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Andrew Hore Quoted Micro 22 April 2019

NEX EXCHANGE

IMC Exploration Group (IMCP) has published the prospectus for its move to a standard listing. No fundraising is planned to accompany the flotation. Management believes that IMC has enough working capital for 12 months. There was €152,878 in cash available at the end of January 2019. This takes account of the statutory spending on its licences.

Block Commodities (BLCC) is calling a general meeting to enable shareholders to decide whether the company should become involved in the medicinal cannabis sector.

Ananda Developments (ANA) owns 15% of LHT, the owner of hapac medicinal cannabis inhaling technology. The hapac products are being sold in Italy and the product range is being widened. Other investments are being assessed.

Ace Liberty and Stone (ALSP) has declared a second interim dividend of 0.83p a share.

Anne Yerburgh has been replaced as chairman of Daniel Thwaites (THW) by chief executive Richard Bailey, although she remains as a non-executive director in order to represent family shareholders. A replacement is being sought for former non-executive director Nick Mackenzie.

Queros Capital Partners (BFD) has raised £305,000 from the issue of 8% unsecured bonds 2025. This will be used to provide bridging finance to UK businesses.

Chris Akers has a 3.97% stake in High Growth Capital (HASH) following the purchase of the intellectual property of Malta-based BDD, a company he founded. RRNB Capital Ltd has increased its shareholding from 1.92% to 9.95%, while Fujairah has raised its stake from 2.31% to 8.59%. High Growth Capital has completed the acquisition of additional shares in AI company Sentiance to take its stake to 15%. Whitman Howard has been appointed as corporate adviser and broker.

AIM  

Modern Water (MWG) reported its 2018 results at 6.19pm o the Thursday before Good Friday. Revenues increased by 18% to £4.2m and the reported loss was more than halved from £5.23m, although this included a £1.53m goodwill write off, to £2.47m. This appears to be the first time that Modern Water has slipped out results after the market has closed for the week. Let us hope that this does not become a habit. Serial offender Immunodiagnostic Systems Holdings (IDH) managed to put out its statement a bit earlier but after the close of the market. More can be found at https://ukinvestormagazine.co.uk/why-you-should-avoid-immunodiagnostic-systems-holdings/.

Enterprise software provider Sanderson (SND) says interim trading was ahead of expectations and further progress is expected in the second half. Interim revenues improved from £14.6m to £17m and underlying operating profit is one-third higher at £2.8m, which is partly due to accounting changes. Like-for-like operating profit would be one-fifth higher. Net cash was £3.29m at the end of March 2019. The order book is worth £8m. The interims will be published on 15 May.

Sheikh Ahmed Bin Dalmook Al Maktoum is investing £534,000 in MX Oil (MXO) for a 29.86% stake. He will appoint a non-executive chairman. This is part of a placing raising £680,000 at 0.04p a share. There are also 800 million warrants being issued that are exercisable at 0.04p over a five year period. Options over 10% of the enlarged share capital will be issued to management. The Aje field, where MX has a 5% investment is producing at around 3,150 barrels of oil per day and cash generated is being used to reduce project debt. The Aje field should start generating free cash in 2020 and that could move MX into profit in the first half of 2020. MX plans to consolidate 100 existing shares into one new share and change its name to ADM Energy.

Chief executive Sean Smith has bought 126,624 shares in biopesticide products developer Eden Research (EDEN) for 10.25p each. Finance director Alex Abrey has acquired 50,000 shares at 10.1p each. House broker Shore forecasts an increase in revenues from £2.8m to £3.7m in 2019, although the loss is expected to rise to £900,000. Shore expects Eden to move into profit in 2021.

PowerHouse Energy (PHE) has gained its first revenue generating contract for its DMG technology in conjunction with partner Waste2Tricity. Revenues will come from IP, design rights and licensing, followed by operational engineering.

Parity (PTY) is increasing its focus on the data analytics market and has appointed a new boss of consultancy services. Pre-tax profit halved to £850,000 in 2018 and a further decline is expected in 2019. Net debt is expected to remain at around £1m. Revenues are expected to continue to decline but there should be a greater proportion of the business coming from higher margin activities and profit is expected to bounce back to £1.5m in 2020.

Fryer and grease management services provider Filta (FLTA) increased revenues by 23% to £14.2m in 2018, while underlying pre-tax profit improved from £1.81m to £2.2m. This is before any significant contribution from the Watbio acquisition, which cost savings appear to be on course. A 2019 pre-tax profit of £3.8m is forecast.

Nektan (NKTN) is selling a 57.5% stake in Respin for £300,000 to a new purchaser because the previous deal could not be completed at a higher price due to the fact that buyer could not raise the finance. The online gaming firm says that it owes £3.6m in tax to the HMRC and it is likely to need additional cash to pay the bill.

TruFin (TRU) plans to sell its stake in unsecured consumer finance provider Zopa for £44.5m, an increase of 22% on the 2017 valuation, and investing £25m in manufacturing finance provider Distribution Finance Capital, which will be floated on AIM in early May. There should also be £10m returned to investors later this year. That will leave early payment services provider Oxygen Finance and Satago Financial Solutions, which provides working capital to small businesses.

Delayed results from consumer care products supplier Venture Life Group (VLG) show revenues 17% ahead at £18.8m and nearly all the growth came from the company’s brands. Pre-tax profit improved from £63,000 to £710,000. Net cash was £5.8m so the company has funds to make additional acquisitions.

Yourgene Health (YGEN) has raised £11.8m at 10.25p a share and that will be used to fund the £6.3m cash payment for molecular diagnostics developer Elucigene, which will cost £9.2m in cash and shares.

Managed services provider Redcentric (RCN) says net debt was £17.6m at the end of March 2019, compared with estimates of £20.2m. Pre-tax profit is expected to rise from £8m to £8.7m.

D4T4 Solutions (D4T4) has announced that its 2018-19 results will be ahead of expectations. This led to a pre-tax profit upgrade from £5.7m to £5.8m, but earnings per share were upgraded from 12.1p to 13.3p due to a low tax rate.

Evgen Pharma (EVG) has raised £5m through a placing at 13p a share. The cash will boost the balance sheet while management undertakes partnership discussions and additional work on SFX-01. The phase IIb data for SFX-01 in subarachnoid haemorrhage is expected in the third quarter of 2019.

Directa Plus (DCTA) doubled its total income to €2.5m in 2018. The graphene-based products developer has net cash of €5.2m, following a €3m outflow from operations.

