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Andrew Hore – Quoted Micro 8 June 2020

AQUIS STOCK EXCHANGE

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

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

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

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

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

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

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

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

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

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

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

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

AIM

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

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

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

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

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

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

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

MAIN MARKET

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

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

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

Andrew Hore

Andrew Hore – Quoted Micro 10 February 2020

NEX EXCHANGE

Wheelsure Holdings (WHLP) is in discussions with providers of additional finance. Sales increased and costs were reduced in the year to August 2019. Two-fifths of sales come from Transport for London, where the Tracksure locking device is mandatory for one application.

The transfer of the exploration licence for the area surrounding the Hellyer gold mine to NQ Minerals (NQMI) has been approved.

Gunsynd (GUN) says that its 6.18%-owned investee company Brazil Tungsten is short of cash and needs to raise money at a discounted share price or go into administration. The value of the investment has already been written down and it is in the balance sheet at £400,000, which is 17% of Gunsynd NAV. This could be written down to nil.

Smaller company investor Gledhow Investments (GDH) made a £110,000 gain on disposals after overheads. The NAV was £884,000 at the end of September 2019, compared with a market capitalisation of £500,000 at 0.95p/1.25p. There was cash of £125,000 at the end of September 2019. This was before the £95,000 gain (£220,000 proceeds) on the disposal of shares in Yolo Leisure and Technology, now Asimilar (ASLR), and the takeover proceeds of £81,000 for Netalogue Technologies.

Rutherford Health (RUTH) has treated more than 100 cancer patients at its proton beam therapy centres.

IamFire (FIRE) has reduced non-core costs and is seeking acquisitions that do not require a lot of capital. The hydrocarbon licences in Botswana have been relinquished. An interim profit was reported, but there was a £88,000 cash outflow from operating activities because trade payables were reduced.

Gowin New Energy 2% preference shares (GWPT) have been admitted to NEX. Up to £5m of preference shares will be issued. The cash will be loaned to the tea business of 15%-owned Goyoung International.

AIM

Telecoms hardware manufacturer Filtronic (FTC) reported lower interim revenues from continuing activities but margins improved because of a change in product mix. Capacity is being increased at the Sedgefield factory. There was £121,000 in the bank at the end of November 2019. That is before the $5.5m from the disposal of the antennas business. Growth is coming from defence and mmWave (X-Haul products) that are used in the 5G mobile market.

More good news from Touchstone Exploration Inc (TXP) as the results of the test well at Cascadura were better than expected. The rate during the test was more than 5,000 barrels of oil equivalent per day. There will be a pressure build up test. There should be further news in March. Shore has increased its risked NAV estimate by one-fifth to 48p a share.

Andalas Energy and Power (ADL) has appointed Leslie Peterkin as chief executive and Mark Rollins as chairman. They have experience in the oil and gas sector. Andalas also raised £525,000 at 0.15p a share, which was a 20% premium to the market price, and most of the cash came from the two men. Dr Robert Arnott and Simon Gorringe have stepped down from the board. The company is changing its name to Advance Energy.

DP Poland (DPP) increased system sales by 13% last year with 3% like-for-like growth. The pizza stores operator improved its performance during the year and there was an acceleration of growth in the second half. DPP has 69 stores with six opened last year. There was still £3.6m left in the bank at the end of 2019.

Volvere (VLE) has made another food manufacturing acquisition. Essex-based Indulgence Patisserie is in administration and the desserts maker is costing £1.25m. Freehold premises and equipment is being acquired. The business lost £230,000 on revenues of £3.3m. Volvere already owns pie maker Shire Foods, which has an overlapping customer base.

PCI-Pal (PCIP) says interim revenues were 70% higher at £2m. Total annual contract revenues are £5m. There is a small net debt figure with a further £1.25m of facilities. The PCI compliant payment services provider will still lost money this year.

Mergers adviser K3 Capital (K3C) reported improved interim figures even though trading conditions remained tough. A full year pre-tax profit of £7.4m, similar to two years ago, is forecast. The interim dividend was raised from 3.6p a share to 3.7p a share and the total dividend is expected to increase from 7.6p a share to 11.4p a share. If K3 can maintain its interim margins, then the full year outcome could be better.

Argentina-based oil and gas producer President Energy (PPC) had a disappointing 2019 with revenues declining by 13% to $41m because of an oil price cap. The company traded at breakeven. A return to a significant profit is expected in 2020.

Greatland Gold (GGP) says that maiden drilling at Derby North on the Warrentinna project in Tasmania has intersected high-grade gold mineralisation. This is more good news following the plans to announce a maiden resource for Havieron before the end of this year. NCM has spent enough money to earn a 30% stake in Havieron. This will be increased to 40% after another $10m of spending.

MAIN MARKET

Nuformix (NFX) says that it still has not received the £2.5m it is owed by NSB. Despite assurances the money has not been paid and the therapeutics company’s contact has been dismissed. Dave Tapolczay has resigned as chairman.

Standard list shell Stranger Holdings (STHP) had £100,000 in the bank at September 2019 and it has started the fundraising process for the reverse takeover of two companies with technology mineral assets in Africa and the US.

Social media company Iconic Labs (ICON) is generating revenues and has relaunched the Gay Star N website, which is trading better than expected. Icon is still trying to sort out its historic financing agreements and difficulties. Additional facilities have been provided by the existing finance provider, which has agreed to reduce previous amounts owed by 30%. Again, though, the new finance is in the form of convertibles, so yet more shares are likely to be issued.

Landscape Acquisition Holdings (LAHL) expects the proposed acquisition of AP WIP Investment, which generates rental income from wireless telecom assets, in early 2020. There is $501m in the bank and the acquisition should cost $333m.

Andrew Hore

Andrew Hore Quoted Micro 28 October 2019

NEX EXCHANGE

Ashley House (ASH) is selling its stake in the Morgan Ashley joint venture to its partner for £2m, with £500,000 deferred for 12-months. Delays in the financial closure of projects has led to a shortage of funds at Ashley House and this deal means it does not have to put any more cash into the joint venture. The renewed focus will be modular buildings and the health and wellness buildings sector. Ashley House cannot work in the elderly care housing sector for three years.

Medicinal cannabis company Ananda Developments (ANA) says that 50%-owned DJT Plants has lodged an application to grow >0.2% THC cannabis. Ananda had net assets of £725,000 at the end of July 2019. That included cash of £162,000. In the six months to July 2019, more than two-thirds of expenses related to the licence application to the Home Office.

Clinical support systems supplier DXS International (DXSP) has been awarded a place on the NHS GPIT Futures framework from the beginning of 2020. This replaces the GPSoC2 framework and means that systems and services will be able to be bought centrally rather than with GP funds. DXS is on course to meet approvals for its specific systems and services. Three newly developed products will be placed on the NHS Digital Online buying catalogue.

Equatorial Mining and Exploration (EM.P) is changing its name to Eastinco Mining and consolidating 100 existing shares into one new share. It is also seeking shareholder approval for the ability to issue more shares. The share purchase agreement conditions for the acquisition of Eastinco have been satisfied. Six billion shares (this will be 60 million after consolidation) and £300,000 of nil coupon loan notes June 2025 have been issued. Heavy mining equipment is being transported to the Kuaka project.

Trading in the bonds of Via Developments (VIA1) has been suspended because a new independent non-executive director has yet to be appointed.

Woodford Investment Management has reported that it has cut its stake in proton beam therapy services provider Rutherford Health (RUTH) from 49.28% to 29.78%, but it is not clear who has acquired the shares.

Ace Liberty and Stone (ALSP) has declared an interim dividend of 0.83p a share and that will cost £359,000. The shares go ex-dividend on 7 November.

Panther Minerals (PALM) plans to consolidate 20 existing shares into one new share and shareholders are being asked to vote for the resolution at a general meeting on 14 November. Panther has been granted its first exploration licence in the Northern Territory. The Marrakai project licence is in the Pine Creek Orogen and covers just over 10 km2. There are a series of gold prospects and there has been previous drilling in the area.

