Home » Uncategorized
Category Archives: Uncategorized
UK Investor Magazine – Berkeley Group #BKG, UK Property and Conroy Gold #CGNR with Alan Green
UK Investor Magazine – Berkeley Group #BKG, UK Property and Conroy Gold #CGNR with Alan Green.
Alan Green talks about Versarien #VRS , Bluefield Solar Income Fund #BSIF & Coinsilium #COIN
Alan Green talks about Versarien #VRS , Bluefield Solar Income Fund #BSIF & Coinsilium #COIN
https://www.voxmarkets.co.uk/articles/alan-green-talks-about-versarien-bluefield-solar-income-fund-coinsilium-df8cab9/
Quoted Micro 29 November 2021
AQUIS STOCK EXCHANGE
Good Energy (GOOD) is selling its 47.5MW of renewable generation capacity and then reinvest the cash. The portfolio is valued at £56.8m, with £39.1m of related debt, and could be sold in the first quarter of 2022. Good Energy is investing in the latest funding round for Zap Map and the disposal cash may be received at around the same time. The company is investing in its decentralised energy services platform, and this will be rolled out next year. There will be further investments in these areas. Competition has fallen away in the domestic energy supply market and management believes that more normal conditions could return next spring. There will be £2.5m of additional costs to cope with the knock-on effect of higher prices and the exit of rivals. There is still a possibility of achieving full year expectations.
Oberon Investments (OBE) nearly trebled revenues in the first half with the growth coming from the broking business. In the six months to September 2021, revenues improved from £1.2m to £3.4m, while funds under management were £765m at the end of the period. Investment management fees doubled, but corporate finance income jumped from £89,000 to £1.56m. Oberon moved from a loss of £514,000 to a pre-tax profit of £128,000. New product launches should enhance growth in funds under management, while the broking side remains busy.
Non-fungible tokens (NFTs) investor NFT Investments (NFT) is investing $250,000 in Afterparty Inc, a platform where creators generate revenues from music events. This was set up by former Disney executive David Fields.
Eastinco Mining and Exploration (EM.P) plans to acquire battery metals explorer Aterian Resources and move to the standard list. There will be a ten-for-one share consolidation and the company’s name will change to Aterian. AIM-quoted Altus Strategies (ALS) will become a major shareholder. A fundraising has raised £850,000 from convertible loans and £100,000 from shares at 1.5p each, which is the conversion price of the convertible loans. Aterian Resources has a portfolio of 15 exploration projects.
Investment company Gunsynd (GUN) had net assets of £6.3m, including £1.07m of cash, at the end of July 2021. Investee company Low6 still intends to float.
KR1 (KR1) has contributed 350,000 Polkadot tokens to the Acala Network auction. It already has more than 10.2 million Acala tokens and more will be received after 96 weeks, when the Polkadot tokens will be returned. A further 350,000 Polkadot tokens were contributed in the auction of smart contract platform Moonbeam Network. Again, these will be locked up for 96 weeks and a undecided number of Moonbeam tokens will also be received.
Newly crowned Aquis company of the year DXS International (DXSP) reported a small dip in interim revenues from £1.72m to £1.62m, while pre-tax profit fell from £151,000 to £21,000. The second half is expected to be stronger, although additional costs will hold back profit. The healthcare IT provider continues to develop its cloud-based product and it is accelerating the development of products aimed at long-term conditions, such as diabetes.
Rogue Baron (SHNJ) is closing its Bin 1301 bar in Washington DC and concentrate on the bigger De Rhum Spot site.
Pioneer Media Holdings (PNER) is planning to acquire NGMI Labs Inc in return for four million shares. Pioneer has 45 days to undertake due diligence. NGMI was founded by three people with significant experience in the decentralised autonomous organisation (DAO) tokens sector.
Tectonic Gold (TTAU) expects to receive a tax rebate of $275,000 by the year end.
Yooma Wellness Inc (YOOM) has persuaded ASDA to stock 17 of its Vitality CBD products.
Scott Livingston has taken a 5.54%, not 5.16%, stake in Silverwood Brands (SLWD).
AIM
Marshall Motor Holdings (MMH) says that 64.4% shareholder Marshalls of Cambridge is thinking about selling its stake. Constellation Automotive has made it clear that it is interested.
Alien Metals (UFO) has acquired 30% of the Munni Munni project in Western Australia from ASX-listed Platina Resources for A$2.23m in shares and cash. This is one of the largest platinum group resources in Australia and it is near to the Elizabeth Hill project, which has platinum, silver, copper and nickel potential. Munni Munni has a historic non-compliant JORC resource estimate that suggests that there is 1.14 million ounces of palladium, 830,000 ounces of platinum, 152,000 ounces of gold and 76,000 ounces of rhodium. Artemis Resources owns the other 70%.
Telecoms billing and customer relationship management software provider Cerillion (CER) more than doubled its full year pre-tax profit from £3.7m to £8.5m, helped by much higher software revenues. New orders are building up and the order book is at record levels. The dividend was raised from 5.5p a share to 7.1p a share.
Driving safety technology developer Seeing Machines (SEE) has won its largest ever driver monitoring systems (DMS) order and raised £30.4m at 11p a share on the back of this announcement. The cash will be used for technology development and boost sales resources. The DMS deal, which has come through Magna International, is worth A$120m. In the year to June 2021, revenues improved from A$39.9m to $46.6m, while the loss was substantially reduced to A$16.7m.
Credit hire and legal services firm Anexo (ANX) has won a new contract with MCE Insurance to provide claims services for non-fault motorcycle accidents, which tends to be higher margin business. This will boost market share.
