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Andrew Hore – Quoted Micro 1 July 2019

NEX EXCHANGE

NEX Exchange company of the year

National Milk Records (NMRP)  

Dairy and livestock services provider National Milk Records has been on NEX for more than a decade. The share price has increased by more than 500% over the past decade. In the latest quarter to March 2019, revenues improved from £5.32m to £5.56m, even though the number of cows on the database had declined from 743,054 to 713,379 over a 12-month period which hit milk recording revenues. Income from specialist testing has increased. Overall, growth was not as strong as in the first six months, which benefitted from one-off income. An oversupply of milk in recent weeks has hit the milk price and this has held back spending by farmers.

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Wealth management group AFH Financial Group (AFHP) is raising up to £20m via a convertible unsecured loan stock issue. The conversion price is 420p a share, up from 360p before the issue was announced, and the interest rate is 4%. This cash will fund further acquisitions. There are five that are already in due diligence.

Health and community care properties developer and modular buildings supplier Ashley House (ASH) is not likely to achieve financial close on three projects, so it will lose money in the 14 months to June 2019. The second half will be profitable. The company should return to profit in 2019-20.

Property investor Ace Liberty and Stone (ALSP) has increased the valuation of its portfolio by 22% to £86.9m at the end of April 2019. Annualised rental income is £6.5m.

Investment company Angelfish Investments (ANGP) had cash of £1.48m, but debt was £3.35m and net liabilities of £543,000 at the end of 2018. This means that the preference dividend cannot be paid because there are no distributable reserves. The decline into net liabilities was mainly due to a £942,000 write-down on loans made to OME. Pre-revenue investments are included at cost.

PCG Entertainment (PCGE) has appointed First Sentinel as its corporate adviser. PCG has not replaced its nominated adviser so it will lose its AIM quotation. Acquisition talks continue.

First Sentinel (FSEN) has invested £75,000 in fintech company Capable Finance in return for a 50.01% stake and a £25,000 loan with an annual coupon of 15%. First Sentinel directors have participated in a £110,000 placing and they own most of the rest of the shares. First Sentinel has gained a Euronext Dublin listing for its 7.5% bonds, May 2024. Some of this cash will be invested in the activities of Capable Finance.

Shareholders in Valiant Investments have approved the change of name to Eurocann International (BUD) and the focus on medicinal cannabis. It has disposed of its investment in Flamethrower one of its own directors and raised £263,000 at 1.5p a share. Valiant had £1,289 in the bank at the end of 2018. There is still a £200,000 convertible investment in All Star Minerals (ASMO). The company has a stake in North Bud Farms Inc, which has a cannabis production facility in Quebec.

AfriAg Global (AFRI) has raised £250,000 at 0.1p a share. This ash will contribute to the £700,000 investment in Apollon Formularies. Executive chairman David Lenigas has bought 17 million shares at 0.11941p each.

Ananda Developments (ANA) has formalised the joint venture with Anglia Salads and JE Piccaver to create DJT Group. Ananda and Anglia which each own 50% of DJT, which will apply for a licence to cultivate and supply cannabis. Ananda had £141,000 in the bank at the end of January 2019.

Sativa Investments (SATI) subsidiary PhytoVista Laboratories has completed an independent blind test consumer cannabidiol products for The Centre for Medicinal Cannabis. Many proved to have too low or too high a content of relevant ingredients.

MetalNRG (MNRG) has terminated its heads of terms with Mkango Resources relating to earning up to 75% of the Thumbani licence because it could not come up with the finance required.

Wishbone Gold (WSBN) increased its revenues from $8.2m to $10.9m, although the loss doubled to $1.89m. That is mainly down to a $797,000 loss on an equity sharing agreement. The cash outflow from operations fell from $904,000 to $813,000.

Via Developments (VIA1) reported an increase in interim loss from £10,000 to £259,000, because of higher finance costs.

Cadence Minerals (KDNC) is raising £1.6m at 0.11p a share and this will fund the investment in the Amapa iron ore project.

Auxico Resources Canada Inc (AUAG) is leaving NEX on 26 July. The minerals explorer has been on NEX for less than nine months. It does not believe it is large enough to benefit from a quotation on NEX as well as the Canadian Securities Exchange.

Small Cap Awards 2019 winners

Company of the year

Beeks Financial Cloud (BKS)

Beeks Financial Cloud provides cloud-based connectivity and infrastructure services provider for automated trading of financial assets. It also provides cyber security services to prevent distributed denial of service attacks. Beeks was formed in 2010 and has consistently grown its revenues. Beeks joined AIM in November 2017 and in May it acquired the trading assets of US-based Commercial Network Services and this adds 1,000 customers. Progressive Research forecasts a rise in pre-tax profit from £1.2m to £1.4m in the year to June 2019.

IPO of the year

Cake Box Holdings (CBOX)

Egg-free cakes supplier Cake Box won this award the day before its first anniversary on AIM. Cake Box raised £16.5m at 108p a share and at one point the share price was nearly double this level. There is still a premium of more than 60% to the flotation price. In the year to March 2019, revenues increased from £12.8m to £16.9m and underlying pre-tax profit improved from £3.3m to £4m. Two new distribution centre sites have been acquired. There is scope to more than double the business, which currently has 113 stores.