AIM

Footwear retailer Shoe Zone (SHOE) has reassured investors that it will be able to achieve the downgraded pre-tax profit of £9.5m. Net cash of £11.3m at the end of September 2019 is better than expected.

Monoclonal antibodies developer Bioventix (BVXP) reported a 6% increase in full year revenues, although the underlying growth was 16% due to the inclusion of back dated royalties in the previous year. Underlying pre-tax profit was 14% ahead at £7.1m. A 47p a share special dividend is proposed on top of the final dividend of 43p a share. Vitamin D antibody sales increased by one-quarter and they account for 46% of group revenues.

D4T4 Solutions (D4T4) says that its first half trading was in line with expectations. Interim revenues of the data analytics and collection company were £8.8m and this should be one-third of the full year total.

Oil and gas producer President Energy (PPC) is acquiring additional acreage in Rio Negro province from the Argentine oil company CGC in return for assuming the liabilities related to the acreage. CGC is also subscribing for $1.825m worth of shares in instalments. The first instalment of $500,000 will be subscribed when the acquisition is completed. The total subscription could be the equivalent of 3% of President, depending on the share prices when the money is invested.

Thor Mining (THR) is raising £510,000 at 0.2p a share. The cash will be invested in the Molyhil and Bonya tungsten and molybdenum projects in the Northern Territory and a copper project in South Australia.

Vianet (VNET) says that its smart machines division is adding to its customer base and the contracts won in August mean that the growth will continue. Overall trading in the first half was in line with expectations.

MAIN MARKET

TNG (TNG) is seeking to join the standard list. The titanium dioxide project owner already has an ASX listing. TNG owns the TIVAN process that enables production of ultra-white titanium dioxide pigment. The Munt Peake project in Australia will be the first to use the technology. The project will also produce vanadium. A final investment decision will be made as early as next summer.

Fasteners supplier Trifast (TRI) has been hit by weakness in its main markets. There have been reduced volumes in the automotive market. The forecast pre-tax profit for the year to March 2019 has been cut from £22m to £20.3m.

Zenith Energy (ZEN) has raised £824,000 at around 3p a share from the placing in Norway.

Standard list shell Rockpool Acquisitions (ROC) has signed heads of terms with a company in Nevada, which will subscribe for £1.6m of shares and convertibles at an issue/conversion price of 12p a share. Rockpool will make a further loan of £750,000 to Greenview Gas, taking the total to £910,000, which will be convertible into 40% of Greenview.

J Smart and Co (Contractors) (SMJ) increased full year revenues from £8.56m to £16m. The pre-tax profit improved from £5.82m to £7.27m, although that was mainly due to the net surplus on property valuations rising from £2.86m to £4.05m. A lull in contracting work means that this year’s profit is unlikely to improve.

Cash shell Baskerville Capital (BASK) still had £1.5m in the bank at the end of June 2019.

Andrew Hore

Andrew Hore Quoted Micro 2 September 2019

NEX EXCHANGE

SG Recruitment Ltd (SGRL) generated revenues of £777,000 in the 15 months to March 2019. The nursing staff provider lost £2.63m. Since the year end, more contracts have been signed with NHS hospitals, as well as with a hospital in the UAE. The staff offered to hospitals have all obtained qualifications in English and 76% end up being employed. Most of the previous debt has been converted into shares, so net debt was £91,000 at the end of March 2019.

Lombard Capital (LCAP) reported an increase in net liabilities from £234,000 to £537,000 at the end of March 2019. There were £750,000 worth of bonds issued during the period.

PCG Entertainment (PCGE) hopes that the acquisition of Vox Markets and Align Research should be closed in early October. Previous operations have been provided for in full and have been sold. There was £14,000 in the bank at the end of March 2019.

A new investor to Walls and Futures REIT (WAFR) has subscribed £100,000 for shares at 70p each, which is a one-third premium to the market price at the time. Westerby Trustee Services Ltd owns 3.8% of the company on behalf of Westerby Private Pension (R Prest).

Cadence Minerals (KDNC) says that the judicial restructuring plan for the Amapa iron ore project has been approved by the Sao Paulo commercial court. This will enable Cadence to acquire a 20% stake in Amapa. A further $3.5m investment will take the stake to 27%. Cadence plans to consolidate 100 existing shares into one new share. Shareholders will be asked to approve the proposal at the AGM on 20 September.

Paul Tuson is stepping down as finance director of Rutherford Health (RUTH) and the reappointment resolution was withdrawn from the AGM agenda.

Sativa Investments (SATI) has opened its third Goodbody CBD Wellness store in Bristol, following store openings in Bath and Cirencester. It is seeking franchisees to roll-out further stores around the country.

Panther Metals (PALM) chief executive Darren Hazelwood has acquired 18.87 million shares at 0.3p each. That takes his stake to 10.3%.

First Sentinel (FSEN) has raised £59,000 at 14p a share via a placing with D Beta One EQ Ltd.

AIM  

President Energy (PPC) insists that it will continue to be profitable even though the Argentinian authorities are attempting to fix the price that producers can sell oil and the dollar exchange rate used for the price for a 90-day period. President has decided to delay its well drilling programme until the first quarter of 2020 and the focus will be gas wells. Gas sales from four wells in Estancia Vieja and Las Bases will commence production by the end of September. A new gas pipeline should be completed by the end of the year. finnCap has withdrawn its forecasts.  

Order books and production volumes are ahead of last year at gift wrap and greetings products supplier IG Design (IGR) thanks to a combination of organic growth and last year’s US acquisition. IG is on course to increase pre-tax profit from £30.3m to £36m.

Online musical instruments retailer Gear4Music (G4M) says that it has taken actions that are already helping to improve gross margin.

Cambridge Cognition (COG) says sales are lower than expected. The digital neuroscience services provider says that full year revenues will fall from £6.13m to around £5.5m. The loss will be around £2.8m. First half revenues were £2.1m and the loss was £1.74m. There is a strong order book, so this augurs well for next year.

Adamas Finance Asia Ltd (ADAM) has funded the second tranche of the investment in Infinity Capital Group. The $2m is being funded equally by Adamas and a Hong Kong family office.  

MAIN MARKET 

Blockchain Worldwide (BLOC) intends to move to AIM if its acquisition of media-focused artificial intelligence and machine learning company Entertainment AI goes ahead.

At a general meeting, shareholders in Tex Holdings (TXH) approved the 2018 report and accounts and directors’ remuneration report, but they did not approve the reappointment of Scrutton Bland as auditors.

Argo Blockchain (ARB) is reaping the benefits of its investment in crypto mining equipment. The cost of 1,000 machines has already been recouped and Argo is on course to recoup the cost of a further 2,267 machines.

Ross Group (RGP) did not generate any revenues in the six months to June 2019 and the loss was £3.15m. Ross acquired start-up operations during the period. They will supply Chitin.

Asian consumer businesses investor Symphony International Holdings (SIHL) increased its NAV by 14% to $560.4m in the six months to June 2019.

George Bennett has become chief executive of Rainbow Rare Earths (RBW) and Martin Eales has left the board. In the year to June 2019, Rainbow sold 850 tonnes of concentrate from the Gakara project, although bad weather hampered production in the fourth quarter. Sales prices have declined.

China-focused healthcare investment company Cathay International (CTI) reported a decrease in revenues from $49.2m to $38.3m. There was a $7.9m gain on the sale of shares in Zhejiang Starry Pharmaceutical, but that was not enough to cover the operating loss and interest costs.

OTHER MARKETS

Britdaq-quoted Staminier Ltd has secured a three-year option over 13 acres of land near to the south terminal of Gatwick Airport and it wants to build a car park with 2,200 spaces. In July, Staminier acquired a majority stake in eco-friendly housebuilder Eco-Space 41 Ltd. There is a four-year option to acquire the other 49% for £750,000. The strategy is to acquire businesses at a discount to their intrinsic value. There are plans to move to a more liquid stockmarket.

