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Andrew Hore – Quoted Micro 5 October 2020

AQUIS STOCK EXCHANGE

Wine and beer maker Chapel Down (CDGP) made a similar interim loss this year. Wine revenues were one-fifth ahead even though sales were lost in pubs and the company’s own retail site. Online sales offset those declines. Wine stocks have increased by one-third to £11m. Beer and cider sales fell by 38% and gross profit slump by 59%. There was £5.83m in cash at the end of June 2020.  

Coinsilium Group Ltd (COIN) reported an increase in interim revenues from £109,000 to £140,000. Reversal of impairments and unrealised gains helped to generate a pre-tax profit of £27,000, down from £242,000 because of lower unrealised gains. NAV was £2.52m, including cash of £129,000, at the end of June 2020. Since then, there has been an increase in the value of cryptocurrency and tokens held by the company.

Western Selection (WESP) has sold its stake in AIM-quoted Brand Architekts (BAR) and raised £1.43m at 109.78p a share. The shares were valued at £1.63m in the recent balance sheet. Peter Gyllenhammr increased his stake in Brand Architekts from 6.1% to 10.5%.

KR1 (KR1) reported an interim pre-tax profit of £522,000, including an unrealised gain of £711,000. The NAV was 6.18p a share at the end of June 2020. The latest digital asset investment is $100,000 in the Moonbeam Network project. This is a smart contract platform and KR1 will receive Glimmer tokens that will power Moonbeam’s blockchain.

Incanthera (INC) has announced positive data for a skin sensitisation study for skin cancer technology Sol. This shows it to be non-irritant. ImmuPharma has subscribed £250,000 for shares at 9.5p each. That takes the stake to 15.3%. A total of £350,000 was raised with directors subscribing for the other £100,000.

Housebuilder St Mark Homes (SMAP) has an NAV of 125p a share, compared with a share price of 87.5p (85p/90p). There was a swing from interim profit to loss.

Gunsynd (GUN) has invested £58,000 in gold explorer Angold Resources, subject to its reversal into ZTR Acquisition, which was formerly Oyster Oil and Gas, where Gunsynd already has a stake.

Property investor Ace Liberty and Stone (ALSP) has completed the £1.43m acquisition of a property in Scarborough leased to Skipton Building Society. It has exchanged contracts on a Carlisle property costing £1.71m.

NQ Minerals (NQMI) says that processing rates at the Hellyer gold mine have increased to 165 tonnes per hour. The average annualised production rate was 1.23Mtpa in July and August.

Gowin New Energy Group (GWIN) says it is near to appointing a new corporate adviser so that trading can resume in the shares. Management is working towards launching a tea business.

Primorus Investments (PRIM) has invested £1m in construction payments software company Zuuse. Thi is part of a £2.2m fundraising to pay for a transaction expected in the next few weeks. Primorus already owned shares and warrants in Zuuse, so it owns 1.7% of fully diluted share capital. Primorus has sold six million Greatland Gold (GGP) shares at an average price of 14.8p each. That leaves Primorus with 20 million Greatland shares.

Capital for Colleagues (CFCP) had an NAV of 51.53p a share at the end of May 2020.

IFA group AFH Financial (AFHP) says that business is recovering and it continues to be profitable and cash generative.

Eurocann International (BUD) is changing its name to DiscovOre (ORE) and the investing strategy broadened to include natural resources as well as cannabis-related activities.

SativaWellness Group Inc (SWEL) has been readmitted to the AQSE growth market following the reverse takeover of the company.

AIM

Avingtrans (AVG) improved its 2019-20 pre-tax profit from £5.3m to £5.9m despite loss contributions from recent acquisitions. One of those acquisitions, Booth Industries, has won a £36m doors contract for HS2. finnCap forecasts a 2020-21 pre-tax profit of £7.3m and Avingtrans is likely to reinstate the dividend.

Demand for the type of data erasure and cyber security services provided by Blancco (BLTG) remains strong, although April and May were tough. In the year to June 2020, revenues improved from £30.5m to £33.4m, helped by acquisitions. Pre-tax profit grew from £3m to £3.9m. Investec expects further profit improvement to £4.3m this year, but it will be second half weighted.

Geospatial services provider 1Spatial (SPA) reported an 8% rise in interim revenues to £11.7m, although the core business revenues made up a greater proportion of the total. There was an interim loss but positive operating cashflow of £1.7m. Net cash was £3.4m. 1Spatial could make a small full year profit.

Grant Thornton has decided to settle litigation with AssetCo (ASTO) rather than appeal the court judgement. This means that AssetCo can access the £28.6m lodged with the court plus the balance of money owed by Grant Thornton. Once this is received, AssetCo will have cash of £55m and net assets of around £52m. The market capitalisation already takes this into account.

The FDA has approved adrenal treatment Alkindi in the US and Diurnal (DNL) should receive a $2.5m milestone payment from distributor Eaton pharmaceuticals when sales start next year. That is on top of licence income. That means that Diurnal’s cash will last longer.

New Trend Lifestyle Group (NTLG) changes its name to Conduity Capital (CCAP) on 5 October. The former activities have been sold and Conduity becomes a shell.

Erris Resources (ERIS) plans to buy a 50% stake in Zinnwald lithium project owner Deutsche Lithium from Bacanora Lithium (BCN) in exchange for shares and a net profit royalty.

Yu Group (YU.) reported a decline in first half revenues from £56.6m to £45.9m due to lower energy consumption by its commercial energy customers. There was a lower loss in the period but reduced working capital requirements meant that there was a significant cash inflow from operating activities. There was £17.9m in the bank at the end of June 2020. Management has invested in marketing in order to win new business.

Intelligent Ultrasound (MED) is launching its first AI software product alongside GE Healthcare. GE has 480,000 ultrasound machines in use and the AI software will be integrated in a range of women’s health ultrasound machines. It could be rolled out across other machines in the future.

M and C Saatchi (SAA) has failed to publish its results and trading in the shares has been suspended. Windar Photonics (WHPO), Clear Leisure (CLP), Malvern International (MLVN), Tri-Star Resources (TSTR) and Hydrodec (HYR) have had share trading suspended for the same reason. The acquisition of Bristol Energy customers will boost scale and help Yu to move towards profitability.

MAIN MARKET

Car finance provider S and U (SUS) generated revenues of £42.8m in the six months to July 2020. That was a 3% decline, but the effects of the Covid-19 lockdown will be greater in the second half. Net receivables were down by 6% to £281.9m, but new loan volumes fell by one-third in the first half. Bad debt provisions were increased by £13.8m to £21.7m and this led pre-tax profit to slump from £17.1m to £6.3m. The property bridging loan business made a lower profit contribution, although the market has subsequently inproved. Even so, a dividend of 22p a share was announced, down from 34p a share.

Guild Esports (GILD) raised £20m at 8p a share. The share price ended the first day of trading at 8.15p.

Mining shell Critical Metals (CRTM) joined the standard list on 29 September. The placing price was 5p and the price was 5.5p at the end of the week.

Toople (TOOP) is on course to achieve £1.6m of annualised cost savings from integrating DMSL. The focus is on margin rather than just growing revenues.  

Ross Group (RGP) reported a reduced loss of £830,000, down from £3.15m, in the first half of 2020. There were no revenues, but the company is trying to build up supply chain operations.

InnovaDerma (IDP) reported full year figures in line with its trading statement in July. The skincare products supplier slumped into loss due to higher marketing costs. There was cash of £1.2m at the end of June 2020.

Newspaper publishing consolidator National World (NWOR) had £4.31m in the bank at the end of June 2020. It is still evaluating acquisition opportunities.

Andrew Hore

Andrew Hore – Quoted Micro 28 September 2020

AQUIS STOCK EXCHANGE

SAPO (SAPO) has agreed to acquire Secure Web Services (SWS) and it will change its name to Rural Broadband Solutions. SAPO is paying £1.6m in cash and shares and £236,500 of the cash paid will be used to subscribe to a fundraising. SAPO wants to raise £2.5m. SWS is based in Shropshire and had revenues of £730,000. There are 2,300 customers and this could be doubled in three years. A buy and build strategy will expand the group across the UK.

