 1p (0.75p/1.25p). Gledhow had a NAV of £714,452 at the end of September 2017, which is equivalent to 1.45p a share. Since the year end, a gain of £115,000 was achieved on the sale of Coinsilium shares and Gledhow retains a significant stake which in Coinsilium, where the share price is more than three times the level at the end of September 2017. That could add more than £100,000 to the Gledhow NAV but the Coinsilium share price is volatile. Directors and company secretary remuneration was £21,514 last year. There are 4.9 million warrants exercisable at 1.5p each but these expire on 6 March 2017. Bruce Rowan and related parties own 83.37% of the current share capital.

IMC Exploration (IMCP) is continuing with its plans to move to the standard list. IMC has signed heads of agreement with Trove Metals Ltd and this should lead to a joint venture for the project at Avoca, County Wicklow. The current Koza/IMC joint venture has been set aside. IMC has decided to focus on the 12 most prospective of its 15 licences.

Crossword Cybersecurity (CCS) says that its revenues more than doubled to more than £700,000 in 2017. There is customer interest in the Rizikon cyber security product and the General Data Protection Regulations will provide momentum when they come into force in May. Full year figures should be published by the end of April.

Sandal (SAND) says that radiators supplier Pitacs will be a distributor of the Energie MiHome range. Pitacs is launching a new boiler in April and the Energie MiHome thermostats and radiator valves can be sold with this. Pitacs supplies more than 2,000 independent plumbers’ merchants as well as Plumb Nation.

Angelfish Investments (ANGP) says that its investee company Rapid Nutrition plans to gain a quotation in London. Rapid, which is already quoted on the SIX Swiss Exchange, has developed a nutraceutical product range. One of the terms of the £150,000 loan to Rapid was that it should be admitted to the London market by the end of February but this date has been extended to the end of April because of delays in the flotation process. If admission to the market happens by 1 March, then the principal and interest will convert into Rapid shares. If it takes longer than the interest after the end of February is payable in cash.

BWA Group (BWAP) has issued £220,000 of 4% convertible loan notes, with £120,000 taken up by Bath Group, which is owned by BWA chairman Richard Battersby. Bath has taken £70,000 of the loan notes in lieu of cash owed by BWA investee company Mineralfields Group.

Trevor Lloyd has succeeded Philip Kirkham as chairman of National Milk Records (NMR).

Kryptonite 1 (KR1) has changed its name to KR1.

AIM    

Shield Therapeutics (STX) disappointed the market with phase III patient trial results for the use of Feraccru in the treatment of iron deficiency anaemia in patients with chronic kidney disease that did not meet statistical significance requirements. The results are being analysed in order to identify the reason the trial failed. The share price fell by two-thirds.

Diversified Gas and Oil (DGOC) expects to complete the acquisition of Appalachian producing gas and oil assets from CNX Gas by the end of March. This will cost $85m (£59.9m), while the acquisition of Alliance Petroleum will cost a further $95m (£66.9m). A placing at 80p a share has raised £133.1m. The group’s net working interest production will increase by 173% to 28,133 boed. Management expects annualised EBITDA to be $70m-$75m.

OnTheMarket (OTMP) joined AIM on 9 February having raised £30m at 165p a share. The share price ended the day at 148p. The online property portal operator will make significant investment in its business over the next two years and this will lead it to fall into loss for a couple of years.

Draper Esprit (GROW) has made three new investments. Evonetix is developing the ability for parallel synthesis of DNA on silicon arrays. Droplet Computing has developed technology to decouple applications from the operating system for online and offline use. Kaptivo is developing products to provide whiteboard live streaming and image capture.

Seeing Machines (SEE) has published a trading statement to try to reassure investors following the unexpected departure of its chief executive. Interim revenues will be greater than the A$13.6m reported for last year. The fleet business is gaining revenues internationally. There is growing interest in the driver fatigue technology from Transport for London.

Recruitment software provider Dillistone (DSG) says that its 2017 figures will be much better than expected. This led to a pre-tax profit upgrade from £200,000 to £300,000. This is still a depressed figure due to the investment in GatedTalent and the future of the business depends on the take-up of this new product.

Engineering and technology recruiter Gattaca (GATC) says that weakness in the technology sector will hold back its progress and its chief executive has resigned. Underlying pre-tax profit is set to decline for a second year while the dividend could be halved to 11.5p a share in order for its to be twice covered.

