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Andrew Hore – Quoted Micro 18 May 2020

AQUIS STOCK EXCHANGE

Arbuthnot Banking (ARBB) says customer loan balances had increased by 4% in the quarter to March 2020. Customer deposits increased by 2%. There were net inflows to the investment management business despite the uncertainty in the markets.

Gunsynd (GUN) has extended the deadline for the Oyster Oil and Gas deal from 30 April to 30 October. If the conditions are not satisfied by October, then the sale of the Oyster shares can be terminated.

Inqo Investments (INQO) says that its February 2020 accounts may not be published until September because of delays to audits. The company’s investments have been affected by COVID-19. Kuzuko Lodge in South Africa was closed in early April and Inqo believes that it could take another two years to fully recover. Kentegra Biotechnology and South Lake Medical Centre in Kenya are both continuing to trade. Four One Financial Services could find trading difficult.

Eastinco Mining (EM.P) is completing the wash plant and starting operations at its tantalum mine in Rwanda. Cash is running out and management wants to raise cash through the exercise of warrants at 1.5p each. If 30% of warrants are exercised it will raise £700,000. If a shareholder exercises warrants, they will receive another warrant exercisable at 3p a share. The cash raised will finance capital investment and exploration.

NQ Minerals (NQMI) has raised £151,000 at 5.75p a share. SulNOx Group (SNOX) has raised £230,000 at 40p a share. Each share comes with a warrant exercisable at 40p.

Belvedere Leisure (BELV) says that the COVID-19 lockdown has stopped it obtaining additional subscriptions. Phase one of the company’s development will be split into two parts. The first 50 self-catering lodges are due to open next February.

Veni Vidi Vici (VVV) had cash of £354,000 at the end of 2019. The company is committed to paying A$300,000 towards initial spending of the joint venture that holds the Shangri La gold, copper and silver project in Western Australia.

Two directors and a managing partner of EPE have bought shares in EPE Special Opportunities (ESO) at 160p each. The total amount invested is £44,259. Boston Trust Company has increased its stake from 2.9% to 4.3%.

AIM

Amryt Pharma (AMYT) has moved into a positive EBITDA position in the first quarter, which is earlier than expected. The orphan drugs provider is on course to generate revenues of $172m this year. An underlying EBITDA of $19.5m is forecast for 2020 and that move above $50m next year. Amryt has cash on the balance sheet that is more than enough for its current requirements, but there is also debt, including convertibles. Net debt is expected to increase to $160m by the end of 2020 before reducing the following year.

Acquisitions helped Focusrite (TUNE) to grow in the first half. There was a decline in the revenues of continuing operations, although trading was strong in the corresponding period. Overall revenues were 24% ahead at £49.9m. there were first time contributions from ADAM Audio and Martin Audio (two months). Lower margins and higher interest charges meant that pre-tax profit fell from £7.15m to £6.38m. Focusrite has moved into a net debt position due to the money spent on acquisitions. Martin is likely to be hardest hit by lockdowns around the world due to its event-based customers, whereas demand for other products is holding up as people make music at home.

Payments platform provider Bango (BGO) has signed a new deal that should be worth £1.5m over three years and there is potential for it to be worth even more. Bango could move into profit this year.

Appreciate (APPS) says that the first 11 months trading was in line with expectations, but March trading was hit by COVID-19. Corporate activity has declined by around two-thirds, while Christmas savings have fallen 10%. There was still free cash of £30m at the end of March 2020. This year’s figures will be much harder hit by COVID-19 and profit is likely to plummet. Achieving a profit will be dependent on an upturn in the second half. Cash is also likely to decline.

MAIN MARKET

Diversified Gas and Oil (DGOC) moves from AIM to a premium listing on 18 May. Diversified has raised £69.4m at 108p a share. This cash will go towards financing two potential oil and gas asset acquisitions. Trident Resources (TRR) will be going in the opposite direction on 2 June.