Specialist social housing developer Walls and Futures REIT (WAFR) swung from loss to profit in the year to March 2020. The pre-tax profit of £626,000 includes a gain on revaluation of £798,000. The underlying loss was similar to the year before. Net assets increased from £3.3m to £4m, equivalent to 107p a share. There are plans to dispose of the remaining London residential units and reinvest in specialist supported housing. The Wimbledon Park property was sold for £656,000 in June, which was a 3% discount to book value.

S-Ventures (SVEN) has made an investment in vitamin fortified, smoothies and juices provider Coldpress Foods. It has taken an initial 3.3% plus an investment in a convertible that could take the stake to 6.2%. The total investment is £60,000. Coldpress has revenues of more than £1.6m.

Oncology treatments developer Incanthera (INC) says that skin cancer technology Sol has exceeded expectations in a recent study. Sol has been shown to be effective in penetrating the skin barrier.  

A requisition for a general meeting at Primorus Investments (PRIM) has been withdrawn following the proposed board appointments of Rupert Labrum, Hedley Clark and Matthew Beardmore. Donald Strang will leave the board.

SulNOx Group (SNOX) says Nicholas Nelson has resigned from the board but remains as chief executive. Shareholders had requisitioned a general meeting to remove him from the board, but there is no need for this to happen. Nouryon has agreed to manufacture SulNOx’s HFO emulsifier and a diesel conditioner, which will be sold under the brand SulNOxEco diesel conditioner.  

Altona Energy (ANR) is seeking to raise up to £500,000 at 6.5p a share. Existing and new investors can subscribe for shares via www.nrprivatemarket.com. The offer is set to last until 15 October. The cash will go towards financing the two rare earth element projects in Malawi and Uganda.

Belvedere Leisure Resorts (BELV) has signed an agreement with Landal GreenParks UK for an exclusive partnership for the leisure park at the Barncosh site until the end of the year. Belvedere will deliver the first 50 units and then the 20-year arrangement will take effect. Belvedere has agreed to acquire the land for the 50 units at a cost of £500,000. Belvedere continues to seek new funds.

Gunsynd (GUN) has invested a further £75,000 in copper/gold explorer Eagle Mountain Mining. Gunsynd owns 1.54% of the ASX-listed company.  

AfriAg Global (AFRI) believes that the FCA guidance has given it confidence that its deal with medicinal cannabis company Apollon Formularies will go ahead.

European Lithium (EUR) has raised A$2.1m at 4.5 cents a share and this will be spent on metallurgical test work at the Wolfsberg lithium project. Early Equity (EEQP) has raised £193,000 at 0.5p a share.

Sativa Wellness Group Inc expects to gain admission to the Aquis Stock Exchange on 30 September.

Newbury Racecourse (NYR) non-executive director Dominic Burke has bought 20,000 shares at 700p each. He owns 127,365 shares.

AIM

Gold production in Azerbaijan fell in the first half but Anglo Asian Mining (AAZ) is confident it can still hit its full year target of 75,000-80,000 ounces of gold equivalent, which would be slightly lower than the previous year. The higher gold price offset the decline in production from 39,905 ounces to 32,501 ounces. Even though the cost of production increased because of lower volumes and the reduction in grades at the Ugur open pit, pre-tax profit improved from $10.3m to $11.8m. There was $21.4m of cash generated from operations. There is plenty of cash to invest in Azerbaijan and the new venture in Ireland with Conroy Gold and Natural Resources (CGNR). The interim dividend was increased by 29% to 4.5 cents a share and the possibility of a special dividend next year. There was cash of $29.2m at the end of June 2020.

Specialist IFA Frenkel Topping (FEN) has made an indicative all-share offer for personal injury claims generator NAHL (NAH). Frenkel Topping has already acquired 6.11% of NAHL. finnCap forecasts an improvement in Frenkel Topping pre-tax profit from £1.8m to £2.3m in 2020.

NWF (NWF) says that trading is in line with expectations. Fuel volumes are lower than the same time last year because of reduced economic activity, but they are as anticipated. The food distribution trading has been hit by volatility in demand and lower demand from the catering sector. The feeds division has benefited from a stable dairy market.  

Spinger-Verlag has increased its stake in DeepMatter (DMTR) from 2.9% to 7.4% following the issue of deferred consideration.

Cyber security services provider ECSC (ECSC) grew managed services and consultancy revenues in the first half, although there was lower utilisation in consulting during lockdown. Consultancy revenues are improving in the second half. There was cash of £1.6m in the middle of September.  

Battery technology developer Ilika (IKA) has signed a framework agreement with the UK Battery industrialisation Centre for the production of Goliath solid state pouch cells. This will help with the scale up of production for the batteries aimed at domestic appliances and electric vehicles.

MAIN MARKET

Critical Metals (CRTM) is raising £800,000 at 5p a share. That will more than double the number of shares in issue. Critical wants to buy or acquire stakes in natural resources assets in Africa. The focus will be near-term brownfield projects that can be brought into production. Chief executive Russell Fryer is a former investment adviser in the natural resources sector and founder of Western Uranium Corporation.   

Gulf Marine Services (GMS) has received another general meeting requisition letter from Seafox. The removal from the board of Mike Turner, David Blewden, Mo Bississo and Dr Shona Grant is Seafox’s wish. It wants Rasid Al Jarwan, Mansour Al alami and Saeed Mer Abdulla Khoory to replace them.

Auctus Growth (AUCT) is in discussions to acquire HeiQ Materials AG, which is a materials innovation company focusing on the apparel, medical and home textile markets. Trading in the shares has been suspended.

Hawkwing (HNG) is switching from AIM to the standard list on 30 September and raising £1.2m after expenses at 3p a share. That values the shell, which has failed to secure a technology acquisition in the time required by AIM, at £1.5m.

Digital Landscape Group (DLGI) is cancelling its standard listing on 2 October. Trading will begin on the Nasdaq Global Market on 5 October.

Challenger Acquisitions Ltd (CHAL) has received 73.94% acceptances from shareholders in Cindrigo Energy. When other conditions are satisfied the remaining shares will be mopped up and a prospectus prepared for a reintroduction to the standard list.

Andrew Hore

Andrew Hore – Quoted Micro 31 August 2020

AQUIS STOCK EXCHANGE

KR1 (KR1) has made two more investments. There is a further investment of $100,000 in the cross-chain finance hub Acala Network in return for 153,846.15 ACA tokens at 65 cents each. KR1 now holds 1.02 million ACA tokens. That stake is valued at $663,000. There is also a new investment in MetaCartel Ventures Decentralised Autonomous Organisation. KR1 received 4,938 MCV shares for its $199,000 investment.

Imperial X (IMPP) plans to buy mineral assets and investments and a placing is raising £750,000 at 2.5p a share. The purchases involve the issue of more than 245 million shares plus 8.71 million warrants exercisable at 5p a share. Trading in the shares has been suspended until the acquisitions are completed. Imperial X is buying Howson Ventures Inc, plus assets from Anglo African Minerals, Cloudbreak Discovery and Cabox Gold. Howson owns the Rupert Minerals property in British Columbia and an investment in Anglo African Minerals, which holds licences in bauxite projects in Guinea.  

Gunsynd (GUN) says that its investment in ASX-listed Eagle Mountain is “well in the money” and it has the cash it requires for its immediate needs even though the disposal of the stake in Oyster Oil and Gas has still not been completed. Gunsynd invested £110,000 in copper/gold explorer Eagle Mountain at A$0.13 a share and the price has risen to A$0.24. Rincon Resources has appointed stockbrokers for its proposed listing on ASX. Gunsynd has invested £138,000 in Rincon and has a 28% stake. Spirits company Human Brands also still hopes to float. Nickel project developer Sunshine Minerals is being acquired by Malachite Resources. Gunsynd will receive 1.26 million shares in Malachite with further deferred consideration of 1.64 million shares.

IamFire (FIRE) is raising £5.5m gross through a discounted capital bond and it is participating in a fundraising for social commerce platform WeShop ahead of a future listing. The bond is being issued at a discount of 78.73% and net proceeds of £4.4m have been received. IamFire is providing £4.5m of a £9m convertible loan to WeShop. This has an interest rate of 8% and lasts for 36 months. A flotation is one of the conversion events and the conversion would be at a 20% discount to the flotation share price. There is also an exclusive option to subscribe for a 10% stake in WeShop at a pre-money valuation of £25m. This would involve an investment of £2.78m.

