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Andrew Hore – Quoted Micro 24 August 2020
AQUIS STOCK EXCHANGE
Medical device developer TruSpine Technologies (TSP) ended the week at 34.5p (32p/37p). TruSpine has raised £1.4m at 36p a share with a commitment for a further £250,000. This should provide enough cash until Cervi-Lok, which is one of the three spinal stabilisation devices being developed, starts to generate sales.
Coinsilium Group Ltd (COIN) says that its joint venture with IOV Labs has signed a deal with RedFOX Labs to build fast scaling internet business on the RSK blockchain. Coinsilium has also secured an adviser role to Indorse for a forthcoming initiative to revive the token economics of its IND token through a decentralised finance model. The value of Coinsilium’s cryptocurrency holdings is $575,000, with further tokens worth $105,000 set to vest over the next 12 months.
KR1 (KR1) has started to generate revenues from staking activities on the Polkadot network, which is KR1’s largest investment. So far, 530.67 DOT have been generated and this has raised $194,802.
Cadence Minerals (KDNC) is raising £1.25m at 12p a share. This will provide working capital and help to pay back loan notes, which are currently valued at £1.7m.
Wishbone Gold (WSBN) is raising £400,000 at 2p a share. Gold exploration is commencing at the Wishbone II project in Queensland. Exploration will also restart at the White Mountains project.
Gunsynd (GUN) owns 4.97 million shares in nickel project developer Sunshine Minerals, which is being acquired by Malachite Resources. Gunsynd will receive 1.26 million shares in Malachite with further deferred consideration of 1.64 million shares.
NQ Minerals (NQMI) has released positive news from surface stockpiles at the Beaconsfield gold mine. The average grade is 3.2g/tonne in 80,000 tonnes of surveyed stockpiles.
World High Life (LIFE) is increasing production capacity by 400%. The new Love Hemp facility will produce 43,000 units of CBD oils, capsules and cosmetics each day. July sales were 57% higher than in June with much higher online sales.
Belvedere Leisure (BELV) has agreed a new strategy with Landal GreenParks UK, which involves delivering lodges for domestic tourism and staycations. The company is in negotiations to acquire the Barncrosh site in Scotland and the company is seeking other sites. Belvedere Leisure Park has been placed in administration and will no longer guarantee the company bonds.
Ian Harebottle and Richard Lloyd have been appointed as directors of All Star Minerals (ASMO).
Capital for Colleagues (CFCP) chief executive Alistair Currie bought 86,419 shares at 25p each and 13,581 at 29.5p each. He has a 3.28% stake.
AIM
Online fashion retailer Sosandar (SOS) doubled its revenues last year. In the year to March 2020, revenues jumped from £4.44m to £9.03m, while the loss more than doubled from £3.55m to £7.81m. First quarter revenues were 54% higher and the lower marketing costs helped to reduce operating costs by 71%. July revenues were 57% higher than the same time last year. Gross margins have improved. There was still £4.4m in cash at the end of June 2020.
Marshall Motor Holdings (MMH) lost £8.9m in the first half of 2020. That is not surprising given that the car showrooms were shut for ten weeks. A small loss is expected for the full year, although this will depend on September demand. Vertu Motors (VTU) says that it lost £5.2m in the March to June period, but made a pre-tax profit of £7.4m in July. Used vehicle sales made a record gross profit last month with volume growth of 13.7%.
Ceramic products manufacturer Churchill China (CHH) managed to make a small profit before exceptional items. Revenues slumped from £31.9m to £18.9m with a strong start to the year offset by COVID-19 in the second quarter. The majority of sales were of hospitality products. Cash improved to £16.3m thanks to the fact that there was no final dividend last year. A potential interim dividend will be reviewed in December when the fourth quarter trading is clearer.
Elypsis Solutions has sold a 3.4% stake in Adamas Finance Asia (ADAM) to Heirloom Investment Management, leaving it with 53.6%. The Adamas share buyback programme is still active. NAV was 75p a share at the end of June 2020, compared to a share price of 26.5p.
Oil and gas producer Hurricane Energy (HUR) admits that it is likely to materially downgrade the resource estimate for the Lancaster early production system and the West of Shetland portfolio of assets. Production is expected to decline from the current 17,000 barrels of oil per day.
Synthetic heavy fuel developer Quadrise Fuels International (QFI) will receive $150,000 for equipment and support supplied to Greenfield Energy for a commercial trial, which will be completed by the end of the year.
Renalytix AI (RENX) has announced a collaboration with AstraZeneca for the use of the KidneyIntelX technology in other chronic diseases.
EKF Diagnostics (EKF) has made a $5m investment in Trellus Health in return for a 31% stake. Trellus has licenced a platform for the management of inflammatory bowel disease.
Cyber security services provider Shearwater Group (SWG) says positive momentum is continuing. An underlying EBITDA is being made due to higher margin products and efficiencies. There is £4.1m in the bank.
MAIN MARKET
Motor dealer Lookers (LOOK) still has not published its 2019 accounts. Further work is required on the corporate leasing division and vehicle financing arrangements. Net debt was £13.5m at the end of June 2020, helped by delayed government payments. There was a significant first half loss in 2020.
OKYO Pharma (OKYO) is seeking a Nasdaq listing. It has raised £1.44m through additional convertible loan notes to finance clinical development.
BATM (BVC) is on course to increase full year underlying pre-tax profit from $5.2m to $8.8m on a revenues one-third higher. There was cash of $44.3m at the end of June 2020. A resumption of dividend payments is promised at the end of the year. The bio-medical division increased interim revenues by two-thirds to $50m and improved its gross margin. Demand for COVID-19 diagnostic kits remains strong. The networking division improved interim revenues by 3% to $27.4m.
LED lighting and wiring accessories supplier Luceco (LUCE) has upgraded its 2020 underlying operating profit guidance from £18m to at least £23m, helped by improved gross margins. Adjusted earnings per share are expected to be at least 11p a share. The interims will be published on 8 September.
Challenger Acquisitions (CHAL) has entered into a letter of intent to acquire Cindrigo and Cindrigo Energy, which are involved in waste-to-energy and biomass energy projects.
Metal Tiger (MTR) wants to obtain an Australian Stock Exchange listing before the end of the year.
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 29 October 2018
NEX EXCHANGE
Auxico Resources Canada Inc (AUAG) has added a NEX quotation to its year-old Canadian Stock Exchange listing. Auxico has mineral properties in Colombia and Mexico. There is already a UK investor base.