Impact company of the year

Kromek (KMK)

Kromek has developed a range of radiation detection and imaging products based on cadmium zinc telluride (CZT) technology. The company focuses on three sectors – medical imaging, nuclear detection and security. Kromek has been winning multi-million pound international contracts and it has a strong balance sheet following a recent fundraising. Revenues increased by 23% to £14.5m in the year to April 2019. Kromek is losing money, but it is on course to reach breakeven in a couple of years. The orders that are already won underpin the revenue forecasts for the coming years.

Executive director of the year

Mike Creedon, chief executive of Scientific Digital Imaging (SDI)

Mike Creedon has been on the SDI board since 2010, having previously been a finance director of two former AIM companies, Ideal Shopping Direct and Ninth Floor. SDI is an acquisitive digital imaging and sensor control technology company. The acquisition record is good. A trading update has led to a small pre-tax profit upgrade to £2.9m. The 2019-20 pre-tax profit is maintained at £4.1m.

Analyst of the year

George O’Connor, Stifel Nicolaus

Journalist of the year

Simon Thompson, Investors Chronicle

Fund manager of the year

Marlborough Nano Cap Growth

Lifetime achievement

Andrew Buchanan

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AIM 

Zoo Digital (ZOO) slipped back into loss in the year to March 2019, but it should return to profit this year. Demand for film and TV localisation services continues to grow but momentum has not been as expected.

Wynnstay (WYN) had already warned about tough second quarter trading, but underlying pre-tax profit held up reasonably well, falling 15% to £4.3m, even though revenues were 19% higher at £218.5m. The increase in revenues was mainly down to commodity inflation. The warmer winter weather hit demand for animal feed, although fertiliser demand has been strong. The agricultural merchanting depots acquired in the past year are moving towards profit. There has been some rationalisation of the depot network. The interim dividend has been raised 4% to 4.6p a share.

China New Energy Ltd (CNEL) has applied for a listing on the Hong Kong Stock Exchange and it will ask shareholders for permission to cancel the AIM quotation, subject to a successful Hong Kong listing.

Harwood Wealth Management (HW.) has increased its assets under influence to £5.3bn, helped by recent acquisitions. There is a strong pipeline of additional acquisitions. Interim pre-tax profit improved from £930,000 to £1.63m.

MAIN MARKET 

BATM (BVC) is raising $18m, 20% more than initially sought, at 42.5p a share. Most of the cash is earmarked for the cyber and networking activities. The rest will go towards medical activities. The cash will help in securing partnerships with larger technology companies.

Argo Blockchain (ARB) has varied and extended its contract with Canadian data centre provider GPU.one. This will provide access to 14MW of power at lower prices. This increases capacity by 47%, utilising the equipment that has already been ordered, and cuts power cost by 39%. The deal starts on 25 June and lasts three years. Argo can give four months’ notice. A previous deposit of £1.44m has been turned into an investment in GPU.one.

Tex Holdings (TXH) says the engineering operations have started the year slowly, but trading should return to previous levels. The plastics division is trading in line with expectations and there is investment in new machinery. The shares remain suspended.

Canadian Overseas Petroleum Ltd (COPL) has joined the standard list. The oil and gas company is focused on Nigeria and sub-Saharan African.

Avocet Mining (AVM) is holding a general meeting on 18 July to gain shareholder approval for a voluntary liquidation. Avocet has sold its interest in the Tri-K gold project in Guinea for $21m. This leaves a small residual cash sum. There is unlikely to be anything substantial left to distribute to shareholders.

Oil and gas company Aminex (AEX) shareholders have approved the switch from a premium listing to a standard listing. It is also cancelling its Dublin listing. It may have been difficult to get the full benefits of the lighter regulation of a standard listing if the company were still listed in Dublin.

Andrew Hore

Quoted Micro 13 March 2017

NEX EXCHANGE

Blockchain technology investment company Coinsilium Group Ltd (COIN) has raised £188,000 at 1p a share with the cash coming from directors and existing shareholders. The valuations of Factom and SatoshiPay have increased since the beginning of the year. Potential new commercial opportunities are being reviewed. Coinsilium is also raising its own profile so that investors’ are aware of the potential investment.

Middle East-focused investment vehicle Indigo Holdings (INGO) has announced its second investment, which is in Net Tejarat Ahoura, which operates an Iranian online classifieds marketplace. A stake of 1.09% was assigned to Indigo by Turquoise Group, which owns 32.1% of Indigo, in return for assuming the commitment to provide an interest free loan of €376,000 (£320,000). Related parties own 14.1% of Net Tejarat. There was net cash of £818,000 at the time of flotation and Indigo previously spent €176,800 (£150,000) on a 5% stake in Iranian car ride sharing app Carvanro.

Technology incubator Milamber Ventures (MLVP) has entered discussions with Barney Battles and he has suspended his general meeting requisition. The one million shares issued to acquire League of Angels has been cancelled because the transaction was not completed. Milamber has added six portfolio companies taking the total companies that it works with to 25. Milamber is providing funding support to all six as well as strategic advice and/or business planning to some. Milamber has raised just over £9,000 from an issue of shares to its executive chairman Andrew Hasoon at 12.5p a share.

MetalNRG (MNRG) has appointed Paul Johnson as chief executive. He was already on the board as a non-executive director and he is also a non-executive of Thor Mining (THR). The management is keen to attract more trading in the shares by taking advantage of the potential opportunities in the resources sector.