Primorus investments (PRIM) has invested £875,000 in WeShop. Primorus has made realised and unrealised gains £3.55m in the six months to June 2020. Greatland Gold (GGP) is the main reason for this. The NAV increased to £8.1m compared with a £4.3m market capitalisation.

BWA Group (BWAP) has agreed to sell its investment in Kings of the North Corp to St George’s Eco-Mining Corp, which sold it for £4.66m. The convertibles issued to St George’s will be cancelled and they amount to £4.3m. St George’s will issue 1.5 million shares and transfer 2.5 million warrants to BWA. St George’s is keeping its 21% stake in BWA.  

There was a £673,000 cash outflow at Cadence Minerals (KDNC) in the six months to June 2020. A cash raising means that there was £2.38m in cash at the end of the period.

NQ Minerals (NQMI) plans to undertake exploration work at the Hellyer mine, possibly as early as October/November this year.

Inqo Investments (INQO) increased annual revenues from R23.8m to R24.4m, but the loss increased from R2.5m to R6.1m. That was partly down to an inventory write-down of R1.44m and higher depreciation. Last year’s Bee Sweet honey harvest was one of the largest ever. The lodge at the Kuzuko Private Game Reserve had high occupancy rates before COVID-19. All the other activities have also been hit since the end of February.  

Eurocann International (BUD) intends to amend its investing strategy and change its name just over one year since it changed it from Valiant Investments.

SulNOx Group (SNOX) has appointed Allenby as corporate adviser.

AIM

Vianet (VNET) says that customer pub sites that have resumed operations have increased from 56% to 80% over the past six years. Vianet continues to offer reduced recurring charges to both closed and reopened customers. Customer demand for data analytics is recovering. The smart machines division says two-thirds of customer vending machines are in operation and generating normal levels of revenue. There have been orders for more than 1,9000 new orders for telemetry and contactless units during lockdown.  

Hostels operator Safestay (SSTY) is taking additional cost saving measures due to the continued uncertainty. Occupancy rates are running at around one-quarter and it is higher in those hostels opened earlier. Safestay has available overdraft facilities but these could run out by early next year if all hostels are not reopened by October and occupancy levels fall below 20% later this year. An occupancy rate of 57% is required for a hostel to breakeven. Sales of freeholds or terminating loss-making leases are being considered. Interim results will be published on 24 September.

Integumen (SKIN) is making an all-share offer for Modern Water (MWG) that values the latter at £21.25m. Integumen plans a ten-for-one share consolidation and it is offering one of these new shares for every ten Modern Water shares. Integumen produces test kits for Modern Water.

Drug discovery company C4X Discovery (C4XD) says that Indivior has started a phase I clinical trial for C4X_3256 for the treatment of opioid dependence. The trial will last until the end of the year, but there will be no data until 2021. C4X is making progress in identifying a candidate for the treatment of IBD and it has reached the lead optimisation stage for the treatment of Psoriasis. A collaboration with the GEN-COVID consortium, which will use C4X’s Taxonomy3 mathematical analysis technology to assess the role of genetics in disease susceptibility.

Dekel Agri-Vision (DKL) says that milling equipment has been delivered to the raw cashew nut processing project in Cote d’Ivoire. The mill should be commissioned in the second quarter of next year.

Grant Thornton has managed to persuade the courts to reduce the damages owed to AssetCo (AST) from £29.8m to £20.8m. Including interest and costs the payment should be £25m.

President Energy (PPC) has formed a renewables division. There are opportunities in wind, solar, hydro and biomass in Argentina. President has commenced a workover programme on oil wells and there are plans to drill two new wells.

MAIN MARKET

Packaging supplier Macfarlane (MACF) reported a 2% decline in interim revenues to £105.6m. The second quarter decline was much lower than for the UK economy, helped by increasing exposure to ecommerce. Increased bad debts led to a 5.5% fall in pre-tax profit to £3.62m. An interim dividend of 0.7p a share is proposed. There could be a greater decline in full year profit, although the business will still be cash generative. Arden forecasts a fall in pre-tax profit from £14.4m to £11.1m.

BATM (BVC) has signed up its first tier 1 NFVTime virtual networking customer. The Asia-based telecoms company has signed up for an initial three years will provide a reference site for the technology. This contract could be a significant revenue generator in the years to come and follows the recent proof of concept trial with ARM and Vodafone.

Anglesey Mining (AYM) has raised £200,000 at 1.6p a share. The cash will be invested in studies for the development of the Parys Mountain zinc, copper, lead, silver and gold mine. Management is also assessing other projects.

Andrew Hore

Andrew Hore – Quoted Micro 17 August 2020

AQUIS STOCK EXCHANGE

Brewer Adnams (ADB) reported a slump in revenues from £34.7m to £21m in the six months to June 2020 and there was a loss. That is no surprise given the problems of the hospitality sector. Online sales grew but could not offset the loss of on-trade sales. Net debt was £14m at the end of June 2020.

Medical device developer TruSpine Technologies (TSP) is on course to join the Aquis Stock Exchange on 20 August. TruSpine wants to raise £1.5m, which would give it a valuation of £31.5m. The investment is eligible for EIS-relief. TruSpine expects to make a FDA submission for Cervi-Lok, which is one of the three spinal stabilisation devices being developed, in the fourth quarter of 2020. Existing Aquis-quoted company Primorus Investments (PRIM) is an investor in TruSpine. In 2017, it invested £500,000 at a pre-money valuation of £15m. Another Primorus investment, Greatland Gold (GGP), has performed strongly in the second quarter and the share price is more than 155% ahead over the period.

NQ Minerals (NQMI) has raised a further £695,000 at 7p a share. NQ has also secured a $55m loan facility to refinance the project debt of the Hellyer gold mine. Interest savings should be $3.4m a year. Chairman David Lenigas has acquired 20,000 shares at $0.12 each.

Sativa Group (SATI) had a record July. The CBD products supplier has benefitted from sanitiser demand.

TechFinancials (TECH) reported a loss of $492,000 in the first half of 2020. There is $716,000 in the bank. The closure of the trading software operations will be completed in the second half. The Footies ticketing business still has not progressed in terms of signing up clients.

Recruitment company Sumner Group Health (SGRL) intends to withdraw from Aquis in order to save money. A general meeting will be held on 3 September.

IamFire (FIRE) has completed the purchase of a 10% stake in Bio2pure, in a deal that values the company at £8m. The investee company’s CoviPure disinfectant has been launched

AIM

Energy supplier Yu Group (YU.) has been criticised for its financial controls and systems back in 2018. A £300,000 fine has been waived because remedial action has been undertaken. Yu has acquired Bristol City Council-owned Bristol Energy’s B2B business for an initial £1.24m.

Appreciate (APP) was going to have a tough year even before COVID-19. In the year to March 2020, underlying pre-tax profit fell from £12.5m to £11.4m and there is likely to be a much larger profit decline this year. Trading has improved after a tough first quarter. If Appreciate had not been investing in its digital products it would have found recent months even more difficult. A property has been sold for £3.2m, which further enhances the cash pile of £29.6m at the end of March. The hamper business will be closed this year, but the overall Christmas savings business is holding up. Corporate demand is recovering.

Investment in VW emissions case work will hold back profit in the second half at credit hire firm Anexo (ANX). Lockdown led to a sharp fall in interim profit, but business is building up again. Profit could return to the 2019 level of £23m in 2021, even if there are no VW case revenues. A 0.5p a share interim dividend is being paid.

The geographic and sector spread of recruitment firm Empresaria (EMR) has helped it cope with difficult trading, particularly in its airline-related business. The business was profitable in the first and second quarters. The underlying interim pre-tax profit fell from £3.7m to £2.4m. There is no full year forecast.

Touchstone Exploration (TXP) has commenced drilling at Chinook on the Ortoire block in Trinidad. Chinook is valued at 2p a share by finnCap, but it could be significant like previous find Cascadura, which is valued at 78p a share. Cost cutting has helped to reduce year-on-year per barrel operating costs by 28% in the second quarter. There was still a second quarter loss. Production has declined to 1,396 barrels/day in the second quarter, but this will rise substantially when Cascadura comes into production.

