ISDX
Chapel Down Group (CDGP) is going back to Seedrs to get crowdfunding for its Curious Drinks business. The wine and beer maker raised £3.95m last year through a crowdfunding issue. Curious Drinks is issuing A voting shares at 200p each (www.seedrs.com). The minimum investment is £1m and the maximum is £3.65m. So far £360,000 has been raised. The company is valued at £16m prior to any new shares being issued and the offer is open until February. The cash will be used to build and equip a brewery near to the Eurostar station in Ashford and boost sales and marketing. Chapel Down will buy the brewery site and lease it to Curious Drinks, which sells brands including Curious Brew lager. Chapel Down will end up with just under 50% of the A voting shares plus all of the B non-voting shares in order for Curious Drinks to be eligible for EIS relief and qualify for VCT investment. The brewer’s revenues have grown from £182,000 in 2011 to £1.75m in 2014 and it has gone from loss to a profit of £86,000 in the same period.
IMC Exploration (IMCP) reported a cash outflow of €126,000 in the year to June 2015. IMC raised €68,000 in the period and had net debt of €27,000 at the end of June 2015. Turkish miner Koza will finance the works programme for metal exploration licences in Wicklow and Wexford. An investment of €3.4m will earn Koza 75% of the joint venture. At 2.5p (2p/3p) a share, IMC is valued at £2.4m. IMC still hopes to move to the standard list by the end of the year.
Green Chemicals (GNCP), which develops cleaner and safer chemicals, reported a further decline in its loss from £251,000 to £138,000 as administration costs were reduced in the six months to September 2015. Revenues fell from £13,000 to £2,000. There was still £169,000 in the bank at the end of March 2015 but this fell to £31,000 at the end of September. At 22.5p (20p/25p) a share, Green is valued at £2.7m. The only share trade last week was at 15p a share. The company says that it is close to raising additional finance to enable it to launch the ReKolor hair colour removal/lightening products.
Last week, Evocutis and Stellar Resources both commenced trading on ISDX as well as AIM.
AIM
Self storage sites operator and manager Lok’nStore (LOK) reported better than expected results for the year to July 2015. Revenues increased from £13.9m to £15.4m, while pre-tax profit improved from £1.97m to £2.65m. Higher storage prices and a small increase in occupancy were behind the growth. The dividend was increased to 8p a share. finnCap has edged up its 2015-16 profit forecast to £3.4m. NAV is expected to grow from 302p a share to 320p a share. Disposals mean that net debt is likely to be steady at around £22.5m by the end of July 2016.
Sports nutrition products supplier Science in Sport (SIS) is raising up to £8.9m from a placing and open offer at 59p a share which will increase the number of shares in issue by nearly three-fifths. The one-for-15 open offer will raise up to £1m of the cash and closes on 10 November. The share issue is eligible for EIS relief and VCT status based on existing rules but amendments are due to be made to legislation and there is a risk that the fundraising will not qualify for these tax benefits following those amendments. The cash will be used to grow internationally and expand the e-commerce operations. Science in Sport intends to enter the US market and start to sell directly in Australia. The cash will help the company to grow faster than expected in 2016. The company is currently loss-making and it had net cash of £826,000 at the end of June 2015.
Bricks maker Michelmersh Brick (MBH) says it will exceed expectations this year. This led to Cenkos increasing its 2015 profit forecast by £400,000 to £4.2m. Energy costs have been lower than anticipated and this has helped to improve efficiency. Better selling prices have offset slightly lower deliveries than expected. The full year results will be published on 21 March.
Even though spatial data technology company 1Spatial (SPA) reported a decline in interim revenues it still expects to meet expectations in 2015-16. A number of contracts slipped into the second half. Cloud computing services provider Enables IT was bought at the end of the interim period. The 17% fall in interim revenues to £8.4m was partly down to pulling out of low margin business. The loss increased from £800,000 to £1.5m even though capitalised development spending increased from £1.2m to £1.3m.
