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Andrew Hore – Quoted Micro 8 July 2019

NEX EXCHANGE

AIM-quoted Aquis Exchange (AQX) is acquiring NEX Exchange from CME Group Inc, which bought it as part of its £3.9bn takeover of NEX Group. Aquis will pay £1, plus £2.7m for working capital requirements. The deal requires FCA approval so it is unlikely to complete before the autumn.

Arbuthnot Banking Group (ARBB) is purchasing a residential mortgage portfolio for £258m. The loan portfolio has £266m outstanding and the yield is 3.6%.

Equatorial Mining and Exploration (EM.P) is raising £1.3m via a share issue at 0.1p a share and loan notes worth £904,000, which are convertible at the same share price. The cash will be used to acquire Rwanda-based Eastinco.

MESH Holdings (MESH) has reached an early agreement to exercise the option to acquire Sentiance. MESH will issue 4,000 shares for each Sentiance share. Sentiance will have €19m in cash when the deal completes. More than 404 million MESH shares will be issued, which is nearly two-thirds of the enlarged share capital. Trading in the shares is suspended until a circular is published in order to gain shareholder approval.

The forecast 2018-19 loss for health and community care properties developer and modular buildings supplier Ashley House (ASH) has been increased from £1m to £1.6m following clarity about what deals were signed prior to the year end. A return to profit is expected this year.

Ace Liberty and Stone (ALSP) has announced a third interim dividend of 0.84p a share. The ex-dividend date is 11 July.

NQ Minerals (NQMI) has extended its A$4m loan facility to 5 September. The two month extension cost A$160,000.

Gunsynd (GUN) has invested a further $130,000 in Oyster Oil and Gas, taking its stake to 30%.

Trading in Ganapati (GANP) shares has been suspended because accounts for the year to January 2019 have not been published.

Wheelsure Holdings (WHLP) has appointed Cairn as its corporate adviser.

AIM

Science Group (SAG) has launched a 35p a share cash bid for Frontier Smart Technologies (FST) and that is higher than the indicative offer of 30p a share. Frontier advises that shareholders take no action and says that it has received approaches from other parties and there are discussions with one of them about the structure and pricing of any deal.

Independent directors of FFI Holdings (FFI) are recommending a bid of 25p a share, which values the film completion insurance provider at £39.5m. The mandatory offer comes two years after FFI floated at 150p a share.

IMImobile (IMO) continues to grow strongly in the Americas and Europe with 42% growth in revenues last year. The cloud and mobile services provider increased total revenues by 28% to £142.7m, with organic growth of 14% on a constant currency basis. Net debt was £7.5m at the end of March 2019 and cash generation is strong. Thee was £14.6m generated from operating activities last year.

Plastic components and packaging producer Synnovia (SYN) has refinanced its debt. The maximum amount available is £25.3m. The maturity has been extended from June 2021 to June 2023. The full year results will be published on 9 July.

Bango (BGO) has partnered with appScatter (APPS) in order to help the latter’s app development clients to grow in-app revenues.

Gfinity (GFIN) has generated better than expected revenues in the year to June 2019. The esports company expects to breakeven by 2021.

Mirriad Advertising (MIRI) is raising £14.18m via a placing at 15p a share, while an open offer could raise up to £3.94m. Revenues remain modest and the cash is required to cover continuing losses. Cash consumption is running at £1m a month and 2019 revenues of £1.1m are anticipated.

Churchill China (CHH) has generated higher than expected revenues in the hospitality sector, particularly in Europe. Full year trading will be ahead of expectations. The interims will be announced on 29 August.

Mirada (MIRA) is raising £2.1m from the sale of its Mirada Connect car park payment services business to part of VW. The business generated revenues of £633,000 and pre-tax profit of £122,000 in the year to March 2019. This will enable Mirada to concentrate on its digital TV business, where annual revenues are approaching $12m. Mirada had net debt of $4.9m at the end of March.

LightwaveRF (LWRF) has signed an agreement with Google to jointly market Lightwave compatible smart speakers that provide voice-controlled lighting.

Intelligent Ultrasound (MED) has secured its first OEM agreement for its AI-based imaging software and the share price nearly doubled on the back of the deal. The technology will be integrated into ultrasound systems. Initial royalties are expected in 2021.

Cellcast (CLTV) plans to sell its operating subsidiary to its management team, but it is unlikely to generate a good price because of its poor performance. The company will become a shell. Fraser Cropper of e-cigarette company Totally Wicked has taken a 3.7% stake.

MAIN MARKET

InnovaDerma (IDP) has reassured investors that it is on course to more than double pre-tax profit to £1.5m in the year to June 2019. The pharma and beauty products supplier had £1.7m in the bank at the end of June 2019, which is better than expected. It is still down from £1.9m one year earlier.

Associated British Engineering (ASBE) has appointed FRP Advisory to find a buyer for loss-making British Polar Engines Ltd. There is a deficit of £1.35m on the pension scheme.

Argo Blockchain (ARB) has announced further outperformance by its crypto mining activities as the bitcoin price continues to recover. The company had £3.07m of crypto assets in the balance sheet at the end of June 2019, which is more than £200,000 more than expected. Additional equipment is being acquired.

Rainbow Rare Earths (RBW) is raising £4.3m at 3p a share. The money will finance production growth at the Gakara rare earth project. There should be some cash left to pay for additional drilling.

Papillon Holdings (PPHP) has revised its 2018 accounts. The original version did not reflect two transactions with director James Longley.

Gulf Keystone Petroleum (GKP) has paid an initial dividend of 5.68p a share with a further dividend double that level (depending on exchange rates) due to be paid after the interim figures are published.

Boston International Holdings (BIH) has returned from suspension following the termination of the reverse takeover of Cornhill FX, which was first announced in August 2017. Boston could not raise the cash required. Management is assessing future strategy. The costs of the proposed transaction mean that cash is below £150,000, which is less than 50% of share capital.  

Andrew Hore

Andrew Hore – Quoted Micro 6 May 2019

NEX EXCHANGE

In 2018, Newbury Racecourse (NYR) increased revenues by 8% to £19.3m. This was despite lower race course attendances because of two abandoned days of racing. Underlying pre-tax profit jumped from £188,000 to £568,000. The NAV was £50.7m at the end of 2018. There was a further £3.25m payment from David Wilson Homes, which helped to finance capital investment.

MetalNRG (MNRG) has entered into heads of terms with AIM-quoted Mkango Resources so that it can earn up to 75% of the Thambi licence in Southern Malawi. The licence allows exploration for uranium, tantalum and niobium. MetalNRG has to spend $500,000 in the first 12 months and then a further $700,000 in the next 12 months. A further $800,000 has to be spent in the third year to earn the full 75%. The Kyrgyz Republic has banned uranium exploration and mining and the farm-in agreement for the Kamushanovskoye uranium deposit has been suspended.

Secured Property Developments (SPD) had a NAV of £554,000 at the end of 2018. There is £584,000 in cash on the balance sheet.

