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Ian Pollard – Stagecoach #SGC regional mileage down but fare revenue up

Stagecoach Group plc SGC updates for the year to the 27th April that it has seen further strong trading  in its UK Rail Division, resulting in an increase in expectations for adjusted earnings per share from when interim results were announced in December. The financial performance of UK rail and Virgin rail is ahead of expectations, Regional bus saw a fall of 0.5% in like for like vehicle miles but strangely like-for-like revenue per vehicle mile grew 4.0% and like-for-like revenue per journey also increased 3.6%. which seems to indicate something about fares.

Shield Therapeutics plc STX saw revenue for the year to 31st December grow from £0.6 to £11.9m whilst the annual loss fell from £19.6 million to £19.6 million1.8m. The CEO states that they are now well positioned to deliver further positive news through 2019. A significant highlight for the year was the receipt of £11.0 million upfront  from Norgine in respect of a licence agreement.

Gattaca plc GATC Profit before tax and basic earnings per share for the six months to the end of January each rose by 12% and underlying reported EBITDA by 14%. The interim dividend of 3% which was paid last year is, however, not being repeated this year in line with the revised dividend policy. The Board will consider dividends at the year end but this comes with a warning that if they are resumed it would only be at modest levels.

M. Winkworth plc WINK is pleased with its  results for 2018,  which it achieved in a sales market which it describes as testing. Weaker  sales were compensated for by ongoing growth in the rentals business which was very  successful and now accounts for half of Group revenues. Profit before tax improved slightly to £1.45 million from : £1.38 million in 2017 and the final dividend is to be increased from 7.25p  to 7.45p.

Audioboom Group plc BOOM  reports trading ahead of management expectations with quarterly revenue of c.US$4.6 million, up 180% to a record .US$4.6 million, The CEO is delighted with the first quarter start to 2019. and claims that “the potential is now there to deliver significant shareholder value this year”. with key developments including an enhanced global commercial agreements signed with Spotify a  strong pipeline of content acqusition and other opportunities, including 11 new shows which were signed during the first quarter.

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Brand CEO Alan Green talks Cadence Minerals #KDNC, Audioboom #BOOM & Europa Metals #EUZ on Vox Markets podcast

Brand CEO Alan Green discusses funds, plus Cadence Minerals #KDNC, Audioboom #BOOM & Europa Metals #EUZ with Justin Waite on the Vox Markets podcast. Interview is 16 minutes 28 seconds in.

Andrew Hore Quoted Micro 4 March 2019

NEX EXCHANGE

Proton Partners International (PPI) joined NEX on 28 February and from day one it became one of the largest companies on the market. The introduction price was 225p, valuing the proton beam therapy provider at £334m, and the share price ended the week at 2275p (210p/245p). Woodford-related interests own 41.9% of Proton (www.proton-int.com) and they invested £20m at 200p a share on admission and promised to invest up to £80m at a maximum price of 176p each. Woodford received a further £1m worth of shares at 200p each in consideration for these arrangements. Proton is four years old and it has completed three centres offering proton beam therapy for cancer patients with another planned in Liverpool. Each cancer centre has cost between £35m and £42m. There is also a cancer diagnostics subsidiary. In the eleven months to January 2019, revenues were £1.11m and the loss was £18.6m.

Formation Group (FRM) owns 4.35 million shares in Proton Partners International, which it acquired in March 2018 at 115p each. The 225p a share flotation price means that the value of the 2.85% stake has nearly doubled to £9.78m. At Formation’s AGM, the resolutions to reappoint Grunberg and Co as auditor and for the board to authorise its remuneration were not passed. Michael Kennedy has resigned from the board.

Trading in Dozen Savings (DS01) 5% secured bonds March 2020 commenced on 1 March. So far £91,000 worth have been issued. The plan is to raise up to £7m. The company has been created to offer the bonds to customers of its financial services-focused parent company, Project Imagine (www.projectimagine.com). The bonds cost £100 each and the price at the end of the first day of trading was £107.50 (£90/£125). The FCA has granted Project Imagine an e-money licence and an investment licence.

IFA consolidator AFH Financial (AFHP) says that trading is in line with expectations in the first four months of the year. Past acquisitions are achieving more than 90% of their deferred consideration targets.

Field Systems Designs (FSD) reported a lower profit in the six months to November 2018 because of delays in energy form waste business. Two of these projects have still not been completed. Sales to the water sector have been strong, but they are likely to decline as the latest water regulation AMP6 period. In the six months to November 2018, revenues were flat at £11.8m, but pre-tax profit fell from £168,000 to £46,000.

Sandal (SAND) reported a dip in interim revenues from £1.88m to £1.73m and that led to a swing from profit to loss. EnergieMiHome home automation product sales were lower than expected but the products are being sold in more outlets.

Ace Liberty and Stone (ALSP) has spent £6.17m on two properties that are both let to the Communities and Local Government department, as Jobcentre Plus centres, on leases with an unexpired term of 8.4 years. The property in Bolton cost £2.54m and has a net initial yield of 7%. The Northampton site cost £3.63m and has a net initial yield of 6.75%.

Milamber Ventures (MLVP) says that investee company Essential Learning has been placed in liquidation after problems with historic data led to the company losing its government-funded training contracts. Milamber invested £228,000 in Essential in a two year period and provided services worth £270,000. It also issued £100,000 worth of shares to Essential minority shareholder Goldvista Properties. Goldvista has loaned Milamber £310,000 and this is likely to be converted into shares. Goldvista’s £6,000 loan to Essential has been written off. The shares issued to Gravity Investment Group for a 15% stake in Essential have been cancelled. Milamber is conducting due diligence on apprenticeship training businesses.

Inqo Investments Ltd (INQO) has raised £1m at 90p a share and the cash will be used to invest in healthcare, education and eco-tourism businesses in Africa that are two-to-three years from profitability and have a positive social impact.

Trading in Via Developments (VIA1) debentures has been suspended because the accounts for the year to September 2018 have not been published.

Karoo Energy (KEP) says it intends to move to AIM “as soon as practically possible”. A general meeting has been called for 18 March in order to gain shareholder approval to issue shares at the time of the move.