Andrew Hore

Andrew Hore – Quoted Micro 23 December 2019

NEX EXCHANGE

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

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

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

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

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

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

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

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

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

AIM

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

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

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

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

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

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

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

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

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

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

MAIN MARKET

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

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

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

OTHERS

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

Andrew Hore

Andrew Hore Quoted Micro 16 December 2019

NEX EXCHANGE

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

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

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

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

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

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

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

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

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

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

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

AIM

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

MAIN MARKET

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

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

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

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

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

Andrew Hore

Andrew Hore Quoted Micro 22 July 2019

NEX EXCHANGE

Arbuthnot Banking (ARBB) improved its underlying pre-tax profit from £2.7m to £3.4m in the first half of 2019. The interim dividend has been raised from 15p a share to 16p a share. The recent residential mortgage portfolio acquisition was after the end of June. The strategy is to diversify the business and asset-based lending and specialist finance are being built up. Savings platform Arbuthnot Direct has recently been launched. The core private banking operations of Arbuthnot Latham are still growing, though. The shareholding in Secure Trust Bank has been sold down to below 10%, which means it is no longer consolidated. The change from associate led to a write down and NAV declined to £13.21 a share.

VI Mining (VIM) has so far paid $9.1m in cash to the vendors of the Minaspampa and Rosario projects in Peru. There is still $42.2m outstanding 18 months after the acquisition agreement was signed. Majority shareholder Sumner Group Holdings is raising money from a security token offering, which could be completed in the autumn. Some of the proceeds will be used to replace existing facilities and help to pay outstanding acquisition considering, pending renegotiation of the deal. Chief executive David Sumner has provided a $10m term loan, plus a £39m facility of which $3m has been drawn down. There is $1.2m outstanding on the Tassili Jewellery LLC loan facility.

AfriAg Global (AFRI) has completed its acquisition of a 2.325% stake in cannabis company Apollon Formularies. The Jamaican subsidiary has produced its first licensed medical cannabis oils for commercial sale on the island.

MetalNRG (MNRG) has published a prospectus for its move to a standard listing on 23 July. It has raised £193,000 at 0.3p a share.

Clean Invest Africa (CIA) says that its CoalTech subsidiary has signed a joint venture agreement with Creon Capital covering Russia and nearby countries. CoalTech is negotiating with other potential partners to set up operations in Europe, Indonesia and the US.

Tectonic Gold (TTAU) says its mining subsidiary has received approval for the R and D tax incentive scheme in Australia for 2018-19. A claim is being prepared.

Share trading has recommenced in Ganapati (GANP) after it published results for the year to January 2019. There was a cash outflow from operations of £23.8m. Since January, two new games have been generated each month.

AIM

Focusrite (TUNE) has acquired Germany-based studio monitor loudspeakers supplier Pro Audio for £16.2m in cash and it will still have £12m left in the bank. Pro Audio supplies ADAM branded products and made a pre-tax profit of €1m. This is an earnings enhancing acquisition. The businesses will operate separately but work together to develop cross-selling benefits.

Swallowfield (SWL) is selling its manufacturing business to the much larger US manufacturer Knowlton Development Corporation for £35m in order to concentrate on its portfolio of personal care and beauty brands. This should leave net cash of £23m in Swallowfield and this will be used to acquire more brands. The company is changing its name to Brand Architekts Group.

Lawyer Gateley (GTLY) grew all its main operations. Acquisitions helped revenues to increase by one-fifth to £103.5m in the year to April 2019, but there was still organic growth of 9.5%. Pre-tax profit improved from £15.4m to £18.1m. The dividend was raised from 7p a share to 8p a share. Corporate business grew more modestly than other parts of the business, but this was impressive given market conditions for corporate deals. A profit of £21m is forecast for this year.

Victoria (VCP) has raised €330m via an issue of 5.25% senior secured notes 2024. This offer was three times subscribed. The floorcoverings manufacturer is using the money to refinance existing debt and will have £80m of cash after the issue.

Packaging machinery supplier Mpac Group (MPAC) is trading significantly ahead of expectations. Equity Development has increased its 2019 operating profit forecast from £4.6m to £5.5m.

Adamas Finance Asia (ADAM) has completed a co-investment agreement with a Hong Kong-based family office for the investment in Japanese resort business Infinity Capital Group. The family office will pay Adamas $1m of the $2m already drawn by Infinity and the other $2m will be provided 50/50 by the two parties. The facility has a coupon of 17.5% per annum. This deal provides cash to invest in other opportunities. Adamas took advantage of a dip in the share price to buy back £30,400worth of shares at 38p each.

Velocys (VLS) has raised £7m at 3p a share on the back of news that Shell and British Airways will co-fund the development of the Immingham biorefinery project. The cash will be used for further technology development and to progress the Mississippi biorefinery project.