High Growth Capital (HASH) has raised £4.99m after expenses via a placing at 1.75p a share with Mirador FZE, which also has warrants to subscribe for 300 million shares at 2.5p each until the end of 2019. If the High Growth Capital share price closes above 4p for five consecutive days, the warrants have to exercised or they will lapse. Mirador has a 14.2% stake. Mike Power has been appointed as a non-executive director.

Sativa Investments (SATI) has opened the first Goodbody and Blunt centre in Bath. The centre will sell cannabidiol products and have a café area.

V22 (V22O) is asking shareholders to approve the cancellation of the NEX quotation 31 May, after nearly 13 years on the market. The art investor and studio space provider plans to sell assets and distribute the cash to shareholders. A matched bargains quotation via JP Jenkins is planned for six months after leaving NEX.

Trading in Valiant Investments (VALP) shares has been suspended because it has not produced its annual report.

Queros Capital Partners (BFD) has raised £205,000 in the past two weeks from the issue of 8% unsecured bonds 2025.

The shortlist for the NEX share of the year at the Small Cap Awards 2019 has been announced. The companies are National Milk Records (NMR), Sativa Investments (SATI), NQ Minerals (NQMI), Chapel Down (CDGP), DXS International (DXSP) and Walls and Futures REIT (WAFR) ,which is also on the shortlist for impact company of the year.

AIM     

Capital equipment manufacturer Mpac Group (MPAC) is acquiring Lambert Automation for an initial £15m. UK-based Lambert provides automation equipment to the medical and healthcare markets. Revenues and profit have been declining, but there was an order intake of £24.5m in 2018 and that should help revenues to recover. Revenues were £17.9m in 2018. There is potential earn out consideration of up to £2.5m. Mpac’s own trading is in line with expectations.

Park Group (PARK) says that trading was better than expected in the second half of its financial year, but there were additional costs and the effects of accounting changes. Edison has reduced its 2018-19 pre-tax profit by 3% to £12.5m. Additional costs next year mean that the profit forecast has been cut from £14.3m to £11.7m.

Tracsis (TRCS) has acquired timetable optimisation software developer Bellvedi for an initial £4m with up to £7.9m more payable over four years depending on performance. Bellvedi made a pre-tax profit of £700,000 on revenues of £1.6m last year. Acquiring the ATTUne software means that less needs to spend on the development of existing Tracsis software. The deal adds 2% to this year’s earnings per share, moving it to 27.3p. Next year’s is enhanced by 7% to 32.3p.

Competitions organiser Best of the Best (BOTB) has published a fourth positive trading update in a year. This prompted finnCap to increase its earnings forecast from 15.4p a share to 18.6p a share. The previous upgrade was in January. The switch to a predominantly online model is paying off. Any upgrades to the forecasts for the year to April 2020 will happen after the 2018-19 figures are published on 20 June.

Allergy Therapeutics (AGY) says that the PQ Grass allergy phase III study will start a year later than expected. It should commence by June 2020. This follows an end of phase II study meeting with the FDA. This means that this year and next year the reported loss will be lower because of deferred spending on the study.

Eight Peaks Group (8PG) plans to cancel its AIM quotation because of limited liquidity. This will save £80,000 a year.

Trading in the shares of property investor Safeland (SAF) will end on 10 May.

MAIN MARKET 

Motor dealer Pendragon (PDG) is selling two Jaguar Land Rover dealerships in California. This is expected to generate around £60m of cash, although £6.9m of profit contribution before central costs will be lost. However, Jaguar Land Rover has right of first refusal.

Papillon Holdings (PPHP) has appointed Novum as broker and it has committed to invest £300,000 in convertible loan notes. The planned purchase of a 50% stake in used car market focused fintech company Pace Cloud.

Ross Group (RGP) has reported its 2018 results, but these are before the completion of the Archipelago Aquaculture which happened early in 2019. Revenues fell from £335,000 to £60,000 and a profit of £57,000 was turned into a loss of £250,000. That is partly down to costs relating to the acquisition of Archipelago Aquaculture.

Thalassa (THAL) received acceptances of 18.5% of the share capital in its bid for Local Shopping REIT (LSR) and this offer has lapsed. Thalassa owned or had acceptances of 39.3%.

Standard list shell Bermerle (BERM) went to a 50% premium on the first day of trading. However, the bid/offer spread of 1p/2p means that investors could only sell at the 1p a share placing price. The company is seeking a pharma acquisition. The areas that Bermele is assessing include diabetes, cancer and mental health. It is also looking at personalised medicine.

Standard list shell Auctus Growth (AUCT) had £920,000 in the bank at the end of 2018. Fellow shell daVictus (DVT) had £355,000 in the bank at the end of 2018 and it has agreed to buy the rights to a restaurant concept from Typical Dutch NV for £100,000. The Havana Rolled Cigar Music Café concept has been developed at a site in Aruba. Spinnaker Opportunities (SOP) has also secured a possible acquisition in the form of Kanabo Research, which is a medicinal cannabis oil company. Kanabo is developing over the counter products and has distribution rights to a vaporiser. Spinnaker had £1.04m in the bank at the end of 2018.

Trading in the shares of Tex Holdings (TXH) and Avocet Mining (AVM) has been suspended because they have not published 2018 accounts.

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

Andrew Hore – Quoted Micro 21 May 2018

NEX EXCHANGE   

Newbury Racecourse (NYR) grew 2017 revenues from the nursery, hotel and media operations. There was a 11% increase in raceday attendances, which totalled 196,000 last year, leading to a 1% like-for-like rise in revenues. Overall revenues were 5% higher at £17.8m, while underlying pre-tax profit edged up from £178,000 to £188,000. There was a small cash outflow from operations. Capital investment meant that cash was reduced from £12.9m to £5.2m with more payments to come from the David Wilson Homes deal. A further £5.17m will be spent on upgrading the Pall Mall stand. There are concerns that the cutting of maximum stakes for gaming machines following the recent government announcement could hit bookmaker sponsorship and media rights revenues.

Block Commodities Ltd (BLCC) has a secured a strategic investment from Swarm Fund, which is a decentralised marketplace platform using blockchain. Investors will be able to participate in the FarmCoin asset-backed investment coin via the Swarm platform. FarmCoin is a joint venture between FinComEco and Block Commodities focused on the agriculture sector. There will be up to $45m of FarmCoin tokens issued.

National Milk Records (NMR) is holding a general meeting on 4 June in order to propose a reduction in capital that should put it in a position to have distributable reserves if it wants to pay a dividend.

Pre-IPO investor Primorus Investments (PRIM) had cash of £561,000 at the end of 2017. The NAV was £4.95m. This was after a £3.26m inflow from share issues.

AIM   

Watkin Jones (WJG) has found a new chief executive but he will not be able to start until the beginning of 2018. Richard Simpson is joining from student accommodation developer Unite Group. The build to rent operations of Watkin Jones has secured a development arrangement for a site in Reading, which will have 315 apartments.