Altona Energy (ANR) has left AIM and the board intends to visit a vanadium mine in China that could become part of a joint venture. Altona still intends to invest in the Arckaringa coal project in South Australia.

John Eckersley is stepping down as chief executive of Capital for Colleagues (CFCP) in order to focus on his role as managing partner of Castlefield Partners and Alistair Currie will become chief executive.

AIM  

Internet of Things products supplier LightwaveRF (LWRF) is raising up to £3m through a placing, subscription and open offer at 8.5p a share. Year-on-year growth in sales in the first quarter was 156% taking the figure to £1.15m.

Churchill China (CHH) and Portmeirion (PMP) have bought the stake in ceramic materials supplier Furlong Mills that was previously owned by Dudson. Churchill has paid £454,000 for 9.5%, which takes its stake to 55.6%. This means that Furlong will be consolidated in Churchill’s figures. In 2017, revenues were £8.6m and pre-tax profit was £500,000. Portmeirion spent £363,000 to take its stake to 44.4%.

President Energy (PPC) is raising up to £6.5m at 8p a share, including a £2.8m debt for equity swap by the chief executive, to invest in its gas infrastructure and accelerate its drilling programme.

Itaconix (ITX) has secured an exclusive global supply agreement with Nouryon for bio-based polymers used in hair care, skin care and cosmetics. This contract comes after a joint development agreement with Nouryon and follows the previous supply agreement for polymers used in detergents. Nouryon will sell the polymers to its own customers in the personal care sector for use in their consumer products.

Audioboom (BOOM) is raising £1.5m at 1.3p a share and this cash will enable the podcast company to make upfront payments for content. Audioboom says that it is on course to achieve higher revenues in 2019 than in the 13 months to December 2018. The success in generating revenues and orders is helping to attract content providers.

Parity (PTY) has won a two-year contract with the Department for Education for the digital transformation of the Funding and Contracting Service, which makes £6bn of payments each year. The deal could be worth up to £4.5m. Matthew Bayfield has taken over as chief executive of Parity from Alan Rommel, who is chief operating officer. Bayfield plans to focus more on the data consultancy activities.

Westmount Energy Ltd (WTE) is nearly doubling its shareholding in JHI Associates Inc to 3% and the investment is 81.8% of Westmount’s gross assets. JHI’s main asset is a 17.5% carried interest in the Canje block, offshore Guyana, which is operated by ExxonMobil. The first well could be drilled by early next year.

Verona Pharma (VRP) used up £18.1m of cash in its operating activities in 2018. There is still £64.5 in the bank. Verona generated positive data for ensifentrine (RPL554) used as a treatment for COPD in a phase IIb clinical trial. The focus is COPD and further trials for cystic fibrosis are unlikely in the short-term. Financial resources will be focused on progressing the nebulised ensifentrine to a phase III study. Verona is likely to seek partners for its dry powder and pressured meter dose inhaler formulations. The results of the part one of the dry powder inhaler clinical trial for COPD could be available before the end of the first quarter. The second phase should then commence with results expected in the second half of the year.

Trading in Herencia Resources (HER) shares has been suspended because it appears that pre-conditions for the financing that has been negotiated are not likely to be met. More cash is required to enable the company to continue trading.

Telematics supplier Quartix (QTX) increased its fleet sales, but insurance business fell and overall revenues profit are set to decline in 2019. In 2018, revenues were £25.7m and pre-tax profit was £8.1m, but that figure is forecast to fall to £6.5m this year.

VietNam Holding Ltd (VNH) has published a prospectus for its move to a premium listing, which should happen on 8 March.

Adamas Finance Asia Ltd (ADAM) has commenced a share buy back scheme for up to $500,000 of shares at a maximum price of 79 cents a share, which is a 25% discount to pro forma NAV. Adamas has separately agreed to buy back 730,529 shares at 10 cents each. The first tranche of 159,847 shares has been issued to China Aerospace for its stake in Hong Kong Mining.

NetScientific (NSCI) says that it will not get the required backing for the resolution to cancel the AIM quotation, so it has adjourned its general meeting. Shareholders owning more than 30% are against the plan.

MyCelx Tech (MYX) has raised $1.83m at 230p a share in order to finance the potential increase in demand for water treatment services.

Telit (TCM) has sold its automotive division for $105m and has received $67.5m in cash, but it has granted the buyer a loan of $38.5m for a six week period because other debt finance was not obtained in time.

MAIN MARKET 

Air Partner (AIR) says that its pre-tax profit will be at least £5.8m in the year to January 2019. The charter division was boosted by strong demand for freight and commercial jets. The consulting and training division has won new contracts.

G3 Exploration Ltd (G3E) plans its third demerger in its time as a quoted company. This time shares in Green Dragon Gas, which owns its producing assets, will be distributed to shareholders. Green Dragon Gas will then either be sold or float on the Hong Kong Stock Exchange.

Wealth manager Walker Crips Group (WCW) says that political uncertainty has hit broking commissions and the launch of new products, which means that the 2018-19 results will be lower than for 2017-18. Chief executive Sean Kin Wai Lam has bought 15,000 shares at 28p each.

Laura Ashley (ALY) has rejected the bid approach by Flacks and says that the indicative offer of 2.748p a share fails to provide a fair value for shareholders.

London Finance and Investment Group (LFI) has a 43.8% stake in NEX-quoted Western Selection. In the six months to December 2018, NAV fell from 65.4p a share to 62p a share. The interim dividend is unchanged at 0.55p a share.

BigDish (DISH) has launched a new restaurant bookings website and upgraded its technology. It is also widening its coverage to include Southampton.

Path Investments (PATH) says that the period of exclusivity included in its heads of agreement with ARC Marlborough has been extended to 29 March. The plan is to acquire ARC, which has a nickel and cobalt project in Queensland, via a share issue.

Oil and gas firm Curzon Energy (CZN) has raised £95,000 at 1.58p a share, which is a 21% premium to the market price. The cash will be invested in a gas project in Texas.

Andrew Hore

Andrew Hore – Quoted Micro 28 January 2019

NEX EXCHANGE

Full year figures from AFH Financial Group (AFHP) show how successful its acquisition strategy is with revenues 51% higher at £50.7m and pre-tax profit that nearly doubled to £6m. Despite the additional shares issued to part-finance these acquisitions, underlying earnings per share were one-third higher. The dividend is 50% higher at 6p a share. Acquisitions have continued since the year end. Management believes that it can double funds under management to £10bn in three to five years.

