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Andrew Hore – Quoted Micro 28 September 2020

AQUIS STOCK EXCHANGE

SAPO (SAPO) has agreed to acquire Secure Web Services (SWS) and it will change its name to Rural Broadband Solutions. SAPO is paying £1.6m in cash and shares and £236,500 of the cash paid will be used to subscribe to a fundraising. SAPO wants to raise £2.5m. SWS is based in Shropshire and had revenues of £730,000. There are 2,300 customers and this could be doubled in three years. A buy and build strategy will expand the group across the UK.

Specialist social housing developer Walls and Futures REIT (WAFR) swung from loss to profit in the year to March 2020. The pre-tax profit of £626,000 includes a gain on revaluation of £798,000. The underlying loss was similar to the year before. Net assets increased from £3.3m to £4m, equivalent to 107p a share. There are plans to dispose of the remaining London residential units and reinvest in specialist supported housing. The Wimbledon Park property was sold for £656,000 in June, which was a 3% discount to book value.

S-Ventures (SVEN) has made an investment in vitamin fortified, smoothies and juices provider Coldpress Foods. It has taken an initial 3.3% plus an investment in a convertible that could take the stake to 6.2%. The total investment is £60,000. Coldpress has revenues of more than £1.6m.

Oncology treatments developer Incanthera (INC) says that skin cancer technology Sol has exceeded expectations in a recent study. Sol has been shown to be effective in penetrating the skin barrier.  

A requisition for a general meeting at Primorus Investments (PRIM) has been withdrawn following the proposed board appointments of Rupert Labrum, Hedley Clark and Matthew Beardmore. Donald Strang will leave the board.

SulNOx Group (SNOX) says Nicholas Nelson has resigned from the board but remains as chief executive. Shareholders had requisitioned a general meeting to remove him from the board, but there is no need for this to happen. Nouryon has agreed to manufacture SulNOx’s HFO emulsifier and a diesel conditioner, which will be sold under the brand SulNOxEco diesel conditioner.  

Altona Energy (ANR) is seeking to raise up to £500,000 at 6.5p a share. Existing and new investors can subscribe for shares via www.nrprivatemarket.com. The offer is set to last until 15 October. The cash will go towards financing the two rare earth element projects in Malawi and Uganda.

Belvedere Leisure Resorts (BELV) has signed an agreement with Landal GreenParks UK for an exclusive partnership for the leisure park at the Barncosh site until the end of the year. Belvedere will deliver the first 50 units and then the 20-year arrangement will take effect. Belvedere has agreed to acquire the land for the 50 units at a cost of £500,000. Belvedere continues to seek new funds.

Gunsynd (GUN) has invested a further £75,000 in copper/gold explorer Eagle Mountain Mining. Gunsynd owns 1.54% of the ASX-listed company.  

AfriAg Global (AFRI) believes that the FCA guidance has given it confidence that its deal with medicinal cannabis company Apollon Formularies will go ahead.

European Lithium (EUR) has raised A$2.1m at 4.5 cents a share and this will be spent on metallurgical test work at the Wolfsberg lithium project. Early Equity (EEQP) has raised £193,000 at 0.5p a share.

Sativa Wellness Group Inc expects to gain admission to the Aquis Stock Exchange on 30 September.

Newbury Racecourse (NYR) non-executive director Dominic Burke has bought 20,000 shares at 700p each. He owns 127,365 shares.

AIM

Gold production in Azerbaijan fell in the first half but Anglo Asian Mining (AAZ) is confident it can still hit its full year target of 75,000-80,000 ounces of gold equivalent, which would be slightly lower than the previous year. The higher gold price offset the decline in production from 39,905 ounces to 32,501 ounces. Even though the cost of production increased because of lower volumes and the reduction in grades at the Ugur open pit, pre-tax profit improved from $10.3m to $11.8m. There was $21.4m of cash generated from operations. There is plenty of cash to invest in Azerbaijan and the new venture in Ireland with Conroy Gold and Natural Resources (CGNR). The interim dividend was increased by 29% to 4.5 cents a share and the possibility of a special dividend next year. There was cash of $29.2m at the end of June 2020.

Specialist IFA Frenkel Topping (FEN) has made an indicative all-share offer for personal injury claims generator NAHL (NAH). Frenkel Topping has already acquired 6.11% of NAHL. finnCap forecasts an improvement in Frenkel Topping pre-tax profit from £1.8m to £2.3m in 2020.

NWF (NWF) says that trading is in line with expectations. Fuel volumes are lower than the same time last year because of reduced economic activity, but they are as anticipated. The food distribution trading has been hit by volatility in demand and lower demand from the catering sector. The feeds division has benefited from a stable dairy market.  

Spinger-Verlag has increased its stake in DeepMatter (DMTR) from 2.9% to 7.4% following the issue of deferred consideration.