Block Energy (BLOE) has completed the increase from a 71.5% to 100% of its working interest in the West Rustavi field in Georgia. The cash and shares payment means tha Georgia Oil and Gas has increased its stake in Block to 7.7%. Miton has cut its stake from 9.17% to 4.73%.

Mortice (MORT) has decided to cancel its AIM quotation and is offering shareholders the chance to sell their shares for 12p each. A lack of liquidity and a weak share price making it difficult to finance acquisitions are the main reasons for leaving AIM.

Albert Technologies Ltd (ALB) also wants to leave AIM, but it is not offering an exit for shareholders. It believes it can attract investors, but they would prefer to invest in an unquoted company.  

Science Group (SAG) has been buying more shares in Frontier Smart Technologies (FST) at the bid price of 35p each and it has built up a 39.9% stake. It also has 3.1% acceptances for its bid.

Mirada (MIRA) has integrated Netflix into its set-top box platform and this will make its technology even more attractive to broadcasters.

Bangladesh has brought in a law that all listed companies have to pay at least 30% of post-tax profit, or an extra 10% tax charge will be levied. Beximco Pharmaceuticals (BXP) is assessing the legislation and will consider how best to manage cash.

Novacyt (NCYT) has sold its loss-making clinical labs business for £400,000 and it will concentrate on diagnostics businesses Primerdesign and Lab21. The first instalment of £100,000 has been paid and £100,000 more is due in September, but the rest will be paid in three equal instalments on the first, second and third anniversaries of the deal.

MAIN MARKET 

Spinnaker Opportunities (SOP) has received a commitment to invest up to £1.4m from a single investor conditional on the deal to acquire medicinal cannabis company Kanabo Research. The investment will be for a maximum of 4.99% of the enlarged share capital, although if there is any of the £1.4m left it could be invested in a convertible loan note. The investment underpins the expected acquisition-related fundraising and a fee of 10% of the investment is payable.

General meeting resolutions to wind-up Avocet Mining (AVM) were withdrawn at its general meeting. This comes after discussions with shareholders. There is a few weeks cash left in the business and any potential transaction would have to come with finance to cover the costs of an acquisition process.

Dukemount Capital (DKE) has commenced construction of 17 specially developed apartments and retail space on its West Derby property.

OTHER MARKETS 

Fashion On Screen has listed on the Vienna Stock Exchange, which has European Growth Market status by the HMRC. This means that there is no stamp duty. The company had previously considered a listing on the Nasdaq First North market in Copenhagen. Fashion On Screen has raised more than £3m prior to its listing. A film based on the kidnapping of racing driver Juan Fangio in Cuba in 1958 could start before the end of the year (for more about the background to the story listen to https://www.bbc.co.uk/programmes/p055fjfx).

Andrew Hore

Andrew Hore – Quoted Micro 24 December 2018

NEX EXCHANGE        

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

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

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

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

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

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

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

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

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

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

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

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

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

AIM   

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

MAIN MARKET  

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

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

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

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

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

Andrew Hore

Andrew Hore – Quoted Micro 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 24 September 2018

NEX EXCHANGE       

In the first half of 2018, Newbury Racecourse (NYR) increased media revenues by one-fifth and, along with growth in nursery and lodge revenues, this helped the racecourse operator to raise revenues by 5% to £7.33m even though two race days were lost to bad weather. Enough cash was generated to more than cover capital spending.

Block Commodities (BLCC) has signed a non-binding letter of intent with the Eelleet Network Corp, which intends to buy Block. There would be an all share recommended offer and the enlarged business would list on the Canadian Stock Exchange. Trading in Block shares has been suspended.

Ananda Developments (ANA) has obtained a £300,000 convertible loan facility with two directors, Charles Morgan and Melissa Sturgess. The annual interest rate is 10% and the conversion price is 0.75p a share. The manufacture of 15%-owned Liberty Herbal Technologies’ vaporisers and consumable packs containing four hapac sachets of 0.25g medicinal cannabis has commenced in China. AfriAg Global (AFRI) has applied for a medicinal cannabis licence in the UK. Fellow cannabis investment company Sativa Investments (SATI) has set up a German wholesaling subsidiary and it will invest €80,000 for a 60% stake.

In the six months to June 2018, St Mark Homes (SMAP) increased revenues from £71,000 to £139,000 and it made a small loss excluding negative goodwill release. The interim dividend was unchanged at 5.5p a share. The NAV is £5.9m, including £754,000 in cash, which is equivalent to 134p a share. St Mark is trying to gain planning permission for the commercial development in Sutton High Street. Two other properties in London are being redeveloped and sales have commenced. A development in Wembley should start in 2019.