Property investment company Ace Liberty & Stone (ALSP) plans to consolidate 25 existing shares into one new share so it is no longer perceived as a penny share. The shareholder meeting will be held on 31 March. Kryptonite1 (KR1) is also consolidating its shares. Nineteen shares will be consolidated into one new shares with the shareholder meeting being held on 3 April.

Western Selection (WESP) has sold 130,000 shares in AIM-quoted toiletries and cosmetics supplier Swallowfield (SWL) for 320p each. Western Selection still owns 1.5 million shares in Swallowfield, where the share price has doubled over the past nine months. The recent interims showed a quadrupling of underlying operating profit of £2.54m and a more than doubled interim dividend from 0.8p a share to 1.7p a share – the shares go ex-dividend on 4 May.

AIM

Plant Impact (PIM) continues to increase its Veritas sales to soybean farmers in Brazil and Paraguay and Bolivia are the next markets it is trying to break into. Another treatment, Fortalis, is being launched in Argentina and the US. In the six months to January 2017, revenues increased from £4.22m to £4.91m, helped by currency movements, with Brazil still dominating sales. Higher sales and marketing and R&D costs meant that there was a loss of £333,000, compared with a pre-tax profit of £541,000. There is £6.03m in the bank which is enough to cover cash outflows for the next year or so.

Strategic Minerals (SML) says that drilling will start by the end of March at the 50%-owned Redmoor tin/tungsten project in Cornwall. The first phase of drilling is 13 holes and the second is 10 holes with potential for six more. This drilling programme is fully funded. On top of this, significant cobalt mineralisation has been identified at Hanns Camp in Western Australia. The company has raised £50,000 via the exercise of warrants at 0.6p a share by Cornhill Capital. There was $1.2m in the bank at the end of 2016 but this was before the £844,000 payment to take the 50% stake in Redmoor.

Remote meetings technology provider LoopUp (LOOP) sharply reduced its loss in 2016 and the cash raised in last year’s flotation should reduce interest costs which were the reason there was a loss in 2016. There was a swing from an operating loss of £353,000 to a £398,000 operating profit in 2016. There is net cash of £2.24m, against net debt of £7.3m at the end of 2015. There was cash generated from operations of £3.29m but that was not enough to cover capital expenditure, which was predominantly capitalised product development investment. There are £12.6m of accumulated tax losses.

Advanced materials developer Versarien (VRS) raised £1.5m at 15p a share via PrimaryBid, having initially tried to raise £1m. All the applications were satisfied. Henderson and Miton each subscribed for 1.33 million shares. The cash will be used to scale up graphene manufacturing facilities and finance the marketing of the Nanene brand.

The People’s Operator (TPOP) is raising a further £1.58m at 8p a share and every two shares will have a warrant attached that is exercisable at 15p a share. The recent fundraisings were at 5p a share. The mobile virtual network operator has confirmed that 2016 revenues were £3.6m and there has been strong growth in US revenues in the first two months of this year. Management has negotiated much better terms with its network providers in the UK and US.

Immupharma (IMM) has raised £4.1m at 52p a share having initially asked for £3m. The drug discovery company has brought new institutions to its shareholder list. Immupharma is negotiating with potential partners for lupus treatment Lupuzor, which is in a phase III trial and the cash will strengthen the balance sheet as well as providing investment in other treatments.

Palm oil waste products-based biogas power generation plants operator Green & Smart Holdings (GSH) says that its figures for the year to September 2016 were in line with expectations but there have been delays in new plants. House broker SP Angel had expected half of forecast 2016-17 gross profit to come from electricity generated by these four projects.

The sale of the broadcast equipment division of Pebble Beach Systems (PEB), formerly Vislink, to xG Technology Inc is not going smoothly. Instead of paying the next part of the deferred consideration xG has taken on responsibility to pay $1.6m of trade creditors. This leaves $4.9m owed but xG says that this payment will be dependent on Pebble’s performance of its contractual obligations. Until outstanding liabilities are clarified xG says that it will not pay any more deferred consideration. The buyer claims that “numerous breaches of contract” have occurred. It is difficult to say whether this is just a negotiating ploy.

Ascent Resources (AST) expects to start untreated hydrated gas production from Pg-10 in the Petisovci gas project in Slovenia in early April. This will provide initial revenues prior to the sale of gas to Croatia later in the summer. Ascent has decided not to lease a dehydration plant and instead it will refurbish the existing plant on the site.

Thor Mining (THR) has reported positive drilling news at the Pilot Mountain tungsten project in Nevada and plans a third drill hole. The second drill hole has intersected 51 metres of mineralisation. The drill hole sample assays should be analysed by the end of April. The third hole is 25 metres to the east of the second hole. Paul Johnson (see MetalNRG) has acquired 500,000 shares at 1.13p each, taking his stake above 2%.

Sunrise Resources (SRES) has raised £250,000 at 0.1p a share. The cash will be used to finance projects in Nevada.

MAIN MARKET

Shares in Ocelot Partners Ltd (OLOT) commence trading on the standard list on 13 March. The cash shell has raised $417.7m at $10 a share. The proposed acquisition is expected to be involved with the European technology, media or telecoms sectors. Management has been involved with other standard list shells, including Nomad Holdings, which acquired frozen foods businesses including Findus.