GAN (GAN) and Webis (WEB) are two companies that could benefit from the legalisation of online sports betting in the US. The Supreme Court of the United States has decided to overturn the Federal prohibition of sports betting. US sports betting could be worth $6bn by 2023. That covers online and onsite gambling. GAN can launch a sports betting service in New Jersey and Pennsylvania in the second half of this year – in time for the NFL season. GAN already has a deal with Betfair in New Jersey and adding sports betting will increase revenues. Webis has a US subsidiary called WatchandWager, which is based in California, a strong potential market for sports betting.

Genedrive (GDR) has agreed to sell its research and pharmacogenomics divisions to a director for up to £1.9m so that it can concentrate on its core Genedrive diagnostics platform. The initial payment is £1.15m with the rest deferred and subject to claims for R and D tax credits.

Lakehouse (LAKE) is acquiring heating and renewables services provider Just Energy Solutions, which fits with the company’s gas compliance businesses in the public sector and expands coverage in the industrial and commercial sectors. There is no upfront cost and payments will be dependent on profitability over two years. Lakehouse has also won a £55m, three year, Warm Homes contract with the Wales government.

Oil and gas demand is recovering at advanced coatings provider Hardide (HDD) but it is still well below previous levels. Other customers are enhancing growth and aerospace business is on the horizon. Interim revenues were 43% higher at £2.16m but the company is still loss-making. That will continue for a couple of years.

Angling Direct (ANG) increased revenues by 44% to £30.2m in the year to January 2018 and this led to an upgrade in forecast revenues for the current year. The fishing tackle retailer grew online sales by 54% but these tend to be lower margin. Pre-tax profit was £900,000 and it is expected to rise to £1.1m this year.

Online women’s fashion retailer Sosander (SOS) says that its full year revenues will be at least £1.34m. Like-for-like sales in the fourth quarter nearly quadrupled and gross margins are improving.

Portmeirion (PMP) has increased revenues by one-fifth in the first four months to 2018, although the second half of the year is always the more significant. Full year profit is still forecast to rise from £8.8m to £9.4m.

Churchill China (CHH) says that trading is ahead of the same period last year. The ceramic products manufacturer continues to have success in Europe and other export markets.

A new patent application has been filed for SkinBiotix by SkinBiotherapeutics (SBTX) and this covers the increasing of filaggrin levels in skin. Filaggrin is required for the formation of the outer layer of skin. Eczema sufferers have a low level of filaggrin.

The People’s Operator (TPOP) is increasing its UK subscribers but US numbers have declined so the performance was down in the first quarter of 2018. Churn is declining. Margins are better than expected. Even so, progress is too slow and an alternative strategy is required by the virtual mobile network business and it is considering divesting the US subscribers. That should cut cash burn by one-third.

A bathing water test by Molendotech, which is one of the investee companies of Frontier IP Group (FIPP), is being launched by Halma. This follows the agreement earlier this year.

Altona Energy (ANR) will begin a drilling programme on the Westfield tenement of the Arckaringa coal project during August. There could be 100mt of coal in the tenement. It will take three weeks to drill 15 holes to a depth of 120 metres.

Active Energy Group (AEG) intends to acquire a controlling interest in PowerWood Canada. Which owns forestry assets in Canada. This will secure feedstock for the roll-out of CoalSwitch, the biomass replacement for coal. There are plans to construct a 25 tonne per hour CoalSwitch plant in Alberta.

Servoca (SVCA) wants shareholders to agree to the cancellation of the AIM quotation. Management says that this will save £150,000 a year.

Volex (VLX) is buying Silcotec Europe for €18.1m and raising £36m at 75p a share. Silcotec supplies harnesses and electronic sub-assemblies to the medical, telecoms and computer industries and generated an operating profit of €3.1m.

Audioboom (BOOM) is not going ahead with the reverse takeover of Triton Digital Canada Inc because it could not raise the cash from a placing. A £700,000 break fee in cash (£90,000) and shares is payable. The audio business still requires more cash and that is why trading in the shares is still suspended.

MAIN MARKET    

Sportech (SPO) has a strong presence in the US so it is in a good position to benefit from the legalisation of sports betting. It already has 90 licenced operator clients and its own network of off-track betting facilities in Connecticut.

The reasons behind founder Laurence Orbach increasing his stake in books publisher Quarto Group Inc (QRT) to 20.1% have become clear. Orbach was removed from the board in November 2012 but he has joined with 27% shareholder Lion Rock to unseat four non-executive directors at the AGM. Orbach and former finance director Mick Mousley have returned to the board, along with two nominees from Lion Rock. Orbach becomes executive chairman.

Shefa Yamim (SEFA) has completed bulk sampling in zone 1 and this should enable a resource estimate to be calculated.

Standard list shell Papillon Holdings (PPHP) has signed heads of terms for a 50% stake in CarCloud, a car sales-based fintech company. The deal to acquire energy storage systems developer Phestor is off. That follows the abortive takeover of Myclubbetting.

S&U (SUS) says non-prime car finance applications are 10% higher this year, although approval rates have fallen. Net receivables have increased by £48m to £258m.

North Midland Construction (NMD) has made a strong start to the year. There is a secured workload of £310m for this year and this should enable an improved financial performance this year.

World Trade Systems (WTS) wants to diversify its business outside of China. A new Taiwan-based health and fitness subsidiary is being incorporated. Kun Xin International will provide a loan facility of up to £3m to finance the new business. European opportunities are being sought.

Blood diseases treatments developer Hemogenyx Pharma (HEMO) has signed a development agreement with a global pharma company, which will provide Hemogenyx with free technical support and some intellectual property. The pharma company will be granted a research licence for anything jointly developed.

Andrew Hore

Quoted Micro 2 October 2017

NEX EXCHANGE

Newbury Racecourse (NYR) reported a slightly lower interim operating loss of £268,000 on revenues 10% higher at £7.04m. More racedays helped the racing operations but there were fewer other events which offset that. The nursery business made a much better contribution. Investment in the racecourse continues and income from residential property development of £1.95m helped to fund this. NAV is £44.1m.

Interim revenues were 22% ahead at £4.98m at Chapel Down (CDGP) helped by a 29% increase in wine sales. Management has reassured investors that there was a good harvest in 2017, which will help to improve wine revenues. The Curious Beer brewery is about to commence construction at Ashford.

St Mark Homes (SMAP) has launched a crowdfunding offer via Crowdstacker to raise up to £2m from a bond offering interest at 6% a year. The bonds can be held in ISAs. The cash will finance residential developments, which will predominantly focus on the government’s Help-to-Buy scheme. The company’s NAV per share was 136p at the end of the interim stage.

Block Energy (BLOK) is acquiring the 31% interest in the Norio field in the Republic of Georgia that it does not own and becoming operator of the field. The deal also includes 90% of the Satskhenisi field. The cost is $310,000 in cash. This is classed as a reverse takeover and trading in Block shares is suspended. An assessment of the reserve potential of the oil and gas assets in Georgia ahead of a return to NEX and a dual quotation on AIM.

V22 (V22O) increased its NAV from 1.55p a share to 3.94p a share in the 12 months to June 2017. That includes £235,000 of cash. If the art portfolio is included at its revalued level then the NAV goes up to 7.47p a share. An uplift in the value of the property portfolio offset an operating loss.

