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Andrew Hore – Quoted Micro 10 February 2020

NEX EXCHANGE

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

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

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

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

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

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

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

AIM

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

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

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

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

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

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

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

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

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

MAIN MARKET

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

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

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

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

Andrew Hore

Andrew Hore Quoted Micro 14 October 2019

NEX EXCHANGE

National Milk Records (NMRP) increased its pre-tax profit by one-fifth to £2.4m in the year to June 2018. Revenues improved from £21.4m to £22.8m. The farm-based milk recording business grew, but the main growth came from the much smaller traceability and reproductive businesses. These figures are for the period before the recent virus attack. The dividend has been halved from 2.5p a share to 1.25p a share because management wants to invest in laboratories and IT. Net debt was £1.7m.

Good Energy (GOOD) has clarified its interim figures. The renewable energy supplier says that there was a misclassification of £4.9m relating to cash and current assets and current liabilities. The problem was the timing of payments. This does not change NAV and profit. There was a £20m in the bank at the end of September 2019. Good Energy has signed a technology platform agreement with Octopus Group, which could involve investment of £4m in order to improve efficiency. The existing technology will be written down over the 12 months to June 2019. Operating cost savings should cover the investment in 18 months of full implementation.

Vox has ended merger discussions with PCG Entertainment (PCGE) and Align Research saying that it is difficult to raise money for any business involving Align Research. Vox is concerned that this will hamper fundraisings for future deals, and it believes it could have a negative effect on its main business.

VI Mining (VIM) has acquired rights to near-surface oxide gold at the Aripuana project in Brazil. The company’s other assets are in Peru.

Reyker Securities has been suspended as a broker on NEX Exchange.

AIM  

PCI-compliant payment services provider PCI PAL (PCIP) is making progress in winning new contracts in North America. Recurring annual contract value is £1.9m, compared with forecast revenues of £4.8m in the year to June 2020, up from £2.8m. PCI Pal will continue to lose money as it builds up revenues. Net cash was £1.5m at the end of June 2019. A new £2.75m facility will provide the working capital required to cover losses until the company starts to generate cash. Net debt of £1.5m is forecast at the end of June 2021, so this is well within the funding available.

Uhuru Corporation is a Japanese Internet of Things technology company planning to join AIM this month. Tokyo-based Uhuru (www.uhuru.co.jp/en) is involved in consultancy and engineering, as well as providing creative content and data analysis. Customers include NEC, Dentsu, Honda, Komatsu, Yamaha and Mitsubishi Heavy Industries.

Duke Royalty (DUKE) raised £461,500 at 44p a share via PrimaryBid.com, which takes the total raised to £16.55m. A two-for-51 open offer has been launched to raise a further £3.45m.

AIM shell Wilmcote Holdings (WCH) had discussions about the participation in the purchase of US-based speciality chemicals company Arclin Inc, but these have ended. The costs of the work done on this potential transaction have reduced the cash pile to £900,000. Wilmcote is holding talks with investors about how to fund expenses while it seeks another speciality chemicals acquisition. Trading in the shares has recommenced and the share price slumped from 97p to 65p.

Oil and gas producer Amerisur Resources (AMER) has issued revised bidding instructions to the potential acquirers that were provided data as part of the strategic review and formal sale process. The process will hopefully conclude before the end of the year.

Applied Graphene Materials (AGM) is focusing on the customers that are utilising its dispersion know-how and provide the best near-term revenue potential. That will enable the graphene producer to cut its operating costs and make the cash in the bank last at least another two years. Net cash was £6.1m at the end of July 2019 and a tax credit of £600,000 has since been received. Manufacturing will be streamlined, and the annual cost base could fall from £4.3m to £3.2m. Revenues remain modest.

Pawnbroker Ramsdens Holdings (RFX) will make a one-off gross profit of £600,000 from scrapping slow moving jewellery in order to take advantage of the rise in the gold price. Trading is in line with expectations. The interims will be published on 3 December.

United Oil and Gas (UOG) is on course to acquire Rockhopper Egypt for $16m before the end of 2019. A share issue is required in order to fund the initial cash payment of at least $11m. The rest of the payment will be in shares issued at the placing price. The main asset being acquired is a 22% interest in the Abu Sennan concession.

Time Out Group (TMO) has raised £17.1m at 127p a share. The June 2016 flotation price was 150p. The cash will be used to cut debt and roll-out more Time Out Market sites, with Chicago and Montreal due to open later this year and more contracted sites for the future. Net debt was £34.4m at the end of June 2019.

Investors give no quarter when it comes to profit warnings these days. Public housing software provider Castleton Technology (CTP) says recurring revenues are still going well, but there is a shortage of one-off revenues. This has led to a 15% cut in forecast revenues for the year to March 2020. That leads to a cut in pre-tax profit forecast from £6.4m to £5.3m. A similar reduction has been made in the forecast for 2020-21, which is £5.8m. The share price fell by more than one-third to 57p, which is less than ten times prospective earnings.

Trading in the shares of Solo Energy (SOLO) has been suspended ahead of a proposed acquisition of assets from ONE-Dyas for an initial €30.1m. That will be funded by debt and a share issue raising £20m, which will involve an open offer. The 14 gas fields are in the Dutch sector of the North Sea. Tom Reynolds is moving from non-executive to chief executive. The admission document should be published in November and the name will be changed to Scirocco Energy.

Dekeloil (DKL) is still being hampered by a low crude palm oil price but it is optimistic that the price will improve. There was a 11% decrease in third quarter crude palm oil production to 4,803 tonnes. However, there was a 30% increase in sales to 7,138 tonnes. The average price achieved was 16% lower at €456/tonne. The cashew processing project is on course for first production in 2020. The company is changing its name to Dekel Agri-Vision Ltd.

Managed services provider Redcentric (RCN) says that first half trading was on track. It is on course to improve pre-tax profit from £7.2m to £9.8m.

MAIN MARKET

Nottinghamshire-based nmcn (NMCN) is acquiring Lintott Control Systems (LCS), which designs and manufactures water and wastewater treatment systems and process software. The total cost of LCS could be as high as £3.76m. The initial payment is £1, plus up to £676,000 dependent on the receipt of payment for certain invoices. The rest is dependent on profit levels over the three years to the end of 2021.

Argo Blockchain (ARB) has increased third quarter revenues by 75%, compared with the second quarter. Revenues were £3.63m and the cryptocurrency mining margin is 73%, even though the bitcoin price has dropped. The number o machines in production should double to 12,000 by the end of the year.

Rainbow Rare Earths (RBW) used cash of £2.31m in operations in the year to June 2019. Rainbow generated revenues of £1.54m from trial rare earths mining at Gakara in Burundi, but production costs were double that level. Write downs mean that net assets were £3.37m at the end of June 2019. More exploration activity is required before production levels are increased.

Stranger Holdings (STHP) has agreed terms to acquire two mineral companies. One has assets in Cameroon and the other is in Idaho. Minerals include cobalt and nickel. Previous potential transactions have been terminated.

Standard list shell Auctus Growth (AUCT) is still seeking an acquisition. There is still £912,000 in the bank.

