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Health and care properties developer Ashley House (ASH) is widening its area of operations through the acquisition of a modular off-site construction business by its subsidiary F1 Modular, which already works with the company. The acquired business was in administration and assets have been acquired for £113,500 and a lease taken out on its premises – there is an option to acquire the premises. Ashley’s stake in F1 Modular has been raised from 52% to 76% for up to £250,000 depending on performance and the repayment of a previous loan. If F1 Modular makes more than £4m in profit over the next three years then the additional stake will be transferred to the minority shareholders. F1 Modular could win housing business and there are already potential housing deals with two local authorities, as well as a prospective customer for retail pods. Other potential markets are schools and student accommodation. There are also opportunities in Ashley’s core business. Ashley has reiterated it warning that the figures for the year to April 2017 because of contract delays due to a consultation on supported housing. This means a small full year profit is likely. Non-executive director John Moy acquired 2.4 million shares at 7.5p each from his son and then transferred his entire holding of 6.9millionshares to his wife, although he is still deemed to have an interest in this 11.6% stake.
Bulgaria property investment company Black Sea Property (BSP) has successfully tendered for a Sofia office building called the UniCredit Building. UniCredit is the current occupier and owner. Black Sea Property bid €10.52m and €7.6m of this will come from a loan, while the rest will have to be raised from shareholders. A deposit of €1.04m has been paid. That deposit will be forfeited if the deal does not go ahead. UniCredit can remain in the building for six months after the transaction is completed, expected to be May assuming the fundraising is successful, and will not have to pay rent. The property is more than 100 years old, has five floors and covers 98,000 square feet.
Capital for Colleagues (CFCP) has been taken on by cosmetics firm LUSH to help it introduce employee ownership. An initial stake of 10% will be held by the employee benefits trust.
There could be a bid battle for FIH (FIH), formerly known as Falkland Islands Holdings. Staunton, which is backed by the Rowland family, has bid 300p a share and has acceptances of just over one-third of the shares in issue – it owned 25% prior to the bid. Eduardo Elsztain has entered the fray via Dolphin Fund, which says it is willing to offer even more. Elsztain is an Argentinian who has built up significant property and agricultural interests having initially been backed by George Soros in 1990. FIH has refused requests for further information because it was not provided with answers to its request about ownership and control of Dolphin. There has been a change to the current bid which no longer require 90% acceptances to go unconditional. The figure has been reduced to 50%.
Audio visual products distributor Midwich Group (MIDW) grew its 2016 revenues by 18% to £370.1m via a combination of acquisitions, currency movements and organic growth. Gross margins are strong for a distribution business but they still edged up from 14.9% to 15.3%. Underlying pre-tax profit was 23% higher at £17.9m. Net debt was £15m at the end of 2016, while the dividend for the eight months that Midwich was quoted on AIM was 8.62p share. Displays and technical products are becoming more important and there was also growth in projection products sales although not as fast as the main parts of the business. Sales of scanners and other document-related products fell. France, Germany and Australasia made significantly better contributions. Further acquisitions are likely to supplement continued organic growth.
Crossrider (CROS) has refocused its business on apps and a mobile security acquisition further boosts this side of the business. CyberGhost will cost an initial €6.2m in cash and shares with up to €3m more payable dependent on performance. The acquisition should be earnings enhancing in 2017. Last year, Crossrider group revenues fell from $84.6m to $56.5m but the core apps business grew both its revenues and its profit contribution. Net cash was $72.1m at the end of 2016. Next year, revenues and profit should start to grow again and Crossrider may even pay a dividend.
University technology commercialisation business Frontier IP (FIPP) has raised £3m at 40p a share in order to finance existing investments and make new ones.
Igas Energy (IGAS) wants to raise £45.2m via a placing and up to €5m through an open offer as part of its financial restructuring. There is also a proposed debt for equity swap and the majority of these bondholders have indicated that they will accept this proposal.
Software provider Cerillion (CER) has won a €2.4m (£2.1m) with a European wholesale telecoms company. So far this financial year, £13.2m of work has been won. That will not necessarily all be delivered this year but, along with the year-end order book, this provides backing for the £16m revenues forecast for 2016-17.
Trading and risk management systems provider Brady (BRY) is restructuring its business but the 2016 figures do not show the benefits. The company has grown by acquisition and the strategy is to fully integrate them all into one platform. Revenues increased 11% to £30.3m, mainly due to currency changes, and Brady returned to profit before exceptional charges.
Recurring revenues continue to grow at performance measurement software provider Statpro (SOG) and they were running at a rate of £39.7m at the end of 2016. House broker Panmure Gordon expects an increase in underlying pre-tax profit from £2.7m to £3.3m in 2017. The dividend is being maintained at 2.9p a share in order to build up earnings cover and invest in software development.
