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Andrew Hore – Quoted Micro 1 February 2021

AQUIS STOCK EXCHANGE

Property investment company Ace Liberty and Stone (ALSP) more than doubled its interim profit. In the six months to October 2020, rental income was 7% lower at £3.22m, while pre-tax profit was 121% higher at £674,000. The profit improvement was due to lower interest charges, offset by a £200,000 write down on assets held for sale. Rent collections have exceeded 80% each quarter. There were £131,000 of rent concessions written off in the period. NAV is £32.2m. Net debt was £49.6m at the end of October 2020. Loan to value is 53%. There is no interim dividend.

Sativa Wellness (SWEL) plans to achieve UK FSA Novel Foods accreditation by the end of March. This will enable the company to sell CBD products under the Goodbody brand and white labels. An online store will be launched. It will also be completing the integration and simplification of the businesses. Management believes the company can become cash generative from operating businesses this year. Chief executive Henry Lees-Buckley has stepped down from the holding company board.

NQ Minerals (NQMI) has resumed exploration at the Beaconsfield mine, which has 483,000 ounces of JORC compliant mineral resources.

Gunsynd (GUN) increased its stake in Rincon Resources to 17.3%. The company’s employee benefit trust is subscribing for 15 million shares at par and that will raise £12,750. That equates to a 3.7% stake.

World High Life (LIFE) raised £566,000 at 1p a share. First quarter revenues of Love Hemp were 13% ahead of the previous quarter.

Altona Energy (ANR) raised £523,000 at 6.5p a share, although £355,000 is still to be received. The cash will enable the company to complete due diligence on two rare earths mining projects in Africa and a move to the standard list. Two more possible acquisitions of rare earths assets are being negotiated.

Early Equity (EEQP) raised £243,000 at 0.5p a share.

Eastinco Mining and Exploration (EM.P) executive chairman has acquired 650,000 shares at 2.0308p each, which takes his stake to 6%. Arbuthnot Banking (ARBB) chairman and chief executive Sir Henry Angest bought 3,161 non-voting shares in the financial services provider. He owns 56.1% of the voting shares and 64.9% of the non-voting shares.

AIM

Insolvency-related litigation firm Manolete Partners (MANO) has warned that the pipeline of new cases has slowed because of the government’s Covid-19 support for businesses. Case enquiries have fallen sharply, and this is expected to remain the case until the end of March at least. Manolete has already completed twice as many cases as in the year to March 2020. Gross cash collected from cases was £9.3m up until the end of December and the company’s share is £4.8m compared with cash overheads of £3.2m.  Full year realised profit will be higher than expected but the increase in unrealised gains will not be as much as anticipated. There may be a small second half profit. Mithaq Capital took a 16.1% stake on the day of the trading statement. Three non-executives bought shares.

Ideagen (IDEA) increased its annual recurring revenues to £54.8m at the end of October 2020 with organic growth of 7%. The document management and compliance software supplier says that 83% of its revenues are recurring. It is on course to improve full year pre-tax profit from £14.3m to £17.2m.

Dekel Agri-Vision (DKL) has completed a £3.5m fundraising at 5p a share. Dekel plans to spend £1.1m in cash and shares acquiring a further 16.7% of the raw cashew nut processing project in Tiebissou, Cote d’Ivoire. That will take the stake to 70.7%. The rest of the cash will fund the ongoing business.

Cloud-based PCI-compliant payment services provider PCI-Pal (PCIP) increased interim revenues by 56% to £3.2m. Total annual contract value has risen to £8.3m. Net cash was £2.1m at the end of 2020.

Beximco Pharma (BXP) increased interim revenues from £112.6m to £125.8m. Export sales were flat. Pre-tax profit increased from £15.5m to £19.4m. Beximco has received the first consignment of five million doses of the Oxford/ AstraZeneca Covid-19 vaccine.

CIP Merchant Capital (CIP) has rejected a potential 50p a share cash bid by Corporation Financière Européenne S.A. That compares with the last quoted NAV of 78.05p a share.

MAIN MARKET

Publisher Bloomsbury Publishing (BMY) continued to trade strongly with revenues ahead of expectations. Investec has upgraded forecast 2020-21 revenues by 4% and earnings per share by 19% to 14.1p a share, which is still down on last year. There should be net cash of £50m by the end of February 2021.

IT firm Triad Group (TRD) says that results in the second half will be well ahead of the same period last year.

Associated British Engineering (ASBE) has still not published its accounts for the year to September 2020. Management is considering opportunities that will help to get the share trading suspension lifted.

Andrew Hore

Andrew Hore – Quoted Micro 25 January 2021

AQUIS STOCK EXCHANGE

Rutherford Health (RUTH) has signed contracts with the NHS that underpin a significant proportion of its fixed costs. More cash will be required in order to take advantage of the potential for the cancer care clinics. The cash will be needed in the next few months and could be raised at the same time as moving to AIM. Capacity of the Cardiff site could be fully utilised in 2021 and patients have been booked in at three other sites.

Broadband services provider Rural Broadband Solutions (RBBS) has grown its number of connections to 2,500 by the start of January and is signing up 25 a month. Digital marketing is being increased to attract clients that have access to the Rural Gigabit voucher funding scheme. There is interest from 300 households so the company can apply for £1m of government funding. The target is 5,000 monthly paying customers by October 2023.

S-Ventures (SVEN) has acquired 75.1% of We Love Purely Ltd by issuing 1.53 million shares at 9p a share, which is equivalent to £137,600 and paying off a loan of £30,000. We Love Purely is a snacks supplier and it sells Purely plantain chips. Under new ownership the product range will be expanded. Two S-Ventures directors held shares in the acquired company.

Investment company Gledhow Investments (GDH) raised £1.69m from investment disposals in the year to September 2020. That generated a profit of £508,000 after admin expenses. NAV increased from £884,000 to £1.3m. That includes £382,000 of cash compared with a market capitalisation of £539,000.

Coinsilium Group Ltd (COIN) says that the value of its crypto currency position has increased by two-fifths. On 21 January, there was cash of $1.5m, which is mainly crypto currencies. There are also $164,000 of RIF tokens that will vest over 22 months.

Gunsynd (GUN) has converted part of its loan to Rogue Baron at 3.97p a share and that gives it a 19.7% stake in the drinks company. Once Rogue Baron joins Aquis Stock Exchange the rest of the loan stock will be converted. Warrants have been exercised that raised £200,000 for Gunsynd.

Engineer Vulcan Industries (VULC) says third quarter trading was in line with expectations. Third quarter revenues were 14% higher the second quarter at £1.6m. Order books are strong. The proposed acquisition of E Lowe will not happen.

Capital for Colleagues (CFCP) has maintained its NAV at 52.75p a share at the end of November 2020. There are 16 investments in the portfolio.

NQ Minerals (NQMI) has filed a draft prospectus for its move to the standard list.

Dozens Savings has issued just over £1m of retail bonds and demand is outstripping supply.

AIM

Business restructuring company Begbies Traynor (LSE: BEG) has acquired rival CVR Global for up to £20.8m, which is its largest acquisition. CVR’s annual profit was £1.2m and there are potential cost savings of £750,000 a year.

Beximco Pharmaceuticals (BXP) is acquiring Sanofi Bangladesh for £35.5m. The deal is still subject to regulatory approval. This will broaden the product range and helps the group move into new sectors. It will also add more manufacturing capacity. The deal should be earnings enhancing. Sanofi made a pre-tax profit of £4.3m in 2019.

Ground engineering contractor Van Elle (VANL) made a loss in the first half of 2020-21 and trading remains mixed. Interim revenues fell by 21% due to the original lockdown and delayed rail work, but there should be a recovery in the second half. Cost reductions are coming through and helping to stem the loss. This puts Van Elle in a stronger position for the next financial year. Improving utilisation of equipment will help the company return to profit and start paying dividends again.