Andrew Hore

Andrew Hore – Quoted Micro 5 August 2019

NEX EXCHANGE

Netalogue Technologies (NTLP) increased its revenues by 26% to £1.35m in the year to March 2019. Pre-tax profit jumped from £82,000 to £300,000 thanks to the ecommerce technology provider keeping overheads flat. There is £770,000 in the bank. Netalogue will consider paying a dividend when it reports its interim results. Netalogue focuses on the B2B market and it continues to win new customers.

European Lithium Ltd (EUR) has secured a A$10m finance facility in the form of convertibles from Winance Investment, which replaces the existing facility. The company is still seeking a strategic investor to help finance the development of the Wolfsburg lithium project.

None of the three Morgan Ashley extra care schemes that Ashley House (ASH) was expecting have closed. They could close over the next couple of months, but Ashley House was hoping to get the cash and it is investigating additional funding.  

Trading in the shares of Equatorial Mining and Exploration (EM.P) was restored after the annual report was published. There was a £221,000 loss in 2018 but the business is very different now. A placing has raised £400,000 at 0.01p a share. The date for completing the acquisition of tantalum business Eastinco has been extended until the end of September. This is a part of the strategy to consolidate mining operations in Rwanda. Align Research believes that Equatorial could generate revenues of £1.19m this year, rising to £9.19m in 2020, which would enable it to make a pre-tax profit of £1.77m.

Social impact company Inqo Investments Ltd (INQO) increased its revenues from R23m to R23.8m in the year to February 2019, while additional finance income and fair value adjustments meant that the loss was cut from R5.99m to R2.5m. There was also an increased share of revenue from Bee Sweet Honey in Zambia. Trading is improving at Kuzuko Lodge with room rates and occupancy rising thanks to the weak Rand.

Coinsilium Group (COIN) says that its Gibraltar-based blockchain consultancy has signed a new advisory agreement with IOV Labs Ltd. This involves supporting the RSK Smart Contract Network and RSK Infrastructure Framework blockchain services. These are focused on Asia.

Eight Capital Partners (ECP) has launched a bond to raise up to €5m and it will be traded on the Vienna Stock Exchange. The interest rate is 7% and the redemption date is 26 July 2022.

AIM  

Transport services provider Xpediator (XPT) has not performed as well as hoped this year and earnings estimates have been cut by one-quarter. There has also been some additional investment in the business, which will double central costs.

Information management software provider IDOX (IDOX) has raised £7m via a placing at 28.5p a share, which will be used to finance the acquisition of Northern Ireland-based Tascomi for up to £7.15m. Tascomi is a cloud-based software supplier to local authorities.

Beximco Pharmaceuticals (BXP) has launched a fifth product in the US. Blood pressure drug Nadolol is the generic equivalent of Corgard tablets. The market is worth $63m.

Elektron Technology (EKT) is selling its original Bulgin electricals business for £105m, £94m after costs, and intends to return a substantial amount of the cash to shareholders. Net cash will be £95m after the transaction. The company will change its name to Checkit and become a Software-as-a-Service business.

The Property Franchise Group (TPFG) says that its lettings brands grew revenues by 3% in the first half. Online estate agency EweMove increased revenues by 11%. Group revenues were £5.5m in the first half. Net cash was £2.8m at the end of June 2019. Ian Wilson will step down as chief executive at the end of 2020.

Property adviser Fletcher King (FLK) reported an improvement in full year pre-tax profit from £274,000 to £282,000 on slightly lower revenues. Management says that market conditions will make it difficult to maintain profitability, although there are substantial funds available for investment when the uncertainty ends. The total dividend is maintained at 1.75p a share. There is £2m in the bank.

Digitalbox (DBOX) subsidiary Daily Mash will publish video content from NextUp on its site. This will enable the company to generate advertising on the back of the videos.

MAIN MARKET

A US customer has released Nanoco (NANO) from the obligation to pay back £4.25m of capital funding. This relates to the investment in the Runcorn facility where demand for nanomaterials has not come through from the customer. The book value of the facility, after depreciation, is £3.7m and may be written down further, along with the value of some materials. The facility is available if Nanoco can secure demand from customers.

BATM (BVC) has completed the sale of its stake in a new fibre optic network being developed in Israel. This should generate cash of $3.4m and add $3m to profit. Net cash could be $38m bythe end of 2019.

Oil and gas company Zenith Energy (ZEN) has secured the financing it requires for its drilling programme. A placing in Canada has raised the equivalent of £1.2m at C0.04 a share.

Trading in the shares of Associated British Engineering (ASBE) has been suspended because it has not published its accounts. This should happen this week.

Standard list shell Landscape Acquisition Holdings (LAHL) still has more than $496m in cash and it has done well to preserve the cash it raised when it floated at the end of 2017. There is a broad remit, but the main focus is a property-related/backed business in Europe or North America.

Stranger Holdings (STHP) is still seeking to close a reverse takeover after its first deal fell through. The shell is in talks to acquire local government supplier HCS. There is no cash in the bank and Stranger has net liabilities.

Andrew Hore

Andrew Hore – Quoted Micro 25 March 2019

NEX EXCHANGE

Good Energy (GOOD) increased full year revenues from continuing operations from £104.5m to £116.9m, helped by last winter’s cold weather and a price increase, and pre-tax profit recovered from £700,000 to £1.7m. The renewable electricity supplier and generator has increased its dividend from 3.3p a share to 3.5p a share. Net debt was £40.1m at the end of 2018. Energy supply volumes increased by 3%, but domestic volumes were 1.2% lower in an increasingly competitive market. The growth came in the business side, which increased volumes by 23%. Good Energy generates energy from six solar sites and two wind farms. The company expects to continue to grow business volumes and invest in digital technology. Non-executive director Nemone Wynn-Evans has bought 9,500 shares at 105p each.

Trading in PCG Entertainment (PCGE) shares has been suspended because it is in talks to acquire VOX Markets and Align Research.

Karoo Energy (KEP) has been told by its potential nominated adviser does not believe its is suitable for an AIM quotation. This also means that the planned fundraising cannot go ahead. A refinancing is required. There are trade creditors of around £300,000. Trading in the shares has been suspended.

Primorus Investments (PRIM) has maintained its 3.4% stake in Fresho by participating in its latest fundraising, which was at a 76% premium to the price paid for the initial investment. The investment is worth A$673,000.

Dana Group International Investments Ltd (DANA) reported swing from loss of $129,000 to a profit of $95,000 in the six months to December 2018, due to other income of $276,000.

Tectonic Gold (TAU) says that roc chip samples from the Clermont project in Queensland show up to 8.01g/t gold, 140g/t silver and 6.32% copper.

Panther Metals (PALM) has completed the acquisition of Parthian Resources and its former shareholders own 16.1% of Panther.

Inqo Investments Ltd (INQO) has raised a further £225,000 at 90p a share.

Imperial X (IMPP) has changed its focus to medicinal cannabis. There was a small cash outflow in the six months to the end of December 2018. There was nearly £70,000 in the bank with net cash of £19,000. There are net liabilities and more cash will be required later this year.