STM (STM) has acquired pensions administrator Berkeley Burke for up to £2.9m. this will add to the UK operations. The business will be rebranded.

Pennant International (PEN) has an order book worth £36m and net cash of £2m. Annualised cost savings of £1m will help the second half performance and a profit is expected. That may not be enough to cover the first half loss.

Pires Investments (PIRI) investee company Getvisibility has signed a US distribution agreement. The data security business will gain access to US government work.

Matthew Freud has taken his stake in Reach4Entertainment (R4E) to 18.7%. The company’s chief executive has increased his stake to 18.7%. The general meeting to vote on the proposal to leave AIM is on 21 August.

MAIN MARKET

Tex Holdings (TXH) says interim revenues fell from £21.8m to £18.5m and the loss has increased from £351,000 to £1.36m. There is £2.54m in the bank, but net debt is £10.7m. The board still wants to raise more cash. The plastics business is still profitable, although it made a lower contribution. The engineering loss was slightly lower, but boards and panels fell from profit to loss.

MATCHED BARGAINS

Fastjet (FJET) is moving from AIM to Asset Match and the airline is reregistering as a private limited company. Trading is expected to start on 24 August. The first auction will be on 30 September.

Andrew Hore

Andrew Hore – Quoted Micro 27 April 2020

AQUIS STOCK EXCHANGE

Cannabis products-focused company Sativa (SATI) has received a bid approach from StillCana Inc, which has built two high volume CBD extraction facilities in Europe. StillCana is Europe’s largest producer of CBD distillate and isolate. StillCana plans to offer 0.33651 of one share for each Sativa share. Sativa shareholders would own 65% of the enlarged business. If StillCana does not go through with the bid it may be required to pay Sativa £1m as a break fee. Trading in Sativa shares has been suspended. Peterhouse has been appointed as corporate adviser.

In the six months to December 2019, there was a £224,000 cash outflow at Imperial X (IMPP) as it assessed the way forward. The new investing strategy is focused on acquiring royalties in the oil and gas sector. There was £179,000 in the bank at the end of 2019. Imperial X has subsequently raised £27,700 at 2.5p a share.

Primorus Investments (PRIM) had net assets of £4.76m at the end of 2019. One of the successes has been the investment in Greatland Gold (GGP) and TruSpine Technologies is moving towards a flotation.

Cadence Minerals (KDNC) owns 16% of AIM-quoted European Metal Holdings (EMH) whose shareholders have approved the £25.8m investment for a 51% stake in the holder of the Cinovec licences in the Czech Republic.

NQ Minerals (NQMI) says that the resource at the Barnes Hill nickel project to 25Mt at 0.6% nickel and 0.05% cobalt on a 0.25% nickel cut-off grade.

Arbuthnot Banking (ARBB) n on-executive director Nigel Boardman has acquired an initial 5,020 shares in two amounts (1,500 shares at 960p each and 3,520 shares at 1010p each).

Altona Energy (ANR) has extended the closing date of its open offer until 12 May and it may consider a further extension if the market uncertainty continues.

AIM

Cyber security services provider Shearwater (SWG) has raised £3.75m at 240p a share. Directors David Williams and Phil Higgins are each investing £125,000. A new £4m, 3-year bank facility has been negotiated. In the year to March 2020, Shearwater generated revenues of £33m and underlying EBITDA was £3.2m. There has been a move towards higher margin business. Management believes that COVID-19 will provide opportunities to expand the business. There are acquisition opportunities with revenues of between £2m and £20m.

Musical instruments retailer Gear4Music (G4M) has confirmed that profit for 2019-20 was better than expected and gross margins improved from 22.8% to 25.9%.

Last year was tough for transport and logistics firm Xpediator (XPD) and this year won’t be easy, but it has a good base and the new Southampton warehouse will come on stream early in 2021. In 2019, revenues grew but lower freight forwarding margins and higher overheads hit pre-tax profit and it fell to £5.2m. Xpediator should still be profitable in 2020 and the second quarter tends to be a weaker period. A scrip dividend of 1.05p a share has been declared.

Health monitoring equipment supplier LiDCO (LID) had a strong start to its new financial year thanks to strong demand from the NHS. Since January 195 monitors have been sold, which is nearly as many as last year. The pre-tax loss is expected to continue to reduce and LiDCO has started to generate cash from operations.

Foreign exchange provider Equals (EQLS) increased first quarter revenues by one-third to £8.3m. The majority of this was business to business revenues. There was a sharp decline in travel money business in March.

Dragon Capital Group is offering a purchase facility to minority shareholders in Dragon-Ukrainian Properties and Development (DUPD) as part of the plan to cancel the AIM quotation. The purchase price is 10p a share.  Shareholder approval for the departure from AIM will be sought at the general meeting in Kiev on 6 May.

DBAY Advisers is building up a stake in Wynnstay Group (WYN) and it has reach ed 6.47%. It is taking advantage of the decline in the share price, although it has rebounded strongly in the past few weeks. Investec has sold most of its stake. Trading has been subdued in the current financial year.

Dawn Ward and Tracy Lewis have resigned from the board of Staffline (STAF) and the company is seeking replacements. Henry Spain Investment Services has increased its stake in Staffline to 13.6%.

Mark Greenwood has taken his stake in Richland Resources (RLD) to 29.1%.

MAIN MARKET

LED light fittings and wiring accessories supplier Luceco (LUCE) reported 2019 figures in line with expectations. Revenues were %5 ahead at £172.1m and improved margins meant that pre-tax profit jumped from £6.3m to £15.8m. Revenues and profit are expected to fall back this year due to COVID-19 with the major hit coming in the second quarter after modest supply issues in the first quarter. Cash outflow should be limited to £500,000 a month while lockdowns are in force in Europe. There are bank facilities available to the group. Looking further ahead, Luceco is involved in a growth market and there should be acquisition opportunities.

J Smart Contractors (SMJ) reported a decline in interim pre-tax profit from £1.12m to £265,000. Net cash was £13.7m at the end of January 2020. An unchanged interim dividend of 0.95p a share has been announced.

Cathay International Holdings (CTI) has launched a 16.7456-for-one open offer at 1.5p each, plus a subscription to at the same share price. This could raise up to £105m. This will reduce borrowings and provide cash to put into investee companies.

BATM (BVC) has received a $31m order for 1,000 critical care ventilators. One-quarter of the cash has been paid upfront and the rest will be paid when the ventilators are delivered later this year.

A trading statement by fasteners supplier Trifast (TRI) sparked a 6% 2019-20 profit downgrade to £17.2m by finnCap.

Motor dealer Lookers (LOOK) says that sales and margins have fallen so far this year. Operating costs have been reduced. Sales of former sites are helping to reduce net debt, which is £65m. The fraud investigation has led to a £4m non-cash charge and there could be further write-downs.

Andrew Hore

Andrew Hore – Quoted Micro 24 February 2020

NEX EXCHANGE

The costs of a cyber-attack meant that National Milk Records (NMRP) interim pre-tax profit fell by two-thirds to £375,000. Revenues also declined from £11.7m to £10.7m, although that was mainly due to one-off revenues in the corresponding period. Disease testing services was the only part of the group where revenues improved. Underlying trading is within expectations. Net debt increased from £2.1m to £2.4m. Lower milk prices may reduce milk volumes from their high levels last year.

GP software supplier DXS International (DXSP) has raised just over £1m at 8p a share. The shares equate to more than one-quarter of the enlarged share capital. The cash will provide working capital required to market the company’s new products. The latest framework agreement has included a modest price rise. NHS accreditation of the company’s new software should be complete in April.

Cancer treatments developer Incanthera is planning to join NEX this week. Manchester-based Incanthera is developing Sol, a topical product for the treatment of solar keratosis and prevention of skin cancer, which could be licenced to a partner within 18 months. There is a pipeline of cancer therapeutics which have come through the Institute of Cancer Therapeutics at Bradford University, which owns 12.3% of the company. AIM-quoted Immupharma (IMM) will hold a 11.9% stake and has 7.27 million warrants, where the exercise price is being rebased to the issue price. Cairn is the corporate adviser and Stanford Capital Partners is the broker. The expected admission date is 28 February.