Appreciate (APPS) made the expected, although lower, loss in the first half, but the 50% increase in the interim dividend to 0.6p a share suggests confidence in the future. Revenues were 50% ahead at £41m with the faster growth coming in the consumer business even though the Christmas savings order book is lower. Appreciate has withdrawn from lower margin corporate business and there is volatility in bookings in recent months.
Asset management services provider MJ Hudson (MJH) achieved organic revenue growth of 14% and it is on course to grow full year revenues from £25.5m to £31m, helped by acquisitions, which would produce a pre-tax profit of £4m. Demand for ESG services is growing rapidly. On top of that, there is increasing outsourcing of the services provided by MJ Hudson.
Ashtead Technology (AT.) provides services and rents equipment to the offshore oil and gas and offshore wind markets. Services can be provided for installation, ongoing maintenance and decommissioning. It raised £15.5m at 162p a share to help it to grow internationally. The offshore wind services market is set to grow at 19% a year up until 2025. The shares ended the week at 162p.
Eneraqua Technologies (ETP) is well positioned to take advantage of the increasing focus on energy and water efficiency. It raised £12m at 277p a share and the shares ended the week at 285p. Eneraqua Technologies supplies and installs technology that improves energy and water efficiency in multiple occupancy social housing and commercial projects. The systems installed include the company’s Control Flow HL2024 technology, which will be manufactured in Spain. The order book for between August 2021 and January 2022 includes £22m of contracted revenues and there a further £21.3m of contracted revenues for the following two years.
Brickability (BRCK) is paying an initial £3.3m for HBS NE, which takes it into the renewable energy products market. It supplies and maintains solar, battery storage and electric vehicle charging. Brickability has relationships with housebuilders, which are being required to install EV charging points in new homes. Even before cross-selling, the deal is earnings enhancing.
Cyber security services provider Shearwater (SWG) reported a small decline in interim revenues due to lower services sales. Software revenues were flat, but margins improved. There is 50% visibility for second quarter revenues.
Treated sustainable wood producer Accsys Technologies (AXS) increased interim revenues by 31% in the first half. Accoya production remains limited because the new reactor will not go into service until next year. The Hull Tricoya plant will should commence production next July. The plans for the potential US Accoya plant are also progressing with a final investment decision expected in the next few months.
Omega Diagnostics (ODX) grew its health and nutrition revenues to pre-pandemic levels. Sales of the global health division also grew but Covid-19 test sales were disappointing. DAM Health has ordered £750,000 of tests since the end of the half year. Net cash was £3.9m at the end of September 2021. Omega remains loss making, and it is difficult to predict how quickly revenues will grow. There are some orders coming in for the VISITECT CD4 test.
Workflow technology provider ActiveOps (AOM) has improved gross margin and interim revenues grew by one-fifth. Annual recurring revenues are running at £19.8m.
MAIN MARKET
Packaging manufacturer and distributor Macfarlane (MACF) is trading ahead of expectations. Revenues are 25% higher than last year and the pre-tax profit is ahead of 2020. There are cost pressures and some customers have had supply problems elsewhere so their demand for packaging has reduced. Net debt was £2m at the end of October 2021.
BATM Advanced Communications (BVC) has announced a dividend of 0.74p a share.
JLEN Environmental (JLEN) is targeting a dividend of 6.8p a share in the year to March 2022. The interim dividend is more than covered by earnings. The portfolio of renewable energy and environmental assets has been diversified in recent years and that means that the company is not as dependent on revenues from wind power, which were hampered by low wind speeds in the period. Other assets performed well and there are plenty of investment opportunities in Europe. NAV is 98.4p a share.
Marine technology developer OTAQ (OTAQ) has secured a multi-year contract with Minnowtech. It will supply sonar technology for the jointly developed shrimp farming technology. Commercial launch is planned in Asia and the initial order will be more than $200,000. OTAQ owns 15.2% of Minnowtech. A major customer has given notice and OTAQ is seeking additional sources of funding.
Oxford Cannabinoid Technologies (OCTP) has signed an agreement with Dalriada Drug Discovery Inc of Canada, which will provide research and development services on compounds that Oxford Cannabinoid has access to via the Canopy Growth Corporation agreement.
Andrew Hore
#KAV Kavango Resources – Option to acquire up to 51.15% of Molopo Farms
Kavango Resources plc (LSE:KAV), the exploration company targeting the discovery of world-class mineral deposits in Botswana, is pleased to announce it has entered an exclusive, three month option (the “Option”) to acquire 85.23% of Kalahari Key Mineral Exploration Proprietary Limited (“KKME”) in a proposed all share-transaction (the “Proposed Acquisition”). Kavango can exercise the option at its sole discretion.
KKME is a privately owned company, which currently owns 100% of prospecting licences PL310/2016, PL311/2016 and PL202/2018 in Botswana, collectively known as the “Molopo Farms Project” (“MFP”). KKME holds no other interests and is debt free. Power Metal Resources plc (LSE:POW – “Power Metal”) has an effective 40% project in the MFP, which it will convert into equity on a pro-rated basis in KKME should the Proposed Acquisition complete.
Following the Proposed Acquisition, Kavango would hold an interest of between 50.74% and 51.15% in KKME, Evrima Plc (“Evrima” – a currenty shareholder in KKME) would hold between 9.26% and 8.86% of KKME and Power Metal would own the remaining 40%. Power Metal and Evrima intend to retain their shares in KKME and will continue as project partners. Kavango would be the operator.
Rather than pay an option fee, Kavango will complete a work programme on the MFP (the “Work Programme”). This will enable the Company to complete technical due diligence, including fieldwork, prior to deciding whether to exercise the Option. As part of the Work Programme, Kavango will perform a review of all geological and geophysical data gathered from previous exploration of the MFP.