Chapel Down Group (CDGP) had a bumper 2018 harvest that was 125% ahead of the previous best, thanks to the hot summer. Some vineyards produced their first crops.
Ace Liberty and Stone (ALSP) is paying this year’s dividend in three instalments: October, April and July. The first interim will be 0.83p a share and the ex-dividend date is 25 October. The sale of Hume House in Leeds has been completed for £3.9m, compared to a cost of £1.67m in March 2014. A 37-storey building will be constructed on the site.
Eight Capital Partners (MORE) is investing £250,000 in AIM-quoted Imaginatik (IMTK) with £160,000 subscription for shares at 1.1p a share for a 29.7% stake, and £90,000 in convertible loan notes with an annual interest rate of 7.5%. Eight Capital is issuing up to £2.5m of convertible bonds at 95% of their nominal value. The annual coupon is 5%. One warrant will be granted for every two shares issued.
Trading in the shares of Etaireia Investments (ETIP) has been suspended ahead of a potential acquisition of property assets from the Oyston family.
Gunsynd (GUN) will get a 4% stake in Human Brands when, or if, it floats on the standard list. Previously it would have been a 1% stake. Gunsynd has £289,000 invested in drinks distributor Human Brands loan notes.
Founder Sebastian Snow has resigned as creative director of pubs and inns operator Barkby Group (BARK) and Lana Snow has also left the group. Occupancy rates were good in September and there is significant demand for the Christmas period.
Ganapati (GANP) reported a reduction in interim loss from £4.54m to £3.56m, although total income was flat at £2.19m. There was cash in the bank of £2m at the end of July 2018. This could be added to by an initial coin offering by Malta-based blockchain subsidiary GanaEightCoin Ltd next spring.
NQ Minerals (NQMI) has raised £81,250 at 15p a share to provide further working capital.
The chairman and chief executive of DXS International (DXSP) have both bought shares in the healthcare technology company. Bob Sutcliffe bought 100,000 shares at 8.515p each, while David Immelman bought 20,538 shares at 8.66p each, which takes the chief executive’s stake to 10.3%.
Sativa Investments (SATI) has signed an option on a 298,806 square foot glasshouse for growing medicinal cannabis. Mark Blower is becoming a non-executive director.
Melissa Sturgess has acquired 590,000 shares in Ananda Developments (ANA) at 0.4496p each. The executive director of the cannabis-focused investment company owns 47.8 million shares. Ananda joined NEX on 4 July having raised £930,000 at 0.45p a share. The share price ended the first day at 0.975p and it has more than halved since then.
AIM
Chris Marsh has resigned as finance director of Patisserie Holdings (CAKE) having been suspended on 9 October. Previously undisclosed LTIP share awards have been revealed.
GB Group (GBG) has acquired Australia-based ID verification services provider Vix Verify Global for £21m. This has led to a 2.7% upgrade in the 2019-20 forecast earnings per share. Third quarter trading of the existing business was in line with expectations with organic growth in revenues of 11%.
Avingtrans (AVG) is acquiring Texas-based Tecmag Inc for $243,000. Tecmag manufactures instrumentation for magnetic resonance imaging and nuclear magnetic resonance systems. This fits well with Avingtrans’ magnets business in the sector.
Energy supplier Yu Group (YU.) has shocked investors with accounting changes relating to accrued income and increases in impairment charges for trade debtors. This will slash £10m for this year’s profit turning it into a loss. There is £11.5m in the bank at the end of September 2018.
1Spatial (SPA) reduced its loss n the first half and is on course to cut its full year loss from £1.5m to £1m. The geospatial data services provider should move into profit next year.
HaloSource Corporation (HALO) says it has sufficient working capital until the end of the year, but up to $5m is required to add a further 12 months. The company expects to generate revenues of $2m-$2.5m in 2018 and the target is to treble that figure in 2019, which would reduce the loss.
EKF Diagnostics (EKF) says the record date for the distribution of shares in Renalytix AI is 23 October and the shares will start trading on 2 November.
Nexus Infrastructure (NEXS) expects 2017-18 profit to be in line with expectations and order books are strong. Infrastructure services provider Tamdown’s revenues will be slightly lower due to planning delays with the growth coming from utility connections business TriConnex. Net cash is £20m.
RA International (RAI) has won a $9.1m contract with URS Group Inc. This is a new client. The contract covers construction services for an asphalt runway in Somalia and lasts for 11 months.
Data analysis software and services provider D4T4 Solutions (D4T4) trebled its interim revenues to £14m, although the comparatives were weak. Net cash is £12.2m.
Gfinity (GFIN) is raising £6m at 8p a share and this cash will further develop the esports activities and the UK Elite series. The 2017-18 revenues were 82% ahead at £4.3m and losses continue.
Angling Direct (ANG) is taking advantage of its strong position in the fishing tackle retail market by raising £20m at 92.5p a share, which compares to the July 2017 flotation price of 64p a share. The cash will finance the opening of 20 stores and the launch of European websites. This accelerated investment means that Angling Direct will fall into loss this year.
Velocity Composites (VEL) has managed to trade in line with downgraded forecasts for the year to October 2018. Revenues will be slightly above £24m and there is net cash of £3.6m. The company is seeking a new chief executive and the former incumbent has left the board.
The cancellation of a contract and the failure to gain backing for an acquisition have hampered the progress of Image Scan Holdings (IGE) in the year to September 2018. Revenues fell from £5m to £3.5m, although the gross margin improved from 39% to 48%. Pre-exceptional profit will slump from £480,000 to £45,000. That was before the £245,000 cost of the failed acquisition. There was £780,000 in the bank at the end of September 2018. Sarah Atwell-King has been appointed finance director.
VR Education (VRE) has been hit by the delayed launch of its Titanic VR product on PlayStation. This should still happen this year, but 2018 revenues will be well below expectations. The timing of the launch will determine the outcome for the year. The ENGAGE platform will be launched before the end of the year as anticipated. Non-executive director Mike Boyce is helping out with sales.
SkinBioTherapeutics (SBTX) increased its research and development spending from £157,000 to £416,000 in the year to June 2018. The cosmetic application has started a human study and data should be available between November and April 2019. A clinical trial for an eczema treatment could start before the end of 2019. There was £3.2m in cash at the end of June 2018.
Rare books trader Scholium (SCHO) says it will move into loss in the first half, but it expects to make a higher full year profit than the £38,000 reported last year. Start-up Mayfair Philatelics is losing money but three auctions are taking place in the second half.