Startup Giants (SUG) has commenced a programme to raise up to £3m. There will be an initial share placing to raise £200,000. The company has launched its 2019 accelerator round for pre-seed capital tech entrepreneurs. Funding of up to £100,000 can be received by successful applications.

KR1 (KR1) has invested $200,000 in Rlay, a data collaboration framework for crowdsourcing. KR1 will receive an undetermined number of discounted tokens. This will be a discount to the lowest price paid by any investor in the tokens. KR1 has spent £50,000 in 50,000 Nash tokens.  These are the first tokens issued out of Liechtenstein.

MiLOC Group Ltd (ML.P) has signed a deal with Master Kingdom Ltd in order to create a range of body care and body wash products, which will be sold under the Artist’s brand name.

MetalNRG (MNRG) says that the Kyrgyzstan authorities have granted the application for a mining licence for the company’s uranium project in the country. The in-situ value of the uranium reserves is $253m and there is potential exploration upside.

Johnny Martin Smith is joining the board of VI Mining (VIM) and trading in the shares has resumed. Smith is a former mining analyst.

NQ Minerals (NQMI) has raised a further £142,000 at 11p a share. Bryan Smart has resigned from the board.

BWA Group (BWAP) had nearly £45,000 left in the bank at the end of October 2018. Elections have delayed progress with the potential licence acquisitions for rutile sands deposits in Cameroon. Investee company Prego International is moving from Guernsey to Norway and it may merge with another business.

Milamber Ventures (MLVP) is seeking a replacement for First Sentinel Corporate Finance as its corporate adviser.

AIM   

Mporium (MPM) has signed a partnership deal with claims management firm Allay, which will use the company’s technology to generate leads for its business. Allay will be issued a 25% stake in Mporium in return for the revenuesthat will be generated, which could be worth millions of pounds. The stake could be increased to 29.9% if Mporium is successful in winning leads for Allay.

Mastercard has launched a rival bid for Earthport (EPO) and Visa is considering its position. The new bid is 33p a share and this values the company at £233m. That is a 10% premium to the Visa bid.

Aquaculture business Benchmark (BMK) has expanded its production capacity and is launching new products. Revenues were 8% higher at £151.5m and it would have been higher at constant exchange rates. It made an underlying pre-tax profit of £5.6m last year, up from £4.7m, and that could nearly double this year. Net debt was £55.7m.

Sureserve (SUR) has been restructured and non-core businesses sold. This enables it to concentrate on compliance and energy support services. Full year revenues from the continuing operations were 5% higher at £191m and underlying pre-tax profit improved from £5.4m to £6.6m. This was better than expected and net debt was £11.4m. The dividend has been halved to 0.25p a share.

K3 Capital (K3C) was expected to report lower figures in the first half due to the timing of larger corporate finance deals and the mergers and acquisitions achieved interim revenues 4% lower at £7.2m and an even larger decline in profit. The second half should be better and revenues could be slightly higher than last year at £16.6m, but full year pre-tax profit is forecast to fall from £7.3m to £7m.

Wynnstay Group (WYN) reported record full year results. The higher milk price has led to increased demand for dairy feed. Revenues grew from £390.7m to £462.7m and pre-tax profit moved from £7.9m to £9.5m. The agriculture and retail divisions both improved their profit and the latter added additional sites in the second half that were not profitable in the period. There was the normal second half cash inflow but it was not as great as in the past, so net debt was nearly £1m. The dividend has been raised 6% to 13.4p a share.

InfraStrata (INFA) has raised £1.5m at 1.2p a share. This will boost its balance sheet while it negotiates with investors in the Islandmagee gas storage project. One equity investor has appointed advisers to do due diligence work. The project will continue to progress as these negotiations continue and the cash will make sure that progress is made while the final funding package is secured.

Lighthouse Group (LGT) has secured a deal to transfer the members and assets of its pension trust to Smart Pensions Ltd. The IFA will protect itself from the rising cost of the administration and capital requirements of pension trusts.

Audioboom (BOOM) grew last year’s revenues by 92% to $11.7m, although this was a 13 month period, and it says that there was no cash outflow from operations in the final three months. That meant that there was $1.6m in the bank at the end of 2018.

Robinson (RBN) traded in line with expectations last year. The packaging manufacturer expects revenues of £32.8m, which is a 10% improvement. The fastest growth was in Poland. Even so, pre-tax profit will be lower, but it should bounce back in 2019.

A large localisation project has been cancelled and this will hamper the progress of Zoo Digital (ZOO) in the second half of its financial year. The legacy DVD business is also declining faster than anticipated. This means that ZOO will not be profitable in the year to March 2019.

Velocity Composites (VEL) increased its full year revenues by 15% to £24.5m, and there was a small loss, but business wins are slower than previously hoped. Revenues could be flat this year.

Another upgrade for audio visual products distributor Midwich Group (MIDW) following its latest trading statement. Pre-tax profit is expected to rise from £24.3m to £29.1m and then a further increase to £31.7m in 2019.

MAIN MARKET 

Robin Boyle has failed to get back on the board of Athelney Trust (ATY) but he was successful in removing the existing directors. David Lawman and Paul Coffin were appointed although the latter resigned at the end of the week and he was replaced by Frank Ashton. The proposed tender offer and placing was also passed.

Dev Clever Holdings (DEV) is the latest company to float on the standard list. A share issue has raised £898,000 at 1p a share, including £220,000 due to the conversion of debt. The software development company was valued at £3.73m. The share price ended the week a 7.75p.

Nanoco (NANO) has signed a contract extension with a US company and this lasts until the end of 2019. This underpins the current year forecast.

Ross Group (RGP) has issued the final 21.3 million shares for the acquisition of Archipelago Aquaculture, which plans to start producing Chitin to help to produce quality shrimp. The deal was announced last September, and 17.9 million shares were issued at 1p a share. Global Blue Technologies Inc owns 19.9% of Ross.