Trading in the shares of BOS Global Holdings (BOS) remains suspended because of the resignation of RFC Ambrian as nominated adviser. BOS still does not have enough working capital so it cannot publish its 2016-17 annual report because the uncertainty over the AIM quotation scuppered a £1.2m placing.

Trading in Kennedy Ventures (KENV) shares will recommence on 12 February following the publication of its annual report. There was a cash outflow of £2.76m in the year to June 2017. The Namibia Tantalite Investment Mine run by African Tantalum has made its fourth shipment of tantalum to its North American customer and there are two more potential customers.

Croma Security Solutions (CSSG) says its first half figures will be much better than those reported for the first half of last year. The EBITDA will improve from £440,000 to more than £1.1m. The company’s largest ever contract was won at the end of the period. There has been an increase in demand for personnel from Croma Vigilant and it has won a five year contract. There is also improved demand for technology supplied by Croma Systems. The interims will be published in February.

BNN Technology (BNN) will lose its AIM quotation on 12 February. A matched bargain facility will be set up. The remaining board hopes to do at least one deal with the two US-listed companies it is in discussions with concerning the acquisition of all or most of BNN’s business.

Strategic Minerals (SML) has extended its access to the Cobre magnetite stockpile in New Mexico until the end of March 2019. This will provide cash to finance other projects.

Origo Partners (OPP) has sold 4.7% of Jinan Heng Yu Environmental Protection Co Ltd for the equivalent of $3m. This is in line with book value but it may take many months for the cash to be received. Origo retains a 7.2% indirect stake. The Origo NAV was $0.09 a share at the end of June 2017.

Alba Mineral Resources (ALBA) has secured additional exploration licences in Greenland. The 466 square km of land is in north west Greenland. Exploration work can be combined with existing licence areas.

Mercantile Ports and Logistics (MPL) says its port in Mumbai will receive its first revenues in a few weeks, following delays in the first customer sorting out its logistics. A further 200 metres is being added to the quay on the east flank of the facility.

Physiomics (PYC) has won a £70,000 contract from a major pharma company. The company’s Virtual Tumour computer model will be used for helping to predict outcomes in pre-clinical testing.

Warpaint London (W7L) says its 2017 results will be in line with expectations suggesting a pre-tax profit of £9.8m and a total dividend of 4p a share.

Polarean Imaging has relaunched plans to come to AIM. It had planned to float at the end of 2017 and the new proposed date is 22 February.

Fryer management services provider Filta Group Holdings (FLTA) says its 2017 revenues were 30% higher at £13.25m. The sale of the refrigeration business should increase the group margin.

TechFinancials Inc (TECH) has pulled out of the sale of non-core operations because the buyer had still not obtained regulatory approval.

MAIN MARKET    

Cadmium-free quantum dots producer Nanoco (NANO) has secured a material development and supply agreement with a major US firm that will provide funding to expand Nanoco’s manufacturing site in Runcorn. The deal covers the production of nano-particles for electronic devices. Commercial supply should commence in 2019.

Dukemount Capital (DKE) has secured a two month extension to its option on a property in north west England while talks with a housing association continue. Plans for the refurbishment of the building will be presented to the housing association. Gary Carp has increased his stake from below 3% to 5% in the past fortnight.

Flying Brands Ltd (FBDU) is negotiating to buy a North American medical imaging software developer, which owns FDA-approved medical imaging software that fits well with Flying Brands; own software. The cost of £500,000 would mainly be financed through a share issue.

Avocet Mining (AVM) has completed the sale of Resolute (West Africa) for $5m.

Path Investments (PATH) is still intending to raise cash and move to AIM in the first quarter of 2018. The farm-in deal to acquire 50% of Alfeld-Elze II licence and gas field in Germany is expected to go ahead in the near future.

Chuk Kin Lau has increased his stake in book publisher Quarto Group (QRT) from 20% to 25.6%. Cavendish Asset Management nearly halved its stake to 3.69%.