AfriTin Mining Ltd (ATM) is making progress towards production at its Uis tin project in Namibia. The first phase plant being constructed will be able to process 500,000 tonnes of pegmatite in order to produce 720 tonnes of tin concentrate a year. AfriTin has the cash required to reach production.
A strong performance from manned guarding meant that Croma Security Solutions (CSSG) increased its full year revenues by 59% to £35.1m and pre-tax profit was 400% higher at £2m. There were some one-off boosts during the year. Net cash was £2.1m. The dividend has been increased from 0.5p a share to 1.6p a share.
Property investment adviser First Property Group (FPO) has reduced its stake in Fprop Opportunities to 44.3% so it will no longer be consolidated in the group’s results. The plan is to lower the stake to below 30%. Fund management will be a greater contributor to profit.
More cash is required at meat and delicatessen products retailer Crawshaw (CRAW) for restructuring purposes and it also still needs a new nominated adviser.
Kemin Resources (KEM) will leave AIM on 29 October because it has not been able to find a replacement for Strand Hanson as nominated adviser. JP Jenkins Ltd will provide a trading facility.
OnTheMarket (OTMP) has signed up Belvoir Lettings (BLV) to its online platform. All Belvoir’s sales and lettings properties will be on the platform.
StatPro Group (SOG) says annualised recurring income has increased by 3% to £54.8m.
MAIN MARKET
Communisis (CMS) is recommending a 71p a share cash offer by consumer communications services provider OSG, which values the target at £153.8m. The combined business would be able to develop internationally because of OSG’s global strength.
WideCells Group (WDC) has signed a partnership deal with stem cell extraction and storage company Smart Cells. The deal is with the healthcare insurance subsidiary CellPlan, whose insurance plans will be offered to Smart Cells’ 60,000 clients.
Hemogenyx Pharma (HEMO) has signed a second agreement with US biopharma company Orgenesis Inc. The deal involves the development and commercialisation of the company’s Human Postnatal Hemogenic Endothelial Cell (Hu-PHEC) technology, which could develop cancer-free, patient-matched blood stem cells after transplantation into a patient. Like the previous agreement, Orgenesis will provide a convertible loan of $1m and this can be converted into shares in the Hemogenyx subsidiary that owns the technology. Orgenesis will pay a 12% royalty on net revenues generated by the technology.
North Midland Construction (NMD) says that full year revenues will be better than anticipated at between £340m and £345m, with net margins between 1.7% to 1.8%. The order book for delivery in 2019 is £222m. A new single identity for the group will be launched in November. HR director Karen Morris has bought 8,172 shares at 550p each.
Andrew Hore: Quoted Micro 15 October 2018
NEX EXCHANGE
Smart home products supplier Sandal (SAND) reported a decline in overall revenues from £3.75m to £3.62m for the year to May 2018, but this masks the 71% growth of the Energenie MiHome revenues to £1.01m. Sandal reduced its operating loss and there was nearly £51,000 in the bank, although net debt was £1.09m.. A small profit is forecast for 2018-19 with a small increase in net debt expected. Sandal may need additional cash to increase the marketing for the Energenie MiHome brand.
High Growth Capital (HASH) has raised £500,000 at 0.8p a share, which was a 77% premium to the market price. Malcolm Burne and Professor Michael Cain have left the board and been replaced by Jens Zimmerman, who becomes non-executive chairman. The investment strategy will be widened from medicinal cannabis, because of a lack of opportunities, to technology. The company intends to acquire a 9.8% stake in Belgium-based artificial intelligence software developer Sentiance. The software enables companies to understand user behaviour. The data comes from smart devices. The technology is used in areas, such as insurance, health and car driving.
Asia Wealth Group Holdings Ltd (AWLP) improved its interim revenues from $1.15m to $1.24m. The pre-tax profit fell from $162,000 to $66,000. There was $1.4m in the bank at the end of August 2018.
Equatorial Mining and Exploration (EM.P) has published its 2017 figures and interims to June 2018. The full year loss was £294,000 and the interim loss increased from £117,000 to £162,000. There was £53,000 in the bank at the end of June 2018. The company is beginning to ship coal from its mine in Nigeria.
Positive Healthcare (DOC) has appointed KSA Group Ltd to liquidate the company.
Shen Chaohuli has sold his 18.3% stake in TechFinancials Inc (TECH) to Ou Qiao.
AIM
Patisserie Holdings (CAKE) has received a cash injection to keep it going, after unknown overdraft facilities were discovered. The cash balance in the recent accounts does not appear to exist. A placing has raised £15.7m at 50p a share. Chairman Luke Johnson is also providing loan facilities of up to £20m.
EKF Diagnostics (EKF) has revealed details of the spinning off of Renalytix AI on AIM. Renalytix AI is raising cash at 121p a share as part of the flotation, which should happen on 31 October. EKF will distribute its near-21 million shares in the company to its own shareholders, although it will subscribe for new shares. EKF shareholders will also get the chance to invest up to £3.5m in new shares.
Diversified Gas and Oil (DGOC) is making another major acquisition. The oil and gas producer is paying $183m for Core Appalachia, which is funded by cash and shares issued at 115p each. The deal is immediately earnings enhancing.
Vertu Motors (VTU) has been hit by a lack of cars due to the newly installed testing procedures but it still has a strong balance sheet and it will make a significant full year profit. September registrations were the worst since 2011 and Vertu was not immune. That will hit the second half. There was an improved performance in the used car market to help offset the weaker new car sales in the first half. Pre-tax profit is expected to decline from £28.6m to £22.1m in the year to February 2019.
Marshall Motor Holdings (MMH) has reaffirmed that it is on course to make a full year pre-tax profit of £24.2m, down from £29.1m in 2017.
OnTheMarket (OTMP) has increased its spending on marketing and IT since floating on AIM and this has pushed it into loss. A full year loss of £14.7m is expected and there is not likely to be much of a reduction the following year. The online property platform has succeeded in doubling the estate agency offices using the service to more than 11,000 many of the additional offices are in a trial period and not paying to put their properties on the platform. The investment being made will only be justified if these offices start to pay fees. The IT investment will enable the company to offer more products and services and increase revenues that way as well.
Access Intelligence (ACC) is acquiring ResponseSource, which provides SaaS-based services to the PR and media sectors, for £5.5m. This company fits well with the group’s existing business. A ten-for-one share consolidation is planned.
Health monitoring equipment developer LiDCO Group (LID) is still going through the transition from a sales model to one based on regular income from hospitals. Interim recurring revenues increased by 11% but total revenues were 8% lower at £3.6m. Importantly, there should be enough cash in the bank to move the business towards profitability. That could happen in 2019-2020 but is more likely to be the following year.