Interim figures from Haynes Publishing (HYNS) show a 23% increase in underlying pre-tax profit to £1.6m on a 7% rise in revenues to £18.3m. Digital revenues were 23% higher at £9.7m. The growth in revenues and profit was in the UK and Europe. The interim dividend is unchanged at 3.5p a share. Net cash was £2.6m.

Andrew Hore

Ian Pollard – Ted Baker #TBK will continue to be challenged

Ted Baker plc TED group revenue rose by 3.5% in the 28 weeks to the to the 11th August but profit before tax fell by 3.2% and basic earnings per share by 1.8%, so the management did two things. Firstly it increased the interim dividend by 7.8% and secondly it sought refuge in the time honoured excuse of “challenging external trading conditions”, thereby completely ignoring the successful companies which not only face challenging conditions but beat them. Wholesale sales did rise by 10% and e commerce by 24.1%. North America, the UK and Europe did see small sales rises in retail sales but the rest of the world  showed a small rise or a small decline depending on how you calculated your currency. As for the future it looks like the board has already succumbed to those challenging conditions which it believes will continue through the second half.

Electrocomponents ECM benefitted from strong momentum in the six months to the 30th September. Group like for like revenue grew by 10% after a strong second quarter and adjusted profit before tax for the half year is expected to grow from last year’s £79m to £100m.

Audioboom Group BOOM produced record revenue for the quarter ended 31 August 2018 with a rise of 14% on Q2 2018 and 26% up on Q3 2017. Despite that revenue for the 13 months ending 31 December 2018 is now expected to be below current market expectations. That will still show a hefty rise on the 12 months to November 2017 which produced $6mUS$ compared to between $11.5m and US$13m which is expected for the end of the current year.

Gooch & Housego GHH  has entered its new financial year with a record year end order book, which, as at 30 September 2018, stood at £96.1 million, an increase of 33% compared with last year. On a like for like basis and excluding the impact of foreign exchange this still comes in as a healthy 17% rise. The company is in a strong position and has been able to take advantage of positive market conditions.

Intercede Group IGP updates that operating losses for the six months to the end of September have been substantially reduced to less than £1.0m compared to last years £3.1m. Revenue for the half year has risen by more than 10% compared to last year.

AB Dynamics plc ABDP has performed well throughout the year and the Board expects both revenue and profit before tax will significantly exceed market expectations.

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Quoted Micro 18 June 2018

Small cap award winners 2018

Company of the year

ZOO Digital (ZOO)

The ZOO Digital share price is ten times the level it was one year ago. ZOO localises film and television content and it has been investing in upgrading its technology and services over the past few years. This investment is paying off and the ability to offer cloud-based services is helping the business to grow and move into profit. Hollywood studios have been customers for many years and ZOO is winning market share. Newer entrants to the market such as Netflix have grown the demand for localisation of content. ZOO is expected to report an underlying pre-tax profit of £500,000 for the year to March 2018.

NEX company of the year

Crossword Cybersecurity (CCS)

Cyber security technology developer Crossword Cybersecurity originally floated on GXG and then switched to NEX. It was one of the youngest companies that was on the shortlist for this award. Crossword is generating modest revenues and it is developing cyber security products with partners. The real potential for the business will not be realised for a few years.

Impact company of the year

Walls and Futures REIT (WAFR)

Walls & Futures REIT is an ethical housing REIT that develops new housing for people with learning and physical disabilities or requiring extra care. In 2017, Walls and Futures achieved a total return on its portfolio of 11.5%, ahead of its benchmark total return of 7%.

IPO of the year

K3 Capital (K3C)

Business sales and corporate finance company K3 Capital Group joined AIM at 95p a share in April 2017 and the share price has more than trebled. Bolton-based K3 helps owners to sell their businesses and it gains clients through a direct marketing strategy. The AIM quotation and the related higher profile appears to have helped to accelerate growth. A move up the Thomson Reuters deal rankings is also helping. Last year, revenues rose by 26% to £10.8m, while pre-tax profit improved 18% to £3.6m.  In the six months to November 2017, revenues were 34% ahead at £7.5m and pre-tax profit moved from £2.48m to £3.21m.

 

Fintech company of the year

FAIRFX Group (FFX)

Foreign exchange and e-banking services provider FAIRFX has a low cost model while offering an improved experience to the more established rivals. Turnover was £1.1bn last year, while revenues were £15.5m and this enable the company to move into profit. Corporate turnover was 52.3% of the total, up from 45.5%. The company recently moved its international payments book onto the City Forex platform following its acquisition. The focus is increasing scale to improve efficiency combined with the rolling out of new products.

Transaction of the year

Proactis (PHD) – merger with Perfect Commerce

Spend control software provider Proactis merged with Perfect Commerce in August 2017. The deal significantly increased the scope of the business and added to the management team. The integration of the businesses appears to be going well but the loss of a couple of large customers has held back progress in the year to July 2018. Even so, annualised contracted revenues are still £45.5m. Progressive Equity Research still expects a near-doubling of this year’s pre-tax profit to £10.2m, rising to £13.2m next year. That means that earnings per share growth is modest this year because of the additional shares in issue.

Executive director of the year

Bobby Kalar – Yu Group (YU.)

Electricity and gas supplier Yu Group floated on AIM in March 2016 at 185p a share. The current share price is more than four times that level. The focus is on commercial customers. Yu increased its revenues from £16.3m to £47m last year and annualised bookings continue to grow. Underlying pre-tax profit jumped from £195,000 to £3.08m. The dividend was increased from 2.25p to 3p a share. Trading continues to be strong and average annualised bookings per month were £6.6m. The cash pile has increased to £18.6m at the end of April 2018. Yu has obtained a licence to supply water.

Journalist of the year

Paul Scott – Stockopedia

Fund manager of the year

Nick Williamson – Old Mutual

Microcap fund manager of the year

Guy Feld – Canaccord Genuity

Analyst of the year

Kevin Ashton – Cantor Fitzgerald

Lifetime achievement award

Katie Potts – Herald Investment Management

Special services to small caps

John Jenkins (Founder of Ofex/NEX)

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NEX EXCHANGE   

Daniel Thwaites (THW) increased its 2017-18 by 9% to £92.2m, while operating profit improved by 7% to £12.9m. There was a 79% increase in earnings per share to 13.8p, mainly due to a swing from a loss on interest swaps to a profit.  The total dividend is unchanged at 4.46p a share. Investment in the pubs and hotels operations and in the new craft brewery at Mellor Brook has led to a rise in net debt from £47.6m to £63.7m. The old brewery will be demolished and the land will eventually be sold or developed. Poor weather means that the new financial year has started more slowly than last year.