Steve Howson is stepping down as chief executive of SG Recruitment Ltd (SGRL) and he will become a non-executive director. Majority shareholder David Sumner will be interim chief executive.

AIM  

Footasylum (FOOT) has recommended a 82.5p a share bid from JD Sports Fashion (SPD) which values the footwear retailer at £90.1m. JD Sports was buying shares between 50p and 75p and built up a 18.7% stake. The bidder promises to maintain the separate commercial identity. Footasylum floated in November 2017 at 164p a share.

Diaceutics (DXRX) ended the week at 97.5p, having floated at 72p. The company provides data analysis and advisory services to pharma companies seeking to develop and commercialise diagnostic tests. There were £15.2m of placing proceeds net of expenses and £5.5m will be spent on the acquisition of data, while the rest will be used to pay off debt and develop AI analysis technology. There is limited liquidity in the shares because they are tightly held.

Wynnstay Group (WYN) warns that trading in the second quarter is weak because of the warmer winter weather. There has also been a weakening in farmgate prices. Interim figures will be well below the first half of last year and the full year will be below forecast. Peel Hunt argues that it has already factored these elements into its forecast for rival feed supplier NWF (NWF) and it is not changing its forecasts.

Pelatro (PTRO) has launched a data monetisation platform with a revenue share contract with an existing client, which is worth $500,000 in the first year. This is a product that can be sold to other customers.

Financial trading platform Aquis Exchange (AQX) reported 2018 revenues ahead of expectations and it doubled its market share during the year. The subscription-based model means that higher trading levels by a trader lead to subscription income levels going up. Aquis will continue to be loss-making this year, but the relatively fixed cost base means that once this is covered the profit should grow significantly as revenues grow.

Scientific instruments supplier Judges Scientific (JDG) increased is cash generation from operations from £10.9m to £15.7m in 2018. There was 5.5% organic growth in revenues and underlying operating profit rose by just over one-third to £14.7m. The cash balance has increased to £15.7m, which provides firepower for acquisitions. Shore Capital has edged up its earnings per share forecast from 188.8p to 190p.

Volvere (VLE) says full year revenues from continuing operations will rise from £16.2m to £18.6m. There was a £23.1m gain on the sale of Impetus Automotive. There was an underlying loss on continuing activities, but the frozen pie maker Shire Foods improved its profit contribution. There is £34.1m of cash in the Volvere balance sheet.

Frontier IP (FIPP) says that the outcome for the year to June 2019 is likely to be ahead of management expectations. A deal by investee company Exscientia, which is involved in AI-based drug discovery, with Celgene Corporation should result in a substantial uplift in its valuation.

Science in Sport (SIS) had a 25-day contribution from the profitable PhD Nutrition business in 2018. The group’s underlying loss increased last year, but PhD will help to reduce the loss and the cash outflow from operations, which was £6.42m last year. There is £8m in the bank and even with capital investment requirements that should be enough to cover requirements this year.

Ceramic products supplier Portmeirion Group (PMP) increased its 2018 pre-tax profit by 10% to £9.7m and a further rise to £10.3m is forecast for this year. Online sales are growing rapidly from a relatively low base. The home fragrance business is doing well, and capacity is being added. The total dividend is 8% higher at 35.7p a share.

Share (SHRE) improved its significantly improved its profitability in the second half of 2018, although trading levels weakened towards the end of the year. That weakness has continued into the early months of this year. Evan so, Cenkos forecasts a rise in pre-tax profit from £700,000 to £1.3m, upgraded from £1.1m, in 2019.

Clear Leisure (CLP) has placed its 50%-owned data mining operation in Serbia on a care and maintenance basis. This is due to the fall in the price of cryptocurrency. Legal actions and negotiations continue concerning a number of past investments. Clear has paid £76,000 for a 10% stake in PBV, which provides data services for the Italian legal sector. At the end of 2018, there were €2.1m of bonds converted into shares.

Andrew Perloff has increased his stake in 600 Group (SIXH) from 6.19% to 8.85%.

Midatech Pharma (MTPH) has changed the ratio of its ADRs from two shares for each ADR to 20 shares for each ADR. This is a way of getting the trading price of the ADRs on NASDAQ back above $1.

EQTEC (EQT) could be a beneficiary of the deal done by its largest shareholder EBIOSS with Urbaser for the collection, treatment and possible conversion of waste to energy. Urbaser is conducting due diligence on EQTEC’s gasification technology and this could be used for any waste to energy plant if all three parties come to an agreement on a specific opportunity. Projects could be in Bulgaria, Greece, Macedonia and Romania.

A local authority report has placed a five year reserve status on the Plymouth Airport site where Sutton Harbour (SUH) has a 135 year lease. The local authorities are keen that the site should be used for general aviation, but a viable business plan needs to be put together. Sutton Harbour would like to develop the site.

Tau Capital (TAU) has sent a circular to shareholders concerning a capital return of $1.19m or 2.42 cents a share, raise $150,000 via a placing at 0.1 cents a share and change its name to UK Onshore. Reverse takeover candidates are being assessed. Gerwyn Williams and Nigel Burton will join the board.

Synectics (SNX) has won a £1m order from the oil and gas sector. This is the largest order for its surveillance systems from this sector for a number of years. Synectics reported a rise in full year revenues from £70.1m to £71.2m and pre-tax profit slipped from £3.02m to £2.86m. The full year dividend is increased from 4p a share to 4.7p a share.

MAIN MARKET 

Athelney Trust (ATY) has responded to the letter from former director Dr Pohl, who wants to regain his place on the board along with Simon Moore and remove David Lawman. Dr Pohl has acquired more than 100,000 shares in the past month, and this means that five shareholders own more than 50% of the investment company putting its investment trust status at risk. As long as there is more than 35% of the company held by the public this is not a problem, but it would be if Dr Pohl joined the board. There have been £90,000 of extra costs because of disputes between the two major shareholders. The plan remains to bring Gresham House on board as fund manager

WideCells Group (WDC) is changing its name to Iconic Labs and moving into digital marketing and technology. The management of this business previously built up social publisher Unilad. In the first 12 months, an agency consulting division will be launched to assists clients to develop brands. There are plans to build up a distribution and publishing division through acquisitions and launch content licensing and e-commerce divisions. There is little indication of what will happen to the stem cell operations, although management appears to believe that the insurance business could be worth pursuing. Historic liabilities are being resolved. The convertible loan note holder continues to convert a proportion of the loan note that is below 30% and then sell the shares. There are 785.6 million shares in issue with more to come.

Bluebird Merchant Ventures (BMV) has raised £436,500 at 2.25p a share. The cash will be used for the pre-construction phase of the South Korean gold projects. An agreement has been made with a local landowner for the use of land outside the main entrance of the Kochang mine.

Highlands Natural Resources (HNR) has raised £1.56m at 8.5p a share via an offer through PrimaryBid.com. This cash will fund a move by the natural resources company into the organic cannabidiol market. It has established Zoetic Organics in the US and it believes that hydrogen produced by Highland in Kansas can be used as a fertiliser with potential to increase the size of the plant. First revenues could be achieved in the summer.