Melissa Blau is stepping down as chief executive of Veltyco (VLTY) fewer than seven months after she was appointed. The shares price has fallen by three-fifths in the subsequent period.
Online women’s fashion retailer Sosander (SOS) has raised £3m at 32p a share, which is more than double the flotation price of 15.1p a share. First half revenues were £1.84m.
MAIN MARKET
Titon (TON) has firmed up its plan to move to AIM. The window components manufacturer expects to join AIM on 10 December.
Toople (TOOP) says trading in the first week of its new financial year is ahead of expectations. The statement remains, as ever, light on proper financials and indications of losses. Toople raised £2.2m at 0.3p a share, so it has enough cash for the time being.
Andrew Hore
Andrew Hore Quoted Micro 24 September 2018
NEX EXCHANGE
In the first half of 2018, Newbury Racecourse (NYR) increased media revenues by one-fifth and, along with growth in nursery and lodge revenues, this helped the racecourse operator to raise revenues by 5% to £7.33m even though two race days were lost to bad weather. Enough cash was generated to more than cover capital spending.
Block Commodities (BLCC) has signed a non-binding letter of intent with the Eelleet Network Corp, which intends to buy Block. There would be an all share recommended offer and the enlarged business would list on the Canadian Stock Exchange. Trading in Block shares has been suspended.
Ananda Developments (ANA) has obtained a £300,000 convertible loan facility with two directors, Charles Morgan and Melissa Sturgess. The annual interest rate is 10% and the conversion price is 0.75p a share. The manufacture of 15%-owned Liberty Herbal Technologies’ vaporisers and consumable packs containing four hapac sachets of 0.25g medicinal cannabis has commenced in China. AfriAg Global (AFRI) has applied for a medicinal cannabis licence in the UK. Fellow cannabis investment company Sativa Investments (SATI) has set up a German wholesaling subsidiary and it will invest €80,000 for a 60% stake.
In the six months to June 2018, St Mark Homes (SMAP) increased revenues from £71,000 to £139,000 and it made a small loss excluding negative goodwill release. The interim dividend was unchanged at 5.5p a share. The NAV is £5.9m, including £754,000 in cash, which is equivalent to 134p a share. St Mark is trying to gain planning permission for the commercial development in Sutton High Street. Two other properties in London are being redeveloped and sales have commenced. A development in Wembley should start in 2019.
TechFinancials Inc (TECH) reported a profit in the first half of 2018, but that was due to a change in the fair value of the option to acquire 90% of Cedex. Revenues fell 48% to $3.78m and the underlying loss of the fintech software provider increased from $282,000 to $971,000. The blockchain operations made an initial contribution of $1.23m to revenues. The B2C operations have ceased in Europe and the company wants to sell its subsidiary with a FSA licence. Higher regulations have hampered the B2B technology customers.
NQ Minerals (NQMI) reported an increased interim loss of $9.43m due to higher finance costs. Admin costs were flat. The development of the Hellyer gold project in Tasmania is progressing well and the first sales of concentrate should happen before the end of this year. Work continues towards a move to a standard listing.
Less than one month after asking for trading in the company’s 7% bonds 2021 to be suspended Positive Healthcare (DOC) has appointed Eric Walls and Wayne Harrison of KSA to advise on a liquidation process. Irregularities were identified at the principal operating subsidiary and Positive is unable to pay the next instalment of interest on the bonds.
Eight Capital Partners (MORE) had cash of £773,000 at the end of June 2018. That was before the former Cogenpower acquired €111,100 worth of 8% corporate bonds 2020 in Italian financial services company Finance Partners Group. Other financial services and technology investments are being considered.
EPE Special Opportunities (ESO) has been readmitted to NEX and AIM on 21 September, after it completed its migration from the Isle of Man to Bermuda.
AIM
IT recruitment and consultancy Parity (PTY) remains on track for an improvement in pre-tax profit from £1.7m to £1.9m but cash generation is not as good as expected. Net debt is still expected to reduce from £1.6m to £900,000. The previously announced Primark managed services contract has started well, although another contract has been delayed. The consultancy business continues to contribute a growing proportion of profit.
Tlou Energy Ltd (TLOU) has agreed locations for pilot production at the Lesedi coal bed methane project in Botswana and the first well should be spudded in October.
N+1 Singer has upgraded its forecast for EKF Diagnostics (EKF) following the interim figures. There was a 5% decline in revenues to £20.4m, while underlying profit improved from £2.3m to £2.7m. Around £250,000 has been added to the profit, taking pre-tax profit to £7.7m. The launch of haemoglobin analyser DiaSpect following FDA approval will boost next year’s figures. The spin out of RenalytixAI continues and it will require a general meeting.
Audio products supplier Focusrite (TUNE) says full year revenues were in line with expectations of £75.4m, while cash of £22.8m is better than forecast. A pre-tax profit of £10.8m is forecast. There are concerns about US tariffs.
Tanfield (TAN) has warned that it may not get anything for its stake in Snorkel if the call option is exercised. Management has already said that it will write down the value of the investment to £19.1m ($25.3m), which already knocks 12p a share off NAV, but there is a disagreement about the interpretation of the original agreement.
Disappointing results from the Atopic Dermatitis study has led Realm Therapeutics (RLM) to appoint MTS Health Partners to advise on strategy alternatives. Realm is considered to be in an offer period. There was $21.3m in the bank at the end of August.
Short-term weakness in the oil palm price has held back the progress of plantations operator MP Evans (MPE) in the first half, but crude palm oil production is increasing in line with expectations (91,900 tons in the first half). That means that full year revenues are likely to be flat and pre-tax profit will be lower. Longer-term growth will come from increased production from more recently planted areas.
Online women’s fashion retailer Sosandar (SOS) is coming up to its first year on AIM and the growth momentum continues.
Huadong Medicine Aesthetics has launched its recommended 32p a share cash bid for Sinclair Pharma (SPH) and that values the company at £166.6m.
There has been a lot of activity at Frontier IP (FIPP) in the past week. The AB Sugar head of innovation Matthew White is joining the company as head of commercialisation. Recycled building materials developer Alusid has raised £1.34m, including the conversion of a £348,000 loan from Frontier IP, which has a 35.6% stake. The Alusid investment had been valued at £700,000 and the latest fundraising values it at £1.73m. The cash will be used by Alusid to invest in its manufacturing facility, which should start production in 2020. The total cost will be £10m. A new company has been set up to develop new antibiotics. Frontier IP has a 10% stake in Amprologix, which has been spun out of the University of Plymouth. The first product is likely to be a cream that contains epidermicin, which can kill antibiotic-resistant bacteria, including MRSA.