NQ Minerals (NQMI) is paying A$2m for 100% of the Beaconsfield gold mine and processing plant in Tasmania. This was a major gold mine up until 2012 and it could go back into production. The gold price has risen by 50% since production stopped. The initial payment is A$100,000.

NAV fell from 64p a share to 59p a share at Western Selection (WESP) in the six months to December 2019. The lack of a dividend from AIM-quoted Bilby (BILB) meant that dividend income nearly halved, although it was the one core investment that increased in value. There will be no interim dividend. Share disposals mean that net cash was £2.45m at the end of 2019.

Gunsynd (GUN) has decided not to take up its option to acquire a further 22.33% stake in the Kolosori nickel prospect in the Solomon Islands. Previously £45,000 was paid for a 7.76% stake. Gunsynd has received £20,000 of the £260,000 it is due to be paid for its stake in Oyster Oil and Gas.

Primorus Investments (PRIM) says that investee company SOA Energy UK hopes to join AIM by the fourth quarter of 2020. Drilling is due to commence at the Ofek well in Israel during May and it could last 40 days with a further 40 days of testing. The results will be known before the flotation. Primorus owns 14,977 SOA shares.

Belvedere Leisure Resorts (BELV) is still waiting for cash to cover the full subscription promised just after flotation and it does not appear likely that the investor can come up with the cash. Other investors may come up with the funds in the next six weeks.

Investment company First Sentinel (FSEN) has raised £196,000 from an issue of Green Finance preference shares at 100p each. There is a fixed interest rate of 5.05% a year and then a variable rate of up to 10.15% depending on whether certain conditions are met. The preference are convertible into ordinary shares. The focus is investments in the ethical, sustainable and renewable energy sectors.

Sativa Group (SATI) says subsidiary Goodbody Botanicals will have its products stocked in 100 of WH Smith Travel’s UK stores.

Angelfish Investments (ANGP) has appointed Novum Securities as its corporate adviser.

AIM

Rail optimisation software and equipment supplier Tracsis (TRCS) had a strong first half. Interim revenues increased from £18.8m to £26m. There were two acquisitions in January 2019, so they contributed for a full period this time. There is cash of £26m and it should reach £31.6m by the end of July.

Medical technology supplier Inspiration Healthcare (IHC) says it did better than expected in the year to January 2020. Revenues should be 15% ahead at £17.8m, which is equivalent to like-for-like growth of 12%. EBITDA should be one-fifth higher at above £2m.

4D Pharma (DDDD) is raising £22m at 50p a share, which is half the level that 4D floated at in June 2014. This cash will provide the additional funds required to support ongoing studies for IBS and oncology. The clinical study data is important when it comes the next step for the group.

Urban Logistics REIT (SHED) plans to raise up to £106.7m at 137.5p a share and this will be used to acquire logistics properties. The cash will be raised via a placing, offer for subscription and open offer. The share price equates to adjusted NAV and is a discount to the market price. A special dividend of 3.85p a share will be paid.

Stanley Gibbons (SGI) is acquiring trading inventory from 58.1% shareholder Phoenix SG Ltd for £1.07m. This will be paid as the inventory is sold, net of sales commission.

AdEPT Technology (ADT) raised £4.25m at 320p a share, which was more than it was initially seeking. This will reduce debt and provide funding for acquisitions.

Chris Pullen has resigned as chief executive of Staffware (STAF) and a search for a replacement is about to commence. The recruitment and training company continues to talk with its lenders. Net debt is estimated at £60m at the end of 2019.

Toys supplier Hornby (HRN) is raising up to £15m via a placing and one-for-3.006268641288 open offer at 36p a share. The cash will be invested in the company’s brands, digital marketing and corporate systems.

MAIN MARKET

Nanoco (NANO) has filed a patent infringement lawsuit against Samsung relating to Nanoco’s synthesis and resin technology for quantum dots. There was a collaboration with Samsung, but it ended without a licence agreement.

Stevia supplier PureCircle (PURE) has secured a waiver and amendment to its bank facility. This covers all previous defaults and provides an additional $8.6m of funds.

Career development platforms developer Dev Clever (DEV) has delayed the roll-out of its platform and that hit interim revenues. Management hopes to secure a partnership with a worldwide technology manufacturer that will enable an international roll-out. Chris Akers has increased his stake from 6% to 7.15%.

World Trade Systems (WTS) intends to cancel its listing on 27 March in order to save costs.

Andrew Hore

Andrew Hore – Quoted Micro 17 February 2020

NEX EXCHANGE

NEX and AIM-quoted Arbuthnot Banking Group (ARBB) says that there has been an increase in the level of confidence in its markets since the General Election. That was too late to have much effect on the 2019 results, but full year pre-tax profit will be at the upper end of expectations. Last year, customer loan balances rose by 31% and deposits by 22%.

Sativa Group (SATI) says that it welcomes the guidance from the Food Standards Agency on the safe use of CBD products and the timetable for novel food authorisation. Management points out that Sativa’s products do not include THC. Sativa expects to report 2019 gross profit slightly higher than expectations on lower than marginally lower than expected. Goodbody Wellness has piloted three retail stores, but they did not perform as well as expected. PhytoVista Laboratories has completed more than 3,000 tests on cannabis-based products. That includes Sativa’s own products and a new sports range is near launch. Medicinal cannabis-based development is focused on veterinary treatments.

EPE Special Opportunities (ESO) has increased its NAV by 55% to 317.2p a share following a strong performance by Whittard of Chelsea and a recovery in the share price of fully listed Luceco. Pharmacy2U continues to grow strongly. Last year, 2.3% of the shares in issue were bought back by the company. New investments are being sought for available funds.

Ethical housing investor Walls and Futures REIT (WAFR) increased its NAV by 15% to 106p a share in the year to January 2020. Chief executive Joseph McTaggart bought 1,991 shares at 61.75p each.

Hellyer gold mine operator NQ Minerals (NQMI) has raised a further £210,000 at 7p a share.

Investment company Primorus Investments (PRIM) has benefitted from the sharp share price rise in Greatland Gold (GGP) and the stake is worth two-fifths of the company’s market value. The current profit is £1.25m. Investee company TruSpine is on course to float in London this year. The spine stabilisation devices developer has gained a new cornerstone investor. Primorus is debt free.

Trading in the shares of Altona Energy (ANR) has been suspended because it has not published its annual report for the year to June 2019. Cash needs to be raised to keep the company going and management says that shareholders will be invited to participate in a fundraising. The company says it expects to publish the report in the next two weeks and blames the delay on a change of auditor and a new accounting treatment for its exploration licences. Final terms for the acquisition of the previously announced new petroleum exploration licence application are being negotiated.

SG Recruitment Ltd (SGRL) majority shareholder and chief executive David Sumner has also taken on the role as chairman after the resignation of Alan Kitchin and Katie Hiess from the board.

AIM

Brickability (BRCK) has acquired McCann Roofing Products for £2.75m. Essex-based McCann imports roofing and building products from Europe and generated a 2019 pre-tax profit of £700,000 on revenues of £8.2m. This deal adds additional suppliers to the group and should be immediately earnings enhancing.

Nostra Terra Oil and Gas (NTOG) has convened the requisitioned general meeting on 3 March. Eridge Capital wants to remove Matt Lofgran and Ewen Ainsworth from the board and replace them with Andrew Morrison. Eridge was previously known as former AIM company New World Oil and Gas. Nostra Terra’s subsidiary has loans that have a key man clause which stipulate that Lofgran has to be president of the subsidiary unless it give consent or there will be a default.

Drug discovery platform developer e-Therapeutics (ETX) has overhauled its board and raised £1.6m at 3p a share. Former Silence Therapeutics boss Ali Mortazavi becomes executive chairman. Ian Ross is stepping down to concentrate his role at Silence Therapeutics. Chief executive Ray Barlow and finance director Steve Medlicott are also leaving. An additional independent non-executive director will be appointed.

Gemfields Group Ltd (GEM) joined AIM last Friday. The share price ended the day at 11.7p.

Bidstack (BIDS) expects to have generated £150,000 from programmatic advertising for video games. That is much lower than previously hoped because it is taking much longer to get advertising agencies to take in-game advertising seriously. There was cash of £3.14m at the end of 2019 following a loss of £5.3m. There was £6m in the bank at the end of June 2019. First half revenues will still be small.