Highlights
Ø About the Molopo Farms Project:
– KKME owns 60% of the MFP, which is a Nickel/Copper/Platinum Group Elements (“PGEs”)exploration project in sourthern Botswana
– The MFP covers 1,723km2
– Exploration targets lie under Kalahari Cover
– Primary exploration strategy led by advanced geophysics
– Spectral Geophysics (“Spectral”) historically engaged to complete surface surveys
– KKME drilled 3 boreholes in October 2020 (“Targets 1, 2 & 3”), each of which encountered ultramafic rocks
– Nickel sulphides were identified in Borehole K1-6 (“Target 2”)
– Power Metal to continue as project partner, with a 40% stake in the MFP
Ø The Work Programme will commence immediately, to include:
I. Spectral to perform a single “moving loop” survey over Target 1
II. Kavango to perform soil geochemical analysis over Target 2
III. Kavango to cut cores and send select samples from Target 3 for assay testing
IV. Kavango to create a unified regional 3D model of MFP using all available borehole data
V. Kavango to send thin sections of core samples, taken from Targets 1, 2 & 3, for university analysis
VI. Kavango to contract Bell Geophysics to perform gravity data analysis over the northern part of the MFP
Ø Acquisition Terms, should the Company exercise the Option:
– Value of the Proposed Transaction estimated to be between £1.17m & £1.875m (payable in stock), depending on the performance of Kavango’s share price
– The Company anticipates closing the Proposed Transaction through the issue of 21,307,500 shares, pro-rated, to certain KKME shareholders (the “Vending Shareholders”) at an issue price of 5.5p (the “Acquisition Shares”), valuing KKME at £1.375m
– Half the Acquisition Shares will be locked in for 6 months & the other half locked in for 12 months
– Kavango to issue 1-for-1 two-year warrants to the Vending Shareholders on the same terms as the 05 July placing (the “Acquisition Warrants”). The Acquisition Warrants are transferrable between the Vending Shareholders.
Ø Kavango CEO Ben Turney will host a live shareholder webinar via Twitter Spaces through the Company’s Twitter account at 1900GMT on Monday 29 November to discuss the Proposed Acquisition and how it fits with Kavango’s strategy (visit https://twitter.com/KavangoRes or use the handle @KavangoRes for more information)
Ben Turney, CEO of Kavango Resources, commented:
“Our vision is to build a world-class minerals exploration firm in Botswana. Our business model is based on making multiple, large-scale metal discoveries, which we can sell to major international mining firms.
Over the course of this year we’ve recruited senior technical staff, deployed the latest technologies into the field, invested heavily in our local operations and significantly increased exploration activity. The Kavango team has now put in place a strong foundation, upon which we can confidently grow the company.
The next important element in our strategy is to have a pipeline of high-quality projects we can acquire or earn into. In this respect, Molopo Farms could be a perfect fit. The fact that our close strategic partners, Power Metal Resources and Spectral Geophysics, are already heavily involved is potentially a big advantage. We look forward to working with Evrima too.
The terms of the deal are also appealing. An all-share transaction makes sound commercial sense, enabling us to preserve cash resources to use in the field. The structure of the Work Programme Option, means we can immediately start moving the project forward, while also performing detailed due diligence,
I look forward to reporting on our progress. “
About the Molopo Farms Project
KKME is a privately owned company, which owns 100 per cent of prospecting licences PL310/2016, PL311/2016 and PL202/2018 in Botswana, collectively known as the “Molopo Farms Project” (“MFP”). The MFP is highly prospective for Nickel/Copper/PGE deposits and covers 1,723km2 . All exploration targets lie under Kalahari Cover. The primary exploration strategy is the use of advanced geophysical surveys, data interpretation and modelling to identify drill targets.
Power Metal Resources (LSE:POW) owns 40 per cent of the MFP earned by financing part of the exploration work.
Evrima Plc currently owns 15.43% of KKME, which will dilute to an interest of between 9.26% and 8.86% on completion of the Acquisition.
KKME has engaged Spectral Geophysics to conduct geophysical surveys over the MFP. Spectral has specialist knowledge and expertise in mapping subsurface geology beneath Kalahari cover. Kavango separately entered into a strategic partnership with Spectral on 20 April 2021, for the Company’s Kalahari Suture Zone (“KSZ”) Project. The exploration challenges in the KSZ and MFP are notably similar.
In October 2020 KKME completed an initial drill campaign, which targeted three separate geological structures, with one borehole in each (Targets 1, 2 & 3).
Drilling at Target 1 appears to have closely missed the main conductive anomaly, but Kavango’s team is encouraged by geophysical survey data. Spectral Geophysics will complete a “moving loop” survey over Target 1, with the aim of producing a more defined model of the conductive target.
Core retrieved from Target 2 (“Hole K1-6”) contains visible nickel sulphides. A soil-sampling programme over Target 2 has been designed to test the surface extent of any possible underlying mineralisation, with a view to preparing future follow-up drilling.
The latest assay results from Hole K1-6 can be viewed in the announcement made by Power Metal on 24 September 2021 below;
Cores from Target 3 will be cut and sent for laboratory testing at the University of Witswatersrand.
The Work Programme Option
In return for being granted the Option, Kavango proposes to complete the following work programme (the “Work Programme”)
I. Spectral to perform a single “moving loop” survey over Target 1, to be paid for by Kavango
II. Kavango to perform soil geochemical analysis over Target 2. KKME to provide details of an outline soil-sampling programme, to be signed off by Kavango’s Exploration Manager. Kavango to provide a maximum of 2 teams for a maximum of 1 calendar month to perform the soil sampling programme.