Investment company Western Selection (WESP) made a 2016-17 profit of £850,000 and nearly all of this came from the gain on the sale of shares in Swallowfield. Dividend income fell because Northbridge Industrial did not pay a dividend last year. NAV was one-fifth higher at 95p a share. The stake in Bilby was increased during the period. The total dividend has been raised from 2.1p a share to 2.2p a share.

Coinsilium Group Ltd (COIN) lost money in the first half of 2017 but it expects token investments to generate near-term revenues. There was £344,000 left in the bank at the end of June 2017 and this has subsequently been boosted by the sale of the shareholding in SatoshiPay. Coinsilium’s NAV is £2.34m.

Chris Bateman has resigned as chief executive of Forbes Ventures (FOR) after the sale of £500,000 of loan notes in Primus Care to his company Gravity Investment Group. Gravity has handed back 1166.7 million shares in Forbes, which have been cancelled. Gravity still owns 49.7% of Forbes, which still owns stakes in K&C REIT and challenger bank Civilised Investments. Trading in Forbes shares remains suspended ahead of the raising of further cash.

Ace Liberty & Stone (ALSP) has purchased Princes House, Barnstaple, which generates annual rent of £190,000, for £2.325m and College Square Margate, generating annual rent of £630,000, for £8.3m. Disposals of residential properties have raised £3.25m. Ace has raised £500,000 at 71.25p a share.

BWA Group (BWAP) had two investments and £17,000 in the bank at the end of April 2017. Pre-paid cards provider Prego Investments has taken longer to build up its business than expected. Mineralfields Group is in the process of obtaining mining licences in Cameroon.

Trading has commenced in Doriemus (DOR) shares on the ASX. A$3.5m was raised at A$0.26 per share equivalent. The cash will be used to complete drilling on the Lidsey and Brockham oil fields in the UK

Healthcare IT provider DXS International (DXSP) says that growth has been held back by changes in the NHS and the benefits of recent development spending are not likely to show through until 2018-19. In the year to April 2017, revenues were 5% higher at £3.43m but pre-tax profit fell from £46,000 to £39,000. There was £166,000 in the bank at the end of April 2017.

IMC Exploration Group (IMCP) has commenced its drilling programme on the zinc licence in south west Ireland. The licence in County Clare is near to other licences where mining companies have achieved encouraging results.

Angelfish Investments (ANGP) is providing a £150,000 loan facility to healthcare company Rapid Nutrition. The interest rate is 10% a year until the end of February 2018 when it rises to 15% a year. If Rapid Nutrition floats before the end of February 2018 the loan is convertible at 13.32p a share. The loan remains convertible after that but it also becomes repayable in instalments over 18 months. Angelfish is still seeking to recover transaction costs related the repaid investment in 4Navitas.

Crossword Cybersecurity (CCS) has licenced blockchain intellectual property to defence-focused ByzGen, which has just raised £500,000 from Regulatory Financial Services Ltd.

NQ Minerals (NQMI) has raised £782,000 at 8.5p a share and paid £400,000 of expenses via a share issue at 10p a share.

Via Developments (VIA1) has raised a further £215,000 from a debenture issue that takes the total value of debentures in issue to £5.11m.

Gunsynd (GUN) has invested £160,000 in a 3.01% stake in standard listed United Oil & Gas. The average cost was 2.7p a share. United has an onshore UK licence and an Italian onshore licence.

AIM

Premier African Minerals (PREM) is raising up to £3.5m at 0.3p a share with the help of PrimaryBid.com. The cash will go towards funding the underground development of the RHA tungsten mine and repaying and cancellation of the YA II loan agreement and D-Beta equity swap.

AP Systems Holdings says that it is considering a bid for RedstoneConnect (REDS). The underlying business of AP has been going since 1985 but AP Systems Holdings is a couple of years old and has only published accounts as a dormant company. The share capital was recently increased followed by a sub division of the shares. It appears that David Anderson still owns 100% of the group.

ITM Power (ITM) is raising £25m via a placing at 40p a share plus up to £4.4m from an open offer at the same price. ITM has £20m of projects under contract and £17m under negotiation. The cash will help to service these projects and finance the winning of additional contracts. The open offer closes on 17 October.

Recruitment software provider Dillistone (DSG) is launching its new software product and this has held back performance in the first half of 2017. The full benefits of the GatedTalent, which enables executives to share their personal information with recruitment consultants on a confidential basis, will not be seen for more than a year. House broker WH Ireland believes that full year profit could fall to £200,000 and it expects the 2018 profit to be flat. Profit is then expected to more than double I 2019 but the exact pace of take u of GatedTalent will be a significant factor in how quickly profit recovers.

Photonstar LED (PSL) significantly reduced its first half costs so even though revenues fell from £2.53m to £2.26m the interim loss decreased from £914,000 to £604,000. Research and development of the new LED systems range is almost complete and the second half sales should be better.

Full year figures from Real Good Food (RGD) show a slump into loss while net debt increased to £16.2m at the end of March 2017. There has been a subsequent refinancing and corporate governance is being improved.

MAIN MARKET

Curzon Energy (CZN) is joining the standard list following the acquisition of coalbed methane licences in Oregon. Curzon believes that gas could be produced before the end of the year. Curzon is raising £2.3m and this will be used to connect five existing wells to a pipeline and drill two more wells. The average cost is $350,000 per well.

Papillon Holdings (PPHP) had £9,000 left in the bank at the end of June 2017 following the costs of the abortive acquisition of Myclubbetting. Papillon has agreed heads of terms to acquire Phestor and Greenway Activated Carbon, which are involved in ultra-supercapacitor development for energy storage and supply of active carbon produced from biomass.

Associated British Engineering (ASBE) says that the level of enquiries for its products are increasing.

Andrew Hore

Quoted Micro 18 September 2017

NEX EXCHANGE

Good Energy (GOOD) is hoping that efficiency improvements will help it to grow its profit. So far annualised savings of £1m have been made with more to come in 2018. Customer churn meant that electricity and gas customers were 1% lower in the first half. In the six months to June 2017, revenues were 16% higher at £52m but pre-tax profit was 37% lower at £700,000 due to restructuring and investment costs. Net debt was £60.4m.

Blockchain-focused investment company Kryptonite1 (KR1) has sold tokens relating to Golem, Melonport and Omisego for significant multiples of their buying prices. The gain on the disposals was nearly £400,000 with the majority coming from the Omisego disposal. The holding in Bancor has been sold for the original acquisition price. Kryptonite1 has invested £100,000 in the FOAM project seed funding round and it will receive discounted tokens in the public token offer in the fourth quarter. A further £100,000 has been invested in 208,333 tokens in the pre-sale of the Enigma Catalyst project. There has been £202,000 invested in the private sale of tokens in the RChain project and £120,000 in Rocketpool tokens. Keld Hans van Schreven has been appointed an executive director of Kryptonite1.

Block Energy (BLOK) is raising $600,000 from the sale of its Ghanaian mining assets. An initial $50,000 has been received and $550,000 will be paid by the end of 2017. The cash will be reinvested in the company’s oil and gas assets in Georgia.