Hellenic Capital has changed its name to Pelican House Mining (PHM) and is focusing on investing in early-stage resources projects in Africa. The focus is making capital gains on the investments. Pelican is trying to supplement its cash resources by selling a commercial property in Leeds, but the buyer withdrew. Pelican has retained the deposit. The investment property in Leeds is in the books at £204,000. Two directors, Simon Grant-Rennick and Mark Jackson, have been granted options over a total of seven million shares exercisable at 0.55p each.

Newbury Racecourse (NYR) says that its conference and events division is 22% ahead of the same time last year and the revenues of the hotel have risen by the same percentage. There has been a 17% rise in revenues for the nursery business on the back of occupancy rates rising by six percentage points. There are longer-term worries about the financial ability of bookies to provide sponsorship and other revenues. Management says it will not be paying any dividends until 2022 at the earliest after the current development projects are completed.

PCG Entertainment (PCGE) has raised £303,000 at 0.15p a share and around £119,000 will go towards paying the £119,000 settlement with D-Beta, which provided an equity sharing facility. D-Beta has sold its existing stake. PCG is talking to Cavitation Solutions Ltd about distributing cavitation technology, which deals with oil and other water pollutants, in China. It is also talking to ChainZy about distributing its blockchain-based technology in Asia. There is interest from third parties concerning the use of PCG’s media and gambling licences in China.

IMC Exploration (IMCP) has raised £250,000 at 0.7p a share and the cash will be used to develop the company’s three main gold and zinc projects.

South Africa-focused investment company Inqo Investments Ltd (INQO) has made a second investment in Uganda-based Four-One Financial Services, which manages the Mazima micro-pension scheme. This is the second tranche of the original investment and is in the form of a $100,000 convertible loan.

AIM   

NWF (NWF) says that last year’s trading was much better than expected and net debt is lower than forecast. The feeds business improved its performance and trading of the fuels division was strong. The food distribution operations wee hit by reorganisation requirements and did not perform as well as expected.

Diversified Gas and Oil (DGOC) has got another large deal on the blocks and trading in the shares has been suspended. The Appalachian Basin oil and gas producing assets will be acquired for $575m and it will more than double the group’s daily production. This should be an earnings enhancing deal. A $225m share placing is required to help finance the deal.

RedstoneConnect (REDS) chief executive Mark Braund intends to leave the smart buildings technology company. Frank Beechinor will move from chairman to chief executive. The disposal of the systems integration and managed services divisions has been completed and the group can focus on its software business.

Ilika (IKA) has gained government funding of £4.1m for two battery technology projects in the automotive sector. The PowerDriveLine project is developing a solid state battery for hybrid and electric vehicles. The other project is headed by McLaren Automotive and is developing a battery for performance cars.

Secure payment products provider Eckoh (ECK) increased its full year revenues by 3% to £30m but pre-tax profit was 61% higher at £2.4m thanks to an improvement in operating margin. Growth in the US made up for a weaker contribution in the UK.

Redhall Group (RHL) slumped back into loss in the first half due to a delayed contract. However, it is still on course to make an improved profit in the full year. Interim revenues were 22% lower at £14.7m. There is strong demand for the company’s specialist doors from the nuclear and transport sectors.

Evgen Pharma (EVG) has enough cash to get to the end of 2018. There should be further positive news about the two ongoing clinical trials prior to the end of the year. Interim analysis of phase II trial of SFX-01 as a treatment for breast cancer show that six out of 20 patients, who had tumours that had initially responded to treatment but had become resistant, saw some benefit from the treatment of their tumours. The treatment has also been shown to be safe. The final results of the trial should be published before the end of the year.

Life sciences company Abzena (ABZA) has decided to focus on monetising its technology rather than raising money via a share issue. A non-binding heads of agreement with a third party would involve the sale of an interest in future royalties. If this deal is completed there would be enough working capital for the short-term.

Active Energy Group (AEG) has signed a memorandum of understanding with Young Living Farms for the sale of a PeatSwitch plant, which makes environmentally friendly peat replacements. The first plant is in Mona, Utah and the client is paying $3.4m in cash. There could subsequently be other plants at the client’s other sites.

Trading has resumed in the shares of Audioboom (BOOM) following publication of its accounts. The share price fell from 3.6p to 2.18p. The podcasts publisher has raised £4.5m from a placing at 3p a share.

MAIN MARKET    

WideCells Group (WDC) managed to raise £513,000 at 3p a share via a bookbuild on the Teathers app. That includes £183,000 from directors. The total amount raised by the stem cell services provider is £2.04m, including conversion of debt of £165,000. Shareholder approval is required for the share issue.Trading in the shares has resumed and the share price has fallen below the placing price. WideCells is using £615,000 of its £624,500 overdraft, which will be reviewed at the end of June. Shareholders have loaned £120,000.

China-based Gamfook Jewellery is planning to join the standard list. The online retailer customised jewellery wants to raise £5m in order to invest in retail sites. Gamfook has managed to generate cash from operating activities in the past few years, although next year there will be a significant working capital outflow according to forecasts. Gamfook is offering an 8.5% yield on its potential placing price of 15p a share and that would rise to 12.5% in 2019.

Air Partner (AIR) has completed its accounting review and the net assets overstatement of £4m net of tax is in line with indications. There were accounting errors and subsequent attempts to cover up the problems going back to 2010. The review has cost £1.3m. Air Partner still intends to pay a final dividend of 3.8p a share.

BATM (BVC) has won a $3m follow-on cyber security for a government department. The total contract value will be $7m.

Falcon Media House (FAL) has raised £500,000 via a convertible loan note issue. The conversion price is 1.5p a share.

Cash shell AIQ Ltd (AIQ) has raised £250,000 from an oversubscribed open offer at 20p a share but there was a delay of one day before the shares were admitted to trading on 14 June. The share price has slumped from a high of 160p to 24.5p over the past month.