Knights Group Holdings (KGH) has acquired Nottingham law firm Fraser Brown Solicitors for up to £8.28m in cash and shares. This follows the purchase of Croftons Solicitors, which is based in Manchester, for up to £2.8m. A new revolving credit facility of £40m has been agreed and it lasts until June 2023.

Octopus Investments has cut its stake in Staffware (STAF) from 13.2% to 0.53%. Gresham House Asset Management increased its stake from 6.7% to 10.6%.

Filta Holdings (FLTA) says it should make an EBITDA of £3.2m in 2019. Cost savings and investment software will help the fryer management services provider to produce a much better performance in 2020.

Keystone Law (KEYS) has traded in line with expectations. Pre-tax profit is forecast to increase from £5.1m to £5.7m.

Hormonal disease treatments developer Diurnal (DNL) says that the FDA has accepted the new drug application for Akindi Sprinkle as a treatment for infants and children. Approval could be gained by the autumn and it will be the only licenced treatment specifically for children. There was cash of £4.6m at the end of 2019.

MAIN MARKET

Automotive information publisher Haynes Publishing (HYNS) is recommending a 700p a share bid from Infopro Digital, valuing the company at £114.5m. The two companies fit well together and will have greater scale.

Finance provider S and U (SUS) says that its figures for the year to January 2020 will be in line with expectations and trading has been getting better in the past few weeks. The used car market has held up well even though the new car market is week. This is why second hand car finance provider Advance should produce another record performance in 2020-21. Property bridging finance provider Aspen has made the progress hoped because of delays in repayments and the loan book is lower than expected, but it is still a young business. A 2019-20 pre-tax profit of £35.5m is expected to increase to £39m this year. The latest total dividend will be raised by around 5% to 124p a share.

JLEN Environmental Assets (JLEN) is raising cash from the placing of up to 49.7 million shares. This will fund a pipeline of investments. The bookbuild will close on 26 February.

Ultimate Products (UPGS) says that sales growth is easing this year with first half revenues 3% ahead at £67.7m. There is also uncertainty about the supply of products from China. Even so, Shore is maintaining its full year pre-tax forecast of £8.77m, a small increase on last year. That could change.

Zenith Energy (ZEN) is widening the geographic scope of its activities by negotiating to acquire an oil production licence in West Africa. Zenith has raised £135,000 through a share issue at 1.5p a share. It has also entered into an equity sharing agreement with a consortium of institutional investors. The nominal amount raised is £810,000, but the ultimate amount will depend on the share price when each tranche is paid over the next 12 months. The benchmark price is NOK0.2231/share, equivalent to around 1.85p. The share price is 1.43p, so the first instalment is likely to be below the notional level if there is no share price recovery.

BATM Communications (BVC) has gained a $1.3m order from a Middle East-based poultry firm for its agri-waste treatment system.

Fasteners supplier Trifast (TRI) says market conditions are more challenging and there has been a slow start to the fourth quarter, which is normally the strongest. Margins have fallen and profit will be at the lower end of the range of forecasts. The Coronavirus has led to the extended closure of Chinese sites, but this is a small percentage of production.

Cathay International Holdings (CTI) says that production at its plants is on hold or preparing to gradual resume production because of the effects of the Coronavirus. The hotel business has been hit by a sharp reduction in occupancy rates.

Avation (AVAP) has made firm orders for two ATR 72-600 aircraft that will be leased to US-Bangla, the largest private airline in Bangladesh.

Predator Oil and Gas (PRD) is raising £3.56m at 4p a share. This will finance the drilling of the Moulouya well in Morocco and provide cash for further investment in Trinidad.

Andrew Hore

Andrew Hore – Quoted Micro 23 December 2019

NEX EXCHANGE

Trading in the shares of Barkby Group (BARK) following the publication of the prospectus for the reverse takeover of the Dickson group companies and move to AIM. There will also be a share consolidation of 193 shares into 74 new shares. Barkby is paying £30.6m, predominantly in shares with £750,000 in cash, and raising £5m at 30p a share. The businesses include Workshop Coffee, which operates four coffee shops and is a wholesaler of speciality coffee, and a south east England-focused commercial property developer. Barkby will also acquire the right to invest in two private companies: Transcend Packaging, which won a contract to supply McDonalds with paper straws, and VivoPlex, which has developed a medical device for fertility monitoring. A dividend is planned for this financial year.

Schroders has bought the whole of the 29.8% stake in Rutherford Health (RUTH) that was previously held by Woodford Investment Management.

Trading in the shares of Tectonic Gold (TTAU) has been suspended. Tectonic South Africa has been awarded an interim land mining contract at a diamond mining project in Alexander Bay in South Africa. It is replacing a previous subcontract that the company had. Mining can resume until the full contract is agreed. That could be by next March. A private investor signed an option agreement for the purchase of a 64% stake in Tectonic South Africa. In return they will fund future project development. There is a £100,000 cash payment to Tectonic on completion. There are 120 days for the investor to raise the cash required. The figures for the year to June 2019 will not be published by the end of 2019.

SulNOx (SNOX) started trading last week and the share price rose from 50p to 55.5p (53p/58p). There have been 35,875 shares traded on NEX.

NQ Minerals (NQMI) is raising £300,000 at 6.5p a share. This will fund an exploration programme to extend the life of the Hellyer mine.

Primorus Investments (PRIM) says that investee company WeShop hopes to float on AIM in the second quarter of 2020. Pre-IPO funding of £2m has been secured. Vela Technologies (VELA) and Two Shields Investment (TSI) are also investors in WeShop.

Clean Invest Africa (CIA) says that its CoalTech subsidiary has had successful tests with two listed South African coal consumers. Pelletised coal fines have been produced and they were deemed suitable. The first potential customer could sign up for a long-term supply agreement and the second could justify a plant at their location.

Wishbone Gold (WSBN) says that it generated 2019 revenues of $10.6m up to 17 December and the full year figure should be higher than the $10.9m reported in 2018. The starting of operations in Europe will help to grow revenues. Wishbone will receive $600,000 in relation to its operations in Honduras. There could be a further $400,000 depending on production. There will be a consolidation of 100 existing shares into one new share.

The CAMRA Members’ Investment Club has increased its stake in brewer Adnams (ADB) from 2.81% to 3.69%.

AIM

Focusrite (TUNE) is paying £39.2m for professional sound systems manufacturer Martin Audio. This will diversify the product range of the group and enhance earnings in the first year. The two companies are based near to each other in High Wycombe. In the 12 months to October 2019, Martin made an operating profit of £2.9m on revenues of £24.4m. ADAM Audio’s contribution has helped revenues to increase in the first quarter. Like-for-like revenues are lower due to adverse exchange rate movements and a on-off boost in the first quarter of the previous year.

Bidstack (BIDS) has entered into a two-year agreement with a global marketing services group, which will spend up to £10m on advertising via the Bidstack in-game platform over that period. None of the revenue will be in 2019, which is why the forecast will not be met and revenues will not be signficant.

Naked Wines (WINE) is paying a special dividend of 5.2p a share. The ex-dividend date is 24 December.

Marshall Motor Holdings (MMH) is acquiring six VW car, one VW commercial vehicles and one SKODA franchise from Jardine Motors for up to £22.3m. Trading remains in line with expectations, but Edison has cut its 2020 profit forecast by £4.1m to £23.2m, partly due to the loss-making acquisition.

Filtronic (FTC) is selling its telecoms antenna business to Microdata for $5.5m (£4.2m). The company can concentrate on the 5G and defence markets.

ValiRx (VAL) says that the VAL201 phase I/II clinical trial is coming to an end and the initial results appear to show that there is an impact on patients with prostate cancer. The compound is also safe and well tolerated.

A trading statement from Van Elle (VANL) has led to Peel Hunt cutting its 2019-20 pre-tax profit forecast from £4.8m to £4m. The ground engineering contractor says that the second quarter was stronger than the first and first half revenues have risen from £42.9m to £48m. However, pre-tax profit slumped from £2.8m to £1m. There should be some improvement in the second half. The share price has halved this year. The interims will be published on 22 January.

Trans-Siberian Gold (TSG) says the Russian authorities have confirmed the company’s residency in the Kamchatka advanced special economic zone and this could save $6m over seven years. Trans-Siberian will develop an extension of the Asacha gold mine and expects to invest up to $21.2m in the next five years.