Acoustic materials supplier Autins (AUTG) would have reported halved second-hand revenues without the contribution from PPE. Full year revenues fell from £26.9m to £21.5m as one major automotive customer was hit by production problems. The loss increased from £1.54m to £1.76m. The high depreciation charge means that £1.48m of cash was generated from operations during the year. The Neptune product is gaining new contracts, particularly for electric vehicles.

Flexible printed circuit technology developer Trackwise Designs (TWD) disappointed the market with its trading statement. Growth in revenues has been slower than expected due to short-term problems, but finnCap has maintained its 2021 forecast, which predicts a rise in revenues from £6.2m to £14.2m. That would be enough to make the company profitable.

Alumasc (LSE: ALU) traded ahead of expectations in the six months to December 2020 and this has led to a large upgrade in the full year pre-tax profit forecast to £8.9m. There has been a bounce back in building and construction activity.

Trans-Siberian Gold (TSG) produced 15,217 ounces of gold at the Asacha mine in the fourth quarter, taking the total for the year to 45,066 ounces. Annual revenues were $81m. Production has stopped at Vein 25 because of an accident that killed two people. Mining in the main zone continues.

CCTV equipment supplier UniVision Engineering Ltd (UVEL) has signed a supplementary agreement with MTR Corp in Hong Kong for an additional £1.53m of work.

Jade Road Investments (JADE) is the new name for Adamas Finance Asia.

MAIN MARKET

LED lighting and wiring accessories supplier Luceco (LUCE) traded at the top of expectations in 2020, helped by a strong second half. Pre-tax profit will be around £29m, up from £15.8m in 2019. Cash generation is strong and net debt has declined to £18.3m.

Castillo Copper (CCZ) is considering selling its Broken Hill Alliance (BHA) project. This will enable the company to focus on the Mt Oxide project in Queensland, where there have been positive drilling results. Plans are being made to accelerate the development of this project. There should be more news about the other assays from the drilling and there will be modelling of a JORC resource. It makes sense to focus on this asset. BHA has is highly prospective for silver, zinc and lead in the west zone and iron oxide copper gold in the east zone. There should be interest from companies operating in the region. BHA could be sold or spun off into a quoted vehicle.

Personal care products supplier InnovaDerma (IDP) is raising £4m from a placing with up to £500,000 more to come from an open offer. This cash will finance investment in ecommerce and improve the balance sheet. The business continues to lose money. It could be profitable in 2021-22.

Argo Blockchain (ARB) has raised £22.4m at 80p a share and the cash will be invested in more crypto currency mining equipment. This will be installed between February and June. Capacity will be increased by nearly three-fifths.

Strong footwear sales helped Zotefoams (ZTF) to achieve slightly higher revenues in 2020 with pre-tax profit at the top end of expectations.

Flavour ingredients supplier Treatt (TET) continues to perform strongly in the first four months of the financial year. Drinks volumes have increased despite Covid-19 restrictions and this has helped Treatt. Forecasts have been raised with the 2020-21 pre-tax profit figure increased from £15.2m to £18.2m.

Tiziana Life Sciences (TILS) has switched from AIM to the Main Market.

Pensana Rare Earths (PRE) will drop the ASX listing on 24 February.

Andrew Hore

Andrew Hore – Quoted Micro 9 November 2020

AQUIS STOCK EXCHANGE

Kent-based brewer Shepherd Neame (SHEP) lost £2.9m in the year to June 2020. There was a small operating profit, but this was swamped by interest charges. The loss excludes one-off charges of more than £9m, predominantly relating to the impairment of 26 properties and the cost of unlawful actions by an employee. Pub revenues fell due to the original lockdown period, although tenanted pubs remained profitable in the financial year. Trade was slow in July, but it started to build up prior to the latest restrictions.

SulNOx Group (SNOX) is not entering into new contracts and suspending existing contracts. Management is paying amounts owed under existing contracts and says that there will be minimal cash balances. The requisitioners of a general meeting have injected cash in order to keep the company trading and enable it to hold the general meeting on 4 December. The employment contracts of the directors have been terminated and the requisitioners want their own representatives elected to the board. Trading in the shares remains suspended.

There was a slight improvement in first quarter revenues generated by National Milk Records (NMRP) to £5.32m. The specialist services such as the testing of Johne’s disease provided the growth. Milk recording figures were 3% down. The latest lockdown should not have a significant effect on performance.

Gunsynd (GUN) has subscribed A$100,000 for a convertible in gold explorer Rincon Resources that converts at a discount to the flotation price on ASX. Rincon plans to raise at least A$5m prior a listing planned for 10 December.

GP software provider DXS International (DXSP) says that revenues are marginally up on the previous year and it remains profitable. There is around £1m in the bank. However, launches of new products have been delayed by the pandemic.

Primorus Investments (PRIM) has sold its remaining shareholding in Greatland Gold (GGP) and raised £4.6m. That means that Primorus made a total gain of around £5.9m.

Wishbone Gold (WSBN) has identified four shallow targets on its Patersons Range project in Western Australia. Wishbone intends to move to close the acquisition of its interest in the tenements.

Cadence Minerals (KDNC) has agreed in principle to a settlement with secured creditors of the Amapa project. Once this is completed, Cadence will inject $2.5m into the project and take a 20% shareholding. There has been a 21% increase in the mineral resource. The initial mine plan envisages the production of 4.7 million tonnes of iron concentrate a year and the mine life could be nearer to 17 years following the updated resource.

Coinsilium Group Ltd (COIN) expects to complete its relaunch with a new strategy before the end of the year. There will be new corporate branding and a new website.

World High Life (LIFE) has raised £381,000 at 1p a share. This cash will finance due diligence on investment opportunities.

Imperial X (IMPP) has appointed Novum Securities as corporate adviser.

European Lithium has left the Aquis Stock Exchange.

AIM

Trinidad-focused oil and gas producer Touchstone Exploration Inc (TXP) has raised £23.1m at 95p a share. The previous placing in February raised cash at 40p a share. The money will be used to fund further exploration and development of the Ortoire onshore block. Touchstone recently announced its third discovery (Chinook-1) out of three wells drilled. Chinook-1 is thought to be a similar size to Cascadura, which is estimated at around 45mmboe. The current exploration well is Cascadura Deep-1 and that will be completed and tested in the first quarter of 2021. The original discovery, Coho, will soon start producing gas.

Mkango Resources (MKA) has started a drilling and soil sampling programme at the Mchinji rutile licence area. This will help management to identify the areas with the best prospects. The licence initially lasts until 2022 but can be extended. It is next door to a rutile discovery by Sovereign Metals, which makes the chances of a commercial discovery even better. There is already significant infrastructure in the area. Rutile is a white pigment used in paints, plastic and paper. Demand is strong and reserves are declining.

PerkinElmer Inc is offering 185p a share in cash for Horizon Discovery (HZD), which is double the previous market price. The bid is equivalent to the high in the past 12 months, but below the share price three years ago. Horizon is valued at £296m. PerkinElmer is keen to increase the scale of its cell engineering business and add to its gene editing services.

Trading in the shares of NWF (NWF) has been suspended following a cyber attack on the feed and fuels divisions. The businesses continue to operate.

Attis Oil and Gas (AOGL) has agreed an amalgamation with Helium One, which will then gain an AIM quotation and raise at least £5m. Helium One is offering one of its shares for 236 shares in Attis, which values the AIM shell at £1.76m (0.012p a share). The Attis share price has risen to 0.02p. Helium One has a potential helium project in Tanzania and is valued at £6m, which is similar to level of investment put into the project. Drilling is planned early next year. Scirocco Energy (SCIR) subscribed for a 10% stake three years ago and that will probably be diluted to around 4.6%.