Karoo Energy (KEP) is making progress towards an AIM quotation. Andrew Smith, who has worked in the finance functions of a number of AIM companies, has been appointed as a non-executive director.

WMC Retail Partners (WELL) has asked for trading in its shares to be suspended while it clarifies its financial position.

AfriAg Global (AFRI) has raised £200,000 at 0.25p a share. Via Developments (VIA1) has issued a further £300,000 of 7% debenture stock 2020. That takes the debenture stock in issue to £4.9m.

EPE Special Opportunities (ESO) had a NAV of 412.26p a share at the end of July 2017. The flotation of Luceco has helped to boost NAV.

AIM

Pennant International (PEN), which provides training and simulation equipment and services for aircraft and defence equipment. The interim profit was £1.1m, compared with around breakeven in the first half of 2016. An electro-mechanical trainer and courseware contract with a MoD contractor has been changed so second half revenues will be lower than expected but Pennant still has the contract and the changes mean it will probably earn more over the medium-term. This year’s profit will be flat at around £2.1m because of the lack of contribution from the contract. The order book of £42m includes £15m to be delivered in 2018, compared with forecast revenues of £18.5m.

Audio visual products distributor Midwich Group (MIDW) reported a one-third increase in interim revenues to £212m. Organic growth was 15%. Margins have fallen but they remain relatively strong. The van Domburg acquisition takes the group into the Benelux countries. Midwich is on course to increase full year pre-tax profit from £17.9m to £22.1m. Midwich will join the FTSE AIM 50 index later in September.

Group Eleven, which is on course for a flotation in Toronto, has acquired Teck’s 76.56% stake in the Stonepark zinc licences in Limerick, Ireland, where Connemara Mining (CON) owns the remaining 23.44%. Connemara took the decision to hang on to its stake even though it could have received C$2.8m and a 1% net smelter royalty. Stonepark is west of the Pallas Green zinc deposit.

Wynnstay Group (WYN) says it is placing its pet retail business Just for Pets into administration. In the six months to April 2017, the business lost £250,000 on revenues of £7m. Wynnstay made an operating profit of £4.24m in the same period. The Just for Pets business has net assets of £2.2m and there is likely to be a significant write-off.

MX Oil (MXO) is seeking to broaden its investing policy so that it is not purely focused on natural resources and also covers oil services and energy activities, where opportunities are lower risk. MX has warned that the carrying value of its investment in Nigerian oil assets may have to be revised.

Central Rand Gold Ltd (CRND) is seeking additional finance and this is likely to be highly dilutive for existing shareholders. The disposal of some or all of the company’s interests is also a possibility.

CSF Group (CSFG) has accepted a conditional indicative offer for one of its subsidiaries for a nominal amount. That would significantly improve the financial position of the group due to a reduction in liabilities. Net liabilities were RM27.5m at the end of September 2016. Last October, shareholders voted against cancelling the AIM quotation.

Kin Group (KIN) hopes to resurface after a company voluntary arrangement and a share placing. The administrator has sold the main assets of the core business have been sold to Australia-based SMG Investment Holdings for £50,000. The shares remain suspended.

Investment company Adams (ADA) has bought shares in fully listed-Petrofac (PFC), which is the subject of a Serious Fraud Office investigation. Adams has invested £941,000 at an average share price of 447.66p a share in the oil services provider. Adams has £100,000 left in the bank.

MAIN MARKET

Standard list shell Silver Falcon (SILF) is buying a US biotech focused on blood diseases such as bone marrow failure and leukaemia. The main product of Hemogenyx is still at preclinical stage but preparing to move into clinical trials over the next 18 months. This product redirects existing immune cells to eliminate unwanted cells in a patient waiting for a bone marrow transplant. This could replace chemotherapy. There is also a second product in preclinical development. Silver Falcon is issuing 228.6m shares at 3.5p each to acquire the company. It is also raising £2m at the same price. Readmission to standard list under the new name of Hemogenyx Pharmaceuticals (HEMO) will be on 5 October.

Papillon Holdings (PPHP) has agreed heads of terms to acquire Phestor and Greenway Activated Carbon, which are involved in ultra-supercapacitor development for energy storage and supply of active carbon produced from biomass. Greenway plans to set up bio-refineries to extract cellulose and other materials from sugar beet pulp, straw and brewery biomass. The active carbon produced can be used in the ultra-supercapacitors. Phestor was set up in October 2016, while Greenway was set up in March 2016, although its name was changed last month. James Etherington Thorpe, who is resident in Denmark, is the sole director of each of the companies. Papillon had previously ended talks with MyClubbetting.com (see below).

Ocelot Partners Ltd (OLOT) still had $413.9m in the bank at the end of June 2017 and it is still on the look out for companies involved with the European technology, media or telecoms sectors. Shares in Ocelot commenced trading on the standard list on 13 March, when the cash shell raised $418m at $10 a share (currently trading at $9.91 each). A further $7.35m was raised from founder preferred shares with one warrant attached to each share. There was a $34.1m non-cash charge relating to founder preferred share dividend rights in the figures to June 2017.

Standard list shell Rockpool Acquisitions (ROC) says that it has been approached by additional reverse takeover targets in a range of sectors. Rockpool wants to buy a Northern Ireland-based business.

Andrew Hore

Quoted Micro 1 May 2017

NEX EXCHANGE

Cyber security technology developer and consultancy Crossword Cybersecurity (CCS) continues to scale up its business and there is a product launch planned for this summer. In 2016, revenues jumped from £21,000 to £345,000 but the loss increased from £755,000 to £950,000 – even after £78,000 of R&D tax credits. There was £1.55m in the bank at the end of 2016. AIM-quoted Iomart is cooperating with Crossword on launching the Nixer machine learning DDoS platform on the market.

Brewer Adnams (ADB) says sales of beers and spirits continue to grow and its pubs are trading well, although the sale of smaller pubs will reduce the profitability of this part of the group. Currency movements, the sale of the UK distribution rights for Lagunitas beers and the renovation of the Swan Hotel will hamper overall progress in the first half. The £7m investment in the brewery is almost complete.

Sandal (SAND) has signed an agreement with Spanish smart home technology business Momit, which will redesign its smart thermostat so that it is compatible with the Energenie MiHome platform. This is part of Momit’s strategy to enter the UK market. The redesigned product should be launched in September and, along with related radiator valve sales, could add £500,000 to the annual revenues of Sandal.

Healthcare staff provider Healthperm Resourcing Ltd (HPR) has revised its strategy and candidates need to have passed the International English Language Testing System, which is required for a visa anyway. Healthperm has opened its own IELTS training facility in the UAE and this is focused on nurses. Healthperm has won two new mandates and there are three other potential mandates on the cards. Chief executive David Sumner has agreed to increase the maximum amount of loan notes he will subscribe for from £1m to £1.8m. The loan notes have a 10% interest charge.