Standard list shell Stranger Holdings (STHP) claims that Alchemy Utilities Ltd has sabotaged the proposed reverse takeover by refusing to provide audited accounts. Stranger is trying to get back the £300,000 it lent to Alchemy as well as its reverse takeover costs of £450,000. Stranger believes that the Alchemy management team may have misrepresented its financial status. An alternative acquisition is being lined up, but Stranger had negative net assets at the end of September 2018 and there are additional costs since then.

Standard list shell Hertsford Capital (HERT) still had £2.88m in cash at the end of 2018.

Telecoms services provider Toople (TOOP) is growing its gross profit but EBITDA is similar to the same period last year, which was around £650,000.

PV Crystalox Solar (PVCS) has ended its wafer production activities in Germany and it intends to apply its wire sawing expertise to cutting non-silicon materials. There are plans to return £38.5m to shareholders, which is equivalent to 24p a share and that is not far short of the current market price. That could still leave more than €10m of cash. Management is considering whether to maintain a listing.

Sure Ventures (SURE) says 23%-owned Suir Valley Ventures has maintained its 10% stake in WarDucks, which is developing an AR game, by participating in a €3.3m fundraising.

Andrew Hore

Andrew Hore – Quoted Micro 31 December 2018

NEX EXCHANGE 

China-based Gamfook Jewellery (GAMF) joined NEX on 24 December. The online retailer of customised jewellery was introduced at 15p a share, and the shares ended the first week at 15.5p (14p/17p).  That values Gamfook at £15.5m. Executive chairman Jindian Lin and his wife own 72.8% of Gamfook. A dividend based on 28% of profit attributable to shareholders is promised.

Part of the £407,000 Sanderson Capital Partners loan to Wishbone Gold (WSBN) has been converted into shares. The conversion of £258,500 was done at 0.1247p a share.

Milamber Ventures (MLVP) reported an increased interim loss of £343,000, up from £263,000. There were net liabilities at the end of September 2018, but the balance sheet has been improved by the issue of shares for cash and to pay off creditors. Problems at apprenticeship training company Eseential Learning are being sorted out.

PCG Entertainment (PCGE) had $913,000 in the bank and shareholders’ funds of £1.02m at the end of September 2018. There was a cash outflow from operations of £817,000 in the six month period to September 2018.

A subsidiary of Lombard Capital (LCAP) is issuing two bonds. The first is a 4% bond, raising up to £50m and expiring at the end of January 2022, and the other is a 4.5% bond, raising up to £90m and expiring at the end of January 2024. It is intended that both bonds should be lised on a recognised exchange.

AIM  

For a change the last major announcement of the year is a positive one. Gordon Dadds (GOR) has completed the acquisition of international law firm Ince UK and it will trade as Ince Gordon Dadds. Trading in the shares recommences on 2 January. The deal will cost £27.3m over four years, plus options over three million shares, and the combined group generated fees of £30.5m in the year to April 2018. The deal should be earnings enhancing in the current financial year.

Earthport (EPO) is recommending a 30p a share bid from Visa Inc. This values the payments technology company at £198m. The bid is 50% higher than the 20p a share placing price in October 2017, but lower than the 40.85p a share placing price in September 2014.

Chamberlin (CMH) improved its trading in the first half and the cash from the sale of the Exidor business has improved its balance sheet. The foundries business moved back into profit in the first half as demand continues to increase for turbo charger housings, which are used for hybrid cars as wells as conventinal ones. The company’s debt has been reduced from £10.5m at the end of September 2018 to £3.7m. The pension deficit has been cut from £4m in the last balance sheet to £1.5m.

Facilities management and security services provider Mortice Ltd (MORT) increased its interim revenues by 10% to $116.7m. Underlying pre-tax profit was 5% ahead at $2.3m. Net debt was $20.1m at the end of September 2018.

TUS International has published a circular for a general meeting in January in order to gain shareholder approval for the acquisition of the Telit Communications (TCM) automotive business, whose reorganisation is near completion.

In the six months to September 2018, Stanley Gibbons (SGI) continues to lose money although costs have been reduced. Revenues fell from £7.14m to £5.03m. Coins and medals are the part of the business still making a profit. The overall loss has been reduced from £2.93m to £2.37m.

The People’s Operator (TPOP) does not expect to appoint a new nominated adviser and the share placing with the owner of LycaMobile has been pulled. The investment of £1.3m in shares (29.9%) and convertible loan notes will not go ahead but the potential investor is considering its options. The AIM quotation will be cancelled on 3 January.

TSX-V quoted PetroTal Corp (PTAL) has gained an AIM quotation. The Peru-focused oil producer is developing its interests at Bretana and growing near-term production.

IT compliance and security services provider GRC International (GRC) increased its interim revenues by 54% to £8.91m, thanks to a boost from GDPR, but it moved from a pre-tax profit of £614,000 to a loss of £2.18m. There was additional investment following the flotation of the company in March. Cash is running out and an overdraft and a loan facility have been secured.

Gaming technology developer Nektan (NKTN) is raising £1.5m at 15p a share, although not all the shares will be issued until the company gets shareholder approval at the AGM on 7 February, and it will generate £2m from the sale of 57.5 of US subsidiary Respin. There are also plans to restructure the conversion terms of loan notes and a shareholder loan. These proposals are dependent on each other going ahead and on the successful negotiation with the HMRC over the payment terms for £2.9m of UK point of consumption tax. There was £1.4m in cash at the end of June 2018, which is similar to the cash outflow from operations in the preceeding 12 months.

Functional food ingredients developer Provexis (PXS) improved interim revenues from £124,000 to £194,000. The company’s Fruitiflow products are being more widely sold and the prospects for the deal with BY-HEALTH in China are positive. Pro forma cash was £556,000.

Veltyco Group (VLTY) is going to launch its own regulated financial trading brand in the first quarter of 2019, although this depnds on regulatory approval.

Oil and gas explorer and producer Cabot Energy (CAB) says that it is still trying to raise cash via a share issue and it would be at a large discount to the current share price. The cash needs to bre raised by the end of January in order to pay overdue creditors and provide working capital.

Building materials sector consolidator SigmaRoc (SRC) has announced its plans to redeem its £10m of 6% convertible loan notes. SigmaRoc is offering 105p for each 100p loan note, plus 0.378p a note in interest payments. The last acceptance date for the tender is 16 January.

Mobile commerce services provider Bango (BGO) will be loss-making in 2018, although there was an EBITDA in the fourth quarter. End user spend more than doubled to £550m. There should be £3.5m in the bank at the end of 2018.

WANdisco (WAND) has secured a three-year agreement with an American healthcare company worth £700,000. The deal involves WANdisco Fusion and comes via the sales partnership with IBM.

Paracale Gold is providing a loan of up to $1.224m to Goldstone Resources (GRL) to finance the development of the Akrokeri-Homase project in Ghana. This mine could be in production in 2020. Paracale will receive 40.35 million warrants exercisable at 1.2p a share, which replace existing warrants.