Ariana Resources (AAU) says that the Kiziltepe gold mine produced 7,296 ounces of gold in the first quarter of 2019. That was lower than the fourth quarter of 2018, but it is ahead of the average annualised quarterly guidance.

IG Design (IGR) is set for 10% organic sales growth in the year to March 2019 and total revenues rising from £327.5m to £447m. Pre-tax profit is expected to grow from £21.4m to £29.5m. There could be further merger benefits to come from the Impact Innovations acquisition.

Europa Oil and Gas (EOG) is selling its 20% stake in PEDL143 in the Weald Basin to UK Oil and Gas (UKOG) for £300,000.

MAIN MARKET 

Plastics and panels supplier Tex Holdings (TXH) made a small loss in 2018 following accounting changes to the recognition of revenues and there is no final dividend. Trading levels were lower in the second half. Tex is in breach of some of its bank loan covenants. The major shareholder continues to support the group. The share price fell by more than one-quarter.

Electronic products distributor DiscoverIE (DSCV) is on course to improve its full year pre-tax profit from £21.8m to £27.7m. The group has raised £29m at 400p a share in order to finance the acquisitions of US-based transformers and magnetic components manufacturer Hobart Electronics and UK-based rugged and submersible sensors manufacturer Positek. The total initial consideration is £15.9m.

Fasteners supplier Trifast (TRI) says full year profit is slightly better than expected even though demand from China has been reduced due to tariff wars with the US. Net debt was £15m at the end of March 2019 and it has agreed a new four-year bank facility of £80m. This could be used for acquisitions.

Argo Blockchain (ARB) has set the date for its requisitioned general meeting, which will be held on 16 May. The requisition came from an entity owning 13.8% that is controlled by Frank Timis, who does not believe that the company will provide a satisfactory return to shareholders with its current cryptomining strategy. The plan is to remove Jonathan Bixby and Mike Edwards as directors and appoint another director. Argo has more cash than its market capitalisation. Cash operating costs have been reduced to £280,000, compared with £500,000 of potential revenues expected in May.

Kazakhstan-focused vanadium miner Ferro-Alloy Resources (FAR) is already spending the money it raised when it gained a standard listing last month. Equipment, a mobile crane and vehicles have been acquired. The design of the extension to the existing facilities and for the connection to the high voltage power line has been completed. The share price has almost halved from the placing price of 70p to 37.37p. More background information can be found at https://ukinvestormagazine.co.uk/ferro-alloy-resources-goes-to-discount-on-first-day/.

BATM (BVC) has won an initial $2m armed forces contract for cyber security and this lasts 18 months.

Emmerson (EML) has signed heads of agreement for an offtake agreement for 100% of the production from the Khemisset potash project.

Andrew Hore

Andrew Hore – Quoted Micro 26 November 2018

NEX EXCHANGE        

Blockchain venture builder Coinsilium Group Ltd (COIN) says that RIF Labs is acquiring RSK Labs, where Coinsilium owns 65,000 series Seed-1 preferred shares. The cost of the investment was $83,750. The acquisition is a share for token swap and Coinsilium will end up with 1.95 million RIF tokens, which is the equivalent of 139.4 bitcoins, currently valued at $773,000. However, an initial 12.5% of the consideration will be released six months after the deal is completed and then 2.5% each month for 42 months.

NQ Minerals (NQMI) has entered into an additional marketing and off-take agreement with Traxys Europe. The deal covers the production from the Hellyer project in Tasmania for the first five years. This includes a facility for prepayment.

Tectonic Gold (TTAU) says that its Australian subsidiary has received a A$590,000 tax rebate from the Australian government. A 43.5% rebate is due on qualifying technical expenditure and so far more than A$2m has been received. Spending continues.

Gowin New Energy Group Ltd (GWIN) chief executive Chen Chih-Lung is lending £40,000 to the company for 12 months at an annual interest rate of 2%.

AIM    

Music and audio equipment supplier Focusrite (TUNE) is continuing to grow internationally although Asia is growing at the fastest rate. Full year revenues grew by 14% to £75.1m, while pre-tax profit improved from £9.51m to £11.3m. The dividend is 22% higher at 3.3p a share. There is £22.8m of cash in the bank and this could be used for add-on acquisitions. Tariffs on Chinese exports are being used as a way of testing out price rises for the US market. Forecast profit growth is modest but there is potential for outperformance.

Tristel (TSTL) is buying its distributor in Benelux and France and this will enhance earnings. The maximum payment for Ecomed will be €6.8m (£6m) with €5m paid up front. The deal also provides an additional warehouse in Europe. A full year contribution in 2019-20 will increase pre-tax profit by £700,000 to £6.5m.

Sustainable timber supplier Accsys Technologies (AXS) has increased its capacity for Accoya production by 50% and this will help production in the second half. Demand for Accoya is strong and sales increased from €28.3m to €31.1m in the six months to September 2018. The development of the Tricoya plant in Hull is progressing. Construction could be completed in the middle of 2019 and it will breakeven at 40% of capacity. Tricoya, which is used in MDF-type panels, is currently produced from Accoya and this plant will free up Accoya production for other customers. Numis forecasts a rise in full year revenues from €60.9m to €73.1m and a decline in loss to €5.1m. Net debt is expected to be €46m at the end of March 2019 and it will continue to rise because of the capital investment programmes. If partners can be secured in the USA and Asia then this could provide a significant boost to the company.

Initial drilling results at the Havieron licence area in Western Australia provided good news for Greatland Gold (GGP) with two wide zones of gold and copper mineralisation intersected. This significantly extends the known mineralisation.

Immunodiagnostic System Holdings (IDH) is up to its old tricks. The interim figures were published at 5.04pm on Friday 23 November. To be fair this is 14 minutes earlier than the half year trading statement so maybe the company is improving. Here’s hoping. Interim revenues were flat at £18.5m but the company fell into loss. There was £27.8m of cash in the bank (net cash of £26.5m) at the end of September 2018. Maybe some of this should be spent on an alarm clock so management can get up in the morning to release its results.

Chris Jagusz has stood down as chief executive of Redcentric (RCN) as revenue growth has been hard to come by. The latest interims have sparked downgrades for 2018-19 with revenues cut by 5% to £94.2m.

SIMEC AtlantisEnergy (SAE) has singed a joint venture with AD Normandie Developpement and this will enable the commencement of tidal energy projects between France and Alderney. A capacity of 3,000MW is being targeted and there is potential for EU grants.