III. Kavango to arrange for the remaining core from Target 3 to be cut and sent for analysis. KKME to provide confirmation of the quote received for lab analysis
IV. Kavango to input the regional borehole data from Targets 1, 2 & 3 into a unified 3D model. KKME has indicated this data is in Microsoft Excel. KKME to provide Kavango with said data.
V. Kavango to send thin sections of core samples taken from the 3 bore holes drilled at Targets 1, 2 & 3 for university analysis
VI. Kavango to fund a contract agreed with Bell Geophysics for a reinterpretation and inclusion of gravity data for the northern part of the licence block
In the event that Kavango does not exercise the Option, Kavango may elect to turn over to KKME all data gathered from the Work Programme, which will then become the property of KKME.
Proposed Acquisition Terms
The Option has a 3-month term, valid commencing 25 November 2021, which gives Kavango the exclusive right (at its sole discretion) to acquire between 50.74% and 51.15% of the fully diluted share capital in KKME from the Vending Shareholders, in exchange for:
– 21,307,500 million shares in Kavango, issued at a price of 5.5p per share and credited as fully paid, with half the shares subject to a 6-month lock-in and half the shares subject to a 12-month lock-in (the “Acquisition Shares”)
– If at the time of exercising the Option, the Kavango share price has traded below 5p on a 10-day Volume Weighted Average Price (“VWAP”) (the “Lower Price”), then Kavango will issue £1,170,000 worth of shares at the Lower Price to the Vending Shareholders.
– If at the time of exercising the Option, the Kavango share price has traded above 8.8p on a 10-day Volume Weighted Average Price (“VWAP”) (the “Upper Price”), then Kavango will issue £1,875,000 worth of shares at the Upper Price to the Vending Shareholders.
– 1-for-1 two-year warrants exercisable at 8.5p per share, which are subject to an acceleration clause, whereby if the Company’s shares close above 17p for 5 trading days, the Company may write to warrant holders at any time providing 10 working days’ notice of accelerated exercise, with 10 working days thereafter for payment (the “Acquisition Warrants”)
– Kavango will issue the Acquisition Shares and Acquisition Warrants directly to the Vending Shareholders, prorated in their respective allocations
– The Acquisition Warrants will be transferable between KKME shareholders, with the written permission of Kavango
– No cash fee is payable in connection with the Option
Upon Option exercise:
Kavango will, if necessary, issue a prospectus as soon as is practicable and (if Kavango considers the same to be necessary or desirable) call a general meeting to seek shareholder approval for the Proposed Transaction, should Kavango exercise the Option.
Further information in respect of the Company and its business interests is provided on the Company’s website at www.kavangoresources.com and on Twitter at #KAV.
For further information please contact:
Kavango Resources plc
Ben Turney
First Equity (Joint Broker)
+44 207 374 2212
Jason Robertson
SI Capital Limited (Joint Broker)
+44 1483 413500
Nick Emerson
Quoted Micro 22 November 2021
AQUIS STOCK EXCHANGE
Globe Capital (GCAP) has reported its 2020 and latest interim results and undergone board changes. Simon Grant-Rennick becomes executive chairman and Burns Singh Tennent-Bhohi an executive director. They are advancing £100,000 via a convertible, which will convert at 0.04p a share following the upcoming AGM. More cash will be raised, and a new corporate strategy announced. There was £23,000 in the bank at the end of June 2021. There were net liabilities. Peterhouse has been appointed as corporate adviser.
Voyager Life (VOY) interim revenues were £59,000 and it remains loss making. There was £1.74m in cash at the middle of November 2021 and monthly overheads are below £50,000. The CBD products supplier is getting its products stocked in retailers and has opened its third store.
Helium Ventures (HEV) has made its maiden investment in Blue Star Helium, which has the Voyager prospect at Las Animas County Colorado. There are indications that it could have one of the highest helium concentrations in the US. A maiden well could be drilled in December.
Sativa Wellness Inc (SWEL) is offering a range of blood tests through 40 Superdrug sites.
Tectonic Gold (TTAU) has completed the Specimen Hill drilling campaign. Initial results for Goldsmith’s Reef, which was mined 100 years ago, has had some positive drilling results and there are more results to come. This will help to secure a partner.
Wishbone Gold (WSBN) is preparing to drill at Red Setter in Western Australia. Four high priority zones have been identified. Wishbone raised £126,000 at 14p a share.
EPE Special Opportunities Ltd (ESO) plans to issue up to 25 million zero dividend preference shares at 100p each.
Pioneer Media Holdings Inc (PNER) has raised C$1.1m at C$1 per unit (one share and one warrant exercisable at C$1.50). Investee company Leaf Mobile Inc is raising cash ahead of a proposed standard listing.
IamFire (FIRE) has an option to subscribe up to $4.5m into convertible loan notes of former Aquis company Boanerges. They convert into shares at 75p each.
Coinsilium Group Ltd (COIN) sold 4.58 million treasury shares at 10p each to raise £458,000.
Omni Egis (OMNI) is leaving Aquis on 24 November.
Scott Livingston has taken a 5.16% stake in Silverwood Brands (SLWD).
AIM
Acoustic and thermal insulation material manufacturer Autins Group (AUTG) has raised £3m at 20p a share, which was a significant discount to the market price. The cash will be used to develop the Neptune acoustic material manufacturing facilities and in product development for electric vehicles.
Steel structures supplier Billington (BILN) has been hit by short-term delays to contracts, which has knocked £3.5m off forecast 2021 revenues. That has led to a halving of the 2021 forecast pre-tax profit to £1.1m. The order book is still strong.