Mobile payments technology provider MobilityOne Ltd (MBO) has secured an agency and reseller agreement with MBP Solutions for the company’s products in Malaysia.

In the six months to September 2018, Vast Resources (VAST) reported a 8% increase in gold production to 13,352 ounes at the Pickstone-Peerless gold mine in Zimbabwe. There was a 61% increase in copper concentrate produced to 1,526 tonnes at the Manaila polymetallic mine and zinc concentrate produced has nearly doubled to 199 tonnes. Revenues increased from $14.9m to $21.9m. There was still a cash outflow from operations of $1.79m.

Michael Principe and Greg Genske have resigned from the board of TLA Worldwide (TLA) following the sale of its core US business. The agreement with SunTrust Bank to defer capital and interest payments has been extended to 31 January.

Phoenix Global Mining (PGM) has raised £358,000 at 28p a share. There is a warrant exercisable at 28p, lasting until the end of 2021, with every four new shares. The cash will be invested in the Empire copper, gold, silver, zinc and tungsten mine in Idaho, where news of the most recent drilling is expected. A new resource statement will be prepared and additional acreage acquired.

Urban Exposure (UEX) had committed new lending of £522m during 2018. It has secured a £165m loan facility for its joint venture with KKR, as well as a £32.8m loan from Aviva for a single transaction by the joint venture.

MAIN MARKET    

Nanoco (NANO) has achieved the third milestone in its cadmium-free quantum dots technology development and supply agreement with a US customer and triggered a £1.6m. This is the final milestone of three and they have generated £4.2m.

Robin Boyle has requisitioned a general meeting at Athelney Trust (ATY) in order to get himself reappointed. He also wants David Lawman and Paul Coffin to be appointed and the three existing directors, Dr Emmanuel Pohl, Simon Moore and Jemma Jackson, to be removed. The other two resolutions are to terminate Jason Pohl as alternate director and any other director appointed by the time of the general meeting on 22 January.

Standard list shell Stranger Holdings (STHP) is still awaiting UKLA approval for its proposed reverse takeover of waste energy technology developer Alchemy, which was announced in August 2017. Management is hopeful that the deal could go ahead by the end of the first quarter of 2019. Stranger had net liabilities of £435,000 at the end of September 2018.

Dukemount Capital (DKE) has forward-funded and pre-sold its first development at West Derby to a fund managed by Alpha Real Capital. Dukemunt will receive £570,000 for the site and the total funding package for the development will be £3m. The development involves demolishing the existing building and constructing 17 supported living appartments and retail space. Dukemount continues to manage and develop the project on behalf of the supported living housing association that has taken a 50-year lease.

Andrew Hore

Andrew Hore – Quoted Micro 18 December 2017

NEX EXCHANGE

Wine and beer maker Chapel Down Group (CDGP) has raised £18.53m at 50p a share and could raise up to £1.47m more via a one-for-35 open offer at the same share price. The latest acceptance date is 5 January. Chapel Down will invest in an additional 500 acres of vineyard land and more money will be put into marketing. The family interests of Michael Spencer have invested in the fundraising. Nigel Wray has invested a further £500,000 but his stake has fallen to 16.5%, prior to the open offer. This year’s turnover is expected to be at least £11.6m and management expects growth to accelerate after the additional investment. New gin and vodka brands have been launched and the Ashford brewery should be up and running by the end of 2018.

Ashley House (ASH) has signed a joint venture with Morgan Sindall to develop extra care and supported living housing. This deal sparked a 55% increase in the share price to 14.75p. Morgan Sindall is paying £4m in total for the 50% stake in the joint venture, with £1.5m of this dependent on certain completion factors. It should all be paid by the end of 2018. The Ashley House housing division will complete two existing schemes and then own 50% of the joint venture, which will develop any further schemes. This additional cash will help to accelerate the growth of this part of the business. There is already a pipeline of potential developments. Ashley House will make an interim loss but expects to profitable for the full year.

e-commerce technology provider Netalogue Technologies (NTLP) reduced its interim loss as revenues grew from £317,000 to £479,000. There has been a lower number of larger projects, particularly in the food and drink sector, and Netalogue would have been profitable without the investment in the company’s technical team. A move towards a SaaS-based model could hold back short-term revenues.

AIM-quoted, spread betting business London Capital Group (LCG) has joined the NEX Exchange Growth Market on 15 December. Glio Holdings Ltd owns 78.1% of London Capital.

Early Equity (EEQP) has made two more investments. It has invested £60,000 in TruSpine Technologies Ltd, which plans to join AIM next year. TruSpine has developed the Faci-LOK and Cervi-FAS minimally invasive spine stabilisation devices and the VOSC catheter atherosclerosis treatment product. The plan is to gain FDA authorisation for Faci-LOK next year and then float. TruSpine is valued at £15m. A £35,000 investment in the profitable corporate finance and asset management business Farina Investments (UK) Ltd has been made ahead of a flotation. Early Equity raised £115,000 at 0.6p a share.

Hydro Hotel, Eastbourne (HYDP) has declared an unchanged total dividend of 21p a share for the year to October 2017.

Lombard Capital (LCAP) says that it is progressing towards the issue of an investment bond that will be quoted on a recognised bond market. There was nearly £60,000 in the bank at the end of September 2017.

Coinsilium Group Ltd (COIN) raised £720,000 at 9p a share and this will be used to invest in blockchain companies and expand the company’s own advisory business. Last June, £250,000 was raised at 2.2p a share. Coinsilium has been appointed as an adviser to token generation event of Hdac Technology AG, which is developing payment platforms for connected devices.

Equatorial Mining and Exploration (EM.P) has raised £5,000 at 0.01p a share and issued further shares for convertible loan notes and warrants at the same price. Valiant Investments (VALP) has raised £34,000 at 0.1p a share. Via Developments (VIA1) has issued a further £50,000 of debenture stock.

AIM

Satellites owner Avanti Communications Group (AVN) has revealed a financial restructuring that could put it on a firm footing. Certainly, without this restructuring the outlook would be bleak. The $557m of 2023 loan notes will be converted into two billion shares, while investors in the 2021 loan notes are being asked to accept and extension of the term and lower income. Annual interest charges would still be $36.6m

Best of the Best (BOTB) says that it expects to pay remote gaming duty and this will knock £300,000 from profit this year and £600,000 next year. This year’s pre-tax profit is forecast to decline from £1.5m to £1.4m, with a further fall to £1.2m in 2018-19. Net cash is expected to be £2.6m at the end of April 2018. The company is still claiming £4.5m of VAT so this could provide a cash boost in the future.

Plant Impact (PIM) is suffering continued delays in demand for its Veritas product in Brazil. A new partnership with Albaugh Brazil will commercialise other Plant Impact products in Brazil. This has sparked the decision to consider putting the company up for sale. Cash is running out and a further £7m would need to be raised to keep the company going well into 2019.

Van Elle Holdings (VANL) has defeated the five resolutions proposed by former chairman Michael Ellis at last week’s general meeting.