Cyber security services provider ECSC (ECSC) grew managed services and consultancy revenues in the first half, although there was lower utilisation in consulting during lockdown. Consultancy revenues are improving in the second half. There was cash of £1.6m in the middle of September.  

Battery technology developer Ilika (IKA) has signed a framework agreement with the UK Battery industrialisation Centre for the production of Goliath solid state pouch cells. This will help with the scale up of production for the batteries aimed at domestic appliances and electric vehicles.

MAIN MARKET

Critical Metals (CRTM) is raising £800,000 at 5p a share. That will more than double the number of shares in issue. Critical wants to buy or acquire stakes in natural resources assets in Africa. The focus will be near-term brownfield projects that can be brought into production. Chief executive Russell Fryer is a former investment adviser in the natural resources sector and founder of Western Uranium Corporation.   

Gulf Marine Services (GMS) has received another general meeting requisition letter from Seafox. The removal from the board of Mike Turner, David Blewden, Mo Bississo and Dr Shona Grant is Seafox’s wish. It wants Rasid Al Jarwan, Mansour Al alami and Saeed Mer Abdulla Khoory to replace them.

Auctus Growth (AUCT) is in discussions to acquire HeiQ Materials AG, which is a materials innovation company focusing on the apparel, medical and home textile markets. Trading in the shares has been suspended.

Hawkwing (HNG) is switching from AIM to the standard list on 30 September and raising £1.2m after expenses at 3p a share. That values the shell, which has failed to secure a technology acquisition in the time required by AIM, at £1.5m.

Digital Landscape Group (DLGI) is cancelling its standard listing on 2 October. Trading will begin on the Nasdaq Global Market on 5 October.

Challenger Acquisitions Ltd (CHAL) has received 73.94% acceptances from shareholders in Cindrigo Energy. When other conditions are satisfied the remaining shares will be mopped up and a prospectus prepared for a reintroduction to the standard list.

Andrew Hore

Quoted Micro 1 February 2016

ISDX

Property investor Ace Liberty & Stone (ALSP) has had a busy week of acquisitions and disposals. Shildon House in Gateshead has been acquired for £1.825m, while Hume House in Leeds is being sold for £3.55m – a profit of £1.88m – although the deal is not expected to complete until the end of this year. Ace has bought out the 62% shareholder in Radcliff Property, the company that owned Telephone House which was sold in October, for £1.235m. Ace has already received £2.8m from the Telephone House sale but there is a dilapidations claim on a former tenant and Ace will now get 100% of any settlement. In the six months to October 2015, revenues jumped from £404,000 to £990,000, while pre-tax profit increased from £282,000 to £514,000. There was a £252,000 cash inflow from operations and net debt was £2.64m at the end of October. Of course, this is before the latest deals and some others that have been announced since October. NAV was £13.8m and the property portfolio, valued at £20.1m, generates more than £2.26m of annual rental income. Hybridan has been appointed as broker. At 3.75p (3.5p/4p) a share, Ace is valued at £21.9m.

Wheelsure Holdings (WHLP), which develops locking nut devices for railway tracks, reported a sharply reduced loss in the year to August 2015. Revenues improved from £144,000 to £240,000 and combined with lower admin expenses this helped the loss decline from £406,000 to £228,000. House broker Daniel Stewart forecasts more than doubled revenues and near break even this year.

Hydro Hotel, Eastbourne (HYPD) reported a higher profit in the year to October 2015. Revenues edged up from £3.07m to £3.13m, while pre-tax profit moved from £124,000 to £134,000. There was £1.15m in the bank. Hydro has already announced an unchanged total dividend of 18p a share, although it is not fully covered by earnings. At 750p (725p/775p) a share, Hydro is valued at £4.5m. Second half trading improved after a weak first half. Staff costs are rising this year.

Investing company Globe Capital Ltd (GCAP) raised £100,000 at 0.105p a share and there is a warrant exercisable at 0.0025p each attached to each placing share. Globe had £11,000 left in the bank at the end of June 2015 and there had been a cash outflow of £188,000. The chief executive has resigned and this could mark a change in focus. Globe had been focused on investing in debt and equity of businesses but failed to find a suitable investment. New director and 3.3% shareholder David Barnett has a background in the fashion industry. Globe was previously known as Ford Eagle Ltd and when it changed its name in June 2013 it raised £207,000 via an open offer at 1p a share and it was capitalised at nearly £250,000 at the open offer price. Later that year, £199,000 was raised at 0.4p a share. At 0.625p a share, Globe is valued at £1.2m, although the bid offer spread is 0.25p/1p and there are no reported trades on the ISDX website suggesting that this is not necessarily fully reflective of the business particularly as the placing is at such a discount to the bid price.