Andrew Hore

Quoted Micro 11 September 2017


NEX EXCHANGE

Milamber Ventures (MLVP) has signed non-binding heads of terms to acquire vocational training provider Essential Learning Company Ltd and it wants to raise up to £2m. Milamber already owns 15% of Essential, which it acquired for £75,000 last May. The other 85% would be acquired for a deferred payment of £800,000 in cash and £100,000 in shares. There will be an initial payment of £30,000 in shares and the rest is dependent on a number of things including winning a warranty case against the previous owners of Essential, receiving R&D tax credits and the achievement of quarterly profitability. It is also depends on Milamber raising the funding. Loss-making Essential, which provides training for the health, care and education services, generated revenues of £888,000 in the year to March 2017. Essential is in a good position to benefit from government funding of apprenticeships and some of the cash raised by Milamber will go towards growing the business. The two businesses have been working together for six months. A formal agreement should be completed before the end of 2017.

In the first half of 2017, cyber security software developer Crossword Cybersecurity (CCS) more than doubled its revenues from £164,000 to £397,000, although the loss increased to £584,000 due to a rise in administration expenses. There was £1.07m left in the bank. Crossword is working with nine universities.

Housebuilder St Mark Homes (SMAP) plans to raise up to £2m through the issue of bonds with an annual interest charge of 6% via the Crowdstacker platform. The bonds can be put in an ISA. This cash will enable more projects to be taken on. There is currently a development in Sutton and two other developments in south west London where St Mark has a 40% interest. St Mark reported a dip in interim pre-tax profit from £315,000 to £211,000 following a slump in revenues from £1.42m to £71,000. The profit was boosted by a non-cash release of negative goodwill and higher interest receivable. The NAV per share has dipped from 137p to 136p, including £955,000 in cash. That was prior to the payment of the interim dividend of 5.5p a share.

WMC Retail Partners (WELL) says that its Cornucopia development in Cornwall is performing poorly and stemming the loss is a priority. Elsewhere, trading is in line with expectations but the interim loss will be much higher than in the first half of 2016. Cornucopia has been a drain on cash and additional finance is required. A party related to a director has lent WMC £75,000. The interims will be published by the end of September.

AIM

Polemos (PLMO) has secured an initial agreement to acquire US-based cyber security firm SecurLinx Corporation. A share issue at 0.035p a share would value the company at £17.8m. SecurLinx supplies biometric identity management and access control systems for the healthcare sector. Polemos will advance $500,000 to SecurLinx and this is convertible into 3.21% of the company. The consideration could be varied depending on whether on conversion of the loan note in Oyster Oil and Gas the shares are worth more or less than £600,000. A one-for-1,000 share consolidation is planned. Trading in Polemos shares has been suspended.

Energy and commodities software provider Brady (BRY) is in the process of moving towards a SaaS-based model. This led to a higher interim loss and, even though a second half profit is forecast, the full year loss is still expected to treble to £1.8m.A move back into profit is on the cards for next year.

WANdisco (WAND) has cut its cash outflow in the first half of 2017. There was still $9.9m in the back at the end of June 2017, although there is also debt of $3m. Big data and cloud revenues are beginning to grow. Interim bookings for big data and cloud increased from $2.6m to $7m. The addressable market is growing as WANdisco gains contract in new sectors, including healthcare and retail.

Starcom (STAR) has secured a strategic collaboration agreement with a European industrial group, covering track and trace technology for logistics. An initial order for 1,000 Kylos Air units should be delivered in 2017. The arrangement is for three years.

Prospex Oil and Gas (PXOG) is raising £650,000 at 0.35p a share. The cash will finance the work programme for the Suceava concession in north east Romania. There will also be cash left for assessing other oil and gas prospects.

MAIN MARKET

Nanoco (NANO) has signed a commercial supply and licence agreement with a US corporation that wants to use its cadmium-free quantum dot technology in medical devices. The light-therapy devices will treat pain, soft tissue injury and dermatology ailments. Nanoco is also involved in developing optical imaging, diagnosis and therapy for pancreatic cancer with University College London.

Avation (AVAP) reported full year figures in line with expectations with revenues one-third higher at $94.2m. Pre-tax profit was 18% ahead at $21.4m, including aircraft disposal gains of $3.4m in the second half. The dividend was increased by 85% to 6 cents a share.

Andrew Hore

Quoted Micro 28 August 2017

NEX EXCHANGE

Good Energy (GOOD) and Ecotricity have come to an agreement that means the latter has withdrawn its requisition of a general meeting. No details were released about the reasons behind the withdrawal.

Cadence Minerals (KDNC) is in talks to sell part of its 16.1% stake in AIM-quoted Bacanora Minerals (BCN) to a strategic investor group. Bacanora’s main interest is in the Sonora lithium project in Mexico.