There was a switch in the mix of revenues at job screening services provider ClearStar Inc (CLSU) in the first half as revenues increased by 11% to $9.9m. The growth has come from Medical Information Systems, which has lower margins and this means that the overall loss is reducing more slowly than expected. The cash outflow is small. Net cash is $1.2m.
Diurnal Group (DNL) is going along as expected with the launch of its Alkindi paediatric adrenal insufficiency treatment in Germany but the market has been unnerved by a negative comment from a German government research organisation. It pointed out that the performance of Alkindi was not compared with another treatment which has not been given regulatory approval. This does not appear likely to affect the relationship with the German regulatory authorities. There will be news from the European phase III trial for Chronocort before the end of the year.
Stockdale has initiated research on professional services group Christie Group (CTG) and expects a full year profit of £3.5m. It has already achieved an interim profit of £1.75m.
VR Education (VRE) still had £4.9m in the bank at the end of June 2018. Since then there have been improvements to the ENGAGE platform ahead of the full commercial launch before the end of the year. The full version of Titanic VR was launched in August and it is set to be launched on Playstation.
Energy supplier Yu Group (YU.) continues to grow rapidly and it is moving into the water sector. Interim revenues jumped from £20.8m to £35.8m, while underlying pre-tax profit moved ahead from £1.15m to £1.8m. Growth is coming from the larger corporate sector which has held back margins because they are via brokers. The interim dividend is one-fifth higher at 1.2p a share. There was £18.2m in the bank at the end of June 2018.
N4 Pharma (N4P) has undertaken a strategic review following the failure of the reformulation of sildenafil to achieve its key targets in its clinical trial. It would cost a lot and increase risk if the company undertook further reformulation of this generic. The generics division has been closed and the focus will be the Nuvec delivery system. Initial results from research should be available before the end of the year. There was £1.6m in the bank at the end of June 2018.
MAIN MARKET
Books publisher Quarto Group (QRT) increased interim revenues from $50.2m to $56.2m and the underlying loss fell from $8.7m to $6.6m. Net debt was $73.2m at the end of June 2018. Management is talking to banks to extend the bank facility until August 2020. Costs are being reduced.
Spinnaker Opportunities (SOP) intends to broaden its investment remit to include cannabis processing, as well as the energy and industrial sectors. Finance professional Alan Hume has joined the board of the standard list shell. He was previously an adviser to the company and until last year finance director of Zenith Energy (ZEN). Between 2010 and 2012 he was finance director of Xtract Energy (XTR).
Bluebird Merchant Ventures Ltd (BMV) has completed its feasibility report into the reopening of the Gubong gold mine and the joint venture with Southern Gold has started. Production of 10,000 ounces of gold is initially targeted.
Andrew Hore
Andrew Hore – Quoted Micro 23 July 2018
NEX EXCHANGE
Netalogue Technologies (NTLP) moved back into profit in the year to March 2018 and it is paying a dividend of 0.4p a share. The e-commerce technology company edged up revenues from £1.04m to £1.07m, while a loss of £46,000 was turned into a profit of £82,000, even after amortisation of £70,000, up from £20,000 in the previous year. Net assets of £770,000 include £502,000 of cash. There are a growing number of opportunities for this financial year.
Sativa Investments (SATI) has signed an IP sharing agreement with Canada-based Veritas Pharma. This could help with Sativa’s plans to grow medicinal cannabis and also help to choose a particular strain.
Equatorial Mining and Exploration (EM.P) has completed its investment agreement with ARQ Minerals and this formalises the commitment to work together in Nigeria. The St Leonard’s mine is supplying trial amounts of coal. ARQ helps to manage the mine and it is subscribing £50,000 each for two tranches of shares in the operating company, which will take is stake to 50%. ARQ will also own 1,000 million warrants exercisable at 0.02p a share. ARQ has committed to producing a minimum of 40,000 tonnes of coal and every 1,000 tonnes produced above this level will earn an additional 0.625% stake in the operating company, which can take the stake up to a maximum level of 75%. ARQ and Equatorial will be paid 10% of gross profit each month with the rest of the profit shared in line with their equity interests.
Welney (WENP) has announced a general meeting to vote on the appointment of Mark Jackson and Mark Chapman as directors.
Secured Property Developments (SPD) still had £627,000 in the bank at the end of June 2018 because it has not been able to find an investment at a realistic price.
Blockchain investment company Coinsilium Group (COIN) says that Malcolm Burne has been appointed as project adviser to the company’s blockchain platform development company TerraStream.
New director Melissa Sturgess has bought 9.23 million shares in Imperial Minerals (IMPP) at 1p each. That is a 29% stake.
Medicinal cannabis sector investment company High Growth Capital Ltd (HASH) had £522,000 in the bank at the end of March 2018 and it has raised £250,000 at 0.4p a share.
AIM
Parity (PTY) is still on track to achieve double digit profit growth this year. The IT recruitment and consultancy services provider remains modestly rated even though the share price has risen substantially this year.
Yu Group (YU.) says interim revenues increased by 69% to £35m. The energy supplier expects full year revenues to be at least £82m, which means that operating profit should rise by three-quarters. There is £18.2m in the bank.
Frontier IP Group (FIPP) says that portfolio company Tarsis Technology has entered into a collaboration with a major crop protection products company. The company will provide the funds to further develop the Tarsis technology to deliver chemical pesticides and fungicides in a more controlled way. In return the company gets exclusive rights to particular agrochemicals usage and Tarsis would get royalties from commercial products. Frontier IP is lending Tarsis £150,000 in return for share options.
Consumer healthcare business Venture Life Group (VLG) is raising £18.75m at 40p a share to help finance the acquisition of Dentyl Dual action mouthwash and BB Mints for £4.2m and repay £3.7m of convertible loan notes. The remaining cash will be used for further acquisitions. The share issue more than doubles the number of shares in issue.
Odey has withdrawn its general meeting requisition at Tungsten Corporation (TUNG) following the appointment of Anthony Bromovsky and Duncan Goldie-Morrison to the board.
600 Group (SIXH) has offloaded its pension scheme to specialist insurer Pension Insurance Corporation. The scheme will be wound up and surplus funds after tax will be returned to the machine tools supplier. That could be up to £4m. Full year revenues grew from $58.8m to $66m, while underlying pre-tax profit improved from $2.65m to $3.05m. That excludes the gain on the sale of ProPhotonix (PPTX) shares.