AB Traction has increased its stake in construction disputes company Driver (DRV) from 15.6% to 17.3%.  

Empire Metals (EEE) has achieved significant results with its drilling programme at the Eclipse gold project in Western Australia. The results confirm extensions to previously defined mineralisation. Drilling has started at the second potential target called Houdini. The proposed sale of the Bolnisi copper and gold project to TSXV-quoted Candelaria Mining Corporation means that Eclipse is currently the main focus of Empire’s cash investment.  

Nasdaq-quoted Masimo Corporation is making a 12p a share recommended cash bid for non-invasive hemodynamic monitoring technology developer LiDCO (LID). Masimo is a medical technology company.

Surgical endoscopy devices supplier Creo Medical (CREO) has acquired its distributor in Belgium. Creo has also received FDA clearance for MicroBlate Fine, which is thought to be the world’s smallest diameter microwave ablation needle.

Dekel Agri-vision (DKL) has acquired a further 14.2% in the Tiebissou cashew nut processing project in return for 28.55 million shares. This takes the stake to 52%.

Beximco Pharma (BXP) has signed a memorandum of understanding with Serum Institute of India and the Bangladesh government for the supply of 30 million doses of the Oxford University/ AstraZeneca Covid-19 vaccine. Supplies will commence one month after regulatory approval in Bangladesh. This could provide a significant uplift to revenues, although the timing is uncertain.

Toilet tissue manufacturer Accrol (ACRL) is buying rival LTC for up to £41.8m. This will take Accrol’s share of the market to 16% and provide greater geographic coverage of the UK market. LTC has revenues of £28m and is profitable. There could be cost savings of £1m a year. Accrol raised £38.5m at 44p a share to help finance the deal. A one-for-21 open offer could raise up to £4.1m.

MAIN MARKET

Zotefoams (ZTF) says that third quarter revenues were 22% higher year-on-year due to demand for protective equipment and footwear. Management expects continued growth in the fourth quarter. Net debt was £36m at the end of September 2020. The new site in Poland should commence production early next year.

Cryptocurrency miner Argo Blockchain (ARB) generated £1.2m in revenues during October. It held 137 BTC in bitcoin at the end of the month. Argo is leasing 4,500 mining machines for 24 months and they should be up and running in February. It is also managing the mining operations of 4,378 machines for a third party.

Shell company Highway Capital (HWC) had £3,000 in the bank at the end of February 2020 and it has net liabilities of £991,000. There was £327,000 in borrowings.

Andrew Hore

Andrew Hore – Quoted Micro 29 June 2020

AQUIS STOCK EXCHANGE

Chapel Down Group (CDGP) increased sales last year, but the loss was also higher. Sales of wine and beer grew and revenues from continuing activities improved from £12.86m to £14.8m, while the loss more than doubled from £850,000 to £2.09m. the Chapel Down Gin Works in Kings Cross has been closed. There was still £2.47m in the bank at the end of 2019, even after the loss and £12m of investment in fixed assets and land. There are 428 acres of planted vineyard. Wine stocks have also increased following a good harvest. The Ashford brewery has been completed and full brewing capacity will be available before the end of the year. Martin Glenn is succeeding John Dunsmore as chairman.

Rutherford Health (RUTH) has entered into a £55m development framework agreement with Equitix, an investor in infrastructure assets. This will finance up to five diagnostic facilities in the UK. Each will be owned by a special purpose vehicle funded by Equitix and operated by Rutherford. An initial agreement has been made with a NHS Trust. Rutherford also announced a collaboration with Panthera Biopartners, which will be able to use Rutherford’s clinics for trials of potential cancer treatments.

Racing recommenced at Newbury Racecourse (NYR) on 11 June. Three race meetings have been held and five more are planned by the end of August. No public are being admitted. Revenues are coming from media rights. The Rocking Horse nursery reopened earlier this month.

Good Energy (GOOD) is increasing its investment in Next Green Car, which owns Zap-Map, to 50.1% through the exercise of a convertible loan.

BWA (BWAP) has spent £120,000 of the initial commitment of £250,000 for two rutile licence areas in Cameroon. Drilling programmes are being designed. COVID-19 has hampered progress with the company’s Canadian interests.

Coinsilium Group Ltd (COIN) says that investee company Factom Inc has filed for Cahpter 11 bankruptcy protection because of its failure to raise more cash. It could exit Chapter 11 protection within three months if things go to plan.The investment was valued at £237,000.

IamFire (FIRE) is reviewing strategies having raised £500,000 at 2.5p a share.  Each share comes with two warrants with an exercise price of 10p a share. The investment focus is natural resources, mining and disruptive technology.

SAPO (SAPO) is still seeking a broadband investment and net assets were £1.1m at the end of 2019. At 3.2p a share, SAPO is valued at £6m.

Gunsynd (GUN) has invested £137,750 in Rincon Resources, which gives it a stake of 28.4%. Rincon has the rights to three prospective gold and base metals projects in Western Australia. Gunsynd has sold its stake in United Oil and Gas (UOG).

All Star Minerals (ASMO) has raised a further £200,000 at 0.02p a share, taking the total raised in share issues to £280,000. Convertible loan notes worth £55,000 have been converted into 275 million shares with 34 million shares at 0.01p each to pay liabilities. This means that more than 1.3 billion shares have been issued, which has nearly doubled the shares in issue.

AIM

Recent trading at floorcoverings supplier Victoria (VCP) has exceeded expectations. Manufacturing has restarted in all the company’s plants. All the main countries are doing relatively well considering the disruption due to COVID-19 and in the most recent three weeks revenues were 85% of pre-COVID-19 budget. The UK carpets business is only just getting going again. Net debt is £370m, which is predominantly bonds that last until July 2024. Cash generation can reduce debt, although management is likely to look for potential acquisitions.

Wynnstay Group (WYN) reported a decline in interim revenues but that was due to lower commodity prices. The interim dividend has been maintained at 4.6p a share. The agriculture division maintained its operating profit, but there was an improved profit from the merchanting division. Pre-tax profit edged up from £4.3m to £4.5m. Shore Capital has reinstated forecasts. It expects a pre-tax profit of £6.7m, down from £7.9m. This id a deliberately cautious figure.

MSQ Partners has launched a 0.5p a share bid for Be Heard Group (HRD) and that values the digital media company at £6.2m. The acquirer was the subject of a buyout last year. The combined business will have the backing of Lloyds Development Capital and the greater scale will help to win larger clients.

United Oil and Gas (UOG) says that average production from the Abu Sennan concession in the first two weeks of June was 13,900 boepd, of which its working interest is 3,060 boepd. That is 69% higher than the average daily figure in April. The 2P reserves at Abu Sennan have been increased by 12.55 to 13.5MMboe

Transense Technologies (TRT) has transferred its iTrack tyre monitoring business to a Bridgestone subsidiary for $1m and it will receive quarterly royalty revenues for the next ten years. That royalty would be £150,000/ quarter currently, but growth should be faster under Bridgestone. Two Transense directors are moving with iTrack. This leaves Transense with its SAWsense (wireless tyre sensor technology) and Translogik (tyre test equipment) businesses. Transense could move into profit in 2021-22.

A positive trading statement from allergy vaccines developer Allergy Therapeutics (AGY) led finnCap to increase its 2020 pre-tax profit forecast even though revenue growth is slower than expected. A 2019-20 profit of £2.9m is expected, partly due to the timing of research spending. Allergy is expected to move back into loss in 2020-21.