Asset Match will provide a trading facility for shares of former AIM company Albert Technologies Ltd. The first auction will be during September.

US Oil and Gas (USOP) has raised $382,000 at 31p a share. This follows a fundraising in July of $577,000 at 30p a share. The cash will be spent on exploration.

Andrew Hore 

Andrew Hore Quoted Micro 12 August 2019

NEX EXCHANGE

Imperial X (IMPP) non-executive director Melissa Sturgess has sold 4.615 million shares at 2p each and she retains an equal number of shares. The total stake was acquired at 1p a share, so she has effectively made her money back. Imperial X is moving into the cannabis sector. Charles Morgan, a relation of Melissa Sturgess, converted £46,150 of loan notes into 4.615 million shares.

NQ Minerals (NQMI) has invested a further £150,000 Tasmania Energy Metals through a convertible loan, taking the total investment to £450,000. The exclusivity period relating to the acquisition of an option over the company’s assets has been extended to the end of October 2019. NQ would have nine months to exercise the option in return for shares worth £5.5m. The latest investment will be used to develop a facility that would produce nickel and cobalt salts for electric vehicle batteries.

Founder Stephen Minion has resigned from the board of Ashley House (ASH) so that there are no conflicts of interest between his role as a director and his other interests. He is chairman and major shareholder of Invescare, which has provided a loan to Ashley House.

iGaming software developer Ganapati (GANP) says that its Malta-based subsidiary has signed a resale agreement with BetConstruct, which will provide the company’s slot games to its integrated operators via its platform. Another deal is with PG Entertainment and this will make Ganapati’s games available in Latin America via a smartphone platform.

Asia Wealth Group Holdings Ltd (AWLP) improved pre-tax profit from $150,000 to $268,000 in the year to February 2019, partly due to a reduction in impairment losses. The company is looking at fintech acquisitions.

The conversion of loan notes in Equatorial Mining and Exploration (EM.P) has led to the issue of just over nine billion shares. There are 24.2bn shares in issue.

Valiant Investments has changed its name to Eurocann International (BUD).

AIM  

Oil and gas company Amerisur Resources (AMER) has effectively put itself up for sale and multiple companies are interested in bidding. They are being provided confidential information. The formal sale process continues.

Execution only broker Share (SHRE) made a first half profit even though stockmarket trading conditions and volumes have been poor and the dividend from Euroclear was moved to the second half. Revenues increased 9% to £11.1m as interest income grew. Account fees have been increased. Share is benefiting from its digital investment. The 20,000 accounts being taken on from JP Morgan will contribute from September. A full year profit of £400,000 is forecast.

Credit hire and legal services provider Anexo (ANX) is trading more strongly than expected, even after previous upgrades. Management has managed to reduce insurance costs. The full year pre-tax profit forecast has been increased by 15% to £23m and next years by 14% to £25m.

Artificial intelligence-based physician platform DocDoc, where Adamas Finance Asia (ADAM) is an investor, has raised $13m. Adamas led the convertible loan note financing for the Singapore-based company. DocDoc operates in eight countries. Hong Kong-based CASIL Clearing has reduced its stake in Adamas from 6.9% to 2.9%. Pello Capital has been appointed joint broker.

Presidential Energy (PPC) is not making the progress it hoped to, but profit is improving. The share price of the Argentina-focused oil and gas company has been declining. finnCap describes its estimates for average production and EBITDA as “challenging” due to delays and disruptions. It has been forecasting EBITDA of $27.9m due to an oil price estimate that is above current levels, whereas the company believes it could be around $20m. There are no plans to change the forecast until the interims are released in September.

StatPro (SOG) increased organic annualised recurring revenues by 3.2% to £56.5m in the first half. The asset management performance software provider increased interim revenues £27.2m to £28.3m, while pre-tax profit improved from £2.37m to £2.66m due to flat operating costs. Net debt is £24.2m.

Richard Bernstein has increased his stake in Ultimate Sports Group (USG) from 27% to 29.8%. Bernstein has an agreement with Ultimate where he would receive 1% of the value of the first acquisition he introduces to the company as long as it is completed by 30 September. Matthew Farnum-Schneider has been appointed chief executive of Ultimate. He has been granted a range of options. Some are exercisable at 20p a share, which is just below the current share price, some at 40p a share and others at 60p a share. Geoffrey Simmonds has left the board.

Urban Exposure (UEX) is not going ahead with a proposed issue of 6.5% secure sterling bonds 2026 because of market conditions.  

MAIN MARKET

S and U (SUS) says demand for motor finance has been strong in the first half, even though the quality of business has been increased. The Aspen property bridging finance business has net receivables of £24m and is growing gradually in a weak housing market. Borrowings are just over £125m and there are additional facilities of £35m. The interims will be published on 24 September.

Construction company nmcn (NMCN) increased interim revenues from £161.2m to £184m, while pre-tax profit improved from £2.5m to £3.5m. The former North Midland Construction had net cash of £15.6m at the end of June 2019. The order book is worth £456m with the main increase coming from the built environment division, which accounts for one-fourth of the order value. A full year profit of £7.4m is forecast.

Iconic Labs (ICON) is making its first acquisition since transforming itself from stem cell services provider WideCells into a social media marketing business. Iconic has agreed to acquire social media agency Social Alchemist. Iconic Labs is still in a poor financial state. There are £600,000 of legacy debts that have to be paid, plus £400,000 that is disputed. The European High Growth Opportunities Securitization Fund will provide up to £1.375m in six tranches in return for loan notes. This is dependent on a prospectus being issued within six months. This prospectus will enable warrants to be attached to the loan notes. There are also more shares to be issued under the previous financing agreement.

Argo Blockchain (ARB) generated 163 bitcoins in July and these are valued at £1.36m. They were mined at a margin of 80%. More mining machines have been ordered and will be up and running by the fourth quarter. This investment will quadruple capacity. Argo could be highly profitable in the second half with a full year pre-tax profit of £6m.

Andrew Hore

Andrew Hore – Quoted Micro 27 May 2019

NEX EXCHANGE

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

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

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

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

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

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

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

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

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

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

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

AIM  

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

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

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

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

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

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

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

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

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

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

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

MAIN MARKET 

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

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

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

Andrew Hore

Andrew Hore Quoted Micro 4 March 2019

NEX EXCHANGE

Proton Partners International (PPI) joined NEX on 28 February and from day one it became one of the largest companies on the market. The introduction price was 225p, valuing the proton beam therapy provider at £334m, and the share price ended the week at 2275p (210p/245p). Woodford-related interests own 41.9% of Proton (www.proton-int.com) and they invested £20m at 200p a share on admission and promised to invest up to £80m at a maximum price of 176p each. Woodford received a further £1m worth of shares at 200p each in consideration for these arrangements. Proton is four years old and it has completed three centres offering proton beam therapy for cancer patients with another planned in Liverpool. Each cancer centre has cost between £35m and £42m. There is also a cancer diagnostics subsidiary. In the eleven months to January 2019, revenues were £1.11m and the loss was £18.6m.

Formation Group (FRM) owns 4.35 million shares in Proton Partners International, which it acquired in March 2018 at 115p each. The 225p a share flotation price means that the value of the 2.85% stake has nearly doubled to £9.78m. At Formation’s AGM, the resolutions to reappoint Grunberg and Co as auditor and for the board to authorise its remuneration were not passed. Michael Kennedy has resigned from the board.

Trading in Dozen Savings (DS01) 5% secured bonds March 2020 commenced on 1 March. So far £91,000 worth have been issued. The plan is to raise up to £7m. The company has been created to offer the bonds to customers of its financial services-focused parent company, Project Imagine (www.projectimagine.com). The bonds cost £100 each and the price at the end of the first day of trading was £107.50 (£90/£125). The FCA has granted Project Imagine an e-money licence and an investment licence.

IFA consolidator AFH Financial (AFHP) says that trading is in line with expectations in the first four months of the year. Past acquisitions are achieving more than 90% of their deferred consideration targets.