Capital for Colleagues (CFCP) has raised £1.44m at 42p a share from its open offer and a further £980,000 in a placing at the same price. Coinsilium Group (COIN) has raised £118,000 at 2p a share and it will use £60,000 to finance the development of a blockchain-based management system. Goldcrest Resources (GCRP) is raising £380,000 at 0.5p a share. The cash will help to finance the competent persons report on the Norio block, which the company is in the process of acquiring.

NQ Minerals (NQMI) has entered into a A$6.5m loan facility to help finance the acquisition of the Hellyer gold mine in Tasmania. This means that NQ has A$15m of the A$20m in cash it requires to make the purchase.

Indigo Holdings (INGO) is investing £200,000 in Iranian Fast Moving Consumer Goods Ltd, an online retail delivery business associated with a convenience store chain.

Ashley House (ASH) has secured a £500,000 loan facility from its non-executive deputy chairman Stephen Minion. The secured facility lasts for 12 months.

Housebuilder St Mark Homes (SMAP) has appointed Alfred Henry Corporate Finance as its corporate broker. Merchant Place had performed this role for 18 years.

AIM

Mortice (MORT) has made a second UK acquisition. The facilities management services provider is paying up to £4.5m for Elite Cleaning and Environmental Services – £3.5m in cash and shares plus a 12-month earn-out of up to £1m in cash and shares. Elite provides cleaning services and clients include ITV and BMW. Elite made EBITDA of £1m on revenues of £12.3m. finnCap has increased its earnings forecast by 5% to 7.8 cents a share.

Internet domain registry company Minds + Machines (MMX) moved into profit in 2016. Revenues grew from $5.5m to $13.5m, while a loss was turned into an underlying pre-tax profit of $3.5m. This follows a restructuring of the business and the sale of non-core operations. Sales of the .vip domain in China were the major factor in the growth in revenues and .boston should be launched later this year. Cash conversion was poor due to restructuring costs and increased working capital.

Directa Plus (DCTA) had technological problems which held back the progress of the graphene producer last year. In 2016, revenues fell from €1.7m to €0.8m and the loss more than doubled to €4.1m. The reason behind the fall in revenues was the lack of sales of mobile decontamination units with sales of G+ graphene nearly doubling. The focus is textiles and environmental uses of the company’s graphene. Directa Plus has net cash of €6.8m and this will be enough to absorb the expected cash outflows for the next couple of years.

Diagnostic tests supplier Omega Diagnostics (ODX) says that its underlying pre-tax profit will fall from £1.3m to £1.1m in 2016-17. All divisions increased their revenues, helped by currency movements. Field trials are planned for the VISITECT CD4 test and the CE mark could be obtained by the end of the year.

TLA Worldwide (TLA) continues to embarrass itself with disastrous trading statements. Having issued a trading statement at 6.26pm on 23 December 2016, it has released its latest profit warning at 4pm – management probably thinks that is a big improvement because it was before the market closed. It turns out that four months after the end of the financial year TLA’s 2016 figures will be even worse than expected. Changes to revenue recognition and provisions for money that TLA thought it was owed but has not been paid are the reason. There is also money that TLA believed it was owed in financial periods prior to 2016 but has not been paid. That will lead to write-downs and the current estimate is between $1.5m and $2.5m. The 2016 figures may eventually be released in late May, according to the company.

Imaginatik (IMTK) says its revenues for the year to March 2017 will be flat at £3.9m but the loss should still be reduced. Bookings for the innovation software were lower at £3.5m but new clients were won in the second half. Imaginatik could be on course to breakeven in the current financial year.

AstraZeneca has returned the rights to AZD9412 to Synairgen (SNG) following a phase IIa study. The inhaled interferon beta did have a beneficial impact on lung function but the positives were not enough to continue with trials. The data will be returned to Synairgen for it to analyse. Synairgen has £4m in the bank.

Avacta (AVCT) has signed its first non-therapeutics licence for its affimers. The licensee is a major global diagnostics companies. The upfront payment is probably small but this is a significant deal.

Radiation detection technology company Kromek (KMK) is trading in line with expectations and it expects to continue to win new contracts.

Property management services provider HML Holdings (HML) has confirmed that its 2016-17 profit will be in line with expectations of £1.8m. There were six acquisitions during the year. A 2017-18 profit of £2.2m is forecast.

Instant communication mobile services provider Mobile Tornado (MBT) has raised £1.1m at 5p a share and the cash will be used for further development of its technology and support the launch of the Dispatch Console service. Last year, revenues fell 10% to £2.02m but recurring revenues increased to more than 90% of the total. The loss increased from £2.03m to £3.73m. Net debt was £9.06m at the end of 2016.

MAIN MARKET

Sealand Capital Galaxy Ltd (SCGL) has completed the acquisition of social media business SecureCom and Sealand hopes that a share split/bonus issue will improve liquidity. Existing shareholders will receive nine bonus shares for each one they own, leaving them with ten times the number of shares and the share price would be adjusted from 25p to 2.5p. The November 2015 flotation price was 10p and earlier this year a further £1.4m was raised at 20p a share. Pro forma cash was £3.26m at the time of the acquisition.

A number of standard list shells have reported their annual figures so that they beat the deadline of the end of April. Financial services-focused shell Vertu Capital Ltd (VCBC) is still discussing the potential acquisition of VCB Malaysia but there is still some way to go before a deal is secured. There was £553,000 in the bank at the end of 2016. Auctus Growth (AUCT) still had £1m in the bank at the end of 2016 and it continues to assess potential acquisitions.

Papillon Holdings (PPHP) is still proceeding with the long drawn out acquisition of Myclubbetting.com and it is near to lodging a readmission document with the UKLA. The publishing of the accounts of Papillon has been delayed because of difficulties concerning quantifying the costs of the acquisition.

Andrew Hore

Quoted Micro 26 December 2016

ISDX / NEX

Diversified Gas & Oil (DOIL) has offered to repurchase its bonds for 105p each or, if the bondholders are outside of the US, they can receive ordinary shares at a discount of 20% to the AIM placing price. The AIM flotation has been delayed until late January and Diversified Gas & Oil plans to raise $40m – it had previously been $40m. The closing date for the offers is 13 January. This means that bondholders will receive interest until the end of 2016. So far, holders of 74% of the bonds have opted for the cash alternative and 1% the share alternative.

Western Selection (WESP) has increased its stake in AIM-quoted Bilby, following a profit warning and accounting adjustment announcement by the gas and electrical installation services provider. Western Selection bought 62,192 shares at 51.18p each, taking the stake to 6.04%. There is still £451,000 in the bank

Netalogue Technologies (NTLP) slipped into loss in the six months to September 2016. Revenues slumped from £552,000 to £317,000 and the ecommerce technology developer swung from a profit of £38,000 to a loss of £232,000. There is still £451,000 in the bank despite a cash outflow. Andrew Robathan has been appointed as chief executive. Deal activity has picked up but markets’ are still uncertain and business may take longer to come through than in the past.

Chinese medicines supplier MiLOC Group Ltd (ML.P) has extended its agreement with its skincare products distributor in Taiwan. The agreement will continue until the end of March 2017. The launch of a range of hair care products. Has been delayed until April. MiLOC has paid the first instalment of £320,513 as part of the endorsement agreement with BrandKing, while the same amount is payable by April.