Beximco Pharmaceuticals (BXP) increased its revenues and pre-tax profit in the nine months to March 2020, with particularly strong growth in the third quarter. There is some disruption to international distribution and supply and full year revenue growth will be lower than originally expected.

Dekel Agri-Vision (DKL) reported flat full year revenues of €20.9m for 2019. The loss was barely changed at €3.29m. There has been a decline in the palm oil price in recent months, which will hamper performance this year. The cashew project is making good progress.

MAIN MARKET

Strong first half trading at BATM Advanced Communication (BVC) has led to broker upgrades for 2020. The biomedical division has done particularly well, but the networks and cyber division has also done better than expected.  Stifel is raising its revenues forecast from $138m to $155m, while the EBITDA estimate has been increased by one-third to $13m. Shore Capital expects to increase forecast revenues by 17% to around $154m with a significant improvement in EBITDA expected.

Construction services provider nmcn (NMCN) made a positive start in the first quarter of this year. Revenues were 4% ahead at £97.9m and pre-tax profit 6% higher at £1.8m. This period was hardly affected by the lockdown. Since the end of March, work has been at three-quarters of normal levels. There was £11.8m in cash at the end of March 2020. The interims will be reported on 6 August and there should be guidance for the full year outcome.

Tex Holdings (TXH) expects to make further cost savings and consolidate more of its activities. The plastics division is operating at 70% of expected levels, while the engineering division has suffered delays but not lost business.

Standard list shell Boston International (BIH) had £302,000 in cash at the end of 2019. It is still assessing the proposed acquisition of invoice factoring company Alexanders Discount Ltd

Rainbow Rare Earths (RBW) has raised £1.25m at 3p a share. The cash will accelerate trial mining at the Gakara rare earth project in Burundi.

The 2019 figures of Ross Group (RGP) include pharmaceutical grade Chitin producer Archipelago Aquaculture Group (AAG) for the first time. There were restructuring and impairment costs relating to the acquisition. Pilot production is being implemented and there are joint venture discussions with the company that has developed the Ionic Liquid extraction process licenced by AAG. There was a £3.6m loss in 2019.

SMALL CAP AWARDS 2020

Company of the year: Volex

Technology company of the year: Avacta

Impact company of the year: ITM Power

IPO of the year: Diaceutics

Transaction of the year: Kape acquisition of Private Internet Access

Executive director of the year: David Cicurel (Judges Scientific)

Innovative financing of the year: Yu Group

Journalist of the year: Joanne Hart (Mail on Sunday)

Analyst of the year: Lorne Daniel (finnCap)

VCT manager of the year: Amati

UK smaller companies fund manager of the year: JPM UK Smaller Companies

Lifetime achievement award: Giles Hargreave

Andrew Hore – Quoted Micro 11 May 2020

AQUIS STOCK EXCHANGE

British Honey Company (BHC) says its hand sanitiser has generated revenues of more than £500,000 since late March. This helps to offset the reduction in sales of alcohol products. There is sufficient alcohol available for the company’s requirements for the rest of the year. British Honey has appointed finnCap as corporate adviser and joint broker with Stanford Capital.

National Milk Records (NMRP) increased first quarter revenues by 1% to £5.61m. The growth comes from testing revenues with other revenues declining slightly. The company remains positive about the prospects for the dairy sector. The supply chain is rebalancing following a drop in demand for milk from coffee shops.

NQ Minerals (NQMI) says that the total gold resources at the Beaconsfield gold mine in Tasmania have increased to 1.454 million tonnes at 10.3g/t for 483,000 ounces of gold. This excludes any estimate for the upper section of the mine.

World High Life (LIFE) says the Love Hemp brand has increased online sales by 39% each month since January. The brand’s CBD products are being stocked by more retailers.

TechFinancials (TECH) has signed a separation agreement with the cofounders of Footies Ltd and it will own 100% of the business. The cofounders get the original source code from May 2019. TechFinancials is ending its B2B brokerage activities by 1 November.

Investment company Gunsynd (GUN) has consolidated 85 shares into one new share.

Adnams (ADB) has appointed Jenny Hanlon to replace Stephen Pugh as finance director, which is a role he has held for 16 years.

EPE Special Opportunities (ESO) reported a NAV of 266.48p a share at the end of April. That represents a decline from 317.18p a share in the latest quarter.

AIM

Best of the Best (BOTB) has sparked another profit upgrade following its trading statement. finnCap has raised its 2019-20 by 27% to £3.8m.

IP investment company Tekcapital (TEK) increased net assets by two-fifths to $22.3m, which is equivalent to 35 cents a share. The biggest gain in value was for Guident, where nearly $7m was added to the valuation. Alternative salt developer Salarius and medical devices company Bellascura also generated good increases. Hi-tech eyewear developer Lucyd’s value fell by nearly $2m. Tekcapital recently raised £925,000 at 10p a share. This will be invested in portfolio companies.

Lower costs meant that ClearStar (CLSU) made a lower loss than expected in 2019. The background checks provider had net debt of $300,000 at the end of the year and this has increased to $1m. The year commenced with a record order book but there have been delays and reductions in volumes.

Genedrive (GDR) has raised £7m at 80p a share to finance the development of two COVID-19 tests.

Filta Group Holdings (FLTA) has launched FiltaShield, a COVID-19 sanitising services. It has also combined with a technology company to provide temperature screening devices.

VR equipment supplier Immotion (IMMO) has raised money for the second time this year. It has raised £1.35m at 2.5p a share, which is much lower than the 7.25p placing price in February.

Beximco Pharmaceuticals (BXP) says that Bangladesh’s economic slowdown and disruption to supplies due to COVID-19 could hamper the fourth quarter of the year to June 2020. Even so, Beximco still expects to report annual sales growth.

ZOO Digital (ZOO) says that strong cash collections mean that it had cash of $700,000 at the end of March 2020.  Demand for localisation services weakened at the end of March but demand is recovering.

Hargreaves Services (HSP) has conditionally exchanged contracts for a 79 acre plot on the Hatfield site in South Yorkshire, which will be used to develop a national distribution centre for a retailer. The company is trading in line with expectations other than in the property business, where planned land sales will not complete before the end of May as originally anticipated.

MAIN MARKET

JD Sports Fashion (JD.) has been told by the CMA that it has to sell Footasylum. The formerly AIM-quoted footwear retailer was acquired last year. An appeal is being considered.

BATM (BVC) has launched an antibody test for COVID-19 and sales have begun to European countries.

Argo Blockchain (ARB) mined 319.2 bitcoin during April, down from 333.8 the previous month. The revenues were £1.8m in each month.

Andrew Hore

Andrew Hore – Quoted Micro 5 August 2019

NEX EXCHANGE

Netalogue Technologies (NTLP) increased its revenues by 26% to £1.35m in the year to March 2019. Pre-tax profit jumped from £82,000 to £300,000 thanks to the ecommerce technology provider keeping overheads flat. There is £770,000 in the bank. Netalogue will consider paying a dividend when it reports its interim results. Netalogue focuses on the B2B market and it continues to win new customers.

European Lithium Ltd (EUR) has secured a A$10m finance facility in the form of convertibles from Winance Investment, which replaces the existing facility. The company is still seeking a strategic investor to help finance the development of the Wolfsburg lithium project.

None of the three Morgan Ashley extra care schemes that Ashley House (ASH) was expecting have closed. They could close over the next couple of months, but Ashley House was hoping to get the cash and it is investigating additional funding.  

Trading in the shares of Equatorial Mining and Exploration (EM.P) was restored after the annual report was published. There was a £221,000 loss in 2018 but the business is very different now. A placing has raised £400,000 at 0.01p a share. The date for completing the acquisition of tantalum business Eastinco has been extended until the end of September. This is a part of the strategy to consolidate mining operations in Rwanda. Align Research believes that Equatorial could generate revenues of £1.19m this year, rising to £9.19m in 2020, which would enable it to make a pre-tax profit of £1.77m.