Integumen (SKIN) is raising £700,000 at 0.65p a share and renegotiated the deal with food supplements supplier Cellulac so that it will acquire a 9.35% stake. Cellulac’s chief executive and chief operations officer will join Integumen in those roles. Cellulac will grant Integumen a licence to sell its products in certain territories.
A positive trading statement from audio visual equipment distributor Midwich Group (MIDW) has led to a forecast upgrade. Earnings per share forecasts have been raised by 3% for each of the next three years. The 2018 profit is expected to be £28.3m and earnings per share 27.6p. The interims will be published on 11 September.
EKF Diagnostics (EKF) has signed a manufacturing agreement with Oragenics Inc. EKF will supply drug substances for the customer and this will boost next year’s profit by 5%.
LiDCO (LID) has signed a distribution deal with a Chinese supplier of blood monitoring cuffs and this will help to replace the lost income from the Argon distribution contract. It may take time to build up sales, though.
Woodford Investment has increased its stake in superyacht painting and maintenance services provider GYG (GYG) to 21.5%. This comes at a time that Old Mutual has been selling down its stake after the recent profit warning.
Corporation tax software supplier Tax Systems (TAX) has grown its recurring and non-recurring revenues in the first half of 2018 and total revenues were 14% higher, which includes 9% organic growth. Net debt is down to £17.5m.
Synectics (SNX) had net cash of £9.1m at the end of May 2018. The surveillance technology company increased interim revenues by 3% to £34.7m thanks to strong demand from the gaming sector. Underlying profit improved from £1.3m to £1.5m. Stockdale has maintained its full year profit forecast at £3.1m.
EMIS (EMIS) says that its primary care business is sorting out its problems and the net cash grew to £32.3m at the end of June 2018. The health IT technology supplier says that the business has grown in the first half and still expects an improvement in full year profit. The share price has recovered since the disappointing trading statement earlier this year.
Ken Kroeger has become permanent chief executive of driver monitoring systems technology developer Seeing Machines (SEE) and he will had over the chairmanship to Jack Boyer at the beginning of 2019.
MAIN MARKET
Investment company Athelney Trust (ATY) says that its NAV dipped to 264.2p a share at the end of June 2018, although this was partly due to the payment of the final dividend of 8.9p a share. Excluding that, there was a 4% decline. There was an improvement on the net return on ordinary activities from £110,000 to £125,000, but the loss in the capital part of the income statement was slightly higher than that revenue gain. The total value of investments was £5.61m and NAV was £5.7m. During the first half, shareholdings in Countrywide, Debenhams, DX, Juridica Investments, HC Slingsby and Sprue Aegis were sold.
Avation (AVAP) has acquired a second new Airbus A220-300 aircraft and leased it to airBaltic.
Flying Brands Ltd (FBDU) is raising £500,000 at 2.5p a share in order to help finance obtaining FDA clearance for StoneChecker software and design a cloud-based interface, as well as boost commercial operations. Subsidiary Imaging Biometrics is involved with a phase II trial that will use its IB Rad Tech technology to process data from 20 sites to determine how well dynamic susceptibility contrast magnetic resonance imaging in measuring the effectiveness of brain tumour treatment.
Andrew Hore
Andrew Hore – Quoted Micro 15 January 2018
NEX EXCHANGE
Wines maker Chapel Down Group (CDGP) says that its open offer at 50p a share was oversubscribed. Excess applications will be scaled back. The additional £1.47m raised takes the total to £20m. BlackRock holds a 5.79% stake and Nigel Wray owns 16.2%.
Startup Giants (SUG) has made its first investment since floating. An undisclosed investment has been made in Go Show Ltd, which operates a brand marketplace designed to enable product placement deals (www.goshow.net), and it will be released when milestones have been achieved. Go Show initially applied for funding in 2015 and it has been mentored by Startup Giants. There is a target for revenue generation of up to £1m within 12 months. An accelerator round has also been launched by Startup Giants. It is aimed at early stage, UK-registered companies.
Coinsilium Group Ltd (COIN) has increased its shareholding in Indorse from 3% to 6.5% at cost of S$175,000. There is an option to acquire a further 3.5%, at the same cost, to take the stake to 10%. Indorse completed a token sales last September and those tokens are currently valued at $34m. The Indorse platform is designed to enable users to generate income from sharing their skills and validating the claims of others.
African Potash Ltd (AFPO) has entered into an agreement with Gibraltar-based TokenCommunities Ltd. This deal will help the blockchain joint venture that has also already been announced with FinComEco Ltd, which is developing platforms for agricultural markets in sub-Saharan Africa. TokenCommunities will advise on the deployment of tokens. The chain will link smallholder farmers, traders, brokers, storage, transportation and commodity buyers. There are plans for microloans to farmers at an annual interest rate of 12%, which is lower than existing rates. African Potash has completed the raising of £400,000 at 0.025p a share.
Black Sea Property (BSP) has completed the €2.76m purchase of four plots of land with permission to develop a camping complex. It has also invested €3.37 to help finance the development of the site, which could be completed by the middle of the year. Black Sea Property raised €3.53m at €0.01 a share late last year.
Lake Acquisitions (U.P) says that the contingent value rights holders will not get a distribution for 2017. The cumulative relevant revenues from the eligible nuclear power output was £41.1m. The cumulative base revenues were £41.9m.
UK Oil and Gas Investments (UKOG) has decided to drop its NEX Exchange quotation on 31 January. That is just over 27 months after it joined. The company says that there have been low levels of trading on NEX and it still has its primary quotation on AIM. Interestingly, oil and gas company UK Oil and Gas was formed many years ago out of the shell of a former technology equipment business, yet it is still classed under the technology hardware and equipment sub-sector of the technology sector in the AIM statistics.
Nexus Infrastructure (NEXS) reported maiden full year results as a quoted company that were slightly better than expected. The housebuilding infrastructure provider reported a dip in pre-tax profit from £10.8m to £9.1m on flat revenues of £135m. The total dividend is 6.3p a share. A 2017-18 pre-tax profit of £10.8m is forecast.
Ilika (IKA) reported a significant cash outflow in the first half but the outflow should be reduced in the second half. Interim revenues trebled to £1m and full year revenues of £2.9m are forecast. The loss is reducing. There are licensing proposals with a handful of potential customers and any one of these could transform the fortunes of Ilika.