AfriAg (AFRI) has decided to leave AIM and concentrate on its ISDX quotation and it says this could save up to £40,000 a year. Trading via ISDX has been increasing since this quotation was obtained. If shareholders agree AfriAg will leave AIM on 24 February. Although the strategy will stay the same AfriAg has hinted that it is assessing strategic options.

AIM

Vertu Motors (VTU) has bought three Honda dealerships from fully listed rival Lookers for £2m. Vertu has 12 Honda dealerships and this makes it the largest Honda car retailer in Europe and it also operates two motorcycle dealerships. All three sites adjoin existing dealership areas and they broke even last year. Vertu says that the acquisition will be earnings enhancing in its first full year.

Cathexis has increased its offer for Interior Services Group (ISG) from 143p a share to 171p a share. This bid is open until 17 February and will not be extended unless there is a rival bid. There were acceptances for the previous bid equal to 1.7% of the ISG share capital. Cathexis has taken its own stake above 30% so this is a mandatory bid.

Online business and marketing platform operator blur (BLUR) reported a decreased cash burn in the fourth quarter partly due to lower development spending. The quarterly cash burn more than halved to $1.5m. More of the projects put on the site are being taken up and completed, while the move towards larger customers is paying off. Revenues are estimated to have been $2.7m in 2015, while the underlying loss is around $10m. That loss is expected halve next year and the rate of cash burn will slow further and net cash is forecast to fall from £6.3m to £2.2m.

Learning Technologies Group (LTG) has expanded its US e-learning interests through the $26m acquisition of Nashville-based Rustici Software. The business is international and it is involved in a wide number of sectors. In 2015, revenues were $6.6m, mainly recurring, and EBITDA was $2.7m. Up to $11m more may become payable depending on performance. Watershed Systems Inc has been split from the rest of the business with LTG taking a 30% stake and the former Rustici owners will own the rest. Watershed is developing a new learning analytics platform that will gather and analyse learning data and LTG is injecting $3m for its stake.

Specialist IFA Frenkel Topping (FEN) says that 2015 figures are broadly in line with expectations with assets under management of £666m at the end of the year. House broker Shore has been updating its forecasts and it has reduced the 2016 figures but increased the 2017 ones. This is because 2016 is a transitional year as assets under management are moved to come under its own management. This still requires final FCA approval. A profit of £1.74m is forecast for 2016, rising to £3.28m in 2017.

IP-focused investment company FastForward Innovations Ltd (FFWD) has raised £5.6m from a placing at 15p a share – a premium to the then market price although it was as high as 18.25p earlier in the month. The share price ended the week at 15.25p. The shares issued are just under one-quarter of the enlarged share capital. The previous placing raised £3.17m at 8p a share. The latest placing follows the appointment of board director Lorne Abony as chief executive and he invested more than £800,000 taking his stake to 19.7%. He stood down from the boards of two investee companies – Vested Finance Inc and Vemo Education Inc – and he will not be involved in future investment decisions relating to them. There are seven investments in the portfolio. Abony has been the boss of two other AIM-quoted (and TSX-listed) companies that were based in Canada – Fun Technologies and Mood Media Corporation.

Tissue Regenix (TRX) has signed a joint venture with GTM-V to form a tissue bank in Rostock, Germany and management believes that this model can be used to expand internationally. Tissue Regenix has invested €250,000 in cash in the joint venture, which has been granted licences for human dCELL . Regulatory submissions for EU approval are being prepared and the first human tissue treatment products based on the dCELL decellularisation technology could be launched in Germany next year.

Call centre and outsourced customer services provider IBEX Global Solutions (IBEX) says that it has won two new clients in financial services and consumer electronics and it has opened a new operation in Nicaragua. There are plans for an additional site in the next few months. Focusing on higher margin business means that the interim figures will be in line with expectations and the second half will benefit from the new customers. The interims will be published on 24 February. House broker Cenkos forecasts 2015-16 earnings equivalent to 14.3p a share, which puts the shares on eight times prospective earnings.

MAIN MARKET

A strong final quarter meant that publisher Quarto Group (QRT) beat 2015 expectations. A better than expected contribution from the Ivy Press acquisition and the strong performance of adult colouring books were behind the improved trading. A profit of around $13.5m is anticipated. Net debt was $59.7m at the end of 2015 – Northland had forecast $60.7m. A profit of around $15m is expected for 2016. At 217.5p a share, Quarto is trading on little more than six times prospective earnings.

Interim figures from automotive manuals and information publisher Haynes Publishing (HYNS) show an improvement in profit in what is the weaker half of the year. In the six months to November 2015, revenues were 3% ahead at £12.2m, while pre-tax profit increased from £55,000 to £295,000. However, capitalised development spending, net of amortisation, increased from £48,000 to £464,000. Net debt was ££475,000 at the end of November 2015. Haynes continues to review its structure and costs. US and Australian revenues were much lower and this was made up for by higher European revenues. There was growth in UK manual sales but against a weak comparative period but the focus is developing the digital platform. Digital revenues were more than one-quarter of the interim total. An unchanged interim dividend of 3.5p a share was announced. A full year profit of £2.47m is forecast. James Bunkum has joined the board as chief financial officer designate and he takes over the role in May.