Field Systems Designs (FSD) reported a lower profit in the six months to November 2018 because of delays in energy form waste business. Two of these projects have still not been completed. Sales to the water sector have been strong, but they are likely to decline as the latest water regulation AMP6 period. In the six months to November 2018, revenues were flat at £11.8m, but pre-tax profit fell from £168,000 to £46,000.

Sandal (SAND) reported a dip in interim revenues from £1.88m to £1.73m and that led to a swing from profit to loss. EnergieMiHome home automation product sales were lower than expected but the products are being sold in more outlets.

Ace Liberty and Stone (ALSP) has spent £6.17m on two properties that are both let to the Communities and Local Government department, as Jobcentre Plus centres, on leases with an unexpired term of 8.4 years. The property in Bolton cost £2.54m and has a net initial yield of 7%. The Northampton site cost £3.63m and has a net initial yield of 6.75%.

Milamber Ventures (MLVP) says that investee company Essential Learning has been placed in liquidation after problems with historic data led to the company losing its government-funded training contracts. Milamber invested £228,000 in Essential in a two year period and provided services worth £270,000. It also issued £100,000 worth of shares to Essential minority shareholder Goldvista Properties. Goldvista has loaned Milamber £310,000 and this is likely to be converted into shares. Goldvista’s £6,000 loan to Essential has been written off. The shares issued to Gravity Investment Group for a 15% stake in Essential have been cancelled. Milamber is conducting due diligence on apprenticeship training businesses.

Inqo Investments Ltd (INQO) has raised £1m at 90p a share and the cash will be used to invest in healthcare, education and eco-tourism businesses in Africa that are two-to-three years from profitability and have a positive social impact.

Trading in Via Developments (VIA1) debentures has been suspended because the accounts for the year to September 2018 have not been published.

Karoo Energy (KEP) says it intends to move to AIM “as soon as practically possible”. A general meeting has been called for 18 March in order to gain shareholder approval to issue shares at the time of the move.

Altona Energy (ANR) has left AIM and the board intends to visit a vanadium mine in China that could become part of a joint venture. Altona still intends to invest in the Arckaringa coal project in South Australia.

John Eckersley is stepping down as chief executive of Capital for Colleagues (CFCP) in order to focus on his role as managing partner of Castlefield Partners and Alistair Currie will become chief executive.

AIM  

Internet of Things products supplier LightwaveRF (LWRF) is raising up to £3m through a placing, subscription and open offer at 8.5p a share. Year-on-year growth in sales in the first quarter was 156% taking the figure to £1.15m.

Churchill China (CHH) and Portmeirion (PMP) have bought the stake in ceramic materials supplier Furlong Mills that was previously owned by Dudson. Churchill has paid £454,000 for 9.5%, which takes its stake to 55.6%. This means that Furlong will be consolidated in Churchill’s figures. In 2017, revenues were £8.6m and pre-tax profit was £500,000. Portmeirion spent £363,000 to take its stake to 44.4%.

President Energy (PPC) is raising up to £6.5m at 8p a share, including a £2.8m debt for equity swap by the chief executive, to invest in its gas infrastructure and accelerate its drilling programme.

Itaconix (ITX) has secured an exclusive global supply agreement with Nouryon for bio-based polymers used in hair care, skin care and cosmetics. This contract comes after a joint development agreement with Nouryon and follows the previous supply agreement for polymers used in detergents. Nouryon will sell the polymers to its own customers in the personal care sector for use in their consumer products.

Audioboom (BOOM) is raising £1.5m at 1.3p a share and this cash will enable the podcast company to make upfront payments for content. Audioboom says that it is on course to achieve higher revenues in 2019 than in the 13 months to December 2018. The success in generating revenues and orders is helping to attract content providers.

Parity (PTY) has won a two-year contract with the Department for Education for the digital transformation of the Funding and Contracting Service, which makes £6bn of payments each year. The deal could be worth up to £4.5m. Matthew Bayfield has taken over as chief executive of Parity from Alan Rommel, who is chief operating officer. Bayfield plans to focus more on the data consultancy activities.

Westmount Energy Ltd (WTE) is nearly doubling its shareholding in JHI Associates Inc to 3% and the investment is 81.8% of Westmount’s gross assets. JHI’s main asset is a 17.5% carried interest in the Canje block, offshore Guyana, which is operated by ExxonMobil. The first well could be drilled by early next year.

Verona Pharma (VRP) used up £18.1m of cash in its operating activities in 2018. There is still £64.5 in the bank. Verona generated positive data for ensifentrine (RPL554) used as a treatment for COPD in a phase IIb clinical trial. The focus is COPD and further trials for cystic fibrosis are unlikely in the short-term. Financial resources will be focused on progressing the nebulised ensifentrine to a phase III study. Verona is likely to seek partners for its dry powder and pressured meter dose inhaler formulations. The results of the part one of the dry powder inhaler clinical trial for COPD could be available before the end of the first quarter. The second phase should then commence with results expected in the second half of the year.

Trading in Herencia Resources (HER) shares has been suspended because it appears that pre-conditions for the financing that has been negotiated are not likely to be met. More cash is required to enable the company to continue trading.

Telematics supplier Quartix (QTX) increased its fleet sales, but insurance business fell and overall revenues profit are set to decline in 2019. In 2018, revenues were £25.7m and pre-tax profit was £8.1m, but that figure is forecast to fall to £6.5m this year.

VietNam Holding Ltd (VNH) has published a prospectus for its move to a premium listing, which should happen on 8 March.

Adamas Finance Asia Ltd (ADAM) has commenced a share buy back scheme for up to $500,000 of shares at a maximum price of 79 cents a share, which is a 25% discount to pro forma NAV. Adamas has separately agreed to buy back 730,529 shares at 10 cents each. The first tranche of 159,847 shares has been issued to China Aerospace for its stake in Hong Kong Mining.

NetScientific (NSCI) says that it will not get the required backing for the resolution to cancel the AIM quotation, so it has adjourned its general meeting. Shareholders owning more than 30% are against the plan.

MyCelx Tech (MYX) has raised $1.83m at 230p a share in order to finance the potential increase in demand for water treatment services.

Telit (TCM) has sold its automotive division for $105m and has received $67.5m in cash, but it has granted the buyer a loan of $38.5m for a six week period because other debt finance was not obtained in time.

MAIN MARKET 

Air Partner (AIR) says that its pre-tax profit will be at least £5.8m in the year to January 2019. The charter division was boosted by strong demand for freight and commercial jets. The consulting and training division has won new contracts.

G3 Exploration Ltd (G3E) plans its third demerger in its time as a quoted company. This time shares in Green Dragon Gas, which owns its producing assets, will be distributed to shareholders. Green Dragon Gas will then either be sold or float on the Hong Kong Stock Exchange.

Wealth manager Walker Crips Group (WCW) says that political uncertainty has hit broking commissions and the launch of new products, which means that the 2018-19 results will be lower than for 2017-18. Chief executive Sean Kin Wai Lam has bought 15,000 shares at 28p each.

Laura Ashley (ALY) has rejected the bid approach by Flacks and says that the indicative offer of 2.748p a share fails to provide a fair value for shareholders.

London Finance and Investment Group (LFI) has a 43.8% stake in NEX-quoted Western Selection. In the six months to December 2018, NAV fell from 65.4p a share to 62p a share. The interim dividend is unchanged at 0.55p a share.

BigDish (DISH) has launched a new restaurant bookings website and upgraded its technology. It is also widening its coverage to include Southampton.

Path Investments (PATH) says that the period of exclusivity included in its heads of agreement with ARC Marlborough has been extended to 29 March. The plan is to acquire ARC, which has a nickel and cobalt project in Queensland, via a share issue.

Oil and gas firm Curzon Energy (CZN) has raised £95,000 at 1.58p a share, which is a 21% premium to the market price. The cash will be invested in a gas project in Texas.