Innovation software provider Imaginatik (IMTK) has achieved annualised cost savings of £1.2m, but the strategic review held back revenues and new orders in the first half. The cash outflow declined. Trading levels are picking up.

There are no competition concerns about the Ebiquity (EBQ) disposal of its advertising intelligence business to Neilsen Media Research. The business has been underperforming because of the uncertainty and this will enable the deal to go ahead. Ebiquity says that 2018 operating profit will be lower than expected.

Positive news about the Wressle oil project, where the planning officer for North Lincolnshire has recommended approval. The original application was refused two years ago. Operator Egdon Resources (EDR) owns a 30% interest in Wressle, Europa Oil and Gas (EOG) has a 30% interest and Union Jack Oil (UJO) has a 27.5% interest. Humber Oil and Gas owns the other 12.5%.

Integumen (SKIN) has raised £355,000 from a placing at 0.44p a share. This cash will support the development and commercialisation of Labskin. Integumen is paying €40,000 and six million shares to former chief executive Declan Service.

Sutton Harbour (SUH) returned to profit in the six months to September 2018, although the corresponding period had a hefty asset write-down, and it is raising cash for pre-construction funding. An open offer of 77-for-786 at 29p a share will raise up to £3m and close on 6 December. Planning approvals have been received for the Sugar Quay and Harbour Arch Quay schemes in Plymouth.

Electronic and battery products supplier Solid State (SOLI) is starting to improve its performance, although there may still be a decline in full year profit. In the six months to September 2018, revenues were 5% ahead at £23.6m and pre-tax profit improved from £1.55m to £1.66m. The interim dividend was 5% higher at 4.2p a share. The order book was worth £29.6m at the end of September 2018.

TomCo Energy (TOM) has appointed Turner Pope to replace SVS as broker and trading in the shares has recommenced.

SEC (SECG) is acquiring France-based public and corporate affairs business CLAI. An initial 10% stake, but with 50.1% of voting rights, will cost €490,000 in cash. A further stake of 40.01% will be acquired in the second half of 2020 and another 10% in the second half of 2023. The shareholders can ask SEC to buy the remaining shares between 30 July 2025 and 30 November 2025. The final payments are based on an earnout although the maximum will be €8.8m. In 2017, CLAI made a pre-tax profit of €551,000 on revenues of €4.49m. The acquisition could be earnings enhancing. CLAI will continue to be run by existing management.

Majestic Wine (WINE) is finding the UK market tough and margins are coming under pressure. Peel Hunt has reduced its 2018-19 pre-tax profit forecast by £2m to £12.8m, partly due to increased investment in Naked.

Kestrel has increased its stake in Pebble Beach Systems (PEB) to 22.2%.

Another disappointing trading statement from Fire Angel Safety (FA.) has led to a 2018 profit downgrade. Stock problems and delays to orders have hit the smoke alarms supplier. Scottish legislation due to be passed next year should provide a boost to demand. Fire Angel will be loss-making in 2018 but should make a small second half profit.

Legal services firm Knights Group (KGH) says that interim figures will be in line with expectations with double digit organic revenue growth. The interims will be announced on 15 January.

Maritime identification systems developer SRT Marine (SRT) had already flagged its 9% increase in interim revenues to £3.2m and increased underlying loss of £1.3m. There was little contribution from the GeoVS analytics system. There are expected to be significant deliveries in the second half, but timing cannot be guaranteed. A full year profit of around £3m is expected if the deliveries do take place. SRT is no longer considering investing in its own satellite constellation for this business.

FIH Group (FIH) reported flat interim profit, although there was a sharp improvement in contribution by the Momart art and museum logistics business. There was a decline in the performance of the Gosport ferry and Falkland Islands activities.

Lawyer Gateley (GTLY) says interim revenues will be one-fifth higher at £46.4m with around 50% of this organic growth. Full year revenues should be at least £102m. EBITDA margins should be maintained suggesting full year EBITDA of more than £19m. That is slightly higher than previous consensus.

Argentina-focused oil and gas producer and explorer President Energy (PPC) says the first Puesto Flores development well is producing at 600 bopd, having peaked at 1,000 bopd. This is as much as was anticipated from all three development wells. The results from the second development well appear positive and testing is about to commence. finnCap believes that the first well could have a post-tax NPV of $20m.

Pallett developer and manufacturer RM2 International (RM2) is raising £13m at 105p a share, following a 200-for-one share consolidation. This replaces the second tranche of a previously announced placing which would have happened at 1p a share (200p a share equivalent) but RM2 did not meet the performance requirements to spark the other placing. All but one of the investors set to buy shares previously will subscribe to the new placing. The cash will be used to fit track and trace devices to existing pallets, produce new pallets and cover admin costs. The cash will last until next April.

finnCap has sharply downgraded its pre-tax profit forecasts for telecoms services provider Maintel Holdings (MAI) due to project delays. The 2018 figure has been cut from £12.9m to £9.8m and the 2019 figure from £16.1m to £12.7m. The 2018 dividend is still expected to be 34.5p a share, although the cover will fall to 1.6 times. There is a move towards recurring revenues which will have a longer-term benefit for Maintel.

Restaurants operator Tasty (TAST) has revised its £7m term loan facility, which will be extended until March 2022. Quarterly repayments will be reduced from July 2019, by which time the amount draw down will be reduced by £1.1m. Net debt is currently £4.3m.

The NAV of value-focused investment vehicle Gresham House Strategic (GHS) has held up well considering the stockmarket decline. It grew to 1264p a share at the end of September 2018 and it was still 1243.2p a share on 16 November. The stake in IMImobile (IMO) has been reduced but it remains a strong performer. Cloud communications software supplier IMImobile improved its interim revenues by one-quarter and organic growth was 15%. The growth came from the European and American operations. Established customers are buying more services from the company and acquisitions are supplementing growth. Liontrust has increased its IMImobile stake to 21.4% but Kestrel has cut its to below 3%.

Payment protection software provider PCI-PAL (PCIP) is paying former boss William Catchpole his contracted entitlements plus £100,100 in settlement of his claims. The board unanimously asked Catchpole to leave in October. The final loan note repayment of £250,000 has been received from the buyer of the contact centre business.

Digital and media recruiter Nakama Group (NAK) reported flat interim net fees of £2.7m, but it managed to return to profit thanks to reduced costs. Further cost cutting is underway. There was a £558,00 cash inflow from operations and net debt was £488,000.