Dukemount Capital (DKE) has agreed a 30-year lease on a second property in north west England. Housing association Inclusion Housing is paying £168,740 a year for the lease subject to planning permission for extra rooms. The property needs to be refurbished.

Bluebird Merchant Ventures Ltd (BMV) has executed the 50/50 joint venture agreement with Southern Gold for the Kochang mine and the feasibility report is expected before the end of September. The required $500,000 investment has nearly been completed by Bluebird and it is on course to invest the required $250,000 in Southern Gold. First gold is expected before the end of 2019.

Andrew Hore

Andrew Hore – Quoted Micro 21 May 2018

NEX EXCHANGE   

Newbury Racecourse (NYR) grew 2017 revenues from the nursery, hotel and media operations. There was a 11% increase in raceday attendances, which totalled 196,000 last year, leading to a 1% like-for-like rise in revenues. Overall revenues were 5% higher at £17.8m, while underlying pre-tax profit edged up from £178,000 to £188,000. There was a small cash outflow from operations. Capital investment meant that cash was reduced from £12.9m to £5.2m with more payments to come from the David Wilson Homes deal. A further £5.17m will be spent on upgrading the Pall Mall stand. There are concerns that the cutting of maximum stakes for gaming machines following the recent government announcement could hit bookmaker sponsorship and media rights revenues.

Block Commodities Ltd (BLCC) has a secured a strategic investment from Swarm Fund, which is a decentralised marketplace platform using blockchain. Investors will be able to participate in the FarmCoin asset-backed investment coin via the Swarm platform. FarmCoin is a joint venture between FinComEco and Block Commodities focused on the agriculture sector. There will be up to $45m of FarmCoin tokens issued.

National Milk Records (NMR) is holding a general meeting on 4 June in order to propose a reduction in capital that should put it in a position to have distributable reserves if it wants to pay a dividend.

Pre-IPO investor Primorus Investments (PRIM) had cash of £561,000 at the end of 2017. The NAV was £4.95m. This was after a £3.26m inflow from share issues.

AIM   

Watkin Jones (WJG) has found a new chief executive but he will not be able to start until the beginning of 2018. Richard Simpson is joining from student accommodation developer Unite Group. The build to rent operations of Watkin Jones has secured a development arrangement for a site in Reading, which will have 315 apartments.

GAN (GAN) and Webis (WEB) are two companies that could benefit from the legalisation of online sports betting in the US. The Supreme Court of the United States has decided to overturn the Federal prohibition of sports betting. US sports betting could be worth $6bn by 2023. That covers online and onsite gambling. GAN can launch a sports betting service in New Jersey and Pennsylvania in the second half of this year – in time for the NFL season. GAN already has a deal with Betfair in New Jersey and adding sports betting will increase revenues. Webis has a US subsidiary called WatchandWager, which is based in California, a strong potential market for sports betting.

Genedrive (GDR) has agreed to sell its research and pharmacogenomics divisions to a director for up to £1.9m so that it can concentrate on its core Genedrive diagnostics platform. The initial payment is £1.15m with the rest deferred and subject to claims for R and D tax credits.

Lakehouse (LAKE) is acquiring heating and renewables services provider Just Energy Solutions, which fits with the company’s gas compliance businesses in the public sector and expands coverage in the industrial and commercial sectors. There is no upfront cost and payments will be dependent on profitability over two years. Lakehouse has also won a £55m, three year, Warm Homes contract with the Wales government.

Oil and gas demand is recovering at advanced coatings provider Hardide (HDD) but it is still well below previous levels. Other customers are enhancing growth and aerospace business is on the horizon. Interim revenues were 43% higher at £2.16m but the company is still loss-making. That will continue for a couple of years.

Angling Direct (ANG) increased revenues by 44% to £30.2m in the year to January 2018 and this led to an upgrade in forecast revenues for the current year. The fishing tackle retailer grew online sales by 54% but these tend to be lower margin. Pre-tax profit was £900,000 and it is expected to rise to £1.1m this year.

Online women’s fashion retailer Sosander (SOS) says that its full year revenues will be at least £1.34m. Like-for-like sales in the fourth quarter nearly quadrupled and gross margins are improving.

Portmeirion (PMP) has increased revenues by one-fifth in the first four months to 2018, although the second half of the year is always the more significant. Full year profit is still forecast to rise from £8.8m to £9.4m.

Churchill China (CHH) says that trading is ahead of the same period last year. The ceramic products manufacturer continues to have success in Europe and other export markets.

A new patent application has been filed for SkinBiotix by SkinBiotherapeutics (SBTX) and this covers the increasing of filaggrin levels in skin. Filaggrin is required for the formation of the outer layer of skin. Eczema sufferers have a low level of filaggrin.

The People’s Operator (TPOP) is increasing its UK subscribers but US numbers have declined so the performance was down in the first quarter of 2018. Churn is declining. Margins are better than expected. Even so, progress is too slow and an alternative strategy is required by the virtual mobile network business and it is considering divesting the US subscribers. That should cut cash burn by one-third.

A bathing water test by Molendotech, which is one of the investee companies of Frontier IP Group (FIPP), is being launched by Halma. This follows the agreement earlier this year.

Altona Energy (ANR) will begin a drilling programme on the Westfield tenement of the Arckaringa coal project during August. There could be 100mt of coal in the tenement. It will take three weeks to drill 15 holes to a depth of 120 metres.

Active Energy Group (AEG) intends to acquire a controlling interest in PowerWood Canada. Which owns forestry assets in Canada. This will secure feedstock for the roll-out of CoalSwitch, the biomass replacement for coal. There are plans to construct a 25 tonne per hour CoalSwitch plant in Alberta.

Servoca (SVCA) wants shareholders to agree to the cancellation of the AIM quotation. Management says that this will save £150,000 a year.

Volex (VLX) is buying Silcotec Europe for €18.1m and raising £36m at 75p a share. Silcotec supplies harnesses and electronic sub-assemblies to the medical, telecoms and computer industries and generated an operating profit of €3.1m.

Audioboom (BOOM) is not going ahead with the reverse takeover of Triton Digital Canada Inc because it could not raise the cash from a placing. A £700,000 break fee in cash (£90,000) and shares is payable. The audio business still requires more cash and that is why trading in the shares is still suspended.