Microbiome-based products developer Optibiotix Health (OPTI) has sold 3.64 million shares in SkinBioTerapeutics (SBTX) at 55p each and raised £2m. Optibiotix still owns 20.7% of the company and that stake is valued at £18m.
Managed IT and networking services provider AdEPT Technology (ADT) increased interim revenues by one-fifth to £34.3m. Underlying pre-tax profit was 16% higher at £3.5m and earnings per share were 30% ahead at 13.2p due to a lower tax charge. Net debt was £31.2m at the end of September 2021, which was after spending £9m on acquiring Datrix.
Ilika (IKA) says that its Stereax and Goliath battery technologies remain on track. Commercial revenues from the smaller Stereax batteries should commence in 2022. Once lithium-ion equivalence is achieved Ilika will seek a partner for Goliath.
Health services provider Totally (TLY) had a strong interim period as insourcing and planned care revenues improved. Organic revenue growth was 14%, while the underlying pre-tax profit was £2.1m. There was £18.3m in cash at the end of September 2021, which provides plenty of fire power for making acquisitions in the out of hospital care sector. The urgent care business has been winning contracts and extensions to existing ones. Full year pre-tax profit could improve from £2.5m to £4.1m with more growth to come from the existing operations as demand returns to more normal levels.
Arden has updated its forecast for Dekel Agri-Vision (DKL) due to shipping delays holding up the start of production at the cashew plant. Palm oil production and revenues continue to grow. This means that the company will not make a pre-tax profit in 2021, but it should still make a substantial 2022 profit.
Trakm8 (TRAK) has not done well in recent years but the latest statement from the telemetry equipment and services provider has sparked an upgrade. The company should breakeven this year and make a significant profit in 2022-23.
MAIN MARKET
Technology-focused shell Red Capital (REDC) raised £4m at 10p a share and after expenses it has total cash of £725,000. The shares certainly jumped when trading commenced and closed at 25.5p. This is the latest vehicle floated by Marwyn Capital founder David Williams.
PYX Resources Ltd (PYX) was already quoted on the NSX in Australia before joining the standard list. PYX is in a strong position as the second largest resources of zircon in the world with zircon prices increasing and demand remaining strong. It has two mineral sands projects in Central Kalimantan in Indonesia with one already in production. No new money was raised. Trading started at 94p a share and ended the week at 92.8p a share. There was solid trading in the shares all week.
Technology Minerals (TM1) was set up as investment company after Stranger Holdings (STPH) decided not to proceed with the acquisition of Technology Minerals and related assets. It has acquired these assets and is building a business that covers the battery cycle from exploration and mining to recycling. The main focus is on the Emperium project in Idaho, where £100,000 will be spent over up to 18 months. The company raised £1.5m at 2.25p a share and issued 786.2 million shares to acquire the assets. The share price opened at 2.6p and ended the first day at 3.25p. It ended the week at 3.5875p.
A general meeting has been requisitioned at East Imperial (EISB) by Andrew Regan of Corvus Capital. He wants to remove two directors and replace them with his picks. The board criticises the experience of his choices.
Andrew Hore
Vodafone, SSE and Inflation with Alan Green #VOD #SSE #BRES
The UK Investor Magazine Podcast is joined by Alan Green to discuss UK shares and leading market themes.
We start by drilling down into the latest inflation data and what it means for shares in the medium term given the Bank of England will have little choice but to hike rates in December.
The Podcast features two FTSE 100 dividend payers that will be of great interest to UK equity income seekers in Vodafone and SSE.
Vodafone now provides not only a very respectable dividend, but after producing a 5% revenue increase in H1, there is a real prospect of capital appreciation. Vodafone rose 5% after the release of their report yesterday and retraced 2% the day after in a weak market.
Is the SSE the best play on renewable energy for UK investors looking for a blue chip company? The company has unveiled a progress report that highlights the focus on their renewables strategy with a £12.5bn strategic capital investment. Their plans have seemingly quelled short term fears of a break up pursued by activist investor Elliot.
We finally update on Blencowe Resources, including their latest funding round and an overview of their resources.
Quoted Micro 15 November 2021
AQUIS STOCK EXCHANGE
Brewer and pubs operator Shepherd Neame (SHEP) is starting to recover from lockdowns. Pubs started to reopen outdoors on 12 April, while indoor trading recommenced on 17 May. From that point pubs achieved 97% of 2019 trading levels. Since June, drinks sales have been down on the 2019 level, but food and room revenues were higher. In the year to 26 June 2021, revenues fell from £118.2m to £86.9m with both periods hampered by Covid-19 lockdowns. There was a swing from a pre-tax profit of £1.5m to a loss of £4.2m. A revaluation of licenced pubs shows a surplus over book value of £35.9m, which is a 13% uplift not reflected in the NAV of 1140p a share.
Silverwood Brands (SLWD) is a shell focused on food and lifestyle acquisitions. It raised £1.03m at 40p a share. The share price ended the week at 43.75p. NAV is 35p a share. The strategy is to build up a portfolio of consumer brands. The cash raised in the flotation and prior to the admission will help to identify targets and carry out due diligence. Directors Andrew Gerrie and Andrew Tone were both involved in building up the Lush handmade cosmetics business.
In the first quarter National Milk Records (NMRP) revenues increased by 8% to £5.72m. There was a small decline in revenues for testing for Johne’s disease, while the core milk testing business increased revenues, although the comparatives were for a weak period when lockdown was ending. The launch of genomic services under the GeneEze brand is planned for this winter. UK milk prices are exceeding 40p a litre, although the costs for farmers are increasing.