Antennas developer MTI Wireless Edge (LSE: MWE) has completed its merger with Israel-quoted majority shareholder MTI Computers and the initial benefits will show through in the second half. The interim figures show organic growth in revenues of 2%, but that growth should accelerate in the second half. Water management technology provider Mottech is winning new business and there are good prospects for the other divisions. The NAV is 17.8p a share and the full year dividend could be 1.25p a share.

Two directors have invested nearly £230,000 in shares in Condor Gold (CNR) at 22pa share. Non-executive Jim Mellon took his stake to 7%, while executive chairman Mark Child has reached 6%. Condor has been granted an important environmental permit for the development of a processing plant at its La India project in Nicaragua. SRK Consultants is preparing an updated mineral resource.

Juridica Investments Ltd (JIL) plans to leave AIM as part of the process of winding-up the company. The quotation will be cancelled on 21 December after liquidators from KPMG Channel Islands are appointed. Management fees will be reduced.

Online women’s fashion retailer Sosandar (SOS) continues to build up its sales, having been trading for two years, and they reached £1.84m in the six months to September 2018. The loss was nearly £2m. Returns were 52% but that was put down to a high level of dress sales in the period and it can be more difficult to get the right fit. The benefits of the move to the Magento 2 ecommerce platform and the investment in the website are showing through in the second half. October was a record month. A placing raised £3m after the balance sheet date so pro forma cash is £5.56m.

600 Group (SIXH) has rationalised its UK business and sorted out its pension problems. Interim revenues were slightly ahead but underlying margins improved from 5.1% to 6%. The machine tools and laser marking equipment supplier is expected to improve its full year pre-tax profit from $3.05m to $3.9m.

Motor dealer Cambria Automobiles (CAMB) has performed well considering the dip in the new car market. Used vehicles and aftersales offset some of the decline. There was a 2% decline in revenues to £630m and underlying pre-tax profit fell by 13%  to £9.8m. The capital investment programme for new sites has peaked and the benefits of that investment are still to come.

Veltyco Group (VLTY) is still finding it difficult to collect the money it is owed. This means that its cash is running low and this will impact its ability to promote its own brands.

Graphene materials supplier Directa Plus (DCTA) is confident that it will achieve 2018 revenues of €2.3m and this figure could double in 2019. Growth is coming from textiles, environmental and elastomers customers.

Ubisense Group (UBI) is selling RTLS SmartSpace for up to £35m, which is around two-thirds of the software company’s current market value. The group had cash of £6.8m in the middle of November 2018. Funds managed by Investcorp Technology Partners will pay an initial £30m. Liabilities of £3.1m and a loan of £1.75m will have to be paid out of the proceeds. The company’s name will be changed to IQGeo and it will focus on the myWorld product, which helps telecom companies to integrate their technology ecosystem. The myWorld business generated interim revenues of £5.7m but £3.2m was geospatial services from third party products. Some of the cash will be distributed to shareholders.

The decline in annual pre-tax profit at Stride Gaming (STR) from £18.9m to £14.8m was no surprise given the impact of regulation and tax. The online bingo and gaming company is likely to report a further fall in profit this year. A special dividend of 8p a share has been announced and in future 50% of net earnings will be paid in dividends.

MAIN MARKET  

Packaging and labels supplier Macfarlane Group (MACF) continues to grow revenues organically, supplemented by recent acquisitions. Organic growth has been 5% and overall growth is 13%. The fourth quarter is important, though. Full year pre-tax profit is forecast to improve by 47% to £13.6m and earnings per share by one-third to 7p. Acquisition payments should be offset by cash generated in the second half.

S and U (SUS) has increased its investment in Aspen Bridging from £20m to £30m. Aspen has been trading for less than two years and is already in profit.

Creightons (CRL) increased its interim profit by 44% to £1.38m on revenues one-third ahead at £22.3m. The main growth in sales has come from retailer own brands, while Creightons own brands raised their sales by 11%.

David Brown has sold his 4.55% stake in Associated British Engineering (ASBE).

Sealand Capital (SCGL) has formed a new subsidiary called ePurse (HK) Ltd, which is generating commissions from WeChat Pay activities in Hong Kong. Licences have been obtained in the UK and Dubai.

Andrew Hore

Andrew Hore – Quoted Micro 11 June 2018

NEX EXCHANGE   

There are eight companies in the running for the NEX Exchange company of the year at the Small Cap Awards. The awards will be held at The Montcalm Hotel, Marble Arch.

Kent-based wines maker Chapel Down Group (CDGP) has built up a significant presence in the English wines market. The company has a winery in Tenterden and it is building a new brewery for its beer operations. Chapel Down reported a 15% increase in annual sales to £11.8m. Wine sales were one-fifth higher at £8.12m with cider and beer sales, via associate Curious Drinks, were 7% ahead at £3.68m. Operating profit improved from £346,000 to £470,000 but there was a much larger loss from the Curious Drinks associate so pre-tax profit was lower. The new brewery should be open in the first quarter of 2019.

Cyber security technology developer Crossword Cybersecurity (CCS) is still at a very early stage of its development but it more than doubled its revenues in 2017. The loss still increased from £950,000 to £1.24m despite the improvement in revenues from £345,000 to £737,000. The cash outflow was £1.06m, which left £490,000 in the bank. Since then, £2.16m was raised via a placing at 270p a share. Crossword has interests in a number of early stage businesses, including CyberOwl, a joint venture between Coventry University and Crossword, which has backing from Mercia Fund Management. CyberOwl is developing network security software for target-centric monitoring.

Field Systems Designs Holdings (FSD) has one of the longest track records on NEX and it has its highest share price in more than one decade of trading. Field Systems designs, installs and supplies electrical, instrumentation and control systems, for the water, power and transport sectors. In the six months to November 2017, revenues jumped from £8.47m to £12m, while pre-tax profit improved from £114,000 to £211,000. There was £3.34m of cash in the bank and NAV was £3.31m, which is more than the market capitalisation.

KR1 (KR1) has had a successful year buying and trading various coins and tokens. The KR1 share price has more than quadrupled over the past year. KR1 generated gains of £4.3m on its trading in digital coins and tokens during 2017. There was also a total unrealised gain of £10.8m on these investments and a £1.18m foreign exchange gain. The total pre-tax profit was £14.5m, with a tax charge of £2.87m.