TechFinancials Inc (TECH) reported a profit in the first half of 2018, but that was due to a change in the fair value of the option to acquire 90% of Cedex. Revenues fell 48% to $3.78m and the underlying loss of the fintech software provider increased from $282,000 to $971,000. The blockchain operations made an initial contribution of $1.23m to revenues. The B2C operations have ceased in Europe and the company wants to sell its subsidiary with a FSA licence. Higher regulations have hampered the B2B technology customers.

NQ Minerals (NQMI) reported an increased interim loss of $9.43m due to higher finance costs. Admin costs were flat. The development of the Hellyer gold project in Tasmania is progressing well and the first sales of concentrate should happen before the end of this year. Work continues towards a move to a standard listing.

Less than one month after asking for trading in the company’s 7% bonds 2021 to be suspended Positive Healthcare (DOC) has appointed Eric Walls and Wayne Harrison of KSA to advise on a liquidation process. Irregularities were identified at the principal operating subsidiary and Positive is unable to pay the next instalment of interest on the bonds.

Eight Capital Partners (MORE) had cash of £773,000 at the end of June 2018. That was before the former Cogenpower acquired €111,100 worth of 8% corporate bonds 2020 in Italian financial services company Finance Partners Group. Other financial services and technology investments are being considered.

EPE Special Opportunities (ESO) has been readmitted to NEX and AIM on 21 September, after it completed its migration from the Isle of Man to Bermuda.

AIM  

IT recruitment and consultancy Parity (PTY) remains on track for an improvement in pre-tax profit from £1.7m to £1.9m but cash generation is not as good as expected. Net debt is still expected to reduce from £1.6m to £900,000. The previously announced Primark managed services contract has started well, although another contract has been delayed. The consultancy business continues to contribute a growing proportion of profit.

Tlou Energy Ltd (TLOU) has agreed locations for pilot production at the Lesedi coal bed methane project in Botswana and the first well should be spudded in October.

N+1 Singer has upgraded its forecast for EKF Diagnostics (EKF) following the interim figures. There was a 5% decline in revenues to £20.4m, while underlying profit improved from £2.3m to £2.7m. Around £250,000 has been added to the profit, taking pre-tax profit to £7.7m. The launch of haemoglobin analyser DiaSpect following FDA approval will boost next year’s figures. The spin out of RenalytixAI continues and it will require a general meeting.

Audio products supplier Focusrite (TUNE) says full year revenues were in line with expectations of £75.4m, while cash of £22.8m is better than forecast. A pre-tax profit of £10.8m is forecast. There are concerns about US tariffs.

Tanfield (TAN) has warned that it may not get anything for its stake in Snorkel if the call option is exercised. Management has already said that it will write down the value of the investment to £19.1m ($25.3m), which already knocks 12p a share off NAV, but there is a disagreement about the interpretation of the original agreement.

Disappointing results from the Atopic Dermatitis study has led Realm Therapeutics (RLM) to appoint MTS Health Partners to advise on strategy alternatives. Realm is considered to be in an offer period. There was $21.3m in the bank at the end of August.

Short-term weakness in the oil palm price has held back the progress of plantations operator MP Evans (MPE) in the first half, but crude palm oil production is increasing in line with expectations (91,900 tons in the first half). That means that full year revenues are likely to be flat and pre-tax profit will be lower. Longer-term growth will come from increased production from more recently planted areas.

Online women’s fashion retailer Sosandar (SOS) is coming up to its first year on AIM and the growth momentum continues.

Huadong Medicine Aesthetics has launched its recommended 32p a share cash bid for Sinclair Pharma (SPH) and that values the company at £166.6m.

There has been a lot of activity at Frontier IP (FIPP) in the past week. The AB Sugar head of innovation Matthew White is joining the company as head of commercialisation. Recycled building materials developer Alusid has raised £1.34m, including the conversion of a £348,000 loan from Frontier IP, which has a 35.6% stake. The Alusid investment had been valued at £700,000 and the latest fundraising values it at £1.73m. The cash will be used by Alusid to invest in its manufacturing facility, which should start production in 2020. The total cost will be £10m. A new company has been set up to develop new antibiotics. Frontier IP has a 10% stake in Amprologix, which has been spun out of the University of Plymouth. The first product is likely to be a cream that contains epidermicin, which can kill antibiotic-resistant bacteria, including MRSA.