Forbes Ventures (FOR) has taken an option over a potential investment in Primus Care (www.primuscareplc.com), which manages residential care services for children and the elderly. Forbes has the right to acquire £500,000 of convertible loan notes with a conversion price of 0.3p a share, lasting 18 months. The option expires on 30 December 2016.

CyberOwl, a spin-off from Crossword Cybersecurity (CCS), has raised an additional £510,000. The cash will fund further development of an early warning system for network security for uses such as the internet of things.

AIM

The award for the latest pre-Christmas warning announcement goes to TLA Worldwide (TLA). The sports agent and marketing business sneakily put out its announcement at 6.26pm on 23 December, having sadly been denied the chance to put it out on Christmas Eve because that is a Saturday. Poor ticket sales for the Australian 2016 International Champions Cup football tournament in July means that the agreement to promote the tournament has been ended. There is talk of another football event to replace this. Second half trading in the US sports management business was not as good as expected. This means that EBITDA will be 15% below previous expectations. That appears to mean that it will be lower than last year. The fact that, in September, the bid from AAPC fell through because it found it difficult to raise money, is less surprising given the trading. That bid cost the company $1m.

Kuala Lumpur Kepong has allowed its bid for MP Evans (MPE) to lapse after it receives acceptances equivalent to 13.2% of the oil palm plantations operator.

Price volatility in the energy trading market has made the autumn a tough trading period for Good Energy (GOOD) and it means that 2016 figures will be at the bottom end of market expectations. Trading has been more favourable in the past couple of weeks. Good Energy is recycling the investment in its 5MW solar site in Dorset, which is being sold to Eneco UK for £5.78m, while retaining an option over the power generated. There will be a disposal gain of more than £340,000, which will be recognised in 2017. The cash will fund further solar sites prior to the end of March, after which the current renewable obligation certificate subsidy will no longer be available.

Facilities management and security services provider Mortice Ltd (MORT) is raising £2.3m at 75p a share to help it to reduce dependence on working capital facilities. Some of these facilities have an annual interest rate of more than 9%. Mortice intends to spend more on the marketing of its Soteria remote surveillance services. First half revenues of $80m have been generated, with more than doubled facilities management revenues thanks to the UK business.

Italy-based PR firm SEC Group (SECG) is acquiring 60% of Martis Consulting for around €1m. Poland-based Martis provides public and corporate affairs services and the latest annual revenues were €1.69m and a pre-tax profit of €286,000. SEC is only acquiring the relevant assets and management will own the other 40%, while having the option to exchange these shares for shares in SEC.

Biopharmaceutical products and services developer and provider Abzena (ABZA) has signed a licence agreement with start-up immunomodulatory oncolytic viruses treatments developer Trieza Therapeutics Inc. The exclusive worldwide licence is for an undisclosed antibody sequence that Trieza wants to use with its own viral vector technology to develop oncology treatments. If the development is successful then up to $35m of milestone payments could be generated on top of any royalties from commercial sales. Abzena made an interim loss of £4.27m. Net debt was £9.38m at the end of September 2016.

Share (SHRE) has sold a further 40,000 shares in the London Stock Exchange and raised £1.12m. This takes the money raised from disposals in recent weeks to £1.66m. Share retains 60,000 shares in London Stock Exchange. Share has taken on up to 8,700 customer with more than £200m under management from Invesco Perpetual – which had not previously been named when the deal was announced. These are mainly ISA accounts.

Simon Fry, Jean-Pascal Tranie and Felipe Simonsen have joined the board of investment company Mercom Capital (MCC) and John Zorbas, Patrick Cross and Kyle Appleby have sold their shares and stepped down from the board. The exiting directors sold their shares at 20p each and returned 2p a share to the company. There are plans for Mercom to raise £3m at 30p a share and issue a warrant with each share that is exercisable at 80p a share for 180 days after issue. Existing shareholders will be issued one warrant, on the same terms, for every four shares they own. The placing price is much higher than that suggested in the initial proposals. This depends on resolutions being passed at the AGM in early January. The new investing strategy is to invest in established technology and media businesses. The name will be changed to Monchhichi.

Learning management systems provider NetDimensions (Holdings) Ltd (NETD) says that 2016 revenues will be at least $26m, up from $25.4m, and EBITDA will be $2m, compared with a loss of $500,000 in 2015. Bid discussions are continuing.

Redcentric (RCN) has reported interim figures which should show a real picture of the company‘s position. Internal systems are being improved and this will continue well into 2017. In the six months to September 2016, revenues edged up 2% to £53m, while there was a turnaround from a loss of £2.5m to a profit of £300,000. There was £7.29m generated from operations during the period and £5m came from the disposal of network assets. Net debt was £34.4m at the end of September 2016. Richard Griffiths and Kestrel have been picking up shares in the market.

NWF (NWF) has warned that a weak first quarter means that the interim figures will be lower than the same time last year but the full year outcome is still expected to be in line with expectations. Demand for feed has weakened at a time when ingredient costs have increased, while the fuel division has been hit by warm weather. The food distribution activities The interim figures will be published on 31 January.

Vislink (VLK) will seek shareholder approval for the disposal of its hardware division on 9 January. The acquirer xG Technology Inc will then seek to finalise the funding of the $16m (£13m) acquisition. If the disposal is completed early in 2017, then the forecast earnings per share will reduce from 1.3p a share to 1.2p a share. Trading in the fourth quarter of 2016 has benefited from the normal seasonal uplift but a £1.2m full year underlying loss is still expected. An additional £5.3m write-down will be required to bring down the book valuation of the hardware division. This appears to indicate a group NAV of around £16m., while net debt will be more than £10m

Diversis has posted the offer document for ServicePower Technologies (SVR). Diversis is offering 6p a share, which values ServicePower at £13.7m.

Collagen Solutions (COS) grew its interim revenues by 30% to £1.89m, but the loss quintupled to £418,000. Additional staff have been taken on and more spent on marketing and R&D. There was still £1.66m in the bank at the end of September 2016. House broker Cenkos expects net cash of £230,000 at the end of March 2017, while net debt is forecast at £3m one year later.

MAIN MARKET

Standard list shell Papillon Holdings (PPHP) has come to an agreement with main shareholders and directors to acquire Myclubbetting.com Ltd, where golfer Lee Westwood is a shareholder and ex-England manager Sam Allardyce was a shareholder – he said in August that he was giving up his shares (https://www.thesun.co.uk/sport/1611113/sam-allardyce-drops-footie-betting-job-and-ditches-shares-after-sun-probe-finds-boss-lost-investors-4m/). The target is run by Neil Riches who used to run Worldlink, which was introduced to the standard list on 24 November 2011 at a notional valuation of £55m (at 250p a share), although it never got near that valuation when trading commenced. Worldlink was a mobile applications developer that had a similar business to Myclubbetting.com but fewer than two years later it was in liquidation. In August, The Sun said that Neil Riches claimed Myclubbetting.com would float on the Scandinavian First North market at a valuation of £75m. There is still due diligence and other matters to complete before the deal goes ahead. Papillon floated on 24 June and raised £824,000 at 1p a share.