Blockchain investment company Coinsilium Group Ltd (COIN) has formed a Gibraltar-based subsidiary called Terrastream Ltd, which plans to develop blockchain platform for a token-based alternative funding system. Gibraltar is expected to be the first jurisdiction to develop a regulatory framework for distributed ledger technology and the blockchain. A token sale will help to finance the development work. The initial focus is likely to be the resources sector.

MetalNRG (MNRG) has added additional ground to its licence in Australia. The new area will be called Palomino North.

All Star Minerals (ASMO) has extended the terms of the convertible loan note issued to Valiant Investments have been extended so it matures in May 2018. The annual interest charge is 20% and the conversion price is 0.1p a share. The maturity dates of other loan notes totalling £110,000 have been extended to January 2018. The interest rate and conversion price are the same. Shares have been issued to satisfy past liabilities on these loan notes.

AIM

Warehouse REIT has issued the AIM prospectus for its placing, offer for subscription and intermediaries offer to raise up to £150m. An existing portfolio of warehouse assets will be acquired for £108.9m, based on a 7% net initial yield, and there are other potential assets being assessed. A dividend of 5.5p a share is being targeted for the year to March 2019.

Utilitywise (UTW) has confirmed that trading last year was in line with expectations so pre-tax profit is likely to decline from £8.2m to £4.7m.

Palace Capital (PCA) has sold a Bristol property for £2.25m, which is its net asset value, following the loss of one of its tenants, Blafour Beatty. The property was acquired as part of a portfolio from Quintain in 2013.

Scientific Digital Imaging (SDI) is acquiring Applied Thermal Control, a manufacturer of chillers, coolers and heat exchangers, for up to £1.2m.

Management Resource Solutions (MRS) says that its chief executive Joe Clayton has left the company. He was appointed chief executive at the end of 2016. In the year to June 2017, MRS generated revenues of A$52.2m and the loss for the year will be higher than expected. Exceptional costs will also be higher than thought initially. MRS had cash of A$2m.

Gatemore Capital has increased its stake in DX (DX.) from 21.3% to 23.8% following the resumption of trading in the shares.

Redx Pharma (REDX) will be paying unsecured creditors in full. The process has begun but it will take some time. This brings the reintroduction of trading in the shares nearer.

Home improvements products provider entu (UK) (ENTU) is appointing an administrator because it has not agreed a refinancing with a potential financial backer. The trading businesses will be sold. Trading in the shares was suspended on 24 August. entu raised £32.8m when it joined AIM in October 2014.

Kin Group (KIN) has been unable to secure the funding it requires and an administrator has been appointed to the main subsidiary. Kin Group will not get anything from a sale of the subsidiary and it will become a shell. There will still be a requirement for a fundraising for the shell to be viable.

365 Agile (365) has left AIM because it has been unable to secure a reverse takeover. Potential acquisitions are still being assessed.

Mercantile Ports and Logistics Ltd (MPL) has signed up the first customer for its Mumbai port facility. This should generate £4.7m for each one million tonnes handled, with the payment raised by 7% a year. Two million tonnes of cargo have been contracted for the first year, with a guaranteed minimum of 750,000 tonnes, and the figure will rise for each of the next two years reaching three million tonnes in the third year, with a minimum of two million tonnes. Operations should commence in December. The share price rose by two-thirds to 8.13p.

Sula Iron & Gold (SULA) has raised £900,000 at 0.146p a share but £500,000 of this figure will be part of an equity sharing agreement. Sula is gambling that it will receive £500,000 or more as part of the equity sharing agreement and this will paid on a monthly basis until September 2018. The benchmark price is 0.161p a share so each month the share price has to be at least that level for Sula to at least receive that amount owed. The board members have agreed to halve their salaries.

Verditek (VDTK) has secured a deal that will mean that 51%-owned Greenflex Energy will provide its solar technology to power digital advertising boards in bus shelters in Italy. This is a trial contract won via competitive tender and starting with one bus shelter and then rolling out to a further 20. The customer is Media One, which operates more than 5,000 digital advertising boards.

Finsbury Food (FIF) is closing the loss-making pastry products maker Grain D’Or,which has failed to improve despite cost controls. Grain D’Or was acquired as part of the £56m Fletchers acquisition in 2014 and last year generated revenues of £28.5m.