There was a switch in the mix of revenues at job screening services provider ClearStar Inc (CLSU) in the first half as revenues increased by 11% to $9.9m. The growth has come from Medical Information Systems, which has lower margins and this means that the overall loss is reducing more slowly than expected. The cash outflow is small. Net cash is $1.2m.

Diurnal Group (DNL) is going along as expected with the launch of its Alkindi paediatric adrenal insufficiency treatment in Germany but the market has been unnerved by a negative comment from a German government research organisation. It pointed out that the performance of Alkindi was not compared with another treatment which has not been given regulatory approval. This does not appear likely to affect the relationship with the German regulatory authorities. There will be news from the European phase III trial for Chronocort before the end of the year.

Stockdale has initiated research on professional services group Christie Group (CTG) and expects a full year profit of £3.5m. It has already achieved an interim profit of £1.75m.

VR Education (VRE) still had £4.9m in the bank at the end of June 2018. Since then there have been improvements to the ENGAGE platform ahead of the full commercial launch before the end of the year. The full version of Titanic VR was launched in August and it is set to be launched on Playstation.

Energy supplier Yu Group (YU.) continues to grow rapidly and it is moving into the water sector. Interim revenues jumped from £20.8m to £35.8m, while underlying pre-tax profit moved ahead from £1.15m to £1.8m. Growth is coming from the larger corporate sector which has held back margins because they are via brokers. The interim dividend is one-fifth higher at 1.2p a share. There was £18.2m in the bank at the end of June 2018.

N4 Pharma (N4P) has undertaken a strategic review following the failure of the reformulation of sildenafil to achieve its key targets in its clinical trial. It would cost a lot and increase risk if the company undertook further reformulation of this generic. The generics division has been closed and the focus will be the Nuvec delivery system. Initial results from research should be available before the end of the year. There was £1.6m in the bank at the end of June 2018.

MAIN MARKET  

Books publisher Quarto Group (QRT) increased interim revenues from $50.2m to $56.2m and the underlying loss fell from $8.7m to $6.6m. Net debt was $73.2m at the end of June 2018. Management is talking to banks to extend the bank facility until August 2020. Costs are being reduced.

Spinnaker Opportunities (SOP) intends to broaden its investment remit to include cannabis processing, as well as the energy and industrial sectors. Finance professional Alan Hume has joined the board of the standard list shell. He was previously an adviser to the company and until last year finance director of Zenith Energy (ZEN). Between 2010 and 2012 he was finance director of Xtract Energy (XTR).

Bluebird Merchant Ventures Ltd (BMV) has completed its feasibility report into the reopening of the Gubong gold mine and the joint venture with Southern Gold has started. Production of 10,000 ounces of gold is initially targeted.

Andrew Hore

Ian Pollard – GKN winning sales at expense of margins prior to takeover

Melrose Industries MRO & GKN. Melrose has published a trading update for GKN for the 13 weeks from 1st January to the 31st March and based on GKN’s own management accounts  produced prior to the takeover on the 19th April. GKN’s performance showed trends which were below market expectations. Melrose has made allowance for further under performance and claims that GKN, with sales up 5% and operating profit down 10%,  was achieving sales growth at the expense of operating margins. GKN’s net debt during the period rose from £889m. to £1124m. Despite this Melrose is confident that its net debt at the 2018 year end will be consistent with previous guidance.

London Stock Exchange Group plc LSE produced a strong performance in the quarter to the 31st March. Total income increased by 13% both year on year and on an organic and constant currency basis. All of the businesses performed well and the Group says it is well placed to develop its many growth opportunities.

Focusrite plc TUNE has thoroughly enjoyed its first six months and is celebrating by increasing its interim dividend for the half year to the 28th February by 33% to 1p per share. Group revenue rose by 21.2%, EBITDA by 33%, profit before tax by 26.8% and basic earnings per share by 23.3%. All major regions benefited from revenue growth and Xmas trading was particularly strong.