Andrew Hore

Andrew Hore – Quoted Micro 18 February 2019

NEX EXCHANGE

National Milk Records (NMRP) increased its interim revenues from £10.5m to £11.7m, although some of this was due to seasonal factors and one-off testing business. Pre-tax profit improved from £0.96m to £1.13m. Net debt was £2.06m at the end of December 2018. Every part of the business grew its revenues. Milk volumes are set to be strong in the second half, although milk margins are been squeezed by a decline in the milk price and higher feed costs.

Barkby (BARK) has completed the acquisition of Centurian Automotive for an initial payment of £201,000 in shares at 4.775p each, with up to £251,000 more based on performance over three years. Operating profit in each of the years is required to be at least £200,000 in order to achieve the full payment. The consideration represents a discount to net assets and will be equivalent to up to 20% of Barkby. In the year to March 2018, the automotive dealer made a pre-tax profit of £123,000 on revenues of £5.6m.

Sandal (SAND) says there was a significant increase in Energie MiHome sales in December, particularly later in the month, but trading is still below expectations because of a lack of cash to spend on marketing. The stock overhang has been unwound. A Wi-Fi adapter plug has been added to the range, which is being rolled out in Denman’s Electrical Wholesale branches.

Sport Capital Group (SCG) owned Palermo Football Club for less than one month before selling it back to the previous management team. It was bought for a nominal sum and is being sold for a nominal value, following further due diligence. The company’s representatives joined the board in December and resigned last week. Debt will be settled at the same time. Sports Capital had been trying to raise up to £20m over the next few months.

Trading has recommenced in the shares of EcoVista (EVTP) after it published its results for the year to August 2018. There was a £142,000 property revaluation gain and net assets were £1.39m. There are plans to launch a €10m Eurobond issue to fund further property site acquisitions in London, Hertfordshire and Essex.

Gold explorer Tectonic Gold (TTAU) has completed stage one drilling on the Specimen Hill project in Queensland and each hole drilled intersected gold. Geological modelling results will be available in March. A further 7,500 metres of drilling is being planned.

Auxico Resources Canada Inc (AUAG) has raised $400,000 at 20 cents a unit (one share and one-half warrant). The expenses of the placing were $28,000. The cash will be used for assessing coltan opportunities in Colombia and Brazil. NQ Mining (NQMI) has raised £54,000 at 11p a share.

AIM  

Panoply Holdings (TPX) has made its third acquisition since floating in December. UK-based GreenShoot Labs provides digital services using artificial intelligence technology. There is no initial consideration and any payment will depend on performance.

Marketing and media services provider Ebiquity (EBQ) traded in line with expectations last year. The disposal of the advertising intelligence was completed on 2 January. This cut net debt to around £8m. The continuing business is expected to continue to grow at 8% a year.

Online merchandising software and services provider ATTRAQT Group (ATQT) increased its 2018 revenues by 26% to £17.1m and the loss declined from £4.1m to £2.7m. The largest customer has renewed for two years. Annual recurring revenues are £16m.

GRC International (GRC) has acquired data consulting business DQM Group for an initial £5.9m with up to £5m in deferred consideration, although it is not expected to be more than £3.5m. This is a significantly earnings enhancing deal.

Cabot Energy (CAB) is consolidating 100 shares into one new share and raising up to £2.85m at 10p per consolidated share. The cash will pay off trade creditors. The main focus is Canada but Cabot believes its Italian oil and gas exploration assets could still be valuable even though the Italian government has suspended exploration work and is reviewing the situation.

The administrator has sold most of the businesses of Patisserie Holdings (CAKE) but there will be no money for shareholders. Dublin-based Causeway Capital has acquired Patisserie Valerie and AF Blakemore acquired Philpotts for a total of £13m, of which £3m is deferred. Baker and Spice was sold to the Department of Coffee and Social Affairs for £2.5m. The AIM quotation will be cancelled on 25 February. Paul Mumford of Cavendish Asset Management believes that the company’s banks should have supported a rescue and been more attentive to what was happening at the company. He thinks that shareholders should seek compensation from the banks.

Malvern International (MLVN) has confirmed that it moved into profit in 2018. The education business has doubled its London-based revenues and this made up for difficult trading in Malaysia.

Realm Therapeutics (RLM) is selling is hypochlorous acid assets for $10m and intends to leave AIM. Realm already had $18.8m in the bank at the end of 2018. The plan is to use the cash to complete a strategic transaction in the life sciences sector. The ADSs will continue to be listed on Nasdaq.

Stride Gaming (STR) has started a strategic review. The choices are acquisitive or organic expansion or the sale of the online gaming company.

Renalytix AI (RENX) has secured a joint venture with laboratory and clinical trials operator AKESOgen and this will enable Renalytix AI to provide additional services in the US. The artificial intelligence-based kidney diagnostics already has a presence in New York and the new joint venture is based in Georgia.

Administrators have been appointed to Utilitywise (UTW) but none of the subsidiaries is in administration. Shareholders are not likely to get anything from the administration process. Unitlitywise was unable to raise the cash it required to keep going and meet liabilities.

Heavitree Brewery (HVT) improved full year revenues from £7.3m to £7.61m and pre-tax profit grew from £1.55m to £2.25m, although that included profit on the sale of pubs and other property of £824,000, up from £6,000. The previous year had benefited from the write-back of a bad debt provision. The final dividend is being increased from 4p a share to 4.25p a share. Heavitree no longer has to cover a pension scheme deficit because three people transferred out of the scheme.

Bowmark Capital has launched a 110p a share recommended cash bid for Tax Systems (TAX) and MXC Capital Ltd (MXC) has accepted with its 25.6% stake. The bid values the tax software provider at £100.6m.

Kodal Minerals (KOD) has published the results of the drilling programme at the Bougouni lithium project. These will be used to update the JORC resource, which should happen by the end of February. Kodal has met with the Mali authorities to update them.

Insignals Neurotech is the third Portuguese spin out for Frontier IP (FIPP) and it will hold a 33% stake. Insignals is developing technology for brain stimulation surgery.

Scientific Digital Imaging (SDI) has made another scientific instruments acquisition and it has raised £2.5m at 34p a share to help finance it. A further £100,000 was raised via PrimaryBid. Graticules manufactures reticules and graticules and fits with the digital imaging division. It cost £3.4m and has added 6% to next year’s earnings per share.

Strategic Minerals (SML) has announced a trebled resource at Redmoor, in which it has a 50% stake. There is an inferred tin equivalent contained metal of 137,000 tonnes.

James Latham (LTHM) has acquired the timber merchant that has the rights to sell Accoya wood in Ireland. Abbey Woods will cost an initial €1.825m with a further €300,000-€400,000 depending on completion accounts. Further deferred consideration of up to €400,000 depending on performance over two years. Last year, Abbey Woods generated EBITDA of €379,000 on revenues of €7.5m and it has operations in Dublin and Cork.

Vast Resources (VAST) says that the tranche B offtake finance from Mercuria Energy Trading did not happen. This means that the planned December and January repayments of the loan from Sub Sahara Goldia Investments have not been made Talks continue with potential finance providers to replace the cash to invest in 80%-owned copper, silver, gold, zinc, lead, tungsten, molybdenum Baita Plai project. Bergen Global Opportunities Fund is pausing the second tranche of the $3m bridge facility because the share price has been below 0.2p for two days. A placing has raised £896,000 at 0.135p a share and this will repay the £525,000 owed to Bergen. There are discussions with a potential cornerstone investor for a diamond project in Zimbabwe.

RiverFort Global Opportunities (RGO) has subscribed for shares in Pires Investments (PIRI), that will give it a 24.3% stake. RiverFort is taking nearly 50% of the shares issued in a placing that raised £782,000 at 2.4p a share for Pires. The cash will be used for new investments.

Trading in the shares of African Battery Materials (ABM) will resume on Monday 18 February following the issue of 200 million shares at 0.5p each. The cash will be used to pay creditors and leave enough to finance the business for 12 months. Andrew Bell has been appointed executive chairman and Paul Johnson as executive director.