Dairy and livestock services provider National Milk Records (NMR) was originally part of the Milk Marketing Board and after it was spun off it joined the forerunner of NEX. National Milk Records generated revenues of £5.32m in the three months to March 2018. This means that revenues are £1.51m ahead so far this year, although the comparatives are weak. Herdwise, the screening service for Johne’s disease and other testing services are providing growth with a small improvement from milk recording services. Rising milk supply has started to hold back milk prices.

Energy saving electrical products supplier Sandal (SAND) reported flat interim revenues of £1.88m but it masks the growth in the sales of MiHome products. This growth will continue in the second half. The interim pre-tax profit edged up from £35,000 to £44,000. Sandal secured a term loan of up to £500,000 from major shareholder Greenbrook Industries Ltd and £250,000 was used to buy back 862,068 shares from Greenbrook. The shares were cancelled and this will enhance earnings per share.

Daniel Thwaites (THW) is a brewer, hotels and pubs operator that has been trading for more than two centuries. It has also been on NEX for more than two decades, since the London Stock Exchange closed rule 4.2, which was a matched bargains facility for unquoted companies. Some of these former rule 4.2 companies moved to AIM, while others, including a number of regional brewers, moved to Ofex/NEX. In the six months to September 2017, revenues improved from £44m to £48m and underlying pre-tax profit were flat at £5.9m. The shares are trading at a near-50% discount to NAV.

Walls & Futures REIT (WAFR) is an ethical housing REIT and it is also on the shortlist for the impact company of the year. The company develops new housing for people with learning and physical disabilities or needing extra care. Earlier this year, Walls and Futures raised £80,000 from an open offer at 94p a share. In 2017, Walls and Futures achieved a total return on its portfolio of 11.5%, ahead of its benchmark total return of 7%. Walls and Futures has joined the MSCI IPD UK Residential Property Index.

The winner will be announced on Thursday 14 June.

Cannabis investment company Sativa Investments (SATI) is widening its remit. It is asking shareholders to agree to investments outside of Canada.

Ace Liberty and Stone (ALSP) has completed the acquisition of offices in Leicester for £4.385m. The Leicester Crown Prosecution Service pays an annual rent of £290,000.

St Mark Homes (SMAP) is paying a maintained interim dividend of 5.5p a share and the ex-dividend date is 5 July. The dividend will cost £247,000. The carbon emissions trading business has also started electronic currency mining.

China CDM Exchange Centre Ltd (CCEP) reported a small dip in revenues from £898,000 to £888,000 but it managed to increase its profit from £2,000 to £35,000.

Karoo Energy (KEP) has secured Contax Partners as technical partner and project manager for the shale gas project in Botswana. Contax will accept £800,000 worth of shares in Karoo as payment for services. Karoo hopes to apply for admission to AIM by 1 July.

Wishbone Gold (WSBN) says full production at its Honduras processing plant has been delayed because permits have not been received for the processing of larger amounts of gold ore.

EPE Special Opportunities (EL.P) had an NAV of 228.16p a share at the end of May 2018.

AIM   

Property investment adviser First Property Group (FPO) reported flat pre-tax profit of £9.23m in the year to March 2018. The final dividend is 3% higher at 1.18p a share. The underlying NAV rose from 47.6p a share to 53.1p a share. Third party assets under management were 45% higher at £454m, which is mainly down to the new office fund. Progress this year will be held back by the departure of the tenant in a building in Poland. Some of the space has already been re-let and the rest should be during the year.

Pawnbroker Ramsdens (RFX) continues to grow on the back of strong foreign exchange revenues. Last year, they were 26% higher at £11.3m. Group revenues were 16% ahead at £39.9m, while underlying pre-tax profit rose 60% to £6.5m. Net cash was £12.7m, although that does include foreign currency stocks. The total dividend was 6.6p a share.

Gooch and Housego (GHH) increased interim revenues by 7% to £55.6m and underlying pre-tax profit was13% ahead at £7m. Aerospace was the main growth area as subsea telecoms demand was weak. The photonics and optical equipment company is on course for a full year profit of £18.5m.

Artilium (ARTA) is recommending a cash and shares bid from Pareteum. The offer is 0.1016 of a Pareteum share and 1.9p in cash for each Artilium share, which values the telecoms software supplier at £78m. The offer follows a strategic alliance between the two companies that was announced last year.

IT managed services provider Redcentric (RCN) says that some public sector contracts have been cancelled and there will be upfront costs for a new contract with the NHS in Yorkshire. That means that 2018-19 EBITDA will be 10% lower than previously forecast.

Imaginatik (IMTK) has completed its strategic review and the chairman and chief executive are both leaving and they are waiving compensation. This will help to reduce annual costs by £750,000. The business is no longer up for sale because no suitable bid was received. Annualised revenues are £2.8m and the innovation software business could move into profit after a full year’s benefit of the cost savings. Former chairman Matt Cooper has sold £225,000 worth of shares at 0.5p each and reinvested the cash in a new £225,000 convertible, interest free loan note. Octopus has reduced its stake from 27.2% to 7.1%.

Mass spectrometry instruments supplier Microsaic Systems (MSYS) has raised £5.5m at 2p a share and an additional £102,000 via a PrimaryBid.com offer.

Trading in cash shell Monreal (MORE) has been suspended because the former Cogenpower has not completed a deal. The board is asking for shareholder approval to move to NEX after the AIM quotation is cancelled on 3 July. The investment strategy will focus on technology, media and telecoms.

Education-focused virtual reality content supplier VR Education (VRE) has delayed the full launch of the latest version of its Titanic VR product until August but it is not expected to affect full year expectations. Work has started with the BBC on 1943: Berlin Blitz.

Driver Group (DRV) continues to improve its margins and profit helped by the growth of the Diales expert witness business. Middle East revenues were lower but profit was higher, while high utilisation rates in Asia Pacific meant that was a sharp swing back to profit in the region. Underlying pre-tax interim profit doubled to £2.1m om the six months to March 2018 and Driver ended the period with net cash of £800,000. The sale and leaseback of the company’s head office was completed in April and net cash is forecast at £5.5m for the end of September 2018. A full year profit of £3.5m, up from £2.5m, is forecast. A return to dividend payments is a possibility in the next year or so.

Rose Petroleum (ROSE) has enough cash to push forward with the exploration of its Paradox basin acreage in the US. Rose is still earning its 75% working interest in the acreage and it has already received interest from potential farm-in partners that could help finance the first well, which could cost $7m-$8m. A competent person’s report will provide an updated resource in the next few weeks.