Standard list investment company Highlands Natural Resources (HNR) has published its prospectus for the acquisition of 75% of patents and know how rights for DT Ultravert and it has raised £765,000 at 12p a share. The cash will cover the costs of field trials for the technology that are part of a potential licence agreement with Schlumberger.

ANDREW HORE

Quoted Micro 23 March 2016

ISDX

Trading in the bonds of Carduus Housing (CHPB/CHP2) has been suspended pending clarification of its financial position. It is noticeable that the suspension announcement is the first not to include managing director Brian Gilmour as the contact name. Instead fellow director Drew Oswald is named at the end of the release. Carduus joined ISDX on 30 September 2015 when £3.5m of 6.5% unsecured bonds were admitted to trading. It has subsequently raised £3.5m from the issue of 6.25% unsecured bonds. The strategy is to invest in affordable housing, with initial investments in Scotland.

Other bond issuers continue to raise cash. Diversified Gas & Oil (DOIL) has raised a further £630,000 from 8.5% unsecured bonds, taking the total to £5.8m. Via Developments (VIA1) has raised an additional £80,000, making a total of £2.64m from eleven placings of 7% debenture stock since joining ISDX. Residential property acquisitions have been made in Manchester and Luton.

Hydro Hotel, Eastbourne (HYDP) has appointed Jonathan Owen as its new general manager. He starts on 16 May. The shares owned by the estate of Richard Cecil James have been equally distributed to Elizabeth Foster and Patricia Gray, who own 10.1% and 9.3% of the company respectively. There were also 200 shares traded at 800p each on 15 March. At 775p (750p/800p) a share, which values Hydro at £4.7m.

Titiana Internet Ventures (TITP) has failed to secure a renewable energy sector deal and it does not have the cash to maintain its ISDX quotation so shareholders are being asked to vote to terminate this quotation. At 2.5p (2p/3p) a share, Titania is valued at £44,000.

AIM

Robotic process software supplier Blue Prism (PRSM) has joined AIM. The business is loss-making but it is profitable in Europe and the costs of building up a base in the US have pushed the group into loss. The software enables automation of manual, rules-based admin processes and it has been available since 2008 and subsequently developed further with customers. Blue Prism raised £10m at 78p a share, while £11.1m was raised by existing shareholders. The share price ended the first day of trading at 110.5p.

Specialist IFA Frenkel Topping (FEN) has gained FCA approval to deal with retail clients and this is the final requirement for the new strategy. This involves taking on the fund management role for assets under management – £666m at the end of 2015. Frenkel has been opening additional offices in order to broaden its coverage of the country and this held back profit last year. Pre-tax profit dipped from £1.57m to £1.42m in 2015. There should be some recovery this year but the real benefits of the strategy should be more obvious in 2017 when profit is expected to be £3.28m. Meanwhile, the dividend has been increased by 25% to 0.8875p a share and there should be further growth in dividends in the coming years.

SIPPs administrator Curtis Banks (CBP) reported an improvement in pre-tax profit from £3.1m to £4m in 2015 as it won new business and got the full benefit from recent acquisitions. Curtis Banks will become the second largest SIPP provider following the acquisition of Suffolk Life from Legal & General for £45m. The enlarged group will have 65,000 SIPPs with assets of £18bn under administration. The deal is still waiting for regulatory approval. There are opportunities for further bolt-on deals.

MAIN MARKET

Standard list shell Opera Investments (OPRA) is still trying to secure the reverse takeover of SoloPower Systems Inc (http://solopower.com/company/) that was originally announced last July. Financing the acquisition of the thin film solar technology developer has proved difficult and the structure of the deal is being changed. SoloPower will raise finance prior to a reversal into Opera, which is required to happen by 15 May or it will not go ahead. There was £1.08m in the bank at the end of June 2015. Opera has already incurred £400,000 of costs relating to the deal but Hudson, the backer of SoloPower, will reimburse £200,000 of these costs by the end of the month.

Highlands Natural Resources (HNR) has paid $32,000 to acquire 100% of 26 unpatented mining claims in Grand County, Utah. Highlands had been assessing oil and gas well logs and thinks there might be a potential uranium discovery in the area. Permits will have to be obtained and then exploration can start a few months later. The seller is Ticaboo Minerals which will have the right to a production royalty of 2% of the gross value of minerals produced from the mining claims. The principal focus of Highlands is still the oil and gas sector.

ANDREW HOREpr

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