Social impact company Inqo Investments Ltd (INQO) increased its revenues from R23m to R23.8m in the year to February 2019, while additional finance income and fair value adjustments meant that the loss was cut from R5.99m to R2.5m. There was also an increased share of revenue from Bee Sweet Honey in Zambia. Trading is improving at Kuzuko Lodge with room rates and occupancy rising thanks to the weak Rand.

Coinsilium Group (COIN) says that its Gibraltar-based blockchain consultancy has signed a new advisory agreement with IOV Labs Ltd. This involves supporting the RSK Smart Contract Network and RSK Infrastructure Framework blockchain services. These are focused on Asia.

Eight Capital Partners (ECP) has launched a bond to raise up to €5m and it will be traded on the Vienna Stock Exchange. The interest rate is 7% and the redemption date is 26 July 2022.

AIM  

Transport services provider Xpediator (XPT) has not performed as well as hoped this year and earnings estimates have been cut by one-quarter. There has also been some additional investment in the business, which will double central costs.

Information management software provider IDOX (IDOX) has raised £7m via a placing at 28.5p a share, which will be used to finance the acquisition of Northern Ireland-based Tascomi for up to £7.15m. Tascomi is a cloud-based software supplier to local authorities.

Beximco Pharmaceuticals (BXP) has launched a fifth product in the US. Blood pressure drug Nadolol is the generic equivalent of Corgard tablets. The market is worth $63m.

Elektron Technology (EKT) is selling its original Bulgin electricals business for £105m, £94m after costs, and intends to return a substantial amount of the cash to shareholders. Net cash will be £95m after the transaction. The company will change its name to Checkit and become a Software-as-a-Service business.

The Property Franchise Group (TPFG) says that its lettings brands grew revenues by 3% in the first half. Online estate agency EweMove increased revenues by 11%. Group revenues were £5.5m in the first half. Net cash was £2.8m at the end of June 2019. Ian Wilson will step down as chief executive at the end of 2020.

Property adviser Fletcher King (FLK) reported an improvement in full year pre-tax profit from £274,000 to £282,000 on slightly lower revenues. Management says that market conditions will make it difficult to maintain profitability, although there are substantial funds available for investment when the uncertainty ends. The total dividend is maintained at 1.75p a share. There is £2m in the bank.

Digitalbox (DBOX) subsidiary Daily Mash will publish video content from NextUp on its site. This will enable the company to generate advertising on the back of the videos.

MAIN MARKET

A US customer has released Nanoco (NANO) from the obligation to pay back £4.25m of capital funding. This relates to the investment in the Runcorn facility where demand for nanomaterials has not come through from the customer. The book value of the facility, after depreciation, is £3.7m and may be written down further, along with the value of some materials. The facility is available if Nanoco can secure demand from customers.

BATM (BVC) has completed the sale of its stake in a new fibre optic network being developed in Israel. This should generate cash of $3.4m and add $3m to profit. Net cash could be $38m bythe end of 2019.

Oil and gas company Zenith Energy (ZEN) has secured the financing it requires for its drilling programme. A placing in Canada has raised the equivalent of £1.2m at C0.04 a share.

Trading in the shares of Associated British Engineering (ASBE) has been suspended because it has not published its accounts. This should happen this week.

Standard list shell Landscape Acquisition Holdings (LAHL) still has more than $496m in cash and it has done well to preserve the cash it raised when it floated at the end of 2017. There is a broad remit, but the main focus is a property-related/backed business in Europe or North America.

Stranger Holdings (STHP) is still seeking to close a reverse takeover after its first deal fell through. The shell is in talks to acquire local government supplier HCS. There is no cash in the bank and Stranger has net liabilities.

Andrew Hore

Andrew Hore Quoted Micro 22 July 2019

NEX EXCHANGE

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

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

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

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

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

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

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

AIM

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

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

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

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

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

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

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

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

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

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

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

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

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

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

MAIN MARKET 

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

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

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

OTHER MARKETS 

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

Andrew Hore

Andrew Hore Quoted Micro 25 February 2019

NEX EXCHANGE

Western Selection (WESP) has reported a 22% decrease in NAV to 75p a share, due to the decline in smaller quoted company share prices. The NAV has recovered to 79p a share. The investment in Swallowfield (SWL) declined by nearly one-third and the value of the Bilby (BILB) stake fell by two-fifths in the six months to December 2018. Net debt was £1.25m at the end of 2018. The interim dividend is maintained at 1.1p a share.

Early Equity (EEQP) has acquired a 60% stake in MEI Home, a ecommerce platform for household, health and food products, for £282,000. The Malaysia-based business was profitable in the first financial year. The founder will retain a 40% stake and he also owns 6.12% of Early Equity. He also promises that annual pre-tax profit will be at least £95,000 in each of the next two financial years.

Tectonic Gold (TTAU) has taken a 50% stake in a joint venture with Vast Mineral Sands covering diamond mining concessions at the government-owned Alexkor diamond mine in South Africa. This should generate cash, through planned production of 900 carat per month, to invest in other projects. Tectonic is paying $650,000 in shares at 2.2p each. A year long research study has confirmed that there is an interaction of two styles of mineralisation at Mount Cassidy prospect in Queensland, Australia. There is stratabound copper and zinc, gold and silver mineralisation and epizonal to epithermal gold and silver mineralisation.

MiLOC Group Ltd (ML.P) has extended the life of its convertible bond by one year to 19 January 2020. The annual coupon increases from 6% to 7.2%. The conversion into shares can take place if an alternative quotation on a recognised stock exchange is secured.

First Sentinel (FSEN) has completed a £4m bond issue. These 7% bonds 2023 are due to start trading on NEX.

AIM  

Michelmersh Brick (MBH) has made its first acquisition outside of the UK. Michelmersh is paying up to €9.9m (£8.7m) for Antwerp-based Floren and Co in a deal that should be immediately earnings enhancing. A placing raised £5m at 90p a share. In 2018, Floren generated EBITDA of €1.75m on revenues of €5.7m. Michelmersh is planning to increase production levels from 19.5 million bricks a year. The acquisition includes 120 acres of land, of which 60 acres is used in production.

IP legal services provider Murgitroyd Group (MUR) is acquiring Southampton-based Chapman IP for £6.6m and Helga Chapman has been appointed a non-executive director. Net cash was £2.03m at the end of November 2018. Interim pre-tax profit edged up from £1.67m to £1.7m. The interim dividend was increased by 8% to 7p a share. Edward Murgitroyd is retaining his role as chief executive and handing over the role of finance director Keith Young.

Carpets and hard flooring manufacturer Victoria (VCP) continued to sacrifice margins in order to add market share in a declining flooring market in the UK in the second half of the financial year to March 2019. Full year EBITDA should be between £95m-£97m, with underlying pre-tax profit of at least £55m. This is not as much as previously forecast. There are additional inventories ahead of Brexit. Restructuring measures and capital investment should add more than £14m to pre-tax profit for the year to March 2020.

JD Sports Fashion (JD.) has acquired 21.3% of Footasylum (FOOT) and it says it may acquire up to 29.9%. FIL Ltd’s stake has fallen below 5%. Artemis has sold its 5.74% stake.

Angling Direct (ANG) expects to report full year revenues of £42m, up from £30.2m. Three new stores have been added to the group, taking the total to 24. International sales doubled. The full year results will be published on 13 May. Angling Direct is considering the acquisition of Glasgow-based Chapmans Angling Ltd, which is a subsidiary of The Glasgow Angling Centre Ltd.