The smart machines division was behind the small improvement in profit at Vianet (VNET) in the year to March 2018. That was helped by a contribution from the Vendman acquisition. The smart zones drinks dispensing technology made a slightly lower contribution to profit as it lost more pub customers but the US side is making progress. Research and development spending on technology peaked at £1.5m last year and should fall this year. Net cash fell to £1.27m because of the extra spending but the dividend was maintained at 5.7p a share. The investment should start to pay off this year and pre-tax profit is expected to rise from £2.7m to £3m.

MAIN MARKET    

LED lighting supplier Luceco (LUCE) is closing its loss-making US business at a cost of £2m. The US business lost £1.9m last year. Luceco announced an operating profit of £14.2m in 2017.

Quarto Group Inc (QRT) has appointed former finance director Mick Mousley as interim finance director following the departure of Carolyn Bresh. This follows the change of control at the AGM.

Lb-shell (LBP) is asking for shareholder approval for the creation of £435,000 of unsecured convertible loan notes with a conversion price of 0.025p a share. That requires the par value to be reduced to 0.025p a share. Full conversion could mean the issue of shares equivalent to 89.4%. Three directors will own a total of £290,000 of the loan notes. The former Intelligent Energy will offer shareholders the chance to sell their shares for 0.025p each.

Andrew Hore

Quoted Micro 9 October 2017

NEX EXCHANGE

National Milk Records (NMRP) has changed its year end to June and its latest figures are for the 15 months to June 2017. This is a period when the dairy information and data services provider sorted out its pension deficit problem and this removed significant, and volatile, liabilities from the balance sheet. The market has been tough for at least two years because of the weak milk price but it is starting to recover. In the 15 month period, revenues were £25.3m and operating profit before pension and one-off charges was £1.1m. The total loss before tax is £11.9m, which is after a pension related charge of £12.5m. Trading is improving.

WH Ireland believes that Ashley House (ASH) could report a pre-tax profit of £1.8m for the year to April 2018, although it is likely to be second half weighted. This follows a decline in underlying pre-tax profit to £53,000 last year because of uncertainty about government policy. The community care properties provider has a strong pipeline of potential developments. The acquisition of an off-site manufacturing business will help the group to win modular buildings business.

Energy efficiency products supplier Sandal (SAND) reported a 14% rise in full year revenues to £3.75m. The Energie MiHome range grew by 154%, albeit from a low base. The loss was halved to £135,000 but refunded tax reduced the cash outflow from operations. Development expenditure will broaden the product range in the smart home sector.

Ace Liberty & Stone (ALSP) reported a jump in pre-tax profit from £612,000 to £1.12m in the year to April 2017 and this is prior to the disposal of all the residential properties. The property investor made a £1.02m gain on disposals but this was offset by a £391,000 unrealised reduction in property values, compared with a £283,000 unrealised gain in the corresponding period. NAV was £18.1m at the end of April 2017.

Capital for Colleagues (CFCP) had a net asset value of 42.58p a share at the end of August 2017. Recent investment include £400,000 in timber frame buildings company Employee Owners Group and £150,000 follow-on investment in Computer Application Services.

London Nusantara Plantations (PALM) has £129,000 in the bank following the disposal of its initial land investment. There was a small gain on disposal but it was not enough to wipe out the interim loss. Management is assessing acquisition opportunities of plantations and mill capacity in Sumatra and Kalimantan, Indonesia. This will require additional funding.

Black Sea Property (BSP) has completed the €5.4m fundraising, at €0.01 a share, which it requires to progress the acquisition of the office building in Ivan Vazov Street in Sofia from UniCredit Bulbank. Debt funding of €7m still has to be secured from UniCredit Bulbank. Black Sea Property has paid a deposit of €1.04m out of the purchase price of €10.5m.

AIM

Bushveld Minerals Ltd (BMN) has published the circular for the demerger of its tin interests. Shareholders will receive one share in Afritin Mining Ltd, which will own the company’s Greenhills business, for each Bushveld share. Afritin will own the Mokopane tin project and Zaaiplaat tin tailings project in South Africa plus an interest in the Uis tin project in Namibia. Bushveld will still have coal assets but the main focus will be the vanadium assets and the potential value adding battery-related products.

Toilet tissue supplier Accrol Group Holdings (ACRL) has asked for trading in its shares to be suspended because of uncertainty about its financial position. It has been difficult to pass on extra raw materials costs and operational problems have also increased costs. There is also going to be a large fine relating to a health and safety incident.

Earthport (EPO) has raised £25m at 20p a share. This cash will be used to expand the corss-border payment services company’s market and global presence, develop further products and invest in the operating platform.

The requisitioner of the general meeting at Conroy Gold and Natural Resources (CGNR) failed to get any of its resolutions passed so there are no more changes to the board. Conroy raised €240,000 at €0.30 a share. The exercising of warrants raised €167,000. The cash will be used to develop the Clontibret deposit and pay for additional exploration at the Slieve Glah gold prospect.

Reabold Resources (RBD) is raising £1.76m at 0.5p a share. This follows a £3.96m subscription at the same share price. Reabold intends to change its focus to European oil and gas projects. Two former M&G analysts have joined the board.

City of London Group (CIN) has completed the reverse takeover of Milton Homes, which provides equity release products for residential property owners.

Stanley Gibbons (SGI) has found a new buyer for its interiors division. Gurr Johns is paying £1.25m with up to £400,000 deferred consideration. Stanley Gibbons is retaining £300,000 of inventory and the Mallett premises in New York. It has also retained the Mallett and Made by Meta brands. Millicent had agreed to pay £2.4m for the assets and brands and it has to pay a termination fee. Stanley Gibbons reported a £30.2m loss for the year to March 2017. Even taking out exceptionals the underlying loss was £11.1m. The NAV is £18m.

Kin Group (KIN) has raised £1m at 0.001p a share and every four shares come with a warrant to subscribe for a new share at 0.004p each. A CVA is proposed where unsecured creditors will swap their money owed of £2.27m for shares at 0.01p each. A capital reorganisation is required to reduce the nominal value of a share to below the placing price. John Taylor, who has been involved in the aerospace and military sectors, and Lindsay Mair, a corporate financier at SP Angel, are joining the board.

Redcentric (RCN) has appointed Chris Jagusz as chief executive. Net debt is falling but it is still £33.3m. Working capital management has improved. Profit should start to recover this year.

Orosur Mining Inc (OMI) has announced a drilling programme for the Anza gold project in Colombia. There will be 15,000 metres of diamond core drilling and the first results should be available by next February. The plan is to define a maiden resource and the potential for further mineralisation.