BATM (BVC) has weathered a difficult 2016 and is in good shape to improve its performance in 2017. A delayed contract hit the network and cyber division but this should be delivered this year. Strong diagnostics activity offset the weaker waste treatment business, enabling the bio-medical division to report flat revenues. finnCap expects the 2016 loss of $3.3m to be turned into a pre-tax profit of $1.5m this year. There was net cash of $23m at the end of 2016, although around £580,000 has been spent on acquiring Israel-based Zer Laboratories.

Bio-decontamination services provider Bioquell (BQE) reported flat revenues of £26.5m and the underlying pre-tax profit improved from £900,000 to £1.6m. There was a £1.5m charge for board restructuring and write-down of intangible assets. The full benefits of last year’s restructuring will come through in 2017. Having returned £40.8m to shareholders, net cash was £8.8m at the end of 2016.

Oil and gas explorer Aminex (AEX) says that the Ntorya-2 well has been successfully tested and it has confirmed that the area should contain a significant amount of gas but there are production difficulties to overcome. Aminex owns 75% of the Mtwara licence in southern Tanzania. Once a full analysis of technical data is complete Aminex will apply for a 25-year development licence over the area. Joint broker Shore Capital says that it is likely to increase its NAV estimate of 3.9p a share on the back of the news.

Electronic Data Processing (EDP) says the original potential bidder has withdrawn but a different bidder has started talks with the board. There was £6.56m in the bank at the end of February 2017 and EDP will consider returning some cash to shareholders if there is no bid. This could depend on the level of distributable reserves, which could be hit by the next pension scheme revaluation.

Andrew Hore

 

Quoted Micro 11 July

ISDX
Positive Healthcare (DOC) has made its initial acquisitions since floating its 7% secured bonds on the ISDX Growth Market. Positive bought 75%  of each of two healthcare recruitment businesses, Capital Care and Fine Locums, for a total of £1.57m.  Positive Healthcare chairman Gary Ashworth has loaned the company £570,000 to help fund the acquisitions. The two companies made total profits of  £360,000 on revenues of £6.19m in the past financial year.

All Star Minerals (ASMO) is broadening its investing policy to include financial services, engineering, construction, renewable energy and technology, as well as natural resources. At the end of 2015, All Star’s main asset was a stake of 5.52 million shares in NQ Minerals (NQMI) valued at £704,000. All Star’s NAV was £385,000 at the end of 2015,compared with net liabilities of £199,000 at the end of 2014. All Star has extended the maturity date of its various convertible loan notes  into 2017. All these convertibles have an interest charge of 20% a year and the conversion price is 0.14p a share.  Additional shares have been issued at the conversion price o cover the recent interest payments for these convertibles.

Diversified Oil & Gas (DOIL) has completed the acquisition of 2,400 oil and gas wells in Pennsylvania from Seneca Resources and further acquisitions are likely in the rest of this year. This means that Diversified has more than 7,500 oil and gas wells in Pennsylvania, West Virginia and Ohio. They produce 23,000 mcf of gas and more than 500 barrels of oil each day. Diversified has raised a further £16,200, which takes the number of bonds in issue to 9.47 million.

TSX Venture Exchange-quoted Knowlton Capital’s shareholders have voted in favour of the reverse takeover of Leni Gas Cuba (CUBA). The British Virgin Islands High Court still has to approve the deal. The combined business will be called LGC Capital Ltd. (QBA) and its investments include a 15.8% stake in MEO Australia Ltd. Oil and gas explorer MEO has an interest in the onshore Block 9 production sharing contract in north Cuba and the first of three identified oil plays has an estimated prospective recoverable resource of 395 million barrels of light oil.
AIM
The Inland Homes (INL) share price has been hit by the leave vote in the EU referendum because of concerns about property prices. This appears overdone because management says that fundamentals are still strong. Inland has announced the purchase of the former Tesco head office in Cheshunt, Hertfordshire. Inland is buying the 13 acres with a 50/50 joint venture partner. Inland will inject £5m into the joint venture.

LXB Retail Properties (LXB) has decided not to sell the properties it had previously announced would provide a £4m gain on book value. It did not appear that the negotiations could be concluded satisfactorily.  Shareholders voted in February to sell off properties and return cash to shareholders. The post-Brexit vote has hit the commercial property market so it may be more difficult to realise the valuations that management had hoped they could achieve.

Specialist services provider Premier Technical Services Group (PTSG) is acquiring UK Dry Risers and UK Dry Risers Maintenance, which install and maintain dry and wet riser systems, for a maximum of £5.1m. The total initial payment is £3m. The two businesses made a pre-tax profit of £1.1m last year.

Musical instruments retailer Gear4Music (G4M) says that its European like-for-like sales increased by 191% in the week after the EU referendum compared with a 120% increase in the week starting 13 June. Exchange rates have become more favourable and management has responded by adjusting Its prices to make them more attractive.

TechFinancials Inc (TECH) has started the financial year strongly and the new joint ventures are helping the B2C business perform much better this year. There was $3.9m in the bank at the end of June and this should increase to $4.5m by the end of the year. House broker Northland expects revenues to hit $20m this year and it is expected to move back into profit ($800,000). The dividend is likely to be reinstated.

Newmark Security (NWT) has warned that this year’s profit will be lower than for 2015-16 because trading conditions have become more difficult. The full 2015-16 figures will be published in August. New sales offices for the access control division are yet to generate meaningful revenues. Revenues for the workforce management software have been delayed. The asset protection business will have to replace revenues from the Post Office contract, which will not generate as much this year.