SulNOx Group (SNOX) has 600 potential customers and 130 trials proposed or underway. This includes vehicle and marine clients for the fuel emulsification additive.
Pharma C Investments (PCIL) has made its first cannabis-related investment in Product Earth Expo UK, which runs an annual CBD trade show in Coventry. A £275,000 investment gives Pharma C a 7.5% stake. Product Earth also offers a digital marketing service. Tom Toumazis, the former boss of European newspapers publisher Mecom, is chairman of Product Earth and Pharma C investment strategy director Gavin Sathianathan is also a director. At the end of October, Pharma C had cash of £608,000.
Sativa Wellness Inc (SWEL) increased revenues in the nine months to September 2021 by 724% to £9.88m. This enabled Sativa to move into profit, although it is a modest one. Trading has been boosted by demand for Covid tests and the range of tests is being broadened.
Rutherford Health (RUTH) is partnering with BUPA, which will open clinics within the company’s sites and refer patients if they have symptoms of cancer. The first clinic will be opened at Rutherford’s Liverpool cancer centre and the second in Northumberland.
Spirits company Rogue Baron (SHNJ) has raised £200,000 at 7p a share, which is just above the market price. Each of the placing shares comes with a warrant exercisable at 7p. The cash will be used to acquire additional stocks of Shinju whisky.
Valereum Blockchain (VLRM) has raised £197,500 from the exercise of warrants.
David Evans has increased its stake in Oberon Investments Group (OBE) from 7.61% to 8.15% and Rodger Sargent has a 3.14% shareholding.
EPE Special Opportunities Ltd (ESO) had net assets of 536.19p a share at the end of October 2021.
AIM
Firering Strategic Minerals (FRG) has a 51% stake in the Atex lithium and coltan project and has the option to increase it. Firering raised £4m at 13p a share and expenses were £516,000. The money raised will finance the £1.55m cost of the exploration spending for Atex for the next two years. There is also potential to generate revenues from tantalum production within 18 months, which will help to finance further development.
The Life Science REIT PrimaryBid offer closes on 15 November, and investors can apply for shares in the intermediaries offer via Interactive Investor and other firms by 16 November. A 4% yield is being targeted, based on the issue price of 100p a share, with annual growth of 5%. Life Science REIT will be the first London-quoted REIT focusing on life science properties. The types of properties will include laboratories, offices and manufacturing facilities and they will be situated in Oxford, Cambridge and London. There is strong demand for these properties from companies and organisations and a lack of supply. It is estimated that up to 20 million square feet of additional office and laboratory space will be required over the next two decades. The target for the offer and placing is up to £300 million.
Parcel and freight delivery company DX (DX.) continues to make a rapid recovery despite the uncertainties of the past year. Group pre-tax profit improved from £200,000 to £12m with freight’s improvement offsetting the decline in profit in the rest of the group. Net cash was £16.8m at the end of June 2021 and there could be a dividend this year. finnCap maintained its 2021-22 pre-tax profit forecast at £16.5m.
Tracsis (TRCS) has shown the solidity of its rail technology and services revenues and the more volatile data and events business has started to recover. Revenues edged up from £48m to £50.2m, with most of the growth coming from acquisitions. Rail technology revenues grew, but the data and events division reported a small decline. According to finnCap, adjusted pre-tax profit improved from £8.3m to £10.9m. Since the end of July, Tracsis has acquired Dublin-based Icon Group, which made a pre-tax profit of £800,000 in 2020, and this will be integrated with the similar UK data analysis operations.
Chain and transmission equipment manufacturer Renold (RNO) is managing to pass on higher materials prices and the chain division revenues have recovered. Group interim revenues were 17% ahead at £95.3m, while pre-tax profit was 52% higher at £5m. Order intake was 55% higher at £113m. Net debt is £13.9m. Forecast full year earnings are 3.2p a share.
Media localisation and post-production services provider Zoo Digital (ZOO) is growing revenues on the back of the international expansion of streaming platforms and broadening the range of services that it offers. New production projects are starting to ramp up and that provides further growth opportunities. Interim revenues jumped from $16.4m to $26.9m and there was a small operating profit.
Insolvency litigation financer Manolete Partners (MANO) continued to generate cash before investment in new cases during the six months to September 2021. Revenues were lower than the first half of 2019-20 when there was a large case settlement, but they were higher than the second half. Interim profit fell and that is why the interim dividend has been reduced from 1.17p a share to 0.39p a share. New case enquiries are rising.
Maestrano (MNO) has won a new contract for surveying an electricity transmission line in Australia. The 700km line goes from Wagga Wagga to the South Australian and the contract runs between 2022 and 2025. This shows there is demand for the surveying technology outside of the rail sector.
MAIN MARKET
Property investor Town Centre Securities (TOWN) says that the latest valuation shows a 0.3% increase over the June 2020 valuation. Since then, a London property has been sold for £3.85m, which is 6% above the 2020 valuation. Rent collections are back to pre-pandemic levels. The full year results will be published on 24 November.
Cookware supplier Procook (PROC) joined the premium list at a valuation of £158m at the placing price of 145p a share. Procook ended the week at 159.75p.
Andrew Hore
Quoted Micro: Small Cap Awards 2021
Company of the year
EKF Diagnostics
The sharp share price rise in recent years only tells part of the story of EKF Diagnostics. Shareholders have also had the opportunity to benefit from the spin-offs of kidney diagnostics company Renalytix, which itself spun-off Verici Dx, and Trellus Healthcare, which provides personalised care for people with chronic conditions and the initial focus is inflammatory bowel disease (IBD).
Renalytix had a restricted offer to EKF shareholders at 121p a share when it joined AIM in November 2018. Although the share price is well below its peak, it is still nearly seven times that level and that does not take into account the one share issued in Verici Dx for each Renalytix share held last year.