Egdon Resources (EDR) has competed drilling at Biscathorpe-2 in Lincolnshire. There are signs of an effective petroleum system even though the sands were poorly developed. The reservoir may be better developed to the north of the well. Egdon owns 35.8% of the exploration licence and Union Jack Oil (UJO) owns 22%.

Trinidad-focused oil and gas producer and explorer Touchstone Exploration Inc (TXP) has raised £3.8m at 12p a share in order to finance the 9,000 feet of exploration drilling at Ortoire.

Pelatro (PTRO) has gained a contract to supply its mViva contextual marketing service to Vietnam-based Vinaphone. The deal with the telecoms company should be worth $1.5m over three years. Pelatro gets a fixed monthly fee plus a share of incremental revenues generated. This provides additional confidence that the 2019 revenue forecast of $10.5m can be met. That is expected to generate pre-tax profit of $6m because of the high operational gearing of the business.

SkinBioTherapeutics (SBTX) has raised £1.5m at 16p a share from Seneca Partners. There was £2.52m in the bank at the end of 2018. The cash will be invested in further development of products and commercialise them.

Duke Royalty (DUKE) has provided £10m of royalty finance to recreational vehicle parts wholesaler Miriad Products. The monthly payments are expected to provide a yield the equivalent of 13% a year.

Biopesticide products developer Eden Research (EDEN) has a second approved product thanks to its commercial partner Eastman Chemical Company. Nematicide formulation Cedroz has received authorisation in Malta and Eastman will apply to gain approvals in individual EU member states. The full benefit of these approvals is likely to show through next year.

EKF Diagnostics (EKF) has received US FDA clearance for the use of the Quo-Test glycated haemoglobin analyser in clinical laboratories.

It has been a mixed start to the financial year for Gooch and Housego (GHH) with softer demand in microelectronics, due to trade tariffs, but the second half improvement in subsea cable business has continue. The AGM statement has led to a reduction in the underlying profit forecast for this year from £21.5m to £19m, which is slightly higher than last year’s outcome.

Social housing software provider Castleton Technology (CTP) has acquired its software development partner in India for £350,000 in cash and shares.

eServGlobal (ESG) says that its 35.7%-owned mobile transfer payments joint venture HomeSend increased its average transaction value by 35% in the second half following a change in strategy to focus on account-to-account transactions rather than remittances.

Beximco Pharmaceuticals (BXP) is acquiring eight abbreviated new drug applications in the US from Sandoz Inc. This takes the number of US approved drugs to 14, with four currently being exported to the US.

Haydale Graphene Industries (HAYD) has raised £4m at 2p a share and wants to raise up to £4m more through a seven-for-one open offer closing on 11 March. If these shares are all issued they will account for 93% of the total shares in issue. Haydale needs cash to invest in its inks business as well as to cover continuing losses. Keith Broadbent will become chief executive.

Reach4Entertainment (R4E) has acquired the arts and entertainment advertising agency trading as Sold Out for an initial £3.94m in cash and £250,000 in shares. The total purchase price is dependent on performance in the period from 1 June 2017 to the end of 2021 and is capped at £10m. In the year to May 2018, Sold Out made a pre-tax profit of £1.3m.

Paragon Entertainment (PEL) has sold its current administration offices in York for £550,000. The relocation to other group premises should save £100,000 a year. The cash will pay off the mortgage of £134,000 and reduce the overdraft from £1.04m. The overdraft limit will be cut from £1.2m to £882,000. A creditor owing £168,000 has filed for protection from creditors. Management want to raise additional capital.

Medical devices supplier Inspiration Health (IHC) says revenues for the year to January 2019, will be £15.5m, which is £1m below forecast, and pre-tax profit will be slightly lower than forecast at £1.2m.

Holders Technology (HDT) has more than trebled its full year pre-tax profit of £177,000 thanks to a reduced LED loss and improved profitability at the printed circuit board materials business. There was still a cash outflow from operations. The dividend has been increased by 50% to 0.75p a share.

Arc Minerals Ltd (ARCM) has raised £2.2m at 3p a unit. The unit includes a share and one warrant exercisable at 4.5p each and lasting for 36 months. The cash will finance exploration and development at the Zamsort copper project in Zambia. Arc has also sold its 18.5% stake in Andiamo Exploration for $250,000.

Malvern International (MLVN) has raised £606,000 at 4p a share. This is more than the education services provider originally asked for in order to cover working capital requirements and investment in a new college in Brighton and online course material.

AIM-quoted blockchain and technology investment company Vela Technologies (VELA) is taking advantage of the discount to cash by buying 500,000 shares in cryptocurrency mining services provider Argo Blockchain (ARB) at 3.072p a share. This compares with cash of 5p a share. Vela has 3 million shares in Argo, equivalent to 1.02%. The rest of the shares were bought prior to Argo’s standard listing and cost 8p each, compared with the flotation price of 16p a share. The average cost is 7.17p a share, so the average cost exceeds the value of cash in the business. Argo is refocusing on its own currency mining. Ongoing costs will be cut by one-third, although there will be some one-off cash costs. Net cash is £15m and that is much more than the market capitalisation of Argo.

ReNeuron (RENE) has released early data on three patients in phase I/IIa clinical trial the human retinal progenitor cell product. There have been significant improvements in vision for the patients, but this is a small sample size over a short time. Cash should last until the end of 2019.

Pires Investments (PIRI) has received a requisition notice for a general meeting in order to make changes to the company’s board.

Best of the Best (BOTB) has received tenders for just over 4 million shares, which is 5.6 times the number that it was tendering for. Best of the Best will pay £3.5m for 721,327 shares (485p a share).

FAIRFX Group (FFX) has become a direct participant in the UK faster payments scheme. It is the fourth non-bank to be a direct settling member.

Crossword Cybersecurity (CCS) says Kinnerton Confectionery will be using its Rizikon Assurance secure third party assurance platform.

Former AIM company Lionsgold Ltd (LION) is changing its name to Tally Ltd. Mobile banking app Tally is in beta testing and could be released by the end of February. Once this has been released the company will seek to gain a new quotation. The exercise of warrants, mostly by directors, at 1.2p a share has generated £288,000.

MAIN MARKET 

Packaging group Macfarlane Group (MACF) increased its pre-exceptional profit by one-fifth to £11.2m in 2018. Both distribution, helped by acquisitions, and manufacturing divisions increased their profit contributions. Manufacturing sales grew fastest but margins fell. The dividend was increased by nearly 10% to 2.3p a share. Net debt was £13.2m and there are plenty of unused bank facilities to fund any further acquisitions. The pension deficit was reduced by £2m to £9.8m.

In the six months to December 2018, Avation (AVAP) reported doubled earnings per share thanks to the gain on the sale of a A321-200 aircraft. The NAV is 288p. The aircraft fleet continues to increase, particularly turboprop aircraft. Although full year pre-tax profit is set to rise even more than originally forecast, earnings per share are likely to be flat at 31.7 cents. Next year’s profit will be lower, assuming no aircraft disposals.

InnovaDerma (IDP) reported interims in line with expectations and there are plans for a mid-March launch for Skinny Tan in Boots. This will help the second half performance, which is normally stronger. Full year pre-tax profit is expected to more than double to £1.5m, a downgrade of 10%. Net cash was £700,000 at the end of 2018. A cash inflow is expected in the second half, but fluctuations in cash in terms of working capital requirements, such as Boots order levels, during the period could lead to InnovaDerma deciding to raise more money.

Anglo African Agriculture (AAAP) reported a reduction in turnover from £2.13m to £1.74m in the year to October 2018. Even so, gross margins improved and the pre-tax loss edged up from £550,000 to £573,000. Net cash was £856,000. The company is assessing acquisitions outside of the agriculture sector.