MAIN MARKET    

Sportech (SPO) has a strong presence in the US so it is in a good position to benefit from the legalisation of sports betting. It already has 90 licenced operator clients and its own network of off-track betting facilities in Connecticut.

The reasons behind founder Laurence Orbach increasing his stake in books publisher Quarto Group Inc (QRT) to 20.1% have become clear. Orbach was removed from the board in November 2012 but he has joined with 27% shareholder Lion Rock to unseat four non-executive directors at the AGM. Orbach and former finance director Mick Mousley have returned to the board, along with two nominees from Lion Rock. Orbach becomes executive chairman.

Shefa Yamim (SEFA) has completed bulk sampling in zone 1 and this should enable a resource estimate to be calculated.

Standard list shell Papillon Holdings (PPHP) has signed heads of terms for a 50% stake in CarCloud, a car sales-based fintech company. The deal to acquire energy storage systems developer Phestor is off. That follows the abortive takeover of Myclubbetting.

S&U (SUS) says non-prime car finance applications are 10% higher this year, although approval rates have fallen. Net receivables have increased by £48m to £258m.

North Midland Construction (NMD) has made a strong start to the year. There is a secured workload of £310m for this year and this should enable an improved financial performance this year.

World Trade Systems (WTS) wants to diversify its business outside of China. A new Taiwan-based health and fitness subsidiary is being incorporated. Kun Xin International will provide a loan facility of up to £3m to finance the new business. European opportunities are being sought.

Blood diseases treatments developer Hemogenyx Pharma (HEMO) has signed a development agreement with a global pharma company, which will provide Hemogenyx with free technical support and some intellectual property. The pharma company will be granted a research licence for anything jointly developed.

Andrew Hore

Andrew Hore – Quoted Micro 30 April 2018

NEX EXCHANGE   

Chapel Down Group (CDGP) reported a 15% increase in annual sales to £11.8m. Wine sales were one-fifth higher at £8.12m with cider and beer sales, via associate Curious Drinks, were 7% ahead at £3.68m. Operating profit improved from £346,000 to £470,000 but there was a much larger loss from the Curious Drinks associate so pre-tax profit was lower. The new brewery should be open in the first quarter of 2019. Last year’s fundraising means that Chapel Down has a strong balance sheet and is in a good position to expand. Michael Spencer has increased his stake from 17.5% to 18.2%.

Adnams (ADB) says that beer volumes were nearly 5% higher in the first quarter, while spirit volumes were 30% ahead. However, the first half outcome will be lower than last time because the poor weather hit the company’s pubs and there are additional costs for updating the brewery and IT systems. The second half is expected to be stronger and also to benefit from cost savings.

PLACTAL (Play Data is Capital) has appointed Coinsilium Group Ltd (COIN) to advise on its token generation event for a decentralised mobile game advertising application. South Korea-developed PLACTAL will tokenise a gamer’s gaming data.

Cyber security technology developer Crossword Cybersecurity (CCS) more than doubled its revenues in 2017. The loss still increased from £950,000 to £1.24m despite the improvement in revenues from £345,000 to £737,000. The cash outflow was £1.06m, which left £490,000 in the bank. Since then, £2.16m was raised via a placing at 270p a share.

Early Equity (EEQP) is seeking to move to a standard listing. The company’s NAV was £1.54m, including £429,000, at the end of 2017

Sandal (SAND) has secured a term loan of up to £500,000 from major shareholder Greenbrook Industries Ltd and £250,000 would be used to buy back 862,068 shares from Greenbrook. The shares will be cancelled and this will enhance earnings per share. Shareholders are being asked to approve the share buy back.

The ownership of Via Developments (VIA1) has changed. It was 100%-owned by Pyramid Court Investments Ltd, which is owned by John Kahn. John Kahn directly owns 90%, Ivan McKeever 5% and David Harris. Stephen Kahn has an option to acquire a 45% stake from John Kahn.

Etaireia Investments (ETIP) has appointed Myles Cunliffe as executive chairman. He has two decades of experience as a finance broker and he founded online car finance provider Get Me Finance. More recently, he has been involved in property finance.

AIM   

Automotive testing systems supplier AB Dynamics (ABDP) reported a 39% increase in revenues to £15.3m in the six months to February 2018. Underlying pre-tax profit was one-third higher at £3.3m. There is a strong order book so the outlook is positive. AB has moved into its new factory and this will provide additional capacity. A new subsidiary has been set up in Germany.

Nexus Infrastructure (NEXS) has warned that its TriConnex utility connections business is likely to report flat revenues and operating profit in 2018 even though its order book has grown. It is taking longer to get onto sites as the builders have to satisfy local government pre-conditions so revenues are slower coming through. The Tamdown infrastructure services provider should contribute a higher profit this year.

Safestyle UK (SFE) is not paying its 7.5p a share final dividend. The replacement windows and doors company wants to conserve its cash because it expects 2018 profit to be much lower than expected due to competitive pressures. Steve Halbert has resigned as chairman.

Panthera Resources (PAT) has been a warded an initial three-year exploration licence for Bassala in southern Mali. Several large gold anomalies have already been identified. Further soil sampling will help to provide drilling targets.

Osirium Technologies (OSI) is expanding in the UK and internationally. The cyber software supplier increased revenues from £478,000 to £648,000 but invoiced sales more than doubled so Osirium already has significant revenues it will recognise this year. There was £1m in the bank at the end of 2017. Since then, £4.2m has raised at 134p a share. It will take time for revenues to build up and losses are anticipated for the next couple of years at least.

Graphene technology developer Directa Plus (DCTA) has a strong base in a number of markets and they should help it grow its revenues over the coming years. A large chunk of the existing revenues come from the textiles sector. The environmental market could be a significant one for the company. Directa Plus has linked up with Sartec to commercialise its Grafysorber technology in the oil and gas sector. The plan is to develop a pilot plant to treat contaminated water. The most recent deal is for the potential use of Graphene Plus in the production of new and retreaded tyres. This is a development agreement with Marangoni, a major truck tyre manufacturer. A bespoke version of Graphene Plus will be developed and there could be a commercial launch in 2019.