AB Dynamics ABDP has made an excellent start to the current financial year with  revenue growing by 39% in the 6 months to 28th February, profit before tax up by 34% and basic earnings per share by 86%. The interim dividend is to be increased by 10% to 1.465p per share. Demand for driving robots hit an all time high and the forward order book is described as good  both for the reminder of this financial year and going through into 2019

Osirium Technologies OSI total revenue for the year the 31st December rose by 63% and bookings by 123% but the loss for the year also rose – from £1,822,497m. to £2,296,814m.The company claims that it is continuing to build both momentum and value

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Andrew Hore – Quoted Micro 12 March 2018

NEX EXCHANGE   

Shepherd Neame (SHEP) improved its interim revenues and underlying pre-tax profit. Revenues were 6% ahead at £84.1m and underlying profit edged up from £5.7m to £5.8m. The interim dividend has been raised from 5.62p a share to 5.75p a share. Net debt was £79.5m. The main growth in revenues was in the managed pubs and hotels division. There was an underlying improvement in the profitability of the brewing business, where own beer volumes were 4.2% higher.

Ashley House (ASH) has reached financial close on the Scarborough extra care housing development. There are 63 apartments plus communal areas and the gross development value is £10m. completion is expected in spring 2019. A housing development and health scheme are likely to follow. This development is not part of the Morgan Sindall joint venture. Non-executive director Christopher Lyons has bought 31,000 shares at 10.09p a share.

EPE Special Opportunities (ESO) had a fully diluted NAV of 239p a share on 5 March 2018 but that was prior to the Luceco profit warning. The NAV included Luceco (LUCE) shares at 77.8p each but the price has subsequently fallen to 57.2p a share. EPE is the largest shareholder in LED lighting products supplier and this was the second profit warning in three months. The original 2017 profit expectation was £16.7m and this has been cut to £11m.

Western Selection (WESP) has raised £668,000 from the disposal of shares in Swallowfield (SWL) and it has a remaining stake of 7.71%. Western sold 120,000 Swallowfield shares at 330p each and 80,000 at 340p each. Last month, personal care products supplier Swallowfield bought men’s grooming brand, Fish for an initial £2.7m.

Ace Liberty and Stone (ALSP) has issued £4.76m of convertible loan notes as part of the £4.85m open offer. A holder of an existing £500,000 loan note is converting into the latest convertible loan notes and like the other subscribers is receiving one warrant for each £1 of loan notes.

MetalNRG (MNRG) says a licence has been granted relating to the Palomino cobalt project, where the company has the right to acquire a 100% stake in return for two million shares at 1.5p each. MetalNRG is also issuing 500,000 shares for work that has already been carried out.

Crossword Cybersecurity (CCS) has raised £2.16m at 270p a share. The cash will be invested in sales and marketing and developing new cyber security products.

Good Energy (GOOD) says that holders of £3.6m of its first energy bonds have agreed to retain them, while the other £4.3m worth will be repaid on 29 March.

Co-chairman David Sumner has increased the amount of Healthperm Resourcing Ltd (HPR) loan notes he will subscribe for to £5m. The outstanding balance is currently £2.7m and additional tranches of up to £200,000 can be subscribed for each month.

London Capital Group Holdings (LCG) is selling a 91.5% stake in its Tradex and 100% of other subsidiary companies to its main shareholder in return for £4.64m of loan notes with a coupon of 8%. The costs of the NEX quotation will also be covered by the buyer. The remaining 8.5% of Tradex can be acquired for £431,000 in loan notes. The disposal requires FCA approval. London Capital will seek a fintech business to acquire within the required six month period.

PCG Entertainment (PCGE) and Wishbone Gold (WSBN) have joined NEX. They are both retaining their AIM quotations and are chaired by Richard Poulden.

AIM   

VR Education has raised more cash than it originally asked for. It has raised £6m at 10p a share and this values the company at £19.3m. The company has developed the ENGAGE education platform and is also developing corporate training and educational content to go on the platform. The business is generating revenues but it still has to take full advantage of the technology it has developed.

Energy supplier Yu Group (YU.) increased its revenues from £16.3m to £47m last year and annualised bookings continue to grow. Underlying pre-tax profit jumped from £195,000 to £3.08m. Yu has gained a licence to supply water. The dividend has been increased from 2.25p to 3p a share.

Share (SHRE) has continued to add to its market share. In 2017, the broker revenues grew from £14.6m to £18.7m and it moved back to underlying pre-tax profit. Digital investment continues and the benefits of this will increasingly show through over the next couple of years. This year the recent partnerships will make a 12 month contribution. Higher interest rates will also help to increase interest income on the cash held.