Avacta (AVCT) has announced a research collaboration with FIT Biotech in order to assess the effectiveness of is Affimer technology with FIT’s vector technology for delivering a gene.

The Environmental Protection Agency in the US has asked Tristel (TSTL) to resubmit its application for its Duo surface cleaner. This means that approval could be five months later than planned.

Northland has initiated coverage of Venture Life (VLG) and it expects the consumer healthcare firm to move into profit in 2018. Northland believes that Venture Life will benefit from growth in demand for self-care products because of the ageing global population. Venture Life already sells its products in more than 40 countries.

Angling Direct (ANG) is acquiring Fosters Fishing for £3m in cash. Fosters have a 17,000 square feet store in Birmingham and made an operating profit of £460,000 last year. When a new store in Slough opens Angling Direct will have 18 outlets.

SkinBioTherapeutics (SBTX) says that its technology has passed third party cytotoxicity tests. Phototoxicity and in vitro ocular toxicity tests are underway.

AdEPT Telecom (ADT) has declared a 13% increase in interim dividend to 4.25p a share. Recent acquisitions are performing well and are helping to focus the group on managed services.

Redhall Group (RHL) says delays on nuclear and infrastructure will hit its figures for the year to September 2017. The Hinckley Point C contract is expected to start in October 2017. The Chieftain facility is being closed. The 2016-17 profit forecast has been halved to £500,000. The 2017-18 profit forecast has been trimmed by £200,000 to £3.4m.

Adams (ADA) has taken its cash pile to £660,000 following the sale of £584,000 worth of shares in GVC.

Former AIM company Clinical Computing has sold its trading subsidiaries to TSX-listed Constellation Software.

MAIN MARKET

InnovaDerma (IDP) is raising £4.4m at 276p a share. The Skinny Tan brand owner needs the cash for working capital. Despite declaring a profit of more than £1m in the year to June 2017 there was a £607,000 cash outflow from operations as inventory levels soared.

Curzon Energy (CZN) raised £2.33m at 10p a share but the share price has declined to 9.25p. Curzon has acquired coalbed methane licences in Oregon. Curzon believes that gas could be produced before the end of the year.

Haynes Publishing (HYNS) has completed the acquisition of E3 Technical from Solera UK for £4.72m. This will expand the data-related operations of Haynes, as well as providing cross-selling opportunities. E3 provides repair and maintenance information and vehicle registration look-up services.

Andrew Hore

easyJet Flying High as Ryanair “Messes Up” Big Time

easyJet EZJ  continues to fly high with statistics for September showing an 11% rise in passenger numbers and load factor up by a further 2.5pp to 93.6%. Mind you easyJet must regard as a blessing, Ryanair’s much publicised confession that it has messed up big time and will continue to do so for months to come, much to the annoyance of its passengers

Intercede Group IGP Revenue rose by about 30% in the 6 months to 30th September, due mainly to new customer wins. A strong second half is expected as diversification into Europe and the strengthening of the European pipeline is expected to offset budget difficulties  in the company’s US government customer base.

Redcentric RCN has been trading in line during the last six months which has seen strong operating cash flow leading to a reduction of  £33m in net debt, ahead of management expectations. A new CEO has been appointed who has a 25 years track record of delivering growth and business transformations.

BTG plc. BTG updates that it has delivered a good first half performance in the 6 months to the 30th September, producing double digit sales growth at constant exchange rates. Interventional Medicine’s growth is expected to have been  in the mid to high teens at constant exchange rates and this is expected to increase in the second half.

Accrol Group Holdings ACRL has experienced more challenging trading conditions which are having a significant effect on the company’s trading performance. It is believed that fine which is due to be imposed by the Health and Safety Executive will be more significant than previously thought, to the extent that it will have a material impact on the company’s cash position. Consequently the dividend payment for the current year is to be reviewed and application has been made for the temporary suspension of trading in the company”s shares on AIM.

Caledonia Mining Corporation CMCL announces yet another quarterly production record at its Blanket Mine in Zimbabwe.Gold production in quarter 3 rose to 14,389 oz. which was 15% up on the second quarter and 7% up on 2016’s third quarter. The improvement in gold production is expected to continue into the fourth quarter.

Beachfront villas & houses for sale in Greece    http://www.hiddengreece.net

Quoted Micro 8 May 2017

NEX EXCHANGE

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

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

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

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

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

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

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

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

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

AIM

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

MAIN MARKET

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

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

Andrew Hore

Quoted Micro 2 January 2017

ISDX/NEX

Business incubator Milamber Ventures (MLVP) is acquiring The League of Angels, an angel network set up by Barney Battles, a Milamber director. There is a subsidiary called The China 68 Club that offers access to Chinese family offices. The business made a small profit last year and since April it has referred work to Milamber worth £200,000. Milamber is paying £150,000 in shares at 15p each. Battles will own 21.6% of Milamber. In the six months to September 2016, Milamber increased its revenues from £34,000 to £224,000, while the loss rose from £54,000 to £196,000.

Residential property developer Via Developments (VIA1) has found buyers for all eight apartments in its Canal Street development in Manchester and non-refundable deposits of £375,000 have been received. The apartments should be completed in the second quarter of 2017. The gross development value of the project is £2.2m. Revised plans have been submitted for the Plymouth Grove development in Manchester and planning applications for the Napier Street site in Luton, the place in the UK where house prices have been strongest over the past year, should be determined in the next few months.

African Potash (AFPO) has revised its bridge loan agreement with Katrina Clayton, the wife of the company‘s finance director. This agreement provided finance of £150,000 and this will be increased to £900,000, in return for a fee of £7,500, because it failed to raise additional cash through share issues. If the shares cease to be traded on ISDX/NEX or a regulated market then African Potash will be in default. The lender can also appoint a director to the company. There was a $2m cash outflow from operating activities in the year to June 2016, plus $873,000 of capital investment. There were limited revenues from fertiliser trading. Net debt was $706,000 at the end of June 2016.

Globe Capital Ltd (GCAP) had £5,000 left in the bank at the end of September 2016. There was a cash outflow of £91,000 over the previous nine months, while £100,000 was raised from issuing shares. The only investment is a 25% stake in online menswear retailer Sterling Craig.