Training technology and services provider Pennant International (PEN) has already secured orders that underpin the 2017 revenues forecast by house broker WH Ireland, although the timing of orders can be delayed. Revenues are expected to grow from £17.2m to £18m and pre-tax profit should edge up from £2.2m to £2.4m. There was £3.5m in the bank at the end of 2016. Two additional facilities have been secured to help cope with demand for the group’s services. Defence clients dominate the business but there are plans to increase exposure to other markets. Phil Walker has taken over permanently as chief executive.film Sandy Wexler 2017
Wealth adviser Brooks Macdonald (BRK) has increased its discretionary funds under management by 19% to £9.33bn. Underlying interim pre-tax profit were one-quarter higher at £8.87m. New chief executive Caroline Connellan will start work in April.
Investment manager Miton (MGR) has grown its funds under management despite a large decline in its value fund due to the departure of its manager. The funds under management increased from £2.78bn to £2.91bn with a recovery in multi-asset funds and growth in other funds covering the loss of value investment funds and growth coming from market improvements. Miton is seeking a new chairman and it will then find a permanent chief executive. On 23 March, Miton is launching its new global infrastructure fund, which is aiming for a 4% yield.
C4X Discovery (C4XD) has raised £7m from a placing at 85p a share. The cash will be used to strengthen the balance sheet while c4X is negotiating with potential partners and strategic collaborators.
EMIS (EMIS) has managed to grow its business even though there is continued uncertainty in the NHS. The GP, pharmacy and health-related administrative software provider reported a 2% increase in 2016 revenues to £158.7m, while operating profit was 6% higher at £38.8m. Net debt fell to £400,000. The total dividend was increased by 10% to 11.7p a share, which is covered more than four times by earnings.
Somero Enterprises Inc (SOM) continues to benefit from the global upturn in construction activity, particularly in North America and Europe, although the revenues from the latter are still not back to their peak levels. The dividend payout level has been raised from 30% of earnings to 40% of earnings but there is still more than $20m in the bank so a special dividend is possible later in the year.
Ilika (ILK) admits that it is unlikely to generate any licence income until the next financial year. The advanced materials developer still has plenty of cash in the bank. Development deal revenues should still double revenues to £1.2m in the year to April 2017. A £1m bioelectronics deal and an additional agreement with Toyota mean that there is a good revenue base going into the new financial year, which should reduce the annual loss even without licence deals.
Active Energy (AEG) has raised £11.6m via a convertible loan note issue. The five-year convertibles will be quoted on the Channel Islands Securities Exchange. The yield is 8% and the conversion price is 3.3p a share. The cash is required to build a commercial scale plant to produce CoalSwitch biomass fuel for use in coal-fired power stations.
Sunrise Resources (SRES) has identified additional potential for the CS project in Nevada. New zones of pozzolan and perlite have been discovered in the Tuff zone and another zone. A project development concept study is due in the next few months.
Haydale Graphene Industries (HAYD) has secured a four year deal to supply silicon carbide micro-fibre to a manufacturer of tooling and wear-resistant parts. The deal has been won by the US subsidiary acquired last September. The minimum annual order quantity should generate revenues of $600,000 a year.
Sportech (SPO) is investing £100,000 in 123gaming Ltd as part of a £1m fundraising via crowdfunding platform Seedrs (www.seedrs.com/123bet). The offer is eligible for EIS relief. The cash will be used to update the US betting platform and to launch an online site in the UK. Sportech already provides technology for the US online wagering site and the pari-mutuel-type offering, which combines traditional wagers and fantasy elements as part of the game. Several US racecourses licence 123gaming’s free-to-play contests as a marketing tool. Sportech is selling its football pools business for £83m – that is lower than the £97.25m offer that fell through last year. Sportech plans to return £20m to shareholders via a tender offer. The result of the tender will be announced on 21 March. There could be a further tender offer after the disposal proceeds are received.
Avation (AVAP) has decided to sell six of its turboprop aircraft at a price above book value. This could generate $31m after related debt repayments. A deposit of $3m has been received and the deal should be completed by the end of June. A further 16 turboprop aircraft are being retained and the additional cash can be used to widen the portfolio of aircraft. House broker WH Ireland estimates an underlying value for Avation of 270p a share.
PRE-IPO / OTHER TRADING FACILITIES
Former ISDX and GXG company US OIL & Gas (USOP) has raised £1.18m at 27p a share via a ten-for-63 open offer to existing shareholders. That is 54% of the amount that the oil and gas company was seeking. A placing had already raised £470,000.