EKF Diagnostics (EKF) has confirmed that trading was strong in 2017 and EBITDA will be much better than the £8.8m forecast. EKF plans to spin-off its sTNFR biomarker technology into a separate company. This technology has no value in the balance sheet.
Hormonal disease treatments developer Diurnal Group (DNL) says that its Akindi treatment has performed well in a food matrix study in the US and it will be able to move onto the next stage in the process of gaining US approval. European approval for Akindi is expected in a matter of weeks. There was £14m in the bank at the end of 2017. The interims will be published on 12 March.
Lombard Risk Management (LRM) is recommending a 13p a share cash bid, which was nearly double the market price. The bid from rival financial services technology supplier is valued at £52.1m.
Somero Enterprises (SOM) has sparked another forecast upgrade with the 2017 pre-tax profit forecast rising 8% to $25.9m. Net cash should be at least $18.5m and that could rise by around $10m by the end of 2018. That leaves room for another special dividend as well as growth in the ongoing dividend. The tax changes in the US had already led to a one-fifth increase in the 2018 earnings per share forecast to 34.4 cents, which has been raised again to 36.8 cents.
Engineer Avingtrans (AVG) says that trading is on track and the integration of Hayward Tyler continues. A pre-tax profit of £2.2m is forecast for the year to May 2018 and this should generate nearly enough earnings to cover the forecast dividend of 3.6p a share.
Tough market conditions and adverse currency movements have not stopped motor dealer Marshall Motor Holdings (MMH) trading ahead of expectations. Forecasts had already been upgraded and the 2017 pre-tax profit estimate has been raised a further 2% to £28.8m. However, a decline in pre-tax profit to £23.5m is forecast for 2018.
Smart meter communications technology provider CyanConnode (CYAN) continues to progress but the timing of orders has been delayed. The order book is worth $100m but 2017 revenues were £1.2m and the loss more than £10m. This year’s revenues are forecast to be £10m and the loss £7m. There should be enough cash to last the whole of 2018.
Strategic Minerals (SML) generated fourth quarter revenues of $2.14m from magnetite ore sales at Cobre. The 2017 total revenues of $5.64m were quadruple the previous year. Strategic had $3.8m in the bank at the end of 2017.
Online Blockchain (OBC) has taken advantage of its rising share price to raise £1m at 100p a share.
Fashion retailer Footasylum (FOOT) increased revenues by one-third to £89.8m in the 18 weeks to 30 December 2017. The fastest growth came from e-commerce. The revenues for the 44 weeks to 30 December 2017 also improved by one-third to £173m. These are not like-for-like increases and six stores were opened in the past 18 weeks.
There was a small decline in the full year revenues of Shoe Zone (SHOE) from £159.8m to £157.8m. The shoes retailer did improve its gross margin from 62% to 63.2% but higher admin and distribution costs offset this and pre-tax profit fell from £10.3m to £9.5m. The total dividend was edged up from 10.1p a share to 10.2p a share. Net cash was £11.8m at the end of September 2017. The pension fund liability has fallen from £13.1m to £7.1m. Consumer demand and currency movements remain the main challenges.
BNN Technology (BNN) directors Harry Keiley and Lord Mancroft are following the nominated adviser out of the door. Mark Hanson becomes non-executive chairman.
Film completion contracts provider FFI Holdings (FFI) has acquired the motorsports entertainment insurance book of business from All Risks for $1.825m. The acquisition has been made by Reel Media, which itself was acquired before Christmas for $7.25m in total.
Background checking services provider ClearStar (CLSU) traded in line with expectations in 2017. Revenues were 11% higher at $17.8m and the loss was reduced. There was net cash of $1m. The loss should be further reduced in 2018.
Masawara (MASA) and Kimberly Enterprises (KBE) both plan to leave AIM. Two shareholders own 90% of Masawara. Minority shareholders are being offered 25p a share or the chance to convert the shares into preference shares. Eastern European property investor Kimberly has net liabilities of €24.1m and sold most of its property assets. The lease agreement for the Marina Dorcol project has been terminated.
Allergy Therapeutics (AGY) has completed the enrolment of its 560 plus patient phase III trial for a treatment for patients with allergic rhino conjunctivitis due to birch pollen. The results of the trial should be available before the end of this year. The potential market is worth around £3bn.
Two large clinical trial contracts have been delayed and this means that Cambridge Cognition (COG) 2017 revenues will be 18% lower than expected. This means that there will be a loss for the year.
Telematics equipment and services provider Quartix (QTX) pleased the market by growing its 2017 revenues by 5% to £24.4m. This means that earnings per share forecasts have been raised from 11.8p to 12.3p.
Geospatial software company 1Spatial (SPA) has won a five-year contract from the state of Michigan in the US worth $766,000. Liontrust has sold all its 9.35% stake.
Xeros Technology Group (XSG) has launched its domestic washing machine that can cut the use of water, detergent and energy by up to 50%. A second development agreement has been signed with a commercial washing machines manufacturer.
Oracle Power (ORCP) is acquiring the minority stake in coal mining lease owner Sindh Carbon Energy for up to £3.6m in shares.
APC Technology Group (APC) has acquired electronic components distributor First Byte Micro for £1.2m. In 2016, First Byte made a pre-tax profit of £194,000 on revenues of £1.3m.
Reconstruction Capital II (RC2) has acquired stakes in two funds that own 60% of Romanian paints and coatings supplier Policolor. This will mean that Reconstruction Capital II has an effective stake of 55.36% in Policolor and make it easier to liquidate the investment.
BOS Global (BOS) wants to raise £1.2m at 1.25p a share to settle debts and provide working capital. The software company says the directors will not be paid until April and one of them, William Giles, will subscribe up to £300,000 in the placing and open offer.
Connemara Mining (CON) has announced drilling results from the Mine River gold project in Wicklow and Wexford. Most of the intersections contained gold at grades of less than 1g/t but two were more positive with 4.53g/t over eight metres and 16.1g/t over two metres.
Versarien (VRS) is collaborating with an Asia-based global textiles manufacturer on incorporating graphene into fabrics via yarns and finishes.
MAIN MARKET
E-commerce-focused cash shell AIQ Ltd (AIQ) soared as trading commenced on the standard list and trading in the shares had to be suspended after three days. There appear to have been nearly 1.4 million shares traded over three days, which is 2.8% of the shares in issue. Cayman Islands-based AIQ, raised £3.6m after expenses, at 8p a share. The suspension price is 125p. That means that the quotation and £3.6m in cash are valued at £62.5m. The plan is to seek an e-commerce acquisition, which has a strong management and is near to cash generation.