EKF backed Trellus Healthcare in August 2020 and distributed its shareholding to its own shareholders last December. The company floated on AIM in May.
EKF does have its own successful businesses involved in haematology, diabetes testing, laboratory operations and contract manufacturing. In the six months to June 2021, revenues increased from £26.3m to £38.6m, while pre-tax profit improved from £7.6m to £11.6m.
In October, EKF completed the acquisition of Texas-based Advanced Diagnostic Laboratory for an initial $10m in shares. The core business is a CLIA-certified laboratory and Covid-related business has boosted recent revenues, but the testing range will be broadened. This is expected to be a strongly earnings enhancing deal, according to Investec.
Director of the year
Julian Baines, EKF Diagnostics
Julian Baines recently stepped down as chief executive of EKF Diagnostics and has become non-executive deputy chairman. He has led EKF since it joined AIM and was behind the strategy that has proved so profitable for EKF and its shareholders. He had previously built up BBI before it was taken over.
Earlier this month Julian Baines sold 250,000 EKF shares at 80.76p each. He still owns more than 1.6 million shares.
Aquis company of the year
DXS International
DXS International provides clinical decision support systems to GPs and pharmacists. The healthcare IT company has official supplier status with the NHS and its systems help it to be more efficient. The ExpertCare Hypertension module has achieved accreditation for the NHS Digital Framework.
More than one-quarter of the GP practices in the UK use the company’s clinical decision support technology. There are also opportunities outside of the UK with a pilot planned in the US.
DXS increased its full year revenues from £3.28m to £3.61m, including £100,000 for an EU hypertension initiative, while pre-tax profit improved from £239,000 to £254,000 even though the amortisation charge was significantly higher.
There was £1.24m of cash generated from operations. Product development is important to the business and there was £1.5m of capitalised research and development spending during the year. Artificial intelligence and personalised health are areas that development will focus on.
IPO of the year
Calnex Solutions
Telecoms network testing equipment supplier Calnex Solutions repeated its win in this category at the AIM awards. It joined AIM on 5 October 2020 via a placing at 48p a share and the share price has reached 135p. There has been more than one profit upgrade since flotation. The latest was last month, when the 2021-22 pre-tax profit forecast was raised from £4.4m to £5.6m.
Calnex designs and manufactures equipment used by telecoms network operators, network providers, data centres and systems suppliers to test their products. This is an international business with Asia and the Americas the major markets.
Product innovation will enable Calnex to capture more of the growing market for the implementation of 5G telecoms infrastructure. Investment is focused on products where the demand has already been identified, although Calnex also intends to enter new markets.
Interim figures will be published on 23 November.
ESG of the year
Symphony Environmental Technologies
Biodegradable plastic additives and products developer Symphony Environmental Technologies has been on AIM for two decades.
Symphony Environmental had an initial focus on oxo-biodegradable plastic products, which are now branded d2w. The newer technology is called d2p (Designed to Protect), which is a range of additives that have antimicrobial, insect and rodent repellent and odour absorbing properties. They can be used for a range of products from bread bags and plastic film to personal protective equipment.
Symphony Environmental made a pre-tax loss of £632,000 on revenues of £4.88m in the first half of 2021. Commercialisation of newer products is gaining momentum and sales should build up. A pre-tax profit of £120,000 is forecast for 2021, followed by a jump to £1.21m in 2022.
Journalist of the year
Andrew Hore
Analyst of the year
Kevin Ashton, Singer Capital
UK Smaller Companies Fund Manager of the year
Gervais Williams and Martin Turner, Premier Miton UK Smaller Companies
Lifetime Achievement award
David Stredder, Mello Events
Marks and Spencer, Halfords and Wetherspoons with Alan Green #MKS #JDW #HFD #POW
Alan Green joins the Podcast for an exploration of a selection of UK equities.
We discuss Marks and Spencer (LON:MKS), Halfords (LON:HFD), JD Wetherspoon (LON:JDW) and Power Metal Resources (LON:POW).
With a backdrop of a Bank of England surprising markets by not hiking rates last week, the focus of this Podcast is UK consumer shares and whether their results reflect the doubts the BoE has on the strength of the UK economy.
We question whether M&S recent results are a sign of a turnaround in the business or just a bounce back from the pandemic.
JD Wetherspoons saw a 30% drop in Ale sales contributing to an overall 8.9% drop in like-for-like sales as the company highlighted a change in the demographics of their customers.
Halfords have enjoyed bumper sales from their auto centres sending shares up over 15%.
Quoted Micro 8 November 2021
AQUIS STOCK EXCHANGE
There are three companies on the shortlist of the AQSE company of the year award at the Small Cap Awards 2021. They are medical IT provider DXS International (DXSP), oncology and dermatology treatments developer Incanthera (INC) and Kent-based wine maker Chapel Down Group (CDGP).
Brewer Daniel Thwaites (THW) was hampered by lockdowns in the six months to September 2021, but they were not as bad as in the first half of the previous year. Revenues increased from £221.8m to £47.8m, while the business returned to profit with £7.5m before tax. Net debt was £61.4m at the end of September 2021. Government support has come to an end and there are inflationary pressures, only partly offset by beer duty changes.
Quantum Exponential (QBIT) is a shell focused on quantum technology and predominantly companies in NATO countries. There are no other quoted companies offering a potential investment in this sector. The plan is to put together a portfolio of quantum technology company investments, which are most likely to be at the seed or early stage. Quantum computing uses the laws of quantum physics to increase the speed of computation. Nearly £2.5m was raised after expenses at 5p and the share price ended the week at 6.625p (6.25p/7p). The NAV is 1.65p a share, so the current share price is more than four times that level. Helium Special Situations has taken a 4.57% stake.