Church & Dwight has terminated its CSD500 condom licensing deal with Futura Medical (FUM) after just over four years. The licence covered North America and part of Europe. The rights will be returned to Futura by November. New partners will be sought.

Green & Smart Holdings (GSH) says that biogas project development is on track and the company could pay a maiden dividend for the 2017-18 financial year.

Investment in the business has held back first half progress at packaging manufacturer Robinson (RBN) and underlying pre-tax profit fell from £580,000 to £364,000. It was also difficult to pass on plastic resin cost increases. Full year profit is forecast to fall from £2.2m to £1.2m.

Bushveld Minerals Ltd (BMN) has retired its $3m prepayment facility, which was used to buy part of its 78.8% stake in Strategic Minerals Corporation, with Wogen Resources. Vametco Alloys has increased its facility from $6m to $11m. Vametco’s Nitrovan vanadium will be marketed by Wogen around the world outside of Japan and Taiwan.

Filta Group Holdings (FLTA) is acquire drain services provider Grease Management for up to £1.11m. Annual revenues are £1.28m and three-quarters are recurring. Post-acquisition cost savings of around £100,000 could nearly double the profit contribution.

Cancer drug developer Sareum (SAR) says that its full year profit will be better than expected. The cash pile will also be higher than forecast.

Sphere Medical Holdings (SPHR) is ditching its AIM quotation as part of a funding deal with Woodford Investment Management and the Wales Life Sciences Investment Fund, which will invest £5m in convertible preferred shares. Other investors will invest up to £3m. The convertibles will be issued at 2.82p each and can be swapped for one ordinary share. Sphere will be re-registered as a private limited company, which makes it possible for Woodford to invest more.

MAIN MARKET

Nanoco Group (NANO) is attracting interest in its cadmium-free quantum dots following the EU’s plans to ban cadmium in displays from October 2019. However, revenues are slower in coming through than hoped.

Photovoltaic silicon wafers supplier PV Crystalox Solar (PVCS) still had net cash of €27.9m at the end of June 2017. Running down inventories has offset the loss of €5.4m. A decision should be made by the arbitration tribunal concerning a customer that did not purchase the wafers it was contracted to buy by the end of September.

Packaging company Macfarlane Group (MACF) increased its revenues from £81.5m to £89.8m, while pre-tax profit jumped from £2m to £2.54m with the improvement coming from the distribution business. Net debt was £14.6m at the end of June 2017, while the pension fund deficit was cut from £14.5m to £13.4m. The interim dividend was increased from 0.55p a share to 0.6p a share.

Following the ending of bid talks for Quarto (QRT), Liontrust has cut its stake from 12.65% to 7.54%. Cavendish Asset Management has taken its stake to 5.18%, while two directors have also made small purchases.

Shares in standard list hostels operator Myanmar Strategic (SHWE) started trading on 22 August. The placing price was $10 and the shares are trading at $9.5m – a bid/offer price of $7/$12.

Standard list shell Boston International (BIH) is in talks to acquire Cornhill FX Holdings. This is part of the strategy to acquire operations in the foreign exchange sector. Legal and financial due diligence is being undertaken. Cornhill Capital is Boston’s broker.

Andrew Hore

Corporate news review Friday 25th August 2017

Air Partner AIP reports a strong start to the year with underlying pre-tax profit for the first half of the financial year expected to be not less than £4m, (2016: £3m) and with a strong net cash position. AIP also reports an encouraging pipeline of opportunities for the second half of the financial year.

Boot (Henry) BOOT reports an 82% hike in interim revenues to £195.4m (2016: £107.3m) driven by higher levels of activity across all business segments. PBT rose 8.7% to £22.6m, with EPS 10.1% higher at 13.1p.

Computacenter CCC reports a 58.7% hike in adjusted PBT to £41.9m, on revenues up 8.7% to £1.7bn. Statutory diluted EPS rose 114.4% to 28.3 pence, resulting in an overall performance marginally ahead of board expectations. Higher profit growth than expected in the first half is expected to return CCC to a more historical norm in the balance of profits between H1 and H2.

WYG Plc WYG says it continues to expect revenue for the current year to exceed £160m, but warns that expectations of near term operating performance means that operating profit (before separately disclosed items and share based payments) for the half year will be significantly lower than previously.