Sabien Technology (SNT) has raised £300,000 at 0.15p a share. This will provide working capital as a review of the business continues. Sabien is seeking to broaden its range of products from energy efficiency to other technologies, particularly health and medical rehabilitation sectors. Alan O’Brien stepped down as chief executive and Richard Parris became executive chairman.

Shareholders have agreed to put Stirling Industries (STRL) into voluntary liquidation. Trading will be cancelled on 24 December.

MAIN MARKET

Sure Ventures (SURE) maintained its net asset value at 83.1p a share at the end of September 2019. That includes cash of £1.45m. Management believes that some of the earlier investments are maturing and they could have valuation uplifts.

Zenith Energy (ZEN) has raised £638,000 at 2p a share via a placing in Norway. The cash will be used to buy drilling equipment.

Career development and consumer engagement platforms provider Dev Clever (DEV) plans to raise more cash four months after raising £436,000 at 3.4p a share. The share price fell by around one-third just before and just after the company admitted it was raising money. The share price fell to 1.05p.

OTHERS

Getmapping has ended its strategic review and is no longer up for sale. The geospatial services provider believes it is not the optimal time to consider offers.

Andrew Hore

Andrew Hore Quoted Micro 16 December 2019

NEX EXCHANGE

Capital for Colleagues (CFCP) is investing in new portfolio company The Security Awareness Group Ltd (TSAG), which was established to acquire an existing business that has been trading for more than two decades. It provides training to ensure than employees are aware of cyber security and potential for human error. The £405,000 investment in loans, preference and ordinary shares, will enable the acquisition to be completed and leave Capital for Colleagues with a 34% stake. Management will own 51% and an employee ownership trust the rest.

Fuel emulsifier technology developer SulNOx is joining NEX on 17 December and it will be valued at £42.3m at 50p a share. SulNOx originally said it planned to join NEX during the spring when it raised £550,000 in pre-IPO funds. It has developed a process that can emulsify hydrocarbon fuels, such as diesel and heavy oils. The products can reduce Nitrous Oxide, Carbon Dioxide and Sulphur Oxide gases and particulates, as well as making combustion more efficient. The emulsifier can be used in existing engines.

Health property developer Ashley House (ASH) is exploring opportunities for modular affordable housing. Overheads have been reduced but the company says that it retains its core team and has appointed Paul Williamson as head of the modular activities. Adrian Wright, who is the largest shareholder with a 13.4% stake, has been appointed to the board.

Primorus Investments (PRIM) has met with the management of AIM-quoted investee company Greatland Gold (GGP) and it says that it believes that the Havieron gold/copper deposit may host more than 20 million ounces. Further share acquisitions are possible. Primorus currently owns 37 million shares at an average cost of 1.71p each, which is slightly higher than the market price. Newcrest Mining is farming-in to Havieron. Six rigs will be working on the project over the coming months.

Gunsynd (GUN) had cash of £568,000 out of total net assets of £2.36m at the end of July 2019. Gunsynd did raise £498,000 from a share issue during the period. There was an unrealised loss on investments of £224,000 partly offset by a realised profit of £35,000. There was a £400,000 cash outflow from operations. The stake in Oyster Oil and Gas was valued at £350,000 and Gunsynd has subsequently agreed to sell the shares for a total of £260,000. Production sharing contracts for four blocks in Djibouti are not included in the transaction.

NQ Minerals (NQMI) is expanding the capacity of the Hellyer gold mine in Tasmania. A 100 tonne per hour mining dredge should be operational by the end of the year.

Hydro Hotel, Eastbourne (HYDP) is increasing its interim dividend from 7p a share to 9p a share and this goes ex-dividend on 19 December. The final dividend will be maintained at 14p a share.

Tectonic Gold (TTAU) has sold its stake in Tirupati Graphite for £86,844. The initial investment in 2016 was £40,000.

EPE Special Opportunities Ltd (ESO) had a net asset value of 261.97p a share at the end of November 2019.

The acquisition of Netalogue Technologies (NTLP) has been completed and trading on NEX will end on 10 January.

Jersey-based Zandra Holdings has increased its stake in Formation Group (FRM) from 74.62% to 89.99%.

AIM

Lawyer Gately (GTLY) is acquiring T-three Group, which offers human resources services for £3.4m. Pro forma sales from continuing operations were £4.2m and EBITDA was £700,000 and the deal should be immediately earnings enhancing. This business fits with Kiddy which was acquired last year.

Feed, fuel and food distributor NWF (NWF) has leased another warehouse on the back of a five-year contract with a food customer. This will add 37,000 pallet spaces in Crewe, which will be predominantly used up by this contract. There is a five-year break clause on the lease. There will be £500,000 of start-up costs this year. Two fuel distributors have been acquired for £5m in recent weeks. The contributions from these will offset the additional cost in the year to May 2020. The feed business has grown its volumes and market share. Interim profit should be better than the weak comparisons.

Pelatro (PTRO) has won another contract. This is for providing additional campaign management services to an existing telecoms client. The deal involves monthly revenues with a share of gains. It is worth $1m over three years.

Investment in connected devices technology is starting to pay off for Vianet (VNET) with the revenues and profit of the smart machines division growing strongly. Additional contracts have been won that provide additional business over the next five years. These contracts alone cover 20,000 units. Technology upgrades are helping the smart zones division to retain and generate more revenues from pub clients. The US smart zones business made its maiden profit in the period. The interim dividend is maintained at 1.7p a share.

Versarien (VRS) has enough cash for its current requirements. The graphene products developer had £2.64m in cash at the end of September 2019. There is an invoice discounting facility available to provide additional liquidity. There is £898,000 of borrowings which are being paid back at around £30,000/month. At the current rate of cash outflow, the cash should last around one year, although a company is not going to wait until it runs out to raise more cash. The hard wear components business is generating cash, but the plastics business has been a drain. There are still plenty of opportunities for Versarien, including in China.

Open Orphan (ORPH) is merging with hVIVO (HVO) via an offer for 2.47 shares for each hVIVO share. Both companies are clinical research organisations. There is limited overlap in the services offered.

Integumen (SKIN) has raised £1.37m at 1.5p a share. The company needs additional funds because a potential client is doing due diligence. Revenues are expected to quadruple to £4m in 2020. Capacity at the Labskin laboratory is being increased.

Audio equipment supplier Focusrite (TUNE) is holding a general meeting to increase the amount it is allowed to borrow from up to £15m to up to £60m. Net cash was £14.9m at the end of August 2019, but the company is keen to make acquisitions.

Digital chemistry analysis company Deepmatter (DMTR) says that AstraZeneca has agreed to use its DigitalGlassware technology in Sweden alongside its own automated compound synthesis platform. This is an initial trial to assess how the technologies can work together. Data capture by DigitalGlassware could reduce cost and time, as well as providing improved analysis.

Spitfire Oil Ltd (SRO) had cash of $2.1m at the end of June 2019. Spitfire has relinquished the Salmon Gums lignite licences. It is a shell and has to make an acquisition by 29 February or trading in the shares will be suspended. This seems likely. The there is six months to make an acquisition or lose the AIM quotation.

Coral Products (CRU) has gained approval to offset production from its plastics recycling plant against the plastic packaging waste levy. Production hours have been doubled and the equipment should be run 24 hours a day by the end of April.

FireAngel Safety Technology (FA.) expects to report a loss nearly double its previous expectations at between £2.6m and £2.9m. that is partly down to lower sales from higher margin products. The fire and smoke alarms company could still be profitable in 2020.

Packaging supplier Robinson (RBN) says that 2019 revenues are slightly lower than forecast but pre-tax profit will be better than expected at £2.2m.

Digital services provider The Panoply Holdings (TPX) reported a one-third increase in interim revenues to £13.4m and the public sector is becoming a greater percentage of revenues. The company is on course to move into profit this year. A pre-tax profit of £3m is forecast.

Wind sensor technology developer Windar Photonics (WPHO) is raising £1.41m at 27.5p a share. This follows the trading statement admitting that sales are disappointing.

India-focused online retailer Koov (KOOV) has been placed in administration because a funder failed to come up with the cash it promised.