Smart audio sales started to take off last year and Frontier Smart Technologies (FST) continues to invest in this area. The original digital radio technology business is profitable but the development costs for smart audio more than wipe that profit out. Net cash was £3m at the end of 2017 and this should be enough for Frontier’s requirements. There is scope to grow the digital radio business but smart audio will provide the main growth. From a tiny percentage in 2016, smart audio could contribute nearly two-fifths of revenues in 2019.

Begbies Traynor (BEG) has bought Springboard Corporate Finance for an initial £2.75m in cash and shares. Springboard generated a pre-tax profit of £750,000 on revenues of £2.3m in 2016-17. Up to £500,000 more will be payable depending on performance over the next five years. Begbies says that third quarter trading is in line with expectations. Corporate insolvencies are increasing, albeit from low levels.

Polemos (PLMO) has terminated the proposal to acquire SecurLinx Corporation, which still hopes to come to the London market. Trading in the shares has been restored. Polemos is raising £270,000 at 0.01p a share, plus a further £140,000 conditional on shareholder approval. These placings are before the planned share consolidation of one new share to every 100 existing shares. When additional approvals are given by shareholders a share offering will be made via PrimaryBid.

Netcall (NET) more than doubled its interim SaaS revenues thanks to the purchase of MatsSoft. Interim revenues grew by one-third to £10.7m, which includes organic growth of 5%. Underlying pre-tax profit was 8% ahead at £1.8m. Net debt is £2.5m.

Audio products supplier Focusrite (TUNE) reported sales growth of more than 25% in the first half. Edison upgraded its full year profit forecast by 4% to £10.4m.

Applied Graphene Materials (AGM) has secured the use of its graphene-enhanced epoxy prepreg in the tailgate of the W Motors Fenyr sports car. This is a limited market but it is a good showcase for the technology.

Second half trading was stronger than expected at FIH Group (FIH) as both trading in the Falkland Islands and Momart improved their performance. This has led to an upgrade in the 2017-18 profit forecast from £2.5m to £2.8m.

GRC International (GRC) raised £5.04m at 70p a share when it joined AIM on 5 March. The share price ended the week at 115p. GRC provides services relating to IT governance and compliance.

Zamano (ZMNO) had €5.05m in the bank at the end of January 2018. It remains in talks for potential acquisitions that would enable the company to remain quoted. Part of any deal would be the offer of a cash return to existing shareholders. Trading in the shares has been suspended.

Microsaic Systems (MSYS) had £3.2m in the bank at the end of 2017. Microsaic is focusing on the biopharma market but it could take until 2019 for its partners to start to generate revenues from its technology. There should be enough cash for more than one year but more will be required. Costs have been reduced.

SysGroup (SYS) has signed a three-year managed hosting deal with TJ Morris Ltd, trading as discount retailer Home Bargains, worth more than £950,000.

Contract research organisation Fusion Antibodies (FAB) says that its 2017-18 revenues are expected to grow by at least two-fifths to £1.9m. Last year’s flotation took up management time so revenues are lower than hoped.

Attraqt (ATQT) reported a full year loss of £4.05m, including exceptional costs of £2.38m. The e-commerce software provider intends to focus on operational efficiency this year. There was £2m in the bank at the end of February.

BOS Global Holdings (BOS) has been placed in administration.

Instem (INS) has switched a long-standing client to the SaaS model and this will increase recurring revenues by two-fifths. There are potentially £10m of fees that could be converted to the recurring revenues model.

WANdisco (WAND) has announced more deals including a partnership with Alibaba, which will embed WANdisco Fusion in some of the cloud services that it offers. Total bookings increased by 45% to $22.5m in 2017 and this has sparked a 2018 revenues upgrade by WH Ireland from $25.5m to $30.8m, although a slightly higher loss of $6.5m is expected. WANdisco could move near to breakeven in 2019.

Mirada (MIRA) has secured a £3m loan facility, which adds to the existing facilities. An initial £1.5m will be drawn down within two months. This provides working capital to finance additional contract wins. The annual interest rate is 15%. The provider of the facility is a 27% shareholder.

Strategic Minerals (SML) has paid A$1.5m in cash and A$1.45m in shares for the Leigh Creek copper mine. Strategic has acquired 24,900 tonnes of JORC compliant resource copper. Production should build up to 200 tonnes of copper each month and there is an offtake agreement for 100% of copper production. Strategic has extended its rolling agreement with the owner of the Cobre magnetite stockpile until March 2019. This deal generated revenues of $5.64m in 2017.