Nanoco Group NANO updates on trading for the full year and says unaudited revenues and other operating income were in line with expectations. NANO has unaudited net cash of £5.7m at 31 July 2017 (£8.3m at 31 Jan 2017) and was in line with expectations.

Legal & General Impressed By Its Excellent Management.

Legal & General LGEN heaps praise upon itself for its resilient and consistently improving financial performance, as it raises its interim dividend from 4p per share to 4.3p per share. The figures are certainly impressive with half year profit before tax and earnings per share each up by 41% and it is all  due to excellent management execution. Of course when Brexit or other clouds, gather on the financial horizon, it will probably all become the fault of the politicians but we can leave that for another day.

G4Splc GFS is yet another company whose Chief Executive witters on about its “pipeline” with new products and services strengthening its sales operations.  For the six months to the 30th June revenue rose by 6.2% and earnings per share at constant rates were up by 7.8%. The company’s investment proposition is to deliver sustainable growth in earnings, cash flow and dividends – hands up anyone who can name a company which admits to different aims. Despite pipelines and investment propositions, the interim dividend remains unchanged.

Telit Communications plc TCM The Chief Executive, Oozie Cats has requested and been granted leave of absence following speculation about his possible indictment in the US in respect of matters which are entirely unconnected with the company.

Tasty plc TAST has had to admit that despite a full review of its operations,  management has been unable to take any action which is  likely to bring about the expected improvement in the company’s fortunes during the course of the current year. Instead it falls back on the forecast made at the end of March that the trading  environment would be challenging and so it has proved to be. Profit after tax for the 27 weeks to the 2nd July collapsed from last years    1,283,000 to a mere   200,000 pounds.. Disposals and closure to take place. The full story should be released with the interim results in September.

Nanoco Group NANO welcomes as much needed, the decision by the European commission to ban the use of Cadmium in TVs lighting and other displays. Nanoco is a world leader in the development and manufacture of cadmium-free quantum dots and other nanomaterials.

Luxury villas & houses for sale in Greece  – visit;   http://www.hiddengreece.net

Quoted Micro 3 July 2017

NEX EXCHANGE

A 40%-owned subsidiary of food and logistics company AfriAg Global (AFRI) has signed a deal with LGC Capital, which is quoted on TSX and acquired former NEX-quoted Leni Gas Cuba but it is no longer purely focused on Cuba, to create a 50/50 joint venture to grow and distribute medical and recreational cannabis products in southern Africa. David Lenigas is a director of both companies.

MetalNRG (MNRG) has obtained the right to acquire 100% of exploration licence applications, which are known as the Palomino cobalt project in Western Australia, in return for A$15,000 and one million MetalNRG shares at 1.5p each. Once the licences are granted a further two million MetalNRG shares will be issued. MetalNRG has formed a cobalt business. The cobalt price has moved from $24,000/t to $59,000/t in the past year.

Kryptonite1 (KR1) has invested £384,000 in 73,272,717 FunFair tokens. FunFair enables anyone to launch a blockchain casino. The company has also invested £83,416 in 46,860 Bancor tokens. Instead of an intermediary matching trades, Bancor tokens use automatically executed rules to do the matching.

Block Energy (BLOK) has successfully acquired up to 75% working interest in permit XIf, West Rustavi 12km from Tiblisi in Georgia, from Gerogia Oil and Gas. A $100,000 cash payment will be made for a 5% interest with a further 20% interest costing $500,000 in cash and $1m in shares and it is dependent on a move to AIM. Once the AIM flotation happens, a further $1m payable in three tranches will pay for a further 25% interest. The remaining 25% will be earned by a commitment to a side-track in two specified wells. Further bonus payments totalling $1.25m in cash or shares are payable depending on the achievement of milestones. Block is raising £90,000 at 0.85p a share and £210,000 via a convertible loan and this will finance a competent persons report on the Rustavi block.

Management believes that social media and consumer games apps developer Ganapati (GANP) could move into profit in two years. Ganapati improved revenues from £2.3m to £3.27m in the year to January 2017. The loss increased from £7.47m to £8.73m because of higher costs and interest charges. There was £2.38m in the bank at the end of January 2017.

Via Developments (VIA1) plans to issue up to $4m of 7% debenture stock 2020 with the first tranche expected to be £100,000.