Arria NLG (NLG) is moving ahead with plans to float on the New Zealand, where the primary listing will be, and Australian Stock Exchanges and as part of this move the natural language generation company will switch from AIM to the standard list in London, where depositary interests will be traded. Cash will be raised as part of the flotations on the additional markets. Existing shareholders will receive one new Arria NLG Group share for each existing share and one warrant, with an exercise price of approximately 53p a share, for every ten existing shares.

Maxit Capital is subscribing / or procuring subscribers for $20m worth of shares in SolGold (SOLG), which will equate to up to 19.99% of the miner. The issue price has yet to be decided but SolGold says that it expects the price to be at a premium to the market price, which at the time was just over 3p – although it has risen to 4.28p. The subscription is expected to close in early October after due diligence and approvals are received.  Maxit will also receive a success fee of 6% of the funds raised plus warrant equivalent to 6% of the shares placed – 50% exercisable at 14p a share and 50% at 28p a share. The cash will be invested in the Cascabel copper gold project in Ecuador.
MAIN MARKET
Tanzania-focused oil and gas explorer Aminex (AEX) is raising up to £19.5m at 1.3p a share – £16.9m from a placing and the rest via a one-for-ten open offer. Zubair Corporation will subscribe £12.8m in this fundraising. The cash will enable Aminex to finance further development of its oil and gas licences while seeking partners for these licences.

Quoted Micro 15 February 2016

ISDX

ZimNRG (ZIMO) is changing its investment policy and its name to MetalNRG. The new policy is to invest in natural resources businesses with no particular focus on any area. AIM-quoted Metal Tiger (MTR) has taken a 28.3% stake via a £50,000 investment at 0.2682p a share. That is a large discount to the market price of 1.25p (1p/1.5p), although it is similar to NAV at the end of August 2015. The par value of the shares has to be reduced before the new shares can be issued. Loeb Aron has become corporate adviser. Christopher Latilla-Campbell will be appointed as chairman and Paul Johnson of Metal Tiger as a non-executive.

 

Care housing and health properties developer Ashley House (ASH) joined the Social Impact segment of ISDX on 10 February but it is retaining its AIM quotation. Ashley House (ASH) moved from ISDX (Plus-quoted) in January 2007. At that time £4m was raised at 150p a share, which valued the company at £40.6m. In the six months to October 2015, revenues jumped from £5.6m to £10.6m and went from a loss to a small profit. Net debt was £2.6m at the end of October 2015. The company has £10.7m of tax losses. At 9.5p (9p/10p) a share, Ashley House is valued at £5.5m.

 

New Haven Trust has sold 3.2 million shares in Coinsilium (COIN) at 3.5p a share. Coinsilium floated at 10p a share and the shares are trading at 5p (5p/6p). New Haven had 3.53 million shares prior to the recent fundraising. There had previously been share issues at 8p a share and prior to that at 0.01p a share. So, New Haven could still have made a large profit on its shareholding. Just over 3.2 million shares were subsequently traded at 3.9p a share. There is no news about who bought these shares.

 

Healthcare recruitment business Positive Healthcare (DOC) has secured a further £1.08m of funding through an issue of 7% bonds 2021. This takes the value in issue to £1.33m. The company had previously stated that £2m of bonds had been issued but it turned out that it did not receive the subscriptions for all these bonds.

 

AIM

Management has tabled a cut price bid for printing services provider Tangent Communications (TNG) but marketing communications services provider Writtle Holdings has suggested that it may top the offer. The 2.25p a share bid values Tangent at £6.69m and it is 64% higher than the previous closing price. The bid is well below the net asset value of £31.6m at the end of August 2015. Even if you take the view that management has overpaid for its businesses then the NAV excluding goodwill is £6.79m. Tangent is profitable but the profit has been declining. However, Writtle’s indicative offer of no less than 2.75p a share, which is still a large discount to NAV. Writtle is run by the ex-management of former AIM company CA Coutts. Between 2005 and 2010 Graeme Harris was a director of Tangent Communications. Before that he was finance director of CA Coutts and since 2011 he has been a director of Writtle.

 

DP Poland (DPP), the Domino’s Pizza master franchise holder for Poland, has achieved 13 consecutive quarters of double digit like-for-like growth in system sales. There are 24 stores in five Polish cities – 16 managed and eight sub-franchised. The stores are making a positive EBITDA but the group is still loss-making. Pro forma cash was £8.8m at the end of June 2015, so even with large cash outflows over the coming year there should be plenty of cash left at the end of 2016. However, the group will still be loss-making so the cash will decline as more is invested in new stores.

 

Real Good Food (RGD) has acquired Chantilly Patisserie for £1.75m and it will become a division of the Haydens business. Devon-based Chantilly makes frozen desserts for caterers and pubs and this could provide an opportunity for Haydens to expand its own customer base, which is focused on retailers.

 

Asset management performance software provider StatPro (SOG) is injecting its StatPro Portfolio Control (SPC) compliance software contracts into South Africa-based InfoVest Consulting in return for a 51% stake. This is a part of the software suite that has not migrated to the cloud. StatPro will consolidate the full revenues of this investment from 2016 so pre-tax profit will look better but there will be a minority adjustment after tax. The 2015 results are due to be published on 9 March.