Kashei Holdings (KASH) intends to build up a portfolio of investments in cryptocurrencies and blockchain. The portfolio will include digital assets, listed investments, venture capital opportunities and staking digital assets into liquidity smart contracts and perform staking services. There should be around £3.7m available for investment, although 10% of that will be required for working capital, following the placing at 16p a share. The current mid-price is 20.25p (19.5p/21p). Pro forma NAV is 13.1p a share.
Samarkand Group (SMK) is acquiring Napiers the Herbalists, which it has been trading with for three years. The initial consideration is £1.7m in cash with deferred consideration of £100,000. There is also contingent consideration of up to $700,000. In the year to March 2021, revenues were £1m and EBITDA was £240,000.
All Star Minerals (ASMO) signed exclusive heads of terms with a company with gemstone assets and another company with diamond assets. It has terminated the gemstone deal and extended the potential diamond deal. The potential acquisition has white and coloured diamonds and an off-take and financing agreement. Ian Harebottle, the interim chief executive of All Star Minerals, owns 25% of the diamond company.
Vulcan Industries (VULC) has signed heads of terms to acquire Aftech, which is a sheet metal fabrication company that fits in with existing subsidiaries. Aftech has net assets of £780,000 and net debt of £90,000. Full year revenues are estimated to be £1m with EBITDA of £175,000. Vulcan will pay £1.55m in shares and this may represent 21.5% of the enlarged share capital.
TruSpine Technologies (TSP) has submitted a request to the FDA to consider the Cervi-LOK system as a breakthrough device technology. That would enable the device to generate higher margins.
Coinsilium Group Ltd (COIN) had crypto assets of $4.22m at the beginning of November 2021. That is more than double the value at the end of June.
Rutherford Health (RUTH) increased interim revenues by 36% to £4.85m in the six months to August 2021. September revenues were more than £1m. More oncologists have been trained to use the company’s technology. Rutherford Health will continue to lose money.
Pioneer Media Inc (PNER) has acquired CryptoPunk 8869 for $433,700.
Asia Wealth Group Holdings (AWLP) increased interim revenues from $894,000 to $940,000, while pre-tax profit improved from $117,000 to $123,000. There was $1.36m in the bank at the end of August 2021.
AIM
Online electrical retailer Marks Electrical (MRK) specialises in kitchen appliance, audio visual products and small electrical appliances and has been growing its share of the market. Since 2014, Marks Electrical has increased its market share from 0.41% to 1.22%. A placing raised £2.63m after expenses at 110p each and shareholders sold shares worth £25m. The company’s warehouse has enough capacity to cope with revenues of £180m, more than treble last year’s level. The shares ended the first day at 110.5p.
Devolver Digital Inc (DEVO) is the latest video games publisher to join AIM. The Delaware-based company’s original focus has been indie games produced by third parties, but more recently it has been acquiring companies with their own IP. The cash raised by the company in the placing will be used to acquire strategic partners and finance the development of third party and in-house games. Nearly £30m was raised after expenses and the price has risen from the placing price of 157p to 187.5p. The overall video games market is forecast to grow from $177.8bn to $218.7bn in 2024.
Escape rooms operator Escape Hunt (ESC) is acquiring Boom Battle Bars, which offers competitive socialising activities along with drinks and food. The total cost is £17.38m, with £9.88m in cash and deferred consideration of up to 25 million shares. The shares are subject to an earn-out based on revenues number of sites open. Escape Hunt raised £15m at 30p a share and could raise up to £2.2m from a one-for-12 open offer at the same share price. The acceptance date is 19 November. The enlarged group will be renamed XP Factory.
Self-storage sites operator Lok’nStore (LOK) had a much more significant than forecast uplift in its NAV at the end of July 2021. It increased from 555.5p a share to 731.1p a share. This year the dividend has been raised by 2p a share to 15p a share. The additional sites in progress will add 38% to space over the next few years.
Bleepa communications technology developer Feedback (FDBK) is raising £10m in a placing at 0.7p a share to take advantage of opportunities and finally build up revenues. There is also a one-for-15 open offer to existing shareholders that can raise up to £500,000 more. The CareLocker technology that is being piloted in Sussex could be a game changer. Combined with Bleepa it can store patient records individually in the cloud instead of in one place where it is easier to hack.
Gensource Potash (GSP) was already quoted on the Toronto Venture Exchange before joining AIM, and its focus is the Tugaske potash project in Canada. Gensource owns 67% of the vehicle that owns the project and has arranged finance to cover the C$352m cost of building the mine. The Tugaske project’s proven and probable mineral reserve is 14.1 million tonnes and there is a likely minimum expected mine life of more than 56 years, based on annual production of 250,000 tonnes of saleable muriate of potash. The share price ended the first day at 27.5p.
Remote tracking and monitoring technology provider Starcom (STAR) is changing its name to t42 IoT Tracking Solutions and rebranding its products. There will also be an eight-for-one share consolidation.
MAIN MARKET
In the six months to August 2021, Braemar Shipping Services (BMS) revenues grew by 11% to £47.4m, while pre-tax profit improved from £4.47m to £4.92m. The order book is 28% ahead at $55.5m. Net debt has fallen to £14.7m. There is a 2p a share interim dividend.
IT services provider Triad Group (TRD) reported a decline in interim revenues, but pre-tax profit jumped from £1,000 to £670,000. There is a 2p a share interim dividend. There is cash of £5.34m. high utilisation levels are continuing.
Andrew Hore