NQ Minerals (NQMI) has appointed Bedford Row Capital Advisers to raise up to £25m through an asset-backed bond. The cash will be used to refinance existing borrowings and to refurbish plant and equipment to enable production at its mine in Australia.

AIM

Robotic software supplier Blue Prism (PRSM) continues to outstrip growth expectations. In the six months to April 2017, revenues increased by 133% to £9.3m but the loss jumped from £1.94m to £3.11m as Blue Prism invests in growing the business. The current run-rate of revenues is £1.72m/month. There was still £10.6m in the bank.

Jangada Mines (JAN) has one of South America’s largest potential platinum group metals projects and it has floated on AIM. There is the prospect of a low cost open pit mine. Previous explorers have already invested more than $35m in developing the potential mine. An updated resource inventory is expected before the end of the year.

Phoenix Global Mining Ltd (PGM) has joined AIM and raised £4.6m at 1p a share, which doubles the shares in issue. British Virgin Islands-based Phoenix (www.pgmining.com) has an option to acquire 80% of the ExGen Resources Inc subsidiary Konnex, which holds the leases to the Empire mine project in Idaho. The plan is to mine 7,000 tonnes of copper a year from an opencast pit with a downstream plant extracting gold and silver. Pre-feasibility study work is already underway.

Bricks maker Michelmersh Brick (MBH) is acquiring Barnsley-based Carlton Main Brickworks for £31.2m. This will increase Michelmersh’s output by 40% to 100 million bricks a year. The acquisition will be significantly earnings enhancing this year. The Dunton brickworks is being sold for £2.68m.

TLA Worldwide (TLA) timewatch: TLA announced that trading its shares was suspended at 2pm on Thursday 29 June. TLA, which is best known for publishing a profit warning at 6.26pm on 23 December 2016, has not been able to complete the auditing and publishing of its accounts by the end of June.

Kromek Group (KMK) has already got the vast majority of its forecast revenues in its existing order book and it is set to reduce its loss this year. Revenues from medical, nuclear and security markets are forecast to grow from £9m to £12.5m and the loss should fall from £3.8m to £2.9m. There is plenty of cash in the bank to cover losses as Kromek moves towards profit.

Niche pharmaceuticals supplier Quantum Pharma (QP.) has sold its non-core biodose services for an initial £1.75m. More importantly this means that the low margin medical adherence division no longer exits and Quantum can focus on the core operations.

Strategic Minerals (SML) says that its Central Australian Rare Earths (CARE) subsidiary plans a three stage exploration programme with stage one including 40-50 drill holes totalling 2,000 metres. This will focus on cobalt and nickel laterites. The second phase will focus on deeper nickel sulphide deposits. Stage three is the sampling of soil for signs of rare earths. This is all fully funded from existing cash and cash to be generated from the tailings operation in the US.

Zoo Digital (ZOO) grew revenues from $11.6m to $16.5m in the year to March 2017. There was an unusually strong second half and Zoo almost broke even compared with a loss of $1.6m the previous year. Demand for localisation services from the likes of Netflix is expanding Zoo’s market and making it less dependent on its main customer. The recent fundraising and loan conversion has significantly reduced debt and net debt is forecast to be less than $1m at the end of March 2018. A small profit is expected this year.

Savannah Resources (SAV) says that metallurgical test work at its lithium project in Portugal demonstrates that a high-grade, low iron spodumene concentrate can be produced. This would be suitable for lithium batteries.

Fairpoint (FRP) says that it will not be able to publish its accounts before the end of June and trading in the shares has been suspended.

MAIN MARKET

Hipgnosis Songs Fund Ltd says that an institutional investor has agreed to subscribe for 20% of the fund which intends to invest in songs and music rights. The offer closes on 5 July. The fund has been set up by Merck Mercuriadis, who has decades of experience in the music industry, particularly managing parts of Sanctuary Group. Former AIM-quoted Sanctuary ran into problems with its accounts when it was quoted and was eventually taken over.

Nanoco Group (NANO) has received its first commercial order for the supply of CFQD resin to Wah Hong Industrial, which manufactures optical films and sheets for displays. The resin will be used to supply films to a manufacturer of TV and monitor products.

Aircraft leasing company Avation (AVAP) has declared an interim dividend of 6 cents a share, up from 3.25 cents a share. The ex-dividend date is 20 July. Revenues for the year to June 2017 are expected to be $94m.

Andrew Hore

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