Trading in the shares of daVictus (DVT) has been suspended ahead of finalisation of a deal where the standard list shell will buy the rights to a restaurant concept from Typical Dutch NV for £100,000. This is deemed to require a prospectus before the company can be readmitted to the standard list. The Havana Rolled Cigar Music Café concept has been developed at a site in Aruba. daVictus had £431,000 in the bank at the end of June 2018.

Offshore support vessels operator Gulf Marine Services (GMS) has sent out the document for its requisitioned general meeting on 18 March. Rival Seafox International wants to remove the chairman and appoint three new directors. Ithmar Capital Partners wants to appoint another director.

Andrew Hore

Andrew Hore – Quoted Micro 19 November 2018

NEX EXCHANGE        

Renewable energy supplier Good Energy (GOOD) has traded slightly ahead of expectations and been cash generative in the first ten months of 2018. Customer numbers have remained flat. The financial year should be in line with expectations. This reassurance led to a 17% increase in the share price, although it is still more than two-fifths lower than one year ago.

Capital for Colleagues (CFCP) has made a further investment in TG Engineering Ltd, which makes steel and aluminium components for the aerospace and medical sectors. A loan of £150,000 takes the total loan to £625,000, alongside a 35% stake.

MetalNRG (MNRG) has raised £159,500 from a placing at 1p a share and the exercise of warrants. This will fund the investment in the uranium mine in the Kyrgyz Republic, over which MetalNRG has an option, and progress work at the Gold Ridge project in Arizona. There was £77,000 in the bank at the end of August 2018.

NQ Minerals (NQMI) has produced its first lead, gold and silver concentrate from the Hellyer polymetallic project in Tasmania. This has been delivered to Traxys Europe and payment has been received.

Tectonic Gold (TTAU) has mapped a large intrusive intersection of two major crustal faults at Mount Cassidy. This could a significant intrusive related gold system.

Clinical support systems provider DXS International (DXSP) has set a target of achieving a six-fold increase in turnover over the next five years and it believes that post-tax profit could reach £7m a year. This would come on the back of past investment in developing new products, two of which have been launched recently.

Ganapati (GANP) says that its Malta-based subsidiary has signed a games licence agreement with NYX Interactive for the supply of gaming software. After the initial software is supplied, Ganapati will supply one game each month for three years.

TechFinancials Inc (TECH) will receive a $867,000 dividend from 51%-owned Asia Pacific-focused subsidiary DragonFinancials.

AIM    

Frontier IP (FIPP) has raised £2.49m at 65p a share from existing and new investors and this will finance an expansion of the management team and provide working capital for the business. The value of the company’s investment portfolio has increased by one-third to £9m and there was £1.1m in the bank at the end of June 2018. The NAV increased from £11.8m to £12.7m. The cash should last into 2020 even if there are no proceeds from investment realisations.

SVS has pulled the £532,000 placing at 8.5p a share for TomCo Energy (TOM) and resigned as broker. SVS says that there has been a material change because of the suspension of the field test on the Holliday block in Utah. Trading in the shares has been suspended. TomCo has cash of £250,000.

There were disappointing phase III trial results for the Hutchison China Meditech (HCM) drug Fruquintinib, which did not achieve the primary endpoint in treating non-small cell lung cancer patients. That knocked nearly one-fifth off the share price.

AB Dynamics (ABDP) continues to grow strongly and is already planning to add to its capacity at its new site. Forecasts were raised for the automotive testing and simulator systems supplier earlier in the year and the full year outcome was a 51% increase in revenues to £37.1m and a jump in underlying pre-tax profit from £5.9m to £8.6m. A profit of £10.4m is expected this year.

Eve Sleep (EVE) is changing its focus following the appointment of a new chief executive. The mattress supplier will focus less on heavy marketing for one-off purchases and instead expand its range and generate repeat purchases. Lower marketing spending will reduce the growth rate of revenues. There was £7m in the bank at the end of October 2018 and the company wants to raise a further £15m.

Genedrive (GDR) has raised £5.6m after expenses from a placing at 23p a share, jointly run by Stanford Capital Partners and Peel Hunt, and an issue of loan notes to the British Growth Fund. There was £3.53m in the bank at the end of June 2018. The funds will finance the launch of the Genedrive HCV-ID kit for hepatitis C diagnosis and further assay development for antibiotic induced hearing loss and tuberculosis.

Trakm8 (LSE: TRAK) slipped out its interims on a Friday, albeit at 7am and not at Immunodiagnostic Systems Holdings (IDH) o’clock (around 4.30pm). In the six months to September 2018, revenues fell 38% to £8.84m and even excluding contract manufacturing, which is not done any more, the decline is 26%. Recurring revenues fell by 7%. Even taking the most flattering figures, a pre-tax profit of £363,000 last time was turned into a £2.46m loss. Net debt more than doubled to £5.73m.

Marshall Motor Holdings (MMH) is going to make a better full year profit than expected despite the disruption of new testing rules. That has helped used car sales. The 2018 pre-tax profit is still expected to decline from £29.1m to £25.7m, but that is an improvement for the continuing operations.

Beximco Pharmaceuticals (BXP) has increased its first quarter revenues by 26%, although some of the improvement came from Nuvista, which did not contribute in the corresponding period. Pre-tax profit was 17% higher at BDT973 million. Beximco reported a 37% increase in export sales for its last financial year and they accounted for 12% of total sales. There are five treatments with US approval and it will take time to build up sales. The plan is to eventually generate two-fifths of revenues from exports.

Trinidad-focused oil and gas producer Touchstone Exploration Inc (TXP) generated $9.12m from operations in the nine months to September 2018, up from $2.22m in the corresponding period last year, thanks to higher production and selling prices and slightly lower operating expenses. This cash has been used to increase development spending.

Wynnstay Properties (WSP) is increasing its interim dividend by 8% to 7p a share. The NAV was760p a share at the end of September 2018 and 99% of the property portfolio is let. There was a decline in income due to disposals.

AIM shell Stirling Investments (STRL) had £7.7m of cash at the end of September 2018. Management includes ex-Melrose management. The share price has fallen from 100p to 74.5p, which is less than the cash per share.

IFA Lighthouse Group (LGT) has signed an agreement with Tavistock Investments (TAVI) for the use of the latter’s investment products, which will be offered by Lighthouse as well as its own Luceo Asset Management products. Tavistock raised £1.2m at 3.28p a share and Lighthouse subscribed for £1m of the total.

Event driven marketing technology services provider Mporium Group (MPM) has raised £2.3m at 5p a share.

Mercantile Ports and Logistics (MPL) is raising £27.75m at 2p a share and could raise a further £2.07m via an open offer.

Fastjet (FJET) has raised £9m at 1p a share in order to keep itself going. There has also been a £3.16m subscription from Solenta Aviation and £19.1m worth of shares have been issued to acquire four Embraer 145s from Solenta and settle various fees, charges and loans. A further £4.1m could be raised via and open offer at 1p a share. This should finance the airline business for 2019.

Empyrean Energy (EME) has raised £1m at 10p a share and this will provide working capital.

Allenby Capital has resigned as nominated adviser to CSF Group (CSFG) and will step down at the end of 2018. CSF has been turned down by potential replacements and trading is likely to be suspended at the end of 2018 and the quotation cancelled at the end of January 2019.

Rasmala (RMA) plans to cancel its AIM quotation and tender for up to 20% of tis share capital at 150p a share.

MAIN MARKET  

Resources-focused standard list shell Cobra Resources (COBR) floated on 15 November when it raised £523,500 at 1.5p a share. The share price ended the week at 1.75p. The board believes this is a good time to identify and acquire undervalued base and precious metals projects, which are already have a good management team and are well on the way to becoming a producing asset. There could be direct investments or farm-ins. There are 59.9 million warrants exercisable at 2p each.