World Trade Systems (WTS) is aiming to relist on the standard list in the first quarter of 2017 and additional funds will be raised at that time. This follows the establishment of Shimao (Suzhou) Biotechnology, which plans to sell healthcare products to consumers. Net liabilities were £1.12m at the end of June 2016. The loans from Kudrow totalling £800,000 are repayable by the end of July 2017 or when trading in the shares recommences and have a 5% interest charge. Trading in the shares has been suspended for more than eight years.

Aircraft leasing company Avation (AVAP) has acquired and delivered a new Airbus A321-200 to Vietjet, taking the number delivered to six. Avation has also sold its remaining five Fokker aircraft. WH Ireland forecasts a full year profit of $21.5m.

Andrew Hore

 

Quoted Micro 27 June 2016

ISDX

Demand for the latest share issue from Good Energy (GOOD) was better than expected and the maximum size of the offer as raised from £3.1m to £3.8m. The company can only raise up to €5m without a prospectus and the movement in the exchange rate has helped Good Energy to raise more. Around 2,000 investors applied for shares at 208p each via the offer. The cash will be invested in the operational platform and to increase the portfolio of generating capacity. At the company’s AGM on 23 June, shareholders failed to pass the special resolutions on the directors’ authority to issue more shares and for the dis-application of pre-emption rights. Good Energy says that it will consult with shareholders if there is the need to issue more shares.

Leni Gas Cuba Ltd (CUBA) has taken a 10% stake in UK-based The Cuba Mountain Coffee Company for £27,300. The focus of the business is the promotion of coffee from the Guantanamo region of Cuba and it is in talks with the Cuban government about additional investment in capital to improve processing efficiency. This will enable Cuba Mountain Coffee to obtain the rights to a greater proportion of production so that it can be marketed internationally. The company’s own coffee brand is Alma de Cuba and the ecommerce platform is www.almacuba.com.

Nordic Energy (NORP) plans to appoint Turpin Baker Armstrong as liquidator and it has called a general meeting for the 30 June.

AIM

Professional services firm Sweett Group (CSG) is recommending a rival cash offer to the existing WSP bid. The 42p a share bid by asset management and construction consultancy services provider Currie & Brown is 20% higher than the previously recommended WSP offer and values Sweett at £29m. However, the Sweett directors cannot withdraw their acceptances for the WSP bid and the same is true for the Cyril Sweett Trustee Company. The meeting to vote on the WSP bid will be adjourned. Currie & Brown is part of The Dar Group international network of professional services and it has previously acquired parts of Sweett in Asia. The new bidder has offered a £9.45m debt facility to cover Sweett’s debt requirements when the existing borrowing facilities expire on 8 July.

Verona Pharma (VRP) has raised enough cash to fund up to phase III trials for its RPL554 COPD treatment for patients with chronic respiratory diseases and announced plans to obtain a Nasdaq listing. Verona raised £44.7m at 2.87p a share and £36m should be left in the bank by the end of 2016 and that is expected to fall to £14.5m by the end of 2017. In fact, further cash is likely to be raised from a Nasdaq listing, which could happen before the end of the year. Vivo Capital, OrbiMed and Abingworth have taken shares in the placing and they will each have a director on the board. The phase IIb study is due to start in the first half of 2017 and a partner could be signed up during 2018 if things go to plan.

Hornby (HRN) is raising up to £8m via a placing and one-for-6.77524 open offer at 27p a share in order to finance its turnaround plan. Banking facilities have also been renegotiated. One year ago, the toys and hobbies supplier raised £15m at 95p a share. Hornby plans to focus on its existing profitable and cash generative products and geographies and reduce its cost base. In the year to March 2016, Hornby lost £13.5m and net debt was £7.2m.

Malaysia-based cloud services provider RapidCloud International (RCI) says that it is adopting a more conservative accounting policy and it means that 2015 profit, due to be reported this week, will be lower than expected. House broker WH Ireland had forecast a 2015 profit equivalent to £320,000 according to Morningstar.co.uk, and it was expecting £570,000 in 2016. There will be changes to depreciation and amortisation charges, recognition of deferred revenues and deferred tax.

BDO has been appointed to liquidate shell company NBNK Investments (NBNK) following its inability to find a suitable bank or financial business acquisition. The AIM quotation was cancelled on 22 June. An initial distribution to shareholders is expected early in August. There was £19.7m in the bank at the end of 2015 – equivalent to just over 36p a share – but there will be liquidation costs.

Patent attorney Murgitroyd (MUR) is paying $2.43m for trade and assets of a Dallas-based IP software and services business with operations in the US and Nicaragua. This business had gross revenues of $860,000 in the 12 months to May 2016. Murgitroyd expects to report full year revenues of more than £42m, while pre-tax profit should be in line with expectations at around £4.3m.

NWF (NWF) says that its feeds division improved its profitability in the year to May 2016 even though the dairy market remains tough. Market share has increased, helped by acquisitions. The food distribution division continues to work at capacity and operating efficiency has improved. Fuels increased volumes even though the warm winter reduced demand. Overall trading is in line with expectations and the pre-tax profit should be around £8.25m. Net debt is lower than expected. The full year results will be published on 3 August.

Savannah Resources (SAV) has been granted reservation permits over the Somero and Erajarvi lithium projects in Finland. Savannah will start to compile data, map and undertake surface sampling in order to identify drill targets by the end of the year.

On Tuesday, rebel shareholders will attempt to unseat Jason Drummond, Nilesh Jagatia and Oliver Fattal from the board of former AIM company Teathers Financial. Matthew Turney, David Kipling and Stuart Langelaan have put themselves up for election to the board. Teathers, which was originally known as CA Sperati, left AIM on 6 June having failed to implement its investing policy. It says that there is an investor willing to invest £1m in the company so that it can finance further development of the Teathers app.

MAIN MARKET

Papillon Holdings (PPHP) is the latest standard list shell. Papillon, which was incorporated on 19 October 2015 and re-registered as a public company on 25 April, has raised £824,000 at 1p a share. Previously 50 million shares were issued at 0.1p a share. The share price ended the first day of trading on 24 June at 1.25p but the bid/offer spread is 1p/1.5p. Papillon directors Charles Tatnall and James Longley are also directors of Plutus PowerGen. Papillon is seeking to acquire an industrial or services business focused on the UK.

Engineer and plastic products supplier Tex Holdings (TXH) says that parts of the business have found it increasingly difficult to turn enquiries into orders but there are other businesses that are doing well this year. The plastics business is coming under pressure although the Derby site has improved its previously poor performance. Tex has secured a £2m loan repayable over five years and £2.5m of short-term facilities.

In the tender offer at 200p a share, Bioquell (BQE) shareholders tendered 20.4 million shares, which is 47% of the life sciences company’s share capital. Bioquell will acquire these shares for a total of £40.8m. It was willing to return up to £44m to shareholders.

ANDREW HORE

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