 

Lok’nStore (LOK) says that like-for-like self-storage revenues were 5.4% ahead in the first half. Higher prices and improving occupancy rates are behind this growth. Newer sites at Reading, Maidenhead and Aldershot are performing strongly. The document storage business is improving its performance.

 

Herencia Resources (HER) has sent out the circular for the disposal of its Picachos project to a Chilean company. Herencia will receive $2m for 70% of the project, after six months $600,000 is payable for 7.5% and after a further nine months a final $2.5m is payable to take the stake to 100%. The company that holds the project has a book value of £1.36m. Due diligence is being undertaken. Herencia will concentrate on the Paguanta and Guamanga projects in Chile and the cash will finance their development. The general meeting will be held on 26 February.

 

MAIN MARKET

Specialist electronics distributor and manufacturer Acal (ACL) is trading in line with expectations so revenues growth should be nearly 10% to £297m in the year to March 2016 – organic growth will be around 2%. Profit is expected to rise from £11.8m to £14.4m. A small bolt-on acquisition, custom transformers manufacturer Plitron, will not make much contribution in this financial year. Plitron increases Acal’s exposure to North America and the medical sector.

 

Oil and gas company Aminex (AEX) is selling a 3.825% interest in the Kiliwani North development licence to AIM-quoted Solo Oil (SOLO) for $2.16m. Solo will then hold a 10% stake and Aminex will own 51.75% and be the operator.

ANDREW HORE

Latest AIM Journal available here.

Quoted Micro 18 January 2016

ISDX

Blockchain technology companies investor Coinsilium Group Ltd (COIN) has made two investments since it joined ISDX. Coinsilium has invested $50,000 (paid in Bitcoin) for the equivalent of a 1% stake in RSK Labs Ltd, and co-investment partners have invested the same amount. RKS developed Rootstock, a platform that is a sidechain of the Bitcoin blockchain. This technology enables transactions that can be set up to complete autonomously when pre-set conditions are met. Rootstock should be launched in the middle of 2016. RSK raised a total of $350,000 and the company’s valuation is $5m. Coinsilium has also increased its stake in Fuzo Ltd, which has developed a SIM card technology focused on adults that do not have a bank account. A $29,000 investment has taken Coinsilium’s stake in Fuzo to 13.6% – the total investment is $300,000. The valuation after the latest investment is $3m, which values the stake at $408,000. The Coinsilium share price has fallen back from the 10p flotation price. At 8p (6.5p/9.5p) a share, Coinsilium is valued at £5.7m. There were 15 trades during last week, which makes Coinsilium one of the more regularly traded ISDX companies.

 

Cyber security products developer Crossword Cybersecurity (CCS) has joined up with MHA MacIntyre Hudson to co-market Crossword’s Rizikon cyber risk analysis tool to the accountant’s small and medium-sized clients. Rizikon was developed at City University and it is Crossword’s first product. At 175p (150p/200p) a share, Crossword is valued at £4.2m.

 

Business incubator Milamber Ventures (MLVP) has acquired a 10% stake in White Cobalt, which develops technology platforms to help businesses to be more efficient and cope with growth. Milamber issued 166,667 of its own shares at 18p each in payment for the stake. This makes Steve Stovold, who founded White Cobalt in 2011, the fifth largest shareholder in Milamber with 4.7%. Powwownow founders Paul Lees and Andrew Pearce have each bought 50,000 shares in Milamber at 18p each. This cash will be used in a joint venture between their new business Thortful and Milamber. At 13p (12p/14p) a share, Milamber is valued at £455,000.

 

David Grierson has joined the board of investment company Lombard Capital (LCAP). He has been working in the timber and contracting sectors for four decades. Mark Jackson and Graham Jones have both left the board. At 6p (5p/7p) a share, Lombard is valued at £136,000.

AIM

Human microbiome-based products developer OptiBiotix Health (OPTI) has signed an agreement with KSF Acquisition UK, which will finance the assessment of the benefits of OptiBiotix’s SlimBiome weight management products when it used alongside SlimFast products. SlimBiome affects appetite, metabolism and energy harvest which fits with the SlimFast meal replacement products. Kainos Capital acquired SlimFast from Unilever in July 2014 and KSF is its UK offshoot with rights to the SlimFast brand in UK, Ireland and Germany.

 

Curtis Banks (CBP) will become the second largest SIPP provider following the acquisition of Suffolk Life from Legal & General for £45m. The enlarged group will have 65,000 SIPPs with assets of £18bn under administration. Suffolk Life made a profit of £1.3m in 2014 and there should be synergy benefits from the combination. A placing at 320p a share has raised £27m. The deal enhances 2016 earnings from 14.9p to 15.8p.

 

Management Resources Solutions (MRS) plans to acquire civil construction equipment and services provider Bachmann Plant Hire Pty for up to A$13.4m and the acquisition will more than double group revenues. There is an initial payment of A$8.2m in cash and the taking on of finance debt, while the rest is dependent on performance in 2016, 2017 and 2018. Bachmann provides earthworks equipment and operators in Queensland, Australia. There is a fleet of more than 200 vehicles and revenues were A$21.7m and pre-tax profit A$2m in the year to June 2015. MRS already supplies technical and strategic services to the oil and gas, construction and resources sectors. Project management activity has offset a decline in consulting work. This deal is a reverse takeover and the shareholder meeting is on 28 January.