There has been positive news from Futura Medical (FUM) concerning its MED2002 erectile dysfunction gel. A phase III efficacy study is being prepared following pharmacokinetic study information that suggests that higher dosages should increase efficacy. A rapid rate of absorption was demonstrated with peak levels in the bloodstream at between 10 and 12 minutes. Lombard Odier has trimmed its stake to below 18% after the uptick in the share price.

D4t4 Solutions (D4T4) says that full year profit will be slightly better than expected as revenues should hit £20m. Demand for Celebrus software remains strong and there is a greater interest in the recurring revenue-based offering. Net cash is £3.9m.

Driver Group (DRV) has sold and leased back its central admin offices in Haslingden, Lancashire. This generated £1.65m in cash. After taking into account rent from a sub-let the annual rental cost will be £105,000.

Tax Systems (TAX) reported revenues of £15.1m and pre-tax profit of £4.9m in its first full year in its current form. The corporation tax services provider has strong recurring revenues and is a strong cash generator. Net debt was £18.2m at the end of 2017. Cash generation will reduce this, although management wants to be acquisitive. It is taking its time, though, and has not gone through with a couple of deals because they did not meet the criteria.

Audioboom (BOOM) says that the structure and terms of its acquisition of Triton Digital Canada are going to change. Candy Ventures is providing a £1m convertible loan note so that the company has working capital while it waits for the deal to go ahead, although there is no certainty it will.

Access Intelligence (ACC) is raising £2.8m at 4p a share in order to invest in its Vuelio platform so that analytical information is better presented.

Volex (VLX) is paying up to 3.5 million shares for medical and industrial cables business MC Electronics. The North American company made a small loss on revenues of $19.1m in the year to October 2017.

Zoo Digital (ZOO) says that full year revenues will grow from $16.5m to at least $28m and EBITDA will improve from $1.8m to $2.3m. The main growth has come from localisation services.

MAIN MARKET    

London and Associated Properties (LAS) has completed the £37.25m sale of its Brixton Markets assets. Andrew Perloff’s Maland Pension Fund, which has a 5.3% shareholding, has requested a resolution at the next annual meeting. Maland wants non-Heller family shareholders to be given a chance to realise their investment at no more than a 7.5% discount to net assets. The current share price is at a greater discount to NAV. The directors and Heller family own 56.6% of the company and they will vote against the resolution.

Bisichi Mining (BISI) has a portfolio of UK shopping centres that it owns jointly with London and Associated Properties and the Heller family are major shareholders. Bisichi owns the Black Wattle coal mine in South Africa. In 2017, revenues increased from £22.8m to £37.5m and pre-tax profit jumped from £630,000 to £1.94m. It would have been higher without a £1.83m write-off of a joint venture investment. A total dividend of 5p a share will be paid for 2017, which includes a 1p a share special dividend. Cavendish Asset Management owns 18.1% of Bisichi.

Nanoco (NANO) has extended its partnership with a major US corporation. Nanoco has won this latest development deal after a competitive process. The original deal was for sensor applications of Nanoco’s technology.

Ross Group (RGP) increased revenues from £59,000 to £335,000 and managed to swing from loss to profit in 2017. The profit was achieved after a provision for unpaid debts. Management still wants to find an acquisition to fully exploit the premium listing. Net debt is just over £6m but this is at zero interest rate.

Standard list shell daVictus (DVT) still had £484,000 in the bank at the end of 2017, down from £632,000 the previous year. Fellow shell Auctus Growth (AUCT) had £972,000 in cash, down from £1.01m. Neither has found a suitable acquisition.

Sure Ventures (SURE) has made its first virtual reality investment. The £500,000 investment in Immotion Group, which has developed VR cinema pods that are being placed in theme parks and museums.  Sure is on the Specialist Fund Segment.

Andrew Hore

Brand CEO Alan Green discusses Prairie Mining #PDZ, Andalas Energy #ADL, Audioboom #BOOM & #ELA on Vox Markets podcast

Brand CEO Alan Green discusses Prairie Mining #PDZ, Andalas Energy #ADL, Audioboom #BOOM & Eland Oil & Gas #ELA with Justin Waite on the Vox Markets podcast. Interview is 32 minutes in.

Ian Pollard – Earthport Forced To Dive Deep Into The Jargon Drawer

Earthport EPO like so many companies faced with unexpected problems, management feels forced to dive deep into the jargon drawer in the false belief that if it can express itself in phraseology which only they and a few other of the initiated can understand, readers will be convinced that it must be doing a good job. The problem is fairly serious in that even as early in its financial year as now, it anticipates that revenue for the year to the 30th June 2018 will be 10%-15% below current expectations. That of course is nonsense in itself because those expectations are no longer the current ones, they are the previous ones which the company now no longer expects to be able to meet. The reasons for the rather dramatic changes in fortunes include delays in some expected contracts and a recent change at one client which on its own, will result in a loss of about 5% of projected 2018 revenue.

But  help is at hand especially from various unspecified pipelines which get star billing in today’s update, in particular the new business pipeline which is stronger than at any time in the company’s history. Incremental transactions are also going to be ramped up and help will be forthcoming from international corridors, on boarding regulated business, receptivity at conferences, existing infrastructure will be leveraged and deep pocketed strategic partners will it seems, be prepared to dig deeply into those pockets. Fine sounding words indeed but what do they mean?. .Well basically it looks like they mean that cash flow beak even point will not be reached until 2019

Hunting plc HTG expects a modest profit for the full year with results strongly weighted towards the second half and following a strong second half performance from Hunting Titan. Restrictions on dividends have been lifted and payments will be resumed at an “appropriate time”

Redde plc REDD The positive start to the year announced in September and October has continued into December with sales continuing to show an increase over last year and trading profit also ahead. Interim results for the half year to the 31st December are expected to be announced on the 1st March.

Audioboom BOOM enjoyed a transformational year in 2017 but despite a surge in business and tight control of overheads the company was still loss making at about the samerateas in 2016. i.e. about 4.5m. Unique file requests rose by over 60%, monthly unique users by over 50% and available advertising impressions surged by 740%. Revenues for the year to 30th November are expected to show a rise of more than 250%. Its Originals Network is expected to grow strongly in 2018, with 15 new podcasts due to be launched.

Waterfront villas & houses for sale in Greece    http://www.hiddengreece.net

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