Windar Photonics (WPHO) will undershoot the 2018 forecast, but there should be higher orders from Vestas and another manufacturer next year. Even so, 2019 forecasts are likely to be reduced. Total 2018 revenues were 59% ahead at €3.5m and higher gross margins meant that the loss before interest, tax, depreciation and amortisation fell from €1.22m to €360,000. The end of year order book was worth €1m.

Nostra Terra Oil and Gas (NTOG) has more than trebled its proved and probable reserves to 2.43 million barrels of oil. Net proved reserves are 764,030 barrels of oil.

President Energy (PPC) has updated the reserves position. The Argentina and Louisiana reserves are valued at almost $300m, which is equivalent to 21p a share. That is more than twice the market capitalisation. Production is predominantly oil but gas production will increase this year.

Harwood Wealth Management (HW.) has acquired IFA Castleton Financial Planning for up to £1.6m.

Trading in the shares of Urals Energy (UEN) has been suspended following the resignation of Allenby as nominated adviser. A general meeting, which will be held on 22 February, has been called by Adler Impex SA in order to remove three directors and appoint four other directors. Oil production was 1,690 barrels/day in January. Loans made without board approval have meant that the company is short of cash.

Waste-to-energy technology developer PowerHouse Energy (PHE) is confident that it could sign up a customer in the next quarter. There is increasing interest and six potential sites are being assessed. Potential engineering, procurement and construction contractors have approached PowerHouse. Development partner Waste2Tricity is in negotiations with Toyota Tsusho, which would be a way of entering the Japanese market.

Braveheart Investment Group (BRH) has reduced its stake in Remote Monitored Systems (RMS) from 5.9% to 1.32%. Stephen Jones increased his stake from below 3% to 14.5% in just over one month.

Dewscope Ltd, where Mark Horrocks is a director, has cut its stake in Sabien Technology (SNT) from 12.7% to less than 3%. Chris Akers has also reduced his stake from 16.9% to less than 3% and Brendan Adams has cut his shareholding from 4.2% to under 3%. These stakes were acquired on 14 December, when the mid-price was 0.11p. On 11 February, when the shares were sold, the share price increased from 0.145p to 0.175p. Sabien reported a decline in interim revenues from £462,000 to £342,000, but the loss was reduced from £233,000 to £207,000 due to cost reductions.

TV programme producer DCD Media (DCD) expects to report revenues of £7.3m and a small EBITDA in 2018. Trading has started well in 2019 helped by business that was delayed from last year.

HaloSource (HAL) is seeking shareholder approval for the disposal of assets to Strix (KETL) for $1.3m. The cash will pay creditors and fund the winding down of the business. The AIM quotation will be cancelled on 12 March.

WANdisco (WAND) has raised $17.5m at 546p a share to provide cash to support relationships with partners. WANdisco has become an advanced technology partner with Amazon Web Services.

Adamas Finance Asia Ltd (ADAM) is issuing 6.1 million shares to China Aerospace for a 6.8% stake in Hong Kong Mining Holdings, where Adamas already has a 84.8% stake. This is a complicated deal, but Adamas can tell China Aerospace where to transfer these shares. It means that Adamas will not necessarily increase its shareholding in the mining company. Sorting out what was effectively a stock overhang should make it easier to do a deal that will unlock cash for Adamas.

NetScientific (NSCI) has concluded its strategic review and it has decided to cancel its AIM quotation. The remaining cash will be spent on the investee companies with the best prospects of providing a return before the company runs out of money.

Angus Energy (ANGS) is repaying the £1.5m initial advance from YA II and RiverFort Global Opportunities. Angus has raised £2.2m at 4p a share.

The University of British Columbia has ordered a polariser system from Polarean Imaging (POLX).

Begbies Traynor (BEG) has made the earnings enhancing acquisition of profitable Newcastle insolvency practice KRE. The initial payment is £450,000 with up to £150,000 more based on revenue targets over 12 months.

Full year figures will be lower than expected at IFA Tavistock Investments (TAVI) but a maiden dividend is still on the cards.

Crossword Cybersecurity (CCS) will report a 45% increase in 2018 revenues, with most of the growth coming from software.

MAIN MARKET 

Cryptocurrency mining services provider Argo Blockchain (ARB) is refocusing its business. All existing contracts will be terminated by the beginning of April. The focus will be Argo’s own currency mining. Ongoing costs will be cut by one-third. Net cash is £15m and that is much more than the market capitalisation of Argo. The cash outflow should be stemmed in the second half of 2019. Hadron Capital recently increased its stake to 7.6%.

Trading is in line at fasteners supplier Trifast (TRI) even though the UK automotive market is weak. More than two-thirds of sales are overseas. Additional UK stocks for Brexit are worth around £2m.

Commercial aircraft leasing company Avation (AVAP) expects to report a doubled interim profit on revenues that have risen from $52.4m to $58m.

Outdoor digital media company Grand Vision Media Holdings (GVMH) has signed a partnership agreement with Rakuten Bank in Japan to add to the one it signed with CY Group in South Korea. GVMH’s marketing services will help its partners promote themselves to Chinese tourists. GVMH has glasses-free 3D technology.

Helen Sachdev has been appointed as a non-executive director of Athelney Trust (ATY) and Frank Ashton has taken on the role of executive chairman. Discussions continue with Gresham House Asset Management about taking over the management of the company’s investments.

Future (FUTR) has secured a new £90m revolving credit facility and it is acquiring CyclingNews.com and Procycling Magazine, which generate annual revenues of £2m. This deal widens the sports publishing activities.

REA Holdings (RE.) significantly increased palm oil production in 2018, even though extraction rates were lower than expected. The Kota Bangun coal concession is heading towards reopening the mine, although there are local disputes.

Andrew Hore

Andrew Hore – Quoted Micro 14 January 2019

NEX EXCHANGE

Bruce Pubs (PUB) has raised £100,000 from an issue of 7.2% bonds and trading has commenced on NEX. The pubs operator wants to raise up to £20m. The cash will be used to acquire pubs in Scotland. Bruce owns 18 licenced premises with another licence pending. Bruce Pubs is a subsidiary of the holding company Bruce Group, which had net assets of £3.8m at the end of June 2018.

Sativa Investments (SATI) is investigating ways of raising cash to finance the company’s glasshouse and working capital for the first cannabis crop. There are also talks with vets about using medicinal cannabis in animal health. Sativa is pleased with the platform that NEX has given the business. Imperial X (IMPP) is the latest NEX company to change its investing strategy to cannabis investments.

Trading in the shares of Clean Invest Africa (CIA) following news that it has negotiated an agreement to acquire the 97.5% of CoalTech LLC it does not own. The company has technology that can convert waste coal into coal pellets for industrial and commercial use. A circular will be sent to shareholders in the first quarter of 2019.

Primorus Investments (PRIM) has increased its stake in Greatland Gold (GGP) to 35 million shares, which is equivalent to 1.09%. The average cost is 1.71p a share. The investment has been made ahead of further drilling results at the Havieron gold/copper project in Australia.

EPE Special Opportunities (ESO) reported a NAV of 189.95p a share for the end of 2018.

AIM

President Energy (PPC) beat its production target for the end of 2018. The Argentina-focused oil and gas company was producing 3,300 boepd by the year end, which is 10% above the target. The latest drilling programme of three wells has been a 100% success. President intends to build on this base during 2019. The next reserves audit should be published in March. There should be a significant jump in profit in 2019. Panmure Gordon forecasts a 2019 pre-tax profit of $18.6m. The cash generated will help to finance forecast capital investment of around $40m during the year. The target price is 15p a share.

Gateley (GTLY) continues to trade strongly with organic growth supplemented by contributions from acquisitions. The legal services provider increased interim revenues by one-fifth to £46.4m, while pre-tax profit rose from £4.2m to £5m. Net debt increased from £7.1m to £8.2m after acquisitions spending and dividend payments. The second half tends to be more cash generative. More business is coming from litigation work but management is confident that its revenue recognition policies mean that the strong cash generation will not be hit.