 

Financial software and consulting services provider First Derivatives (FDP) has acquired Kx consultancy QuntumKDB for up to £2.2m, with £500,000 of this depending on the achievement of targets in the first 12 months. This deal will be earnings enhancing in the first full year. Quantum made a profit of £300,000 in the year to September 2015. First Derivatives has also signed a memorandum of understanding with Utilismart, which is expected to use Kx software for smart grid applications.

 

Interactive gaming operator Netplay TV (NPT) has extended its agreement with ITV for three years until 2019. Jackpot 247 has been on ITV since 2010 and Netplay will combine this TV exposure with its developing mobile platforms. Talks about the purchase of Sportech’s pools business have ended and NetPlay is not involved in the bidding process.

 

The UK National Screening Committee (NSC) is recommending that the IONA non-invasive test developed by Premaitha Health (NIPT) should be offered by the NHS to high risk pregnant women as part of the foetal anomaly screening programme. This will reduce the need for invasive testing.

 

Cambria Automobiles (CAMB) is paying £10.8m for a Land Rover franchise in Welwyn Garden City – Cambria has Jaguar and Aston Martin franchises nearby. In 2015, the franchise generated a pre-tax profit of £2.5m on revenues of £54m and it will be immediately earnings enhancing. A Jaguar franchise in Exeter is being sold for £1.3m and the Aston Martin franchise on the site will be closed. These businesses generated £500,000 profit in 2015. This leaves Cambria with 44 franchises and 17 brands. Cambria says that its first half trading is well ahead of the same period last year.

 

Ramblers Metals & Minerals (RMM) has completed the all share acquisition of Thundermin Resources. This means that Rambler owns 100% of the Little Deer and Whales Back copper projects. These have previously been mined and still include copper mineralisation. The infrastructure at the Ming mine could be used if the mines are brought back into production.

MAIN MARKET

Standard list shell RockRose Energy (RRE), which is headed by former Igas boss Andrew Austin, floated on 13 January and the shares ended the first week at 51.5p. RockRose raised £4.4m at 50p a share, having previously raised £600,000, but the costs of the flotation were £833,000. The company is capitalised at £5m at the placing price – so the net cash covers 83% of the valuation. The focus is UK onshore and offshore oil and gas assets which are in production and have significant reserves. The cash will help to finance the costs of due diligence and acquiring suitable assets.

 

Cash shell Falcon Acquisitions Ltd (FAL) will join the standard list on 18 January. A placing raised £1.6m at 10p, which capitalises the company at £2.04m, and there is a secondary fundraising may raise up to £2m at a share price to be set between 10p and 30p. There was already £265,000 in the bank before the flotation so there is cash of £1.65m after costs of £220,000. The focus is acquiring businesses involved in online, mobile and video broadcasting. Any target is likely to be worth up to £30m. The board includes directors from previous standard list shell Challenger Acquisitions.

 

Africa-focused oil and gas company Aminex (AEX) has secured a gas sales agreement with Tanzania Petroleum Development Corporation for the Kilwani North gas field, where Aminex has a 55.575% interest. Solo Oil has until the end of January to take up an option to buy an additional 6.5% stake in the field from Aminex, which would take its stake to 12.675%. A pre-determined level of production will be purchased each year and an invoice will be issued each month. The initial gas price is $3.07/mcf and there will be an annual indexation of the gas price.

Andrew Hore

Quoted Micro 23 November 2015

ISDX

Blockchain technology investor Coinsilium (COIN) has raised £1.15m of the £1.5m it is seeking via crowdfunding site Seedrs.com. Coinsilium has also raised additional cash via a placing ahead of a potential flotation on ISDX. There are still 39 days to go for the crowdfunding. Coinsilium already has a portfolio of eleven investments. Blockchain technology groups digital transactions into blocks that can be accessed easily and provides a permanent record of transfers of assets. This means that transactions can be verified and reconciled without the need for a centralised third party.

Property investor Ace Liberty & Stone (ALSP) has completed the sale of the remaining units of Telephone House in Sheffield. The property is owned by a 38%-owned associate but it was consolidated in the Ace figures. The latest disposal proceeds were £4m taking the amount raised from the site to £8.1m. Ace will receive £2.2m, which includes a profit of £456,000.  This can be reinvested in other properties. The strategy is to acquire properties with short-term tenancies with government or other blue chip tenants. These are properties that can be converted into residential or student accommodation, or other new uses. Once planning is approved then Ace will probably sell them on to developers, although it could choose to develop some sites itself. Dr Abdel-Karim El-Rousstom has bought 2 million shares and Hikmat El-Rousstom 2.91 million shares at 2.75p each. That raised £135,000 for Ace and takes their stakes to 18.7% and 2% respectively.

Online secondary school operator and consultancy Wey Education (WEYP) wants to raise £1.75m as part of a move to AIM on 7 December.  The cash will be used to grow the business. At 4.5p (4p/5p) a share, Wey is currently valued at £2m.

GP software provider DXS International (DXSP) says that its revenues have increased by 42% in the five months to September 2015. Annualised revenues are £3.2m. The interims will be published in the middle of December. At 13p (12.5p/13.5p) a share, DXS is valued at £4.3m.