The former Golden Saint Resources, now known as Golden Saint Technologies (GST), is planning to join the standard list. A placing at 0.75p a share will raise £911,000, of which £270,000 will go to pay directors fees that are owed. The rest will pay other costs. The company has switched from diamond exploration to an installer of network and connectivity products.

Trifast (TRI) reported interims in line with expectations and the fastenings supplier is on track to improve full year pre-tax profit from £22.2m to £23.1m. Management is cautious about the UK, but two-thirds of revenues are overseas.

Andrew Gaughan is stepping down as chief executive of Sportech (SPO) in February. The chairman will take up an executive position for an interim period and he purchased 250,000 shares at 40.6p each. The potential acquisition of ilottery provider Lot.to Systems was also announced with a strategic alliance initially put in place.

Avation (AVAP) has announced a 2 cents a share interim dividend. The aviation leasing business estimates that in the six months to December 2018 leasing revenues will increase from $41.7m to $57.8m and, along with a disposal gain, this means that interim profit will be better than expected and much higher than the $7.3m achieved in the first half of the previous year.

IQ-AI (IQAI) has made its first commercial sale of StoneChecker Software to a South Korean hospital.

BigDish (DISH) is building up resources to grow its business in the UK next year. The restaurants platform is considering selling its Asian business.

Bluebird Merchant Ventures Ltd (BMV) has completed a $380,000 placing at 2.5p a share. Each of the new shares has a warrant exercisable at 2.5p, which has to be done if the share price trades at 3p a share or above for ten consecutive days.

Andrew Hore

Andrew Hore – Quoted Micro 6 August 2018

NEX EXCHANGE        

Veni Vidi Vici Ltd (VVV) joined NEX on 2 August. The minerals investment company has net cash of £513,000, following a £490,000 subscription at 50p a share. The focus will be precious metals and base metals opportunities in Australia, Western Europe and North America. Management will concentrate on capital appreciation.

EPE Special Opportunities (ESO) is changing its domicile from the Isle of Man to Bermuda. The private equity investment company will have to be readmitted to NEX and AIM. EPE has invested £2m in Main Market-listed LED lighting company Luceco at 39.74p a share. That takes EPE’s stake in Luceco to 27.4%. Poor trading has meant that the Luceco share price has slumped to well below its 2016 flotation level. EPE has redeemed 50% of its unsecured loan notes.

Etaireia (ETIP) has appointed Dennis Rogers as chief executive. He has more than three decades of experience in property development.

Equatorial Mining and Exploration (EM.P) has issued 2.685 billion shares, around one-quarter of the enlarged share capital, to wipe out the convertible loan note debt and other creditors. Twenty three year old Devon Marais, who works with ARQ Minerals, which is helping Equatorial to extract coal from the St Leonard’s mine in Nigeria, has been appointed as a non-executive director of Equatorial.

Asia Wealth Group Holdings (AWLP) reported a profit last year. In the year to February 2018, revenues increased from $1.52m to $2.16m, while a pre-tax loss of $110,000 was turned into a pre-tax profit of $150,000. That figure was helped by a $114,000 currency gain, compared with a $19,000 loss. There was still a small net loss from operations before other income.

AIM   

Petrol stations operator Applegreen (APGN) intends to take a majority stake in UK Motorway services operator Welcome Break. The purchase of a 55% stake for €361.8m would be a reverse takeover. The deal would make Applegreen market leader in the UK as well as Ireland.

A subsidiary of Stride Gaming (STR) has been issued a notice by the Gambling Commission, which intends to levy a significant financial penalty because of the manner in which it carried on its trading. This is not final and there might be room to appeal but it has hit the share price of the online bingo operator.

The Property Franchise Group (TPFG) increased interim revenues by 11% to £5.3m. Most of the growth came from management service fees from the property lettings franchisees. The EweMove estate agency business was profitable.

Goldplat (GDP) says that gold production fell by 17% to 35,400 ounces, which is lower than anticipated, but pre-tax profit will be in line with expectations because of a higher margin per ounce. There was 39,400 ounces of gold sold during the year.

Beximco Pharmaceuticals (BXP) has received abbreviated new drug application approval from the FDA to sell Nadolol tablets, which are a generic form of Corgard and used for managing high blood pressure. This is the fifth approval in the US. A pre-tax profit of £33.3m is forecast for the year to June 2018.

Tough UK trading and higher costs held back the results of security and facilities management services provider Mortice Ltd (MORT) in the year to March 2018. Revenues were 21% higher at $219m, but underlying pre-tax profit was down by 16% to $3.9m. Net debt was $18.4m.

Precision marketing software supplier Pelatro (PTRO) is acquiring assets from the Danateq Group for an initial $7m. The deal will take the group into central Europe and adds to the recurring revenues base. A placing has raised £6m at 73p a share.

GetBusy (GETB) grew its interim revenues from £4.5m to £5.2m, with £4.5m of that figure recurring revenues. Annualised recurring revenues are running at £9.4m. Profit generated from document management software sales is being ploughed back into developing the existing product and the new GetBusy software. There is £2.37m in the back.

Starcom (STAR) says that interim revenues have improved from $1.92m to $3m and the loss will be lower. Most of the revenue increase came from two large clients. Growth is starting to come from higher margin security products. The 2018 loss is expected to be much lower than last year’s.

Kosovo-based quarry operator Fox Marble Holdings (FOX) increased interim sales from €329,000 to €614,000 and the second half has started strongly. The benefits of investment in capital equipment are beginning to show through.

MAIN MARKET    

Argo Blockchain (ARB) has joined the standard list after raising £25m at 16p a share, which values the company at £47m. However, the share price fell to 12.5p by the end of the first day of trading on 3 August. Argo is developing a global datacentre management business facilitating cryptocurrency Mining-as-a-Service. It currently covers four cryptocurrencies. AIM-quoted Vela Technologies (VELA) owns 2.5 million shares, which were acquired for 8p a share.

Motor finance provider S&U (SUS) achieved record first half profit as the second hand car market continues to grow. Quality standards have been tightened with 25% of applications accepted, but net receivables have reached £263m. The property bridging loan book has risen from £11m to £16m over six months. The interims will be announced on 25 September.

BigDish (DISH) was originally going to reverse into AIM shell Nyota Minerals Ltd but instead it has joined the standard list. The company operates an online and mobile restaurant reservation platform, which is in operation in the Philippines, Indonesia and Hong Kong. The purchase of Pouncer, takes the company into the UK. Revenues come from booking fees per diner. BigDish raised £2.22m at 4.5p a share.

Path Investments (PATH) is raising £10m to complete the farm-in agreement with 5P Energy for the proposed acquisition of a 50% participating interest in the Alfeld-Elze II licence and gas field. This will make Path cash generative. The new shares will be eligible for EIS and VCT relief because Path is moving to AIM.

Dave Brieth has sold his stake in telecoms services provider Toople (TOOP).

Associated British Engineering (ASBE) reported a sharp increase in full year revenues from £1.04m to £1.6m in the year to March 2018. The loss fell from £962,000 to £582,000. This includes investment in developing new diesel engines. The NAV is £976,000, as the loss was partly offset by a £600,000 property revaluation gain. The oil and gas-related operations are still depressed.

Mila Resources (MILA) plans to acquire Capital Metals, which owns 100% of a high-grade mineral sands project in southern Asia. The reverse takeover will be subject to due diligence and shareholder approval.

Fandango Holdings (FHP) has ended bid discussions with Corporate Commercial Collections and Vatbridge following initial due diligence.

Andrew Hore

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