MAIN MARKET

ASX-listed Adriatic Metals (ADT1) has joined the standard list. Adriatic has projects in Bosnia Herzegovina. The main focus is the Vares project, north of Sarajevo. There is lead, zinc, copper, silver, gold and barite.

Shefa Gems Ltd (SEFA) has announced a maiden resource for the Kishon Mid-Reach project. The contained revenues are $41/tonne, predominantly due to the Carmel Sapphire. The mining cost is estimated at $26/tonne and it could be reduced.

Zenith Energy (ZEN) has decided not to acquire Nordic Petroleum because of high costs. Work on the C-37 well in Azerbaijan should enable production of more than 250 barrels of oil a day.

Hadrian’s Wall Secured Investments Ltd (HWSL) says it should not continue in its current form due to the large discount to NAV. A review could end up with a decision to run down the company. Brett Miller has been appointed to the board. A new NAV figure has been delayed.

Ferro-Alloy Resources (FAR) says that a sharp fall in the vanadium price has hit short-term profitability and cash generation. It remains confident that the operations in southern Kazakhstan are still viable.

Andrew Hore

Andrew Hore Quoted Micro 18 November 2019

NEX EXCHANGE

Trading in the shares of Barkby Group (BARK) has been suspended ahead of further information about a proposed reverse takeover. The acquisition of a group of companies referred to as the Dickson controlled entities is expected to cost £30m, predominantly paid in shares. There will also be a share placing to provide working capital for the enlarged group. Charles Dickson would become executive chairman if the deal goes ahead. The businesses include Workshop Coffee, which operates four coffee shops and is a wholesaler of speciality coffee, a commercial property developer. Barkby will also acquire the right to invest in two private companies: Transcend Packaging, which won a contract to supply McDonalds with paper straws, and VivoPlex, which has developed a medical device for fertility monitoring.

Brewer and pubs operator Daniel Thwaites (THW) says fears that interest rates will fall has required a £4m increase in the provision for its interest rate swaps. That is a non-cash item and underlying pre-tax profit increased from £5.6m to £6.2m in the six months to September 2019. That figure also excludes a quadrupling of property disposal profit to £800,000. Interim revenues improved 7% to £53.4m. The new brewery is operating at full capacity, while there was a small increase in like-for-like pub revenues. The contribution from hotels improved. Net debt was reduced by £8.6m to £61.6m compared with 12 months before, although £22.5m has been reclassified as due within one year. The interim dividend is unchanged at 1.1p a share.

NEX and AIM-quoted AFH Financial (AFHP) says it is trading in line with forecasts. The wealth manager will report underlying EBITDA of more than £17m, up from £10.4m, in the year to October 2019. Funds under management were £6bn. The contribution from acquisitions has been earnings enhancing. The total dividend is expected to be 8p a share and this is expected to rise by one-quarter to 10p a share in 2019-20. There was still £11.9m in the bank at the end of October 2019, although there is estimated to be £32.2m of contingent consideration and a £15m convertible loan in the balance sheet. The current focus is on organic growth and there should be enough cash generated, along with the current balance, to pay the deferred consideration over the next two years.

Ashley House (LSE: ASH) has published a trading statement and it is changing its year end from April to October following the disposal of the Morgan Ashley joint venture. In the 12 months to April 2019, revenues fell from £18.5m to £11.9m and a pre-tax profit of £805,000 was turned into a £2.95m loss. There was a loss contributed by joint ventures. Net debt was £1.8m.

Clinical support systems supplier DXS International (DXSP) is considering a move to AIM. This would be part of a potential fundraising to enable further investment in the business. DXS has already announced that it 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. The focus will be on the existing core product DXS Point of Care, analytics and reporting service CompleteCare, digital medicines service ExpertCare and condition management platform MyVytalCare. The first is already on sale and the rest will be launched in early 2020. DXS is gaining final approvals for its four solutions to be listed in the NHS catalogue.

AfriAg Global (AFRI) has raised £160,000 at 0.1p a share. This cash will be invested in additional shares in Apollon Formularies, which will take the company’s stake to 2.68%.

Primorus Investments (PRIM) believes that the lack of flotations is providing it with more opportunities. Primorus has received the £275,000 it was owed by Zuuse and still owns 57,205 shares and holds options over one million shares at A$0.50 (26p) each. The latest fundraising by Zuuse is at A$1 a share. There is a potential market to sell the shares even before a flotation.

Rutherford Health (RUTH) shareholder Formation Group has appointed Andrew Bennett as a non-executive director of the proton beam therapy firm.

David Lenigas has been appointed chairman of NQ Minerals (NQMI) and the board is in talks to replace existing debt with lower-cost debt. First Sentinel, which is run by former NQ Minerals director, has been appointed as corporate adviser.

Block Commodities (BLCC) has raised £388,000 from an issue of convertible loan notes and shares. This is less than the company wanted to raise more than six months ago. The share issue raised £133,000 at 0.02p a share, with a warrant exercisable at the same price, and the conversion of the loan notes will also be at the same price. The cash will be used to move into the medicinal cannabis sector. Additional shares are being issued to pay creditors.

EPE Special Opportunities Ltd (ESO) had net assets of 246.47p a share at the end of October 2019.

One hundred shares in Equatorial Mining and Exploration (EM.P) will be consolidated into one new share on 18 November.

Karoo Energy has changed its name to IamFire (FIRE).

Queros Capital Partners (QCP) will leave NEX on 28 November.

AIM

DBAY Advisors does not intend to bid for Eddie Stobart Logistics (ESL) and instead will acquire 51% of the underlying subsidiary that owns the transport operations. The poor financial situation of the business led to the change of strategy and Eddie Stobart Logistics has recommended the deal, which involves the injection of £55m of additional finance through a PIK Facility. This will pay off a £35m loan and provide working capital. The deal requires the extension of other existing debt facilities. The interim results to May 2019 are still being compiled. An operating loss of at least £12m is expected, but the underlying business could make a full year operating profit of up to £2m. There could be a goodwill write-down of £50m. Net debt will be around £200m. Wincanton (WIN) is still considering a rival deal.

ECO Animal Health (EAH) is still suffering the after effects of the African Swine Flu outbreak in China and the US/China trade war hitting imports from the US. First half revenues from China fell by three-fifths. Restocking will take time to flow through in terms of FCO’s results. There will be a sharp fall in full year profit. The interims could also be affected by accounting policy changes.

Advanced surface coatings provider Hardide (HDD) has been selected to coat parts for the new F-35 Lightning II Joint Strike Fighter. This is an important step in building up business in the aerospace sector. The Hardide-A coating will replace HVOF thermal spray coatings. HVOF is one of the most widely used coatings in aerospace and Hardide-A is said to be technically superior. Hardide has also been awarded a patent for a water droplet erosion resistant coating for blades and vanes, including those used on steam and gas turbines for power generation. A field test is planned.

Adamas Finance Asia (ADAM) says that a test production run is planned later this month by 85%-owned Future Metal at its quarry in China. The plan is to restart production by the end of the year. This will help to underpin the Adamas NAV and provide potential upside. At the end of September 2019, NAV was 84p a share, which is more than three times the share price. Future Metal is 45.2% of that NAV and when the quarry is up and running then Adamas could raise cash by selling some of its stake. Cash is required to invest in new opportunities that are being presented to the company. Adamas issued 16.18 million shares at 34.8p each for its equity investment in Infinity TNP.

Safestay (SSTY) has bought the Hotel Auberge in Berlin, which is near to Berlin zoo, and intends to turn it into a 150-bed hostel. The site has an eleven year lease. This is the latest acquisition this year and it takes the total number of hostel sites to 18. The plan is to have 20 hostels by 2020.

MAIN MARKET

PureCircle Ltd (PURE) chief executive Magomet Malsagov has stood aside temporarily pending further investigation of the classification of the stevia sweeteners supplier’s inventory and other transactions. The investigations have identified that inventory was $23m too high. Other transactions could lead to additional valuation changes. There could be write downs of intangibles and inventories. There should not be any increase in net debt, although the figures are still not fully audited. Bank covenants may need to be waived. Finance director Rakesh Sinha had previously resigned, although he remains with the company until the end of January.

Automotive information publisher Haynes Publishing (HYNS) is seeking a buyer. Management believes the company needs to be part of a larger group with greater financial resources.

Andrew Hore

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