Real time fluid monitoring and vending machines telemetry technology provider Vianet (VNET) has reassured investors that it will maintain its 1.7p a share interim dividend. Trading is ahead of the same period last year. The pub market is still tough but vending telemetry is a growing sector. A maintained total dividend of 5.7p a share should be covered nearly two times by underlying forecast earnings. The yield is 5.7%. The interim figures will be released on 8 December.
Risk and compliance software provider Lombard Risk Management (LRM) increased its interim revenues from £9.3m to £10.8m but it fell into loss. Net cash was £2.7m at the end of September 2015 and the second half is normally more cash generative. However, Lombard continues to invest in additional software and extensions to existing products. The order book is worth £6.8m. The new regulatory platform should enable larger deals to be secured.
Mobile gaming platforms and content supplier Nektan (NKTN) has signed a licence agreement with NetEnt, which will supply more than 40 mobile games that can be offered to existing partners. Group revenues are currently modest but they should start to build up next year. In Europe, Nektan has already signed up mobile gaming partners in Europe, including the Sun, and these will make a bigger contribution in the year to June 2016. There is a US joint venture which is marketing a piece of equipment that can be added to slot machines in order to offer bonuses. The US requires investment in this equipment. There was £3.4m in the bank at the end of June 2015 and £2.75m was raised after the balance sheet date. Nektan is expected to lose money this year. Profit forecasts for 2016-17 range from £5.15m to £6.87m. Even the lower forecast would be an impressive performance if it could be achieved. The US joint venture could be a major contributor to that profit and it is likely to retain its cash as it grows so the cash generation of Nektan may be much lower than its profit.
Myanmar social media platform operator MySQUAR (MYSQ) has gone past the 1.5 million users mark for its MyCHAT service – 50% higher than at the end of June. MySQUAR is forecast to reach 1.9 million users by the end of the year. Cash levels have been higher than expected because it has cost less than anticipated to add users so the $257,000 outstanding on the loan facility provided by Rising Dragon Singapore was repaid during September. The loan facility is still available. MySQUAR needs to show that it can generate revenues from these users. A service agreement with MyPAY, a company where MySQUAR chief executive Eric Schaer has an indirect controlling interest, to integrate its mobile payment services in MyCHAT. MySQUAR will receive $500,000 in initial fees and then 50% of net fees from transactions.
MAIN MARKET
Photo-Me International (PHTM) says that revenues and pre-tax profit have both increased – on a constant currency basis – in the first four months of the photo booth and laundry services company’s financial year. The pre-tax profit is 10% ahead but the underlying growth has been held back by currency movements – cash generation has improved. Photo-Me has a three-year exclusive agreement with Karchner for car wash equipment for the retail market in France. Four machines have been installed at French supermarkets with a further 40 units to be installed. The prospective yield is approaching 8%. The interim results will be published in December.
WH Ireland has reduced its profit forecasts for commercial passenger aircraft leasing company Avation (AVAP) because cash raised earlier this year is taking longer than expected to invest in aircraft. Interest charges have increased and have not been fully offset by new business. The 2015-16 pre-tax profit estimate has been cut from $23.6m to $18.9m and the 2016-17 figure reduced from $31.2m to $29.1m. Avation has increased its holding in Capital Lease Aviation (CLA), which has announced its plan to leave AIM, to 98.2%. It has also bought back 5% of its own share capital at 140p a share.
Education services provider Tribal (TRB) lost nearly half of its value following its profit warning and profit forecasts for 2015 have been more than halved to around £6m. New business is taking longer to secure and revenues will be lower than last year. Tribal has started a review of its operations but it has not been able to reduce its cost base quickly enough to offset poor trading. Tribal is seeking a new chief executive.
TRADING PLATFORMS
Shareholders in former AIM investment company Gate Ventures have agreed a share split that will reduce the par value of the shares from 0.02p to 0.01p. This follows a 50-for-one share split earlier this year. Gate has moved to the Britdaq trading platform and the last deal was at 60p a share – 30p post share split. Gate continues to trade at a baffling valuation.
Andrew Hore