Castleton Technology (CTP) is paying £1.8m for Deeplake Digital, which provides digital communications services between landlords and tenants. Thirty of its 90 customers are new to Castleton.

ATTRAQT (ATQT) is expecting to make a small EBITDA figure for 2018. The online shopping performance enhancement services provider will report its 2018 results on 14 February.

More woe for Footasylum (FOOT) as gross margins come under pressure. Revenues were in line with expectations over Christmas but less money was made from them as old stock was discounted. The 2018-19 loss forecast has been edged up to more than £5m.

Higher input costs mean that Accrol Group (ACRL) will not do as well as expected and it will make a significant 2018-19 loss after exceptional charges.

Packaging machinery supplier Mpac Group (MPAC) says 2018 trading was in line with expectations and the year has started with a strong order book. The company is assessing the potential additional cost of pension equalisation for its defined benefit scheme.

Bowleven (BLVN) is paying a 15p a share special dividend on 8 February. This will leave the oil and gas explorer with the cash it requires for its exploration programme.

Wealth manager Mattioli Woods (MTW) says that its interim EBITDA margin was substantially ahead of the 20% target. Gross discretionary assets under management were £2.4bn at the end of November 2018.

Churchill China (CHH) had a strong finish to the financial year with a better second half performance in the UK. The 2018 profit will be higher than expected. The figures will be published on 27 March.

Shoe Zone (SHOE) stands out amongst its peers because it has had strong 2017-18 figures and a good Christmas. Last year’s pre-tax profit improved from £9.5m to £11.3m. Forecasts have been upgraded with 2018-19 earnings per share increased from 16.4p a share to 17.6p a share based on flat profit and a higher tax charge.

Quiz (QUIZ) sales continue to decline, albeit at a slightly lower rate of 5% like-for-like. The fashion retailer had to discount and gross margins were two percentage points lower. Overheads are also too high because of the lack of growth. The full year profit forecast has been cut from £6m to £4.4m.

A North African order for the Helios product supplied by Starcom (STAR) has been delayed until 2019 so 2018 revenues will be lower than expected. The total order value is $1.1m and the majority was expected to be recognised in 2018. Even so, revenues were better than expected, but the loss will be higher.

A general meeting has been requisitioned at Angus Energy (ANGS) by shareholders owning 6.2% of the company. It is believed that former chairman Jonathan Tidswell-Pretorius is behind this requisition, which involves the proposed removal of Paul Vonk from the board and the appointment of the Earl of Lucan and George Bingham. Non-exec Rob Shepherd has resigned. Angus has entered into a 24 month, £3m loan facility with YA II PN Ltd and Riverfort Global Capital in order to finance the development of the Balcombe field in the Weald basin. A £1.5m drawdown is planned immediately.

Rose Petroleum (ROSE) has acquired additional acreage in the Paradox Basin in Utah at a cost of $35,000. Rose believes that the new acreage could have an NPV10 of around $12m. The deal follows the results of the Schlumberger study which suggests that the site of a proposed well in the area should be in an optimal position.

Diurnal Group (DNL) has been granted a second patent for hydrocortisone treatment Chronocourt, which already has orphan drug designation. The patent lasts until 2033.

A £2m subscription and $5m investment into an internal finance note by 1795 Volantis Fund will provide Obtala Ltd (OBT) with additional funds. 1795 Volantis Fund will own 12.9% of Obtala, as well as 40 million warrants exercisable at 10p each. The disposal of a Tanzanian agricultural business will bring in a further $2.5m. Obtala intends to acquire the 25% it does not own in Montara Continental for $5m, which will be reinvested in the internal finance note.

Fuel cell developer Proton Power Systems (PPS) will own 33.33% of Hamburg-based Clean Logistics, which is being set up to build heavy trucks powered by fuel cell hybrid systems in the range of 75kw-150kw. The other two equal shareholders are Hopen, which has interests in battery and electric vehicle developers, and modular transport service provider Hary.

Sopheon (SPE) had a strong end to 2018. The software provider will provide more details in its trading statement later this month, when finnCap says it will reassess its forecasts.

Dekeloil (DKL) says that fourth quarter volumes were in line with expectations with a 2% increase in crude palm oil production on the third quarter. The annual production was 15% lower because of the weak first half. Selling prices have been at a premium to the market price. The purchase of a 43.8% stake in the Tiebissou cashew processing project has been completed.

Imaginatik (IMTK) has decided to sell its software business and assets to Planbox. The initial cash payment is $1.7m and up to $800,000 more could become payable. If it is all paid then the selling price would be higher than the book value of the assets. Imaginatik will become a shell with around £1m in cash left from the initial payment. If the disposal is approved by sharehodlers the company will change its name to Abal Group.

Telematics firm Quartix (QTX) continues to grow fleet sales but lower insurance sales are partly offsetting that growth. A supplementary dividend will be announced with the final dividend when the 2018 figures are published on 25 February.

Brighton Pier Group (PIER) says problems with the railways are hampering the income generation of Brighton Pier and earning shave been lower. The trading of the bars division was flat last year. Pre-tax profit will be around £3.2m, which is 18% lower than previous expectations.

Frontier IP (FIPP) says that its investee company Exscientia has raised $26m and is collaborating with Roche in a deal worth up to CHF67m. Frontier IP owns 3.32% of artificial intelligence-driven drug developer Exscientia.

MAIN MARKET

InnovaDerma (IDP) has revealed a 6% dip in first half revenues to £3.9m, even though retail sales grew strongly. Direct sales fell, although there are indications that they are recovering. The cosmetic products supplier will have to do well in the second half to achieve full year forecast revenues of £14.4m.

Trident Resources (TRR) has £1.85m in the bank at the end of October. The shell raised £4m when it floated in October. The balance sheet includes trade receivables of £2.1m, although management says that it started the year with just under £4m in cash. Potential acquisitions are being assessed.

Andrew Hore

Andrew Hore – Quoted Micro 24 December 2018

NEX EXCHANGE        

China-based Gamfook Jewellery had planned to join the standard list, but it has decided to float on NEX. The online retailer of customised jewellery had intended to raise cash at 15p a share, but the flotation on NEX on Christmas Eve will be an introduction at 15p a share. Management hopes the flotation will help to increase its profile and customer base. A dividend based on 28% of profit attributable to shareholders is promised.

Walls and Futures REIT (WAFR) has maintained its NAV at 92p a share at the end of September 2018. In the six months to September 2018, rents increased from £33,000 to £67,000. Additional supported housing opportunities have been assessed.

KR1 (KR1) has raised £785,000 at 5p a share and paid £40,000 in fees to advisers in shares at the same price. KR1 director Keld van Schreven subscribed for 50,000 shares. The cash will fund further blockchain token investments.

Panther Metals (PALM) has signed heads of terms for the acquisition of Parthian Resources, which owns exploration assets in Australian. Parthian shareholders will own 15% of Panther if the deal goes ahead. One of these shareholders is Kerim Sener, who is non-executive chairman, who will end up with 4% of Panther. The deal should be completed in January 2019.

Blockchain investment company Coinsilium Group Ltd (COIN) says that Gibraltar-based StartupToken has attracted a £193,000 investment from South Korea-based Blockwater Capital in return for a 7.4%. Coinsilium had invested £360,000 in StartupToken during November and the value of the investment has doubled to £722,000. Executive chairman Malcolm Palle has bought 200,000 shares in Coinsilium at 3.6p a share, taking his stake to 6.35%.

Clean Invest Africa (CIA) is acquiring the remaining 97.5% of CoalTech LLC for £24.6m. This will be funded by a share issue. A circular will be published in the first quarter of 2019. A new incentive plan for management, in the form of options exercisable at 2.5p a share, is planned.

IMC Exploration (IMCP) has issued five million shares at 1p ia share and every five shares has a warrant exercisable at 1p a share. The £50,000 will be used to continue exploration in Avoca, County Wicklow. Wishbone Gold (WSBN) has raised £300,000 at 0.1p a share. The cash raised will be used to accelerate production at the Honduras gold facility. NQ Minerals (NQMI) has raised £38,000 at 12p a share.