Zoo Digital (ZOO) says full year revenues will be at least $28m, up from $16.5m last year, while EBITDA will be ahead of expectations and be at least $2.3m. Localisation services remain the main growth area. Herald has reduced its stake from 15.7% to 14.6%.

Volvere (VLE) says that its 2017 pre-tax profit improved from £1.94m to £3.22m. Impetus Automotive contributed the growth in profit with CCTV software company Sira and Shire Foods reporting lower profits. NAV is 656p a share, with £18.4m in cash and marketable securities.

AFC Energy (AFC) reduced its loss to £5.5m in 2017. The fuel cell technology developer should have enough cash for this year, but it is likely to run out in 2019. AFC could move into profit in 2020.

Pallet developer RM2 International (RM2) has received $2m from the disposal of a building in Switzerland. That means it will have enough cash until mid-April.

Drilling is set to recommence at the Stonepark zinc project in Limerick and Connemara Mining (CON) has set aside £250,000 to cover its share of the spending over the next 12 months. Connemara has a 23.4% stake in the joint venture that owns the project.

Drilling results from the Kodal Minerals (KOD) lithium project at Bougouni in Southern Mali continue to be positive. The latest 19 drill holes have shown high grade intersections of consistent pegmatite mineralisation of up to 1.68% Li2O.

Clear Leisure (CLP) is ready to set up its Bitcoin mining joint venture in Serbia. Management says that the joint venture could produce more Bitcoins at a lower cost than expected. That would increase the return on the €200,000 investment. Assuming a Bitcoin price of $10,000 and an 8% discount rate, the investment could eventually be worth €389,000.

MAIN MARKET    

Bioquell (BQE) reported a rise in pre-exceptional profit from £1.6m to £2.9m in 2017. This was despite a decline in defence revenues. There is £14.6m in the bank. The focus is the biodecontamination business and management believes that this will show through in improved performance this year.

InnovaDerma (IDP) has warned that its full year figures will be below expectations. The personal care products supplier always expected the year to be second half-weighted and full year revenues will be higher. However pre-tax profit will be similar to the £1.03m reported for last year. Last October, £4.4m was raised at 276p a share. The share price has fallen to 121.5p.

Toople (TOOP) has raised £250,000 at 1.022p a share. This will keep the telecoms business going as it tries to increase its revenues in order to reduce its loss. Last June, Toople raised £1.41m at 3.25p a share. Toople joined the standard list in May 2016 when it raised £2m at 8p a share.

Path Investments (PATH) is delaying its exit from the standard list until 29 March. The plan is to move to AIM when an oil and gas asset acquisition is made.

Andrew Hore

Ian Pollard – Immarsat #ISAT strong positive momentum leads to dividend cut.

Image result for inmarsat logoImmarsat plc ISAT 2017 saw strong positive momentum, in fact so strong that it intends to reduce the level of annual dividend payments to 20 cents per share to ensure that it has sufficient financial resources. It will stay at that level until the cash flow of the business rebuilds enough to justify an increase. Group revenue for the year to the 31st December grew by 5.4% and EBITDA by 8% but the figures for quarter 4 were far worse with profit after tax down by 51.3% and EBITDA by 26.2%. Strong long term growth is anticipated in mobile satellite communications with mid-single digit % revenue growth expected on average over the next five years. No doubt shareholders will be hoping that this does not lead to further dividend cuts

Image result for gvc holdings logoGVC Holdings GVC adjusted profit before tax for 2017 rose by 182% and adjusted earnings per share nearly tripled from 0.19 Euro to 0.56 Euro. A second interim dividend of 0.175 euro per share is to be paid giving a full year increase of 13% to 0.34 Euro. A strong start has been made to 2018

Image result for focusrite logoFocusrite TUNE has seen first half growth in revenue, profits and cash, across a wide range of product groups and regions.Christmas trading was particularly strong and revenue for the half year is expected to have risen by over 25% to a total of 38m.

Image result for clear leisure logoClear Leisure plc CLP updates that its first data mining computers have now completed testing and its mining mobile units is ready to be shipped to its permanent home in Serbia and the first fractions of Bitcoins have already been extracted in ‘mining pool mode’. Delivery of low cost miner machines is expected within 10 days.A continuous daily stream of fractions of Bitcoin can now be mined.The results so far indicate that the joint venture with Miner One Limited will be able to produce more Bitcoin than initially anticipated and at a lower cost.

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