Recruitment and outsourcing services provider Servoca (SVCA) reported better than expected full year figures. Pre-tax profit improved from £3.5m to £3.9m. Education and healthcare will be the main growth areas.

Evgen Pharma (EVG) is collaborating with King’s College London to examine the use of SFX-01 as a therapy against ischaemic stroke. Multiple doses will be assessed and this will take nine months. This could lead to a clinical trial that might be funded by a charity organisation associated with King’s College.

Range Resources Ltd (RRL) returned to AIM following the reverse takeover of producing oil and gas assets in Trinidad from Trinity Exploration and Production (TRIN).

Defence equipment and services supplier Cohort (CHRT) had a weak first half but it expects to more than make up for that in the second half. There was a mixed performance with some parts of the business finding trading conditions difficult. The order book is worth £132m. Full year pre-tax profit is forecast to improve from £14.5m to £15.4m.

Savannah Resources (SAV) says that it has discovered high-grades and large intercepts in the latest drilling at the Mina do Barroso lithium project. A maiden mineral resource estimated could be announced before the year end with potential for upgrades from further drilling.

Daniel Stewart expects China New Energy (CNEL) to report a jump in pre-tax profit from £400,000 to £2.6m in 2017. The shares are trading on less than four times fully-taxed 2017 prospective earnings. The company constructs bioenergy plants that convert feedstock into ethanol. The most recently reported order book was worth £28.7m with the orders due to be fulfilled in 2017 and 2018. Demand from China is strong and there is also international business.

Coal bed methane projects developer Tlou Energy Ltd (TLOU) has secured a listing on the Botswana Stock Exchange and trading commenced on 13 December. Tlou raised £2.4m at 11p a share.

Synairgen (SNG) has secured a £5m cash injection from a deal with Pharmaxis, which will take over the development of LOXL2 in fibrotic diseases. Synairgen will also receive 17% of any partnering revenues. This compares with £3m invested by Synairgen in LOXL2. The cash will enable Synairgen to fund the phase IIa study for SNG001 for COPD. The trial should be complete by the end of 2018.

New management has turned around the performance of contract disputes and expert witness services provider Driver (DRV) and it moved back into profit last year. Cost savings have been made and the focus is on profitable business rather than just growing revenues. Cash collection is improving with net debt down to £200,000 and there is likely to be net cash of £2m in one year’s time. This year’s revenues are likely to be flat at around £60m but pre-tax profit should improve from £2.5m to £2.7m.

One month after its previous trading statement IDOX (IDOX) says that an internal audit has found that it should not recognise all the revenues that it originally intended to. This will knock £3m off profit for 2016-17. The software company reported its full year figures in December but the attest full year figures have been delayed until February. Chief executive Andrew Riley is away ill and former boss Richard Kellett-Clarke has taken over on a temporary basis.

Abzena (ABZ) reported interims in line with expectations. Growth came from the chemistry and manufacturing businesses. This is a period of capital investment as various parts of the company move to new facilities. The ADC master services agreement with a US biotech will yield at least $5m in services revenues over the next 12 months. This deal is shared between chemistry and manufacturing divisions.

Surface coatings provider Hardide (HDD) is starting to improve its gross margin as demand improves. There is even some signs of improved demand from the oil and gas sector. Even so, Hardide remains loss-making but it still has not gained any orders from Airbus. It raised £2.5m for capital investment earlier this year. A new reactor will be installed in the US in this financial year and another next year.

MAIN MARKET

Titon Holdings (TON) continues to benefit from strong demand for its window ventilation components in South Korea. The majority of profit comes from South Korea and that is where all the growth came from last year as the contributions from the UK and North America fell. In the year to September 2017, revenues were one-fifth ahead at £28m, while pre-tax profit improved from £2.14m to £2.49m. The dividend growth of 20% to 4.2p a share is ahead of earnings per share growth. A pre-tax profit of £2.81m is forecast for this year.

Avation (AVAP) has secured an initial $100m revolving facility to finance the acquisition of aircraft.

Sealand Capital Galaxy Ltd (SCGL) has secured an agreement with AIM-quoted MySQUAR (MYSQ) for the distribution of its games on MySQUAR’s platform and MySQUAR’s games on the Huawei InTouch platform. This is initially a two year deal.

Standard list shell Stranger Holdings (STHP) says that it expects to complete the acquisition of biogas and renewable energy business Alchemy Utilities. A five-year £20m bond is being raised.

Andrew Hore

Quoted Micro 4 September 2017

NEX EXCHANGE

Gowin New Energy Group Ltd (GWIN) is moving into the tea market, where its chief executive already has experience. Gowin intends to buy a 15% stake in a Cayman Islands-registered tea business and this new business will link up with experience of the industry that are based in Taiwan. The plan is to raise £5m from a preference share issue at 2p each, with an initial £2m raised, and use part of this cash as a loan to the new business. There will be a fixed annual preference dividend of 2%, while the loan will geerate 3% a year.

Walls & Futures REIT (WAFR) raised £1m when it joined the NEX Exchange Growth Market. There was £843,000 in the bank at the end of March 2017 and since then £475,000 has been spent on a building in Stroud that is being rented to a supported housing operator. The private rented housing portfolio, which is properties in the Wimbledon area, is worth £2.15m and the group NAV is £2.98m, equivalent to just over 90p a share. The focus is supported housing and there are plans to raise more cash from a placing and open offer in order to fund more property purchases.

Lombard Capital (LCAP) is close to finalising a 7.5% 2020 unsecured loan note series 2 issue to raise between £500,000 and £3m. This will be invested so that it provides a fixed income and capital return.

An impairment charge against the book value of the Royston Hill property meant that Etaireia (ETIP) lost £622,000 last year. The company expects to complete the purchase of properties at the Whitehouse Office Park having secured bridging finance. The current portfolio of properties should generate enough income to make the company profitable.

Block Energy (BLOK) has raised £250,000 at 0.85p a share and this cash will be used to finance the proposed move to AIM. Block has also issued 70 million shares to complete the acquisition of the 90% working interest in the Satskhenisi production sharing agreement in Gerogia. This means that Iskander Energy owns 13.3% of Block.

Healthcare recruitment company Positive Healthcare (DOC) reported revenues of £7.8m and a loss of £276,000 between November 2015 and March 2017. The two majority-owned subsidiaries were included for nine months.

Andrew Sparrow is replacing Malcolm Ball as chief executive of WMC Retail Partners (WELL). Crossword Cybersecurity (CCS) has appointed Rob Johnson, a former senior investment director at AIM-quoted Mercia Technologies, as chief operating officer.

Primorous Investments (PRIM) has made six investments in the past month and four of them are seeking to join AIM in 2018. Primorous has invested £400,000 in a £5.25m fundraising for software company Engage Technology Partners and £200,000 in online shopping and rewards firm WeShop. The other two potential AIM flotations are the investee companies Sport:80, where £100,000 was invested, and TruSpine Technologies, where £500,000 was invested to help TruSpine’s minimally invasive spine stabilisation devices to gain FDA clearance.

Doriemus (DOR) has filed a prospectus for an ASX listing. A 400-for-one share consolidation has been completed in advance of the listing. The new investing policy is focusing on oil and gas assets in Asia Pacific.