Milamber Ventures (MLVP) has issued shares valued at nearly £302,000 to creditors at a range of share prices. Management has acquired the majority stake in Milamber USA and Milamber retains a 20% stake. Milamber has also reduced its stake in Vocademia to 5% with the rest of the share capital acquired through the return of 900,000 Milamber shares. A further 166,667 shares were returned for Milamber’s stake in White Cobalt. Milamber has created a new training compliance company called Checkbox and taken a 51% stake in an education joint venture with Black Arrow Space Technologies, which is developing commercial orbital launch services.

Imperial Mining (IMPP) is changing its name to Imperial X to reflect the change in investment focus from resources to the cannabis sector.

Medicinal cannabis investment company Sativa Investments (SATI) says that investee company Rapid Dose Therapeutics Inc has listed on the Canadian Stock Exchange. This has provided a 70% uplift in the initial investment value for a gain of C$140,000.

Lombard Capital (LCAP) had £4,130 in cash and £112,000 in assets available for sale. at the end of September 2018. Lombard still plans to issue an asset-backed investment bond.

Tectonic Gold (TAU) says that initial analysis of drilling at the Specimen Hill project in Queensland has confirmed mineralisation with grades up to 6.06g/t. Full results should be available in January.

Trafalgar Property Group (TRAF) is raising up to £1m through an issue of 8.5% convertible bonds 2025. The issue could eventually be increased to £5m. The bonds will be traded on NEX. The cash will be used to fund residential development and planning applications. Trafalgar has limited cash and it lost money last year.

AIM   

Filta Group (FLTA) has multipled the size of its grease management operations in the UK through the acquisition of Watbio for £6.9m in cash and shares, plus working capital adjustment. Cenkos has provisionally upgraded its 2019 earnings forecast by 26% to 11.8p, assuming completion of the deal in early January. Filta is raising £3m at 200p a share, which is a premium to the market price, and has obtained a £4m, five-year loan facility. Filta started building a grease management division through acquisition just over one year ago. Watbio generates annual revenues of £10.3m and pre-tax profit of £800,000 so it is much larger than the existing operations. It also offers other drain management services.

A strong performance from property servies more than made up for a weak first half performance of the business recovery division of Begbies Traynor (BEG) and pre-tax profit was 9% higher at £3.2m on revenues 8% ahead at £28m. The number of insolvencies increased in the first half but there was no repeat of the large one-off fee in the first half of the previous year. The interim dividend was raised by 14% to 0.8p a share. Net debt fell 10% to £6.3m. The performances of the divisions will reverse in the second half and 2018-19 pre-tax profit should improve from £5.6m to £6.4m.

President Energy (PPC) has drilled the third Puesto Flores well on budget and there have been good oil shows, but they are lower than the previous two wells. All three wells could be in production by the end of the year.

AssetCo (ASTO) has transferred the loal employees in Abu Dhabi to the new supplier of fire services. There is a possibility of winning work in the region. The litigation against former auditor Grant Thornton continues and a judgement could happen in the first couple of months of 2019.

URA Holdings (URA) was not able to complete the acquisition of Entertainment AI early enough to prevent the cancelation of the AIM quotation on 24 December. The acquisition could still happen.

Real Good Food (RGD) has sold jams maker R and W Scott for £1.5m, of which £500,000 is deferred until September 2019, and the assumption of £2.45m of debt. That takes disposal proceeds to £17.8m and completes the main corporate activity. The cake decoration and food ingredients businesses make up the majority of the remaining group.

Small business financial services provider City of London Group (CIN) continues to lose money as it builds up its activities. Recognise continues to try to obtain a UK banking licence.

HaloSource Corporation (HALO) has not been able to secure additional finance and trading in the shares has been suspended. There is limited cash left.

Thalassa Holdings (THAL) intends to move to a standard listing. No new shares will be issued and the move should take place on 25 January.

Revenue and EBITDA growth in the range of 15% to 20% is expected by Craneware (CRW) in the six months to December 2018. The healthcare accounting software provider has a 100% renewal rate in dollar terms in the first half.

Replacement windows and doors manufacturer Safestyle (SFE) has improved its order intake in the past six months after its agreement with a former employee who was competing with the company. However, costs have increased and the 2018 loss will be between £8.2m and £8.6m. The 2019 performance could be ahead of expectations. Otus Capital Mananagement has taken a 5.42% stake.

Audio equipment supplier Focusrite (TUNE) had a strong November but it is still cautious about the full year. The trade dispute between the US and China remains a concern.

N4 Pharma (N4P) has extended the licence agreement with UniQuest for Nuvec. It has become an exclusive global licence with certain fields licensed back to UniQuest.

finnCap has resigned as nominated adviser and broker to The People’s Operator (TPOP) and that could scupper the placing with the owner of LycaMobile. An investment of £1.3m in shares (29.9%) and convertible loan notes was planned.

Yu Group (YU.) says that the Financial Conduct Authority is investigating the accuracy of its announcements between March and October. Poor internal controls caused a shortfall in profitability. The energy supplier has revealed that its 2018 loss could be as high as £7.85m, which is higher than previously estimated. This is due to a decline in gross margins and balance sheet corrections. There was £11m in the bank at the end of November 2018.

LiDCO Group (LID) will report float full year revenues and this has led to a £800,000 increase in forecast pre-tax loss to £1.9m. The take-up of the high usage programme has been slower than expected and an Asian order was delayed. The patient monitoring equipment supplier is expected to have cash of £1.5m by the end of January 2019.

TLA Worldwide (TLA) has agreed in principle to sell its Australian business to QMS Media and this would make TLA a cash shell.

Rasmala (RMA) left AIM on 19 December. A new holding company is based in the British Virgin Islands.

It gets worse at Paragon Entertainment (PEL) with another loss in the second half on lower than expected revenues. A 2018 loss of £2.4m is forecast. Overheads have been reduced so the loss could be smaller next year.

Scientific Digital Imaging (SDI) increased interim revenues by 23% to £8.05m through a combination of acquisitions and organic growth, while pre-tax profit was one-third higher at £1.5m. finnCap is cautious about the full year for the scientific instruments supplier and has maintained its full year pre-tax profit forecast at £2.6m, which suggests a lower second half profit.

Management has launched a 12p a share bid for former AIM-quoted PR firm Freshwater as a way of enabling existing shareholders to exit the business.

MAIN MARKET  

Trading in standard list shell Fandango Holdings (FHP) shares has been suspended ahead of the proposed reverse acquisition of Konnect Mobile Communications Inc, which owns PaySocial Inc, a mobile banking and payments eWallet.

Standard list shell Papilon Holdings (PPHP) has acquired 50% of Pace Cloud Ltd, which owns CarCloud, a fintech company involved in the used car sector. This represents a fundamental change in the business. Papilon is raising up to £500,000 via a convertible loan note issue. The conversion price is 1.25p a share.

Telecoms services provider Toople (TOOP) lost £1.4m in the year to September 2018, which was slightly more than the previous year. The gross profit of £203,624 was enough to cover the directors pay of £196,713. There was a cash outflow of nearly £1m in the period. There was £2.14m in the bank at the end of September 2018, but there is a loan from former shareholder David Breith with a cash value of nearly £607,000, which could become repayable from 3 May 2019.

Zegona Communications (ZEG) has decided not to tender €7.75 a share for up to 14.9% of Euskaltel, where it is trying to improve performance, because it has not been abe to secure funding. Zegona has secured a relationship with Talomon Capital, which will own up to 2.4% of Euskaltel on top of Zegona’s existing 15% stake, which will be increased via market purchases. That requires a share issue by Zegona.

Investment company Athelney Trust (ATY) is consulting with existing and potential shareholders, concerning a tender offer to existing shareholders at the same time as an issue of new shares.

Andrew Hore

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