Bio-decontamination products supplier Bioquell (BQE) has completed the £122,000 disposal of the UK AirFlow parts and manufacturing business and received the final £70,000 for the sale of the service business. There was already net cash of £14.5m at the end of 2017. Full year revenues were better than expected at £29.3m, up from £26.8m and pre-exceptional profit will be much better, even before the £250,000 gain on the Airflow disposals. The 2017 figures will be published on 7 March.
Software supplier Gresham Technologies (GHT) says 2017 revenues were 24% ahead to £21.3m and more of these revenues are coming from Clareti enterprise data integrity software. There is £8.5m in the bank. Kestrel has trimmed its stake from 14.9% to 12.5%.
BATM Advanced Communications (BVC) has won a cyber communication technology contract with a government worth $4m over 12 months. Delivery will start in the second quarter of 2018.
Thomas Charlton has further increased his stake in North Midland Construction (NMD) from 7.24% to 8.2%. This appears to have sparked a recovery in the share price.
Avocet Mining (AVM) has deferred the completion the sale of its Burkina Faso assets for $5m. The buyer, the Balaji group of companies, wants more time to settle a claim from International Royalty Corporation, a creditor of the holding company of the assets. Avocet has received a deposit of $500,000.
Bluebird Merchant Ventures Ltd (BMV) has announced the results of preliminary grab samples from the Gubong gold mine. The majority of samples had gold grades of more than 1g/t and silver grades of 10g/t or more.
Zenith Energy Ltd (ZEN) has entered an exclusivity agreement for the acquisition of production and exploration licences in a Central Asian country. Azerbaijan-focused Zenith would be acquiring assets in a proven petroleum system and they produce 250 barrels of oil per day.
Rainbow Rare Earths (RBW) has started drilling at the Gakara project in Burundi. Gakara has an estimated in situ-grade of 47%-67% total rare earth oxide. The drilling is focused on the production area at Gasagwe and anomalies that have been identified. The first results will be in April. A second phase of drilling is planned later in the year and this could produce a JORC-compliant resource before the end of 2018. Production is building up and the run rate target for the end of 2018 is 5,000tpa. In December, Rainbow raised £2.8m at 14p a share in an oversubscribed placing. The cash will be used to acquire capital equipment.
Finsbury Food Growth Halted
Finsbury Food Group FIF A successfull roll out of vision and values appears to have been the main feature of Finsbury’s second half and once you see management reduced to that level of jargon, you know that something is not quite right. Well revenue for one thing was completely flat, in fact it was so flat that the first and second half revenues were virtually identical – so much for meaningless empty phrases like vision and value. Profit before tax for the 26 weeks to the end of December rose by 5.3% and the interim dividend was increased by 7.5%. The CEO refers to the company’strack record of exceptional growth but offers no explanation as to why that should suddenly have come to a halt in the second half of 2016.
EKF Diagnostics EKF A successful restructuring helped to produce strong organic growth in the year to the end of December, with revenue rising by 28% and gross profits by 24%. EBITDA of £6.1m compared to 2015’s loss of £2.9m
Volution Group FAN is increasing its interim dividend by 12.5% for the half year to 31st January. Revenue grew by 26.1% or 2.3% on a like for like and constant currency basis. Reported profit before tax grew by 10% compaed to the first half of 2016. Further good growth is expected in 2017.
Taptica TAP A strong performance for the year to the end of December saw revenue rise by 66% and gross profit more than double. Adjusted EBITDA more than tripled to $25.7m and an increase in the final dividend means an increase for the year from 0.00784 to $0.1011 cents per share.
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Ryanair Beats The Competition
Ryanair Holdings RYA has more than halved its planned UK growth from 12% to 5% because of weaker sterling and slower economic growth. For the half year to 30th September profits rose by 7% on fares down by 10% and unit costs also down by 10%. Basic earnings per share for the half year rose by 15%. Some competitors have been unable to stand the competition and have closed bases and routes. The 18% fall in sterling has reduced full year guidance by 75m Euro.
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Hiscox HSX In the 9 months to 30th September material foreign exchange gains helped Hiscox to increase gross written premiums by 20.9%, compared to 14.3% in local currency. All segments put in a strong performance but Hiscox London Market and Hiscox RE continued to find trading conditions difficult and margins are evaporating in some areas.
Keywords Studios KWS Revenues and adjusted profit before tax will be significantly ahead of current market expectations for the year to 31st December, with adjusted profit before tax expected to be not less than 14m. Euro.
Fevertree Drinks FEVR has continued to perform strongly in the second half, particularly in the UK and anticipates that results for the year to 31st December will be materially ahead of current market expectations.
EKF Diagnostics EKF Revenue and adjusted EBITDA will exceed current market expectations for the year to the end of December. Early fourth quarter trading has been materially higher than budget and exceeds the previous revised figures.
Dignity DTY Underlying operating profit fell by 2.9% in the 39 weeks to the end of September, slightly ahead of expectations, as the number of deaths declined by 2.9% at the same time as the company lost market share.
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Brammer Scraps Final Dividend
Brammer plc BRAM has already decided it will have to scrap its final dividend after it has been forced to go round with its begging bowl and arrange a rights issue. Third quarter group sales per working day which fell by 2% and a reduced level of supplier support mean that quarter three produced an operating loss and a pre tax profit is not expected for the full year to 31st December. The Nordic countries appear to have been a disaster area with quarterly sales falls of 21%, 13% and 13% over the first nine months. And that is not an end to it. Margins have been impacted and further declines are expected in sales of its more profitable products. A business review will have taken months to reach its conclusions by the time they are announced in November. Presumably that is what passes for urgent action but it is already becoming clear to senior management that what will help to solve the company’s problems will be greater focus and greater clarity and the new CEO appointed in August has been going round talking to people. Well that is very comforting.
If ever the argument that a collapse in sterling is good for industry and commerce was exposed as economic nonsense, Brammer provides proof.
EKF Diagnostics EKF Third quarter trading has turned out to be materially higher than budget and has also exceeded market forecasts. Revenue and adjusted EBITDA for the full year are now expected to exceed current market forecasts.
XP Power Ltd XPP Revenue over the nine months to 30th September has risen by 13% and orders by 19%. At constant currency rates the figures are 5% and 11% respectively. The third quarter saw orders at a record £ 34.2m, almost a 50% rise on 2015’s figures, although this was partly due to some orders being brought forwards from October.
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