AIM

IT healthcare software and services provider EMIS (EMIS) reported a 1% increase in interim revenues to £79.2m even though the healthcare market is tough, particularly when it comes to hospital services. EMIS’s recurring revenues were 84% of the total. Profit was slightly lower. There could be a small fall in full year profit but the 10% increase in interim dividend to 12.9p a share indicates the strength of cash flow and the longer-term potential. Net cash was £10.5m at the end of June 2017. The newly created patient division is a growth area and the patient.info website is still being developed so that ecommerce revenues can be earned.

Digital TV software provider Mirada (MIRA) has secured a SaaS-based contract with ATN International and four of its cable networks in the Caribbean. In the past Mirada has been paid every time a viewer signs up for the service but this contract is based on recurring subscriber fees. There will still be an initial upfront payment for implementation services but the rest of the revenues will be generated on a monthly basis. Mirada is expected to release its 2016-17 annual report before the end of September so trading in the shares should not have to be suspended. Mirada will require additional working capital facilities and these are being negotiated.

MP Evans (MPE) is acquiring a 10,000 hectare estate in Indonesia for $108m, including the assumption of $20m of debt. This will be funded by the sale of the company’s minority stake in another estate. Infrastructure spending will cost a further $30m over five years. The estate is just starting to build up production and it will become more significant in a couple of years time. NAV is £11 a share and Peel Hunt expects this to rise by more than 5% a year as group production increases.

South America-focused gold miner Orosur Mining Inc (OMI) generated $9.7m from operations in the year to May 2017 thanks to lower operating costs and a higher gold price. There was net cash of $3m at the end of May 2017. Since the year end, Orosur has raised £3.2m at 14.7p a share and two new institutions invested in the placing. This will help to finance drilling at the Anza gold project in Colombia.

The administrator of Fairpoint Group (FRP) is selling off parts of the group but there is no chance that shareholders will get anything. Consumer claims business IVA Assurance is being sold for £450,000 plus cash balances on completion. Allixium, another consumer claims company, has been sold for £53,000. The original Debt Free Direct business has been sold to Aperture Debt Solutions for £1.34m but unlike the rest of the proceeds this cash will pay Debt Free Direct creditors rather than the creditors of the holding company. Legal subsidiary Simpson Millar has sold Simpson Millar Financial Services to its boss for £271,000 plus up to £250,000 over five years. This cash will go back into Simpson Millar.

Stockbroker Share (SHRE) will be paid £900,000 for work carried out relating to a potential partner that is not going ahead with a deal. Trading continues to be strong.

Pawnbroker and foreign currency services provider Ramsdens Holdings (RFX) says that its pre-tax profit will be higher than expected this year. This is thanks to strong foreign exchange trading results and a higher gold price.

Samuel Heath & Co (HSM) has appointed former Zeus Capital director Ross Andrews as a non-executive director.

Real Good Food (RGD) says that EBITDA will be half its previous, already downgraded, expectations at £1m. The company is in discussions with its bankers to change the conditions of its bank facility.

Educational services provider Wey Education (WEY) says revenues will increase from £1.5m to at least £2.4m and this will enable it to make a maiden pre-tax profit. There is still £909,000 in the bank. The figures for the year to August 2017 will be published in October. David Massie has taken his £33,000 annual salary in shares at 3.88p each.

Conroy Gold & Natural Resources (CGNR) has appointed Dr Karl Keegan and Brendan McMorrow as non-executive directors. Another general meeting has been requisitioned by Patrick O’Sullivan, who owns 28% of Conroy, and it will take place on 6 October. He had asked for assurances that new directors would not be appointed. The previous general meeting successfully removed six directors but Conroy said the proposed appointments of Patrick O’Sullivan, Paul Johnson and Gervaise Heddle did not comply with the company’s constitution and they are being proposed as directors again. A hearing will be held at the High Court in Dublin on 14 September and that could affect whether the three people are upheld as directors prior to the new general meeting. The plan is also to remove Professor Richard Conroy and Maureen Jones from the board.

Galileo Resources (GLR) has raised £1.09m at 2p a share to finance a joint venture with BMR Group (BMR) to develop the Star Zinc project in Lusaka, Zambia and also to finance exploration of the gold property in Nevada and the Glenover phosphate project in South Africa. Galileo had £1.1m in the bank at the end of March 2017. Galileo will lend $592,000 to BMR, which will be received once there is a settlement agreement with Bushbuck Resources for the acquisition of Star Zinc. This loan will eventually be swapped for 51% of the joint venture and $100,000 will be placed in escrow. Galileo can then increase that stake to 85% by funding $250,000 of work on the project.

Back office optimisation software provider eg solutions (EGS) has signed a five year master supply agreement that will be worth at least £8.12m. This will kick-in next year and increases the order book of recurring revenues to £22.9m. In the year to July 2017 revenues were at least £10.5m.

Cyber security software provider Defenx (DFX) has raised £1.25m from a convertible bond issue to add to the £1.74m raised from a share issue at 160p each. Defenx was trying to raise up to £2m via a bond auction carried out by UK Bond Network.

Robin Williams has taken over as chairman of FIH Group (FIH) and the company continues to seek acquisitions. There was £15.25m in the bank at the end of August 2017. Trading is expected to be flat this year with modest growth in the UK but quiet trading in the Falkland Islands with additional retail competition. The low oil price is too low to prompt development of oilfields around the islands.

Trading technology provider TechFinancials Inc (TECH) reported a dip in interim revenues from $9.86m to $6.97m mainly due to lower software licencing income. Pre-tax profit fell from $1.33m to $282,000. There was cash of $5.81m in bank at the end of June 2017.

MAIN MARKET

BATM Advanced Communications (BVC) is beginning to reap the benefits from past investment and the second half should show even more progress. Revenues have started to grow even though the corresponding first half included more significant sales of older networking products. Overall group interim revenues were 10% ahead at $49.8m with both divisions increasing their revenues. There was a 17% increase in R&D spending to $4m. There was an interim loss but Shore Capital still believes that BATM can break even this year.

Ross Group (RGP) continues to seek an acquisition that would provide a more significant business for the company. In the six months to June 2017, revenues grew 51% to £93,000, while the pre-tax profit was one-fifth higher at £17,000. The balance sheet is weak with net debt of £6m but the major shareholder is supportive. That level of debt might put off some potential acquisition targets.

Standard list shell Stranger Holdings (STHP) has signed non-binding heads of terms with Irish sustainable utility company Alchemy Utilities. This acquisition would be a reverse takeover. Alchemy is involved in waste to gas production, renewable energy and using waste energy to remove salt from water to produce drinking water (www.alchemyutilities.ie). Trading in the shares was suspended at 1.38p.

Standard list shell Derriston Capital (DERR) had £2.2m left in the bank at the end of June 2017. Derriston has changed its investing strategy from a focus on medtech to technology and high growth sectors.