AIM

It is not just TLA Worldwide (TLA) that has used the Christmas and New Year period to put out bad news, although none was quite as blatant and late in the day as TLA. Legal and debt management services provider Fairpoint (FRP) used the period between Christmas and New Year to report the departure of chief executive Chris Moat, although he will continue to assist in the closure of the debt management business. The share price has fallen by two-thirds since its profit warning on 9 December. Hargreave Hale has been trimming its stake from above 14% to 12.2%. 1Spatial (SPA) has parted company with its chief executive Marcus Hanke. This follows the disposal of the Avisen and Storage Fusion businesses. 1Spatial had warned that contracts were going to fall into 2017 and therefore it will make a 2016 loss.

Intercede (IGP) is raising around £5m from the issue of £4.5m of convertible loan notes and a £500,000 subscription at 57p a share – although this requires shareholder approval – compared with a market price of 57.5p. The identity and digital security services provider is not generating enough cash to make the required investment in its products and a move into the consumer market. Full year revenues will be less than the £11m reported for 2015-16. Interim revenues halved to £2.8m and the pre-tax loss soared from £432,000 to £3.67m. The cash pile fell from £5.29m to £1.38m in the six months to September 2016 so most of this cash has probably already gone. The convertibles last for five years and have an annual interest charge of 8%. The conversion price is just over 68.8p a share.

B2B gaming services provider Nektan (NKTN) has raised £2.275m at 27.5p a share and is offering shareholders the chance to subscribe for £500,000 at the same share price. That was a 15% discount to the market price but it has since fallen to 27p – compared with the November 2014 flotation price of 236p. In the year to June 2016, revenues jumped from £528,000 to £5.78m but the loss still increased from £8.12m to £10.5m. The cash outflow, before a rise in trade payables, was £6.18m. Conversion of loans means that Nektan’s stake in US business ReSpin has been raised from 50% to 85%.

It has not just been bad news between Christmas and New Year. Windar Photonics (WPHO) has revealed a number of new orders for its LiDAR wind sensors for use on wind turbines. An Indian power producer and the Indian National Institute of Wind Energy have ordered sensors, with the power producer ordering an initial five units with an option for a further 35 units. On top of this there are orders for seven units from Canada – a repeat order – and South Korea – the first order in that country. Windar has already said that its 2016 revenues will be between €1.5m and €2m – slightly below expectations. Before Christmas, Windar raised £491,000 at 94p a share. The share price has since fallen back to 77p.

Commercial property investor Summit Germany Ltd (SMTG) is paying a third interim dividend of 1.02 cents a share – the same as the previous quarterly dividend. The ex-dividend date is 5 January and forms to receive the dividend in pence need to be completed by 4 January. The exchange rate for the previous quarterly dividend was 0.8815p to one Euro, so the current exchange rate suggests that the sterling equivalent will be lower in this quarter. Summit has sold an empty office building in Hamburg for €14m.

Facilities management and security services provider Mortice Ltd (MORT) is generating more than three-quarters of its revenues from repeat business. In the six months to September 2016, revenues were 79% ahead at $91.1m. Much of that growth comes from a full contribution from the UK operations but the Indian business grew 22% and still accounts for 63% of revenues. Underlying pre-tax profit has jumped from $300,000 to $2/6m. Net debt was $14.6m but since then £2.3m has been raised at 75p a share. Trading continues to be strong.

Kodal Minerals (KOD) says that the latest samples at the Bougouni lithium project show high grade lithium mineralization of up to 2.03% lithium oxide. A total of 18 holes have been drilled and the results of analysis are expected by the end of January.

Stanley Gibbons (SGB) lost £6.18m in the first half, compared with a £1.11m profit in the comparative period after revenues slumped from £29.4m to £20.2m. Net debt was £16.5m at the end of September 2016. The US-based ecommerce business has been closed after an investment of £10m. A new coin joint venture has been set up by Baldwin with coin auctioneer St James’s, following a number of management departures.

Redcentric (RCN) has issued options to finance director Peter Brotherton and chief operating officer Mo Siddiqi. Brotherton has 161,905 options at nil cost and Siddiqi has 257,143 options at no cost, while Siddiqi has 250,000 at 84p each. These options are dependent on diluted earnings per share growth between March 2016 and March 2019. The compound annual growth rate required is not specified but the figures for the year to March 2016 have already been restated downwards. Siddiqi also has 250,000 options at 84p each that have no performance criteria. The current share price is 91p.

Grapheme NanoChem (GRPH) has gained its first commercial order for PlatDrill synthetic-based drilling mud in China. The initial order of 4,000 barrels of PlatDrill will be used for two shale gas wells in south west China and will generate revenues of $360,000. There could be more than 300 wells drilled in China each year over a five year period.

Mobile financial services provider Vipera (VIP) is increasing its stake in Codd & Date, which deploys Vipera’s technology services with customers, from 51% to 80.7%. In fact, the part of the business that focuses on Vipera’s Motif software will be split out and become a wholly-owned business. The enlarged group will move into larger premises in Milan More Info. Vipera is issuing 21.4 million shares and six million warrants exercisable at 5p each to pay for the additional stake.

CPP Group (CPP) is paying SSP £2.5m for terminating the contract to build an IT platform.

Fire and emergency services resource manager AssetCo (ASTO) is still attempting to renew its main contract in Abu Dhabi, which was due for renewal on 17 November. The contract will continue on existing terms until the new one is agreed. There should be further news concerning a one year extension at the end of January. Trading is in line with expectations.

Positive news from Providence Resources (PANR) concerning its VOBM4 well. Drilling of the Wilcox sandstone suggests that there is a potentially highly productive hydrocarbon zone at shallower depths.

Igas Energy (IGAS) is still trying to negotiate a capital restructuring and a strategic investor is interested in injecting funds into the business. There is around $32m left in the bank but net debt is significant enough for IGas to be on the verge of breaking its leverage covenant.

Circle Oil (COP) has lost its AIM quotation because trading in the shares had been suspended for six months and management says that the shares are unlikely to have any value. The International Finance Corporation and associates have waived debt repayments and deferred interest payments until 26 January.

MAIN MARKET

Derriston Capital (DERR) joined the standard list on 29 September. Medical products and devices are the proposed areas where an acquisition is likely to come from. Derriston (www.derristoncapital.co.uk), whose investors include Nigel Wray, former Domino’s Pizza boss Stephen Hemsley and Primary Health Properties boss Harry Hyman, raised £2.275m at 10p a share to go with the £56,000 previously raised. Derriston was valued at £2.5m when it floated. The standard list shell more than doubled in value in the first couple of days of trading but ended the week at 17.5p.

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

 

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