Green Chemicals (GNCP), which is developing cleaner and safer consumer and cleaning products, has decided to withdraw from the ISDX Growth market. The share price slumped from 22.5p to 4.5p on the news. There was one trade during the week at 2p a share. The board is asking shareholders to vote for the withdrawal in order to save £35,000 a year and in the hope that an investor in unquoted companies can be attracted. News will be published on the website (www.greenchemicalsplc.com) and broker Keith Bayley Rogers will provide a matched bargains service for the shares. Earlier this month, IP Group provided a loan facility of up to £1.5m to Green Chemicals. This can be converted into shares. IP Group along with two other associates has a total interest of 29.5%.

Diversified Gas & Oil (DOIL) has raised a further £1m (£990,000 after expenses) through the issue of 8.5% unsecured bonds 2020. This means that there will be £3.2m of unsecured bonds in issue. There should be more than £3m in total to invest in developing the company’s oil and gas assets in Ohio and West Virginia.

AIM

Structural steels supplier Billington Holdings (BILN) is adding additional capacity through the £4.85m acquisition of property and assets five miles away from the company’s Barnsley facility, which is operating at record levels. The purchase will be funded by a £2.5m mortgage and from the company’s cash pile. Capacity will be increased over a two year period as the acquired facilities are adapted to optimise production. The site has long-term tenants which generate annual rents of £400,000. Assuming the deal goes through it should add £200,000 to profit in 2016 before the benefits of the additional capacity show through.

Inland Homes (INL) has sold a major part of the former RAF Stanbridge site to Catalyst Housing Association for £14m. Inland has retained a 0.5 acre retail site pre-let to a major food retailer and another small parcel of land. The disposal will help to underpin the 2015-16 profit expectations of £16m. Inland has invested £1m in a 25% stake in housebuilder Troy Homes. Inland will also be providing a further £2m to Troy in loan notes. Troy is run by former Banner Homes boss Richard Werth. Inland has also secured a £20m revolving credit facility with Barclays, which matures in October 2019. There is scope for a further £10m to be added to the facility.

Property lettings and sales business franchisor Belvoir Lettings (BLV) says that its franchisees have made acquisitions in Southampton and Brighton, which will add network revenues of £250,000. This means that they should add £30,000 to Belvoir’s franchise revenues, plus additional interest income of £10,000 a year from the loans. Belvoir has loaned £118,500 to help finance these acquisitions. In Southampton, lettings and estate agency Langford Charles has been bought, while in Brighton a property portfolio was acquired.

Fifty Four Four Ltd, which is owned by YCO director Charles Birkett, has increased its stake in former AIM company YCO to 71% following its 1p a share bid, which valued the superyacht services provider at £485,000. Fifty Four Four already owned 50.4% prior to the bid but it does not have a high enough stake to compulsorily purchase the rest of the shares. YCO was trading at 7.25p a share prior to the announcement of its intention to leave AIM in May 2012 – it left in July 2012 and re-registered as a private company in 2014. Net cash was £2.46m at the end of 2011 following the disposal of a fuel business.

MAIN MARKET

Specialist Fund Market-listed Marwyn Value Investors Ltd (MVI) has raised £50m at 220p a share with the founders Mark Watts and James Corsellis investing an additional £2m in total. The cash raised will go into the Master Fund, whose portfolio includes BCA Marketplace, Zegona Communications, Gloo Networks and Le Chameau Holdings SAS. There will be a special dividend of 2p a share paid in January and from then on the dividend will be quarterly. Last year’s dividend was 8.255p a share and this will be the minimum total payment in 2016 – not including the January dividend. The disposal of the Entertainment One stake will provide cash to distribute to shareholders. There could also be special dividends following any disposals from the portfolio. In October, Marwyn paid 24.6p a share to investors. Marwyn is trading at a 16% discount to estimated NAV of 256.3p a share.

Dr Qu Li has been appointed as a non-executive director of cash shell Flying Brands Ltd (FBDU) and she will be seeking an acquisition in the area of logistics and/or technology. LCP Consulting (http://www.lcpconsulting.com/) has been taken on to identify an acquisition. LCP has been researching city logistics, including the use of electric vehicles in order to improve air quality. Annual costs are around £70,000 and there was £247,000 in the bank at the end of October.  Since then, a further £100,000 has been raised via the issue of convertible loan notes, taking the total issued to £369,800. The new loan notes are convertible at 1.5p a share.

Aminex (AEX) has signed a disposal and farm out agreement for its Tanzania oil and gas assets with AIM-quoted Bowleven. The deal will raise cash of $8.5m and Aminex will receive $5m of shares in Bowleven, which it will have to retain for at least nine months. Bowleven is buying a 25% stake in the Kiliwani North development licence and earning a 50% gross interest in the Ruvuma PSA. Aminex will have a net carry of $10m on Ruvuma activity. Aminex is also entitled to a bonus of $500,000 in cash when drilling is completed on the Ntorya-2 well and $4m in cash or shares when Ruvuma has been in production for at least 30 days. Current partner Solo Oil is entitled to 25% of the net carry and 25% of the bonus for Ruvuma. Aminex will be able to reduce its debt but it remains as operator of the assets with 30.575% in Kilwani North – Solo can purchase a further 6.5% stake from Aminex – and 37.5% of Ruvuma. The deal has to be approved by Aminex shareholders and by Solo.

ANDREW HORE

Latest edition of AIM Journal available here.

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