Andrew Hore

Quoted Micro 23 January 2017

NEX / ISDX

 

Clinical decision support systems supplier DXS International (DXSP) increased its interim revenues by 17% to £1.78m and it has moved into profit. DXS has moved from a loss of £39,000 to a pre-tax profit of £64,000. DXS has won the tender for London Partnership Procurement, which has 100 members and is expected to spend £1.5bn over the four year contract period, and a new version of its software has been launched. There was £361,000 in the bank at the end of October 2016.

 

Based on the latest fundraising price, the value of the Coinsilium Group Ltd (COIN) stake in nano payments company SatoshiPay Ltd has grown in value from €200,000, mostly invested one year ago, to €725,220. Fellow NEX-quoted company Kryptonite 1 (KR1) has invested just over €59,000 as part of the €1m fundraising giving it 1% of SatoshiPay. AIM-quoted Blue Star Capital (BLU) is investing a further €640,000 at €340 a share and it is raising £700,000 from a share placing at 0.15p a share in order to finance the investment. AIM-quoted FastForward Innovations Ltd (FFWD) is another investor in SatoshiPay and the value of its investment has, since the original investment in September 2015, increased by 212.5% to €500,140.

 

Early Equity (EEQP) has increased its NAV from £209,000 to £706,000 at the end of August 2016 mainly thanks to the £607,500 raised at 0.45p a share last year. The full year loss was slightly lower at £110,000. Early Equity invested £450,000 in a 32.1% stake in Yicom Global, a healthcare products supplier primarily focused on China. This business started trading in February 2015 and is already profitable with revenues building up each month. Early Equity has received a dividend of nearly £26,000.

 

AIM

 

Eco (Atlantic) Oil & Gas plans to raise up to £3m ahead of its admission to AIM. Eco is already quoted on TSX-Venture market but it believes that the London market will take more account of the prospects for its exploration interests. Eco has offshore exploration interests in Guyana and Namibia. The Orinduik block in Guyana, where Eco has a working interest of 37.1%, is near to the Liza discovery by ExxonMobil and Eco’s partner is Tullow Oil. Part of the cash raised will go towards funding seismic exploration of the block. This will help to identify where the exploration well should be drilled next year. There are applications for other blocks in Guyana. Eco has stakes in four blocks in Namibia but the initial focus is Cooper (32.5% working interest) where an economic impact assessment needs to be carried out before any drilling.

 

Strategic Minerals (SML) moved into profit in 2016 thanks to strong sales of magnetite from the Cobre mine in New Mexico and it has enough cash to push ahead with the development of its other interests. Strategic Minerals has the rights to sell the magnetite which is a by-product of the mining. The rights to sell the stockpile of magnetite are coming up for renewal. They could be renewed for a further 12 months or even possibly for a number of years, which would provide more certainty about future revenues. Last year, there was a 24% increase in sales, taking revenues to $1.55m. The company has also received a $400,000 compensation settlement from the rail provider to the mine. This cash will go towards exercising the option to take a 50% stake in the Redmoor tin/tungsten project in Cornwall. The cash will fund the 2017 drilling programme for the joint venture. Strategic Minerals is also interested in the CARE nickel project in Australia.

 

Vislink (VLK) is still selling its hardware division to xG Technology Inc (XGTI) but surprise, surprise Vislink is not getting the full disposal proceeds of $16m upfront. This means that Vislink shareholders have to shoulder the costs of another general meeting to agree to the revised disposal already having agreed to the original terms at a previous general meeting on 9 January. Vislink is still likely to receive $16m for the business but only $6.5m of this is payable initially. On completion, secured loan notes of $9.5m will be issued and should be redeemed within 45 days. Vislink also retains the right to cash received from an outstanding debt up to a maximum of $2m. It is not clear if there is any chance of the debt being paid. The xG share price has bounced back since Christmas and a ten-for-one consolidation means that the share price complies with regulatory requirements for the Nasdaq Capital Market. The loss-making company raised $10m gross at the end of 2016.

 

Global Energy Development Ltd (GED) proposes to acquire subsea surface vessel businesses and change its name to Nautilus Marine Services. The deal covers 11 offshore subsea service vessels and one barge vessel, which provide services in the Gulf of Mexico. A convertible loan note issue is planned to raise $10.5m – the coupon is 8% and the conversion price 50p a share. The current share price is 16.25p. The loan note cash, plus the issue of two other loan notes valued at $6.1m and $15m and convertible at 160p a share and 225p a share respectively, will finance one transaction and the other transaction will be financed by forgiving $8m out of $12m of existing loan notes. Issued by the seller

 

Premier Technical Services Group (PTSG) has bought lightning protection and earthing systems installer Nimbus for £1m. This business made a pre-tax profit of £300,000 in 2015. Premier says that last year’s trading was in line with expectations.

 

First Property Group (FPO) has won a new investment mandate from three colleges in Oxford and Cambridge totalling £14.5m. A new fund has been set up called Fprop UK Special Opportunities LP and First Property is investing £725,000. Including debt, the fund can invest £30m. Fees will be dependent on the value of the properties under management. At the end of 2016, First Property had invested 95% of the funds it manages for the Shipbuilding Industries Pension Scheme.

 

Gold miner Orosur Mining Inc (OMI) reported a first half profit of $3.7m and generated cash of $7m from operations. The commencement of underground production from San Gregorio west in November will boosted the second half. Cash operating costs were $914/ounce but this figure should fall below $900/ounce for the full year. There was $5.4m in the bank at the end of November despite the heavy capital expenditure in the period. There will be more drilling at the Anza gold project in Colombia in order to define the potential mineralisation and provide a maiden resource figure.

 

Independent Oil & Gas (IOG) plans to acquire a gas pipeline in the southern North Sea. This unused pipeline, which has a capacity of 300,000mmcfd, could be used to transport gas from the Blythe hub and Vulcan satellite fields. There will be a lot of technical work required to get the pipeline up and running. Drilling at the Skipper field indicates that the oil is heavy making it difficult to produce.

 

SQS Software Quality Systems (SQS) continues to increase its higher margin managed services business and 2016 profit was in line with expectations despite the negative effect of currency movements (SQS reports in €). Net debt was €12m at the end of 2016. Significant new business continues to be won.

 

Arria NLG (NLG) has left AIM although it has not finalised its admission to ASX and the New Zealand Stock Exchange. Arria hopes to complete a $25m fundraise in the first quarter of 2017.

 

MAIN MARKET

 

Standard list cash shell Stranger Holdings (STHP) has raised a further £110,000 at 1p a share. Trading in the shares commenced on 13 January, following a £848,000 (£675,000 after costs) placing at 1p a share. The initial 50 million shares were issued at 0.1p each. The current share price is 1.25p (1p/1.5p). There is no guidance concerning a specific sector focus for any acquisition. The two directors are also directors of Plutus PowerGen and standard list shell Papillion Holdings. They were also directors of former AIM company BioProgress.

 

Hair and skin care products supplier InnovaDerma (IDP) says that its first half revenues are more than 80% ahead at £3m. The revenues have been boosted by UK sales of skin tan brand Skinny Tan, which tans and reduces the visibility of cellulite.

Andrew Hore

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