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Andrew Hore – Quoted Micro 17 August 2020

AQUIS STOCK EXCHANGE

Brewer Adnams (ADB) reported a slump in revenues from £34.7m to £21m in the six months to June 2020 and there was a loss. That is no surprise given the problems of the hospitality sector. Online sales grew but could not offset the loss of on-trade sales. Net debt was £14m at the end of June 2020.

Medical device developer TruSpine Technologies (TSP) is on course to join the Aquis Stock Exchange on 20 August. TruSpine wants to raise £1.5m, which would give it a valuation of £31.5m. The investment is eligible for EIS-relief. TruSpine expects to make a FDA submission for Cervi-Lok, which is one of the three spinal stabilisation devices being developed, in the fourth quarter of 2020. Existing Aquis-quoted company Primorus Investments (PRIM) is an investor in TruSpine. In 2017, it invested £500,000 at a pre-money valuation of £15m. Another Primorus investment, Greatland Gold (GGP), has performed strongly in the second quarter and the share price is more than 155% ahead over the period.

NQ Minerals (NQMI) has raised a further £695,000 at 7p a share. NQ has also secured a $55m loan facility to refinance the project debt of the Hellyer gold mine. Interest savings should be $3.4m a year. Chairman David Lenigas has acquired 20,000 shares at $0.12 each.

Sativa Group (SATI) had a record July. The CBD products supplier has benefitted from sanitiser demand.

TechFinancials (TECH) reported a loss of $492,000 in the first half of 2020. There is $716,000 in the bank. The closure of the trading software operations will be completed in the second half. The Footies ticketing business still has not progressed in terms of signing up clients.

Recruitment company Sumner Group Health (SGRL) intends to withdraw from Aquis in order to save money. A general meeting will be held on 3 September.

IamFire (FIRE) has completed the purchase of a 10% stake in Bio2pure, in a deal that values the company at £8m. The investee company’s CoviPure disinfectant has been launched

AIM

Energy supplier Yu Group (YU.) has been criticised for its financial controls and systems back in 2018. A £300,000 fine has been waived because remedial action has been undertaken. Yu has acquired Bristol City Council-owned Bristol Energy’s B2B business for an initial £1.24m.

Appreciate (APP) was going to have a tough year even before COVID-19. In the year to March 2020, underlying pre-tax profit fell from £12.5m to £11.4m and there is likely to be a much larger profit decline this year. Trading has improved after a tough first quarter. If Appreciate had not been investing in its digital products it would have found recent months even more difficult. A property has been sold for £3.2m, which further enhances the cash pile of £29.6m at the end of March. The hamper business will be closed this year, but the overall Christmas savings business is holding up. Corporate demand is recovering.

Investment in VW emissions case work will hold back profit in the second half at credit hire firm Anexo (ANX). Lockdown led to a sharp fall in interim profit, but business is building up again. Profit could return to the 2019 level of £23m in 2021, even if there are no VW case revenues. A 0.5p a share interim dividend is being paid.

The geographic and sector spread of recruitment firm Empresaria (EMR) has helped it cope with difficult trading, particularly in its airline-related business. The business was profitable in the first and second quarters. The underlying interim pre-tax profit fell from £3.7m to £2.4m. There is no full year forecast.

Touchstone Exploration (TXP) has commenced drilling at Chinook on the Ortoire block in Trinidad. Chinook is valued at 2p a share by finnCap, but it could be significant like previous find Cascadura, which is valued at 78p a share. Cost cutting has helped to reduce year-on-year per barrel operating costs by 28% in the second quarter. There was still a second quarter loss. Production has declined to 1,396 barrels/day in the second quarter, but this will rise substantially when Cascadura comes into production.

STM (STM) has acquired pensions administrator Berkeley Burke for up to £2.9m. this will add to the UK operations. The business will be rebranded.

Pennant International (PEN) has an order book worth £36m and net cash of £2m. Annualised cost savings of £1m will help the second half performance and a profit is expected. That may not be enough to cover the first half loss.

Pires Investments (PIRI) investee company Getvisibility has signed a US distribution agreement. The data security business will gain access to US government work.

Matthew Freud has taken his stake in Reach4Entertainment (R4E) to 18.7%. The company’s chief executive has increased his stake to 18.7%. The general meeting to vote on the proposal to leave AIM is on 21 August.

MAIN MARKET

Tex Holdings (TXH) says interim revenues fell from £21.8m to £18.5m and the loss has increased from £351,000 to £1.36m. There is £2.54m in the bank, but net debt is £10.7m. The board still wants to raise more cash. The plastics business is still profitable, although it made a lower contribution. The engineering loss was slightly lower, but boards and panels fell from profit to loss.

MATCHED BARGAINS

Fastjet (FJET) is moving from AIM to Asset Match and the airline is reregistering as a private limited company. Trading is expected to start on 24 August. The first auction will be on 30 September.

Andrew Hore

Andrew Hore – Quoted Micro 19 November 2018

NEX EXCHANGE        

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

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

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

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

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

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

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

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

AIM    

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

MAIN MARKET  

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

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

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

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

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

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

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

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

Andrew Hore

Andrew Hore – Quoted Micro 12 November 2018

NEX EXCHANGE        

Crossword Cybersecurity (CCS) plans to raise up to £2.25m prior to a move to AIM at the end of this year. The cash will be invested in sales and marketing, product development and working capital.

Primorus Investments (PRIM) says that investee company Stream TV Networks has secured a deal with Beijing Optical and Electrical, which will use Stream’s 3D display technology in large flat TV and monitor screens. Primorus has invested £1.4m in Engage Technology, which has 75 corporate clients for its construction software and a further 17 that are contracted but not yet live. Revenues are growing more slowly than hoped. Engage is talking with partners and potential corporate investors.

Angelfish Investments (ANGP) is increasing its shareholding in YBOO from 20% to 35% for an investment of £400,000. A working capital loan of up to £1.5m with an annual interest charge of 10%.

Inqo Investments Ltd (INQO) reported an increase in interim revenues from R7.65m to R8.37m and the loss declined from R4.52m and R4.12m. At the end of August 2018, net cash was around R11.5m. The South Africa-based social impact investor generated the majority of its revenues from Kuzuko Lodge with a contribution from Bee Sweet Honey.

KR1 (KR1) says that its investee company Volt Ltd has raised $2m. KR1 has converted loan notes and has a 7.94% in institutional digital asset custodian Volt valued at $1.4m. The initial investment of £200,000 acquired a 5% stake in September 2017.

MetalNRG (MNRG) has completed the acquisition of the Gold Ridge project in Arizona from Winston Gold for £530,000. The final payment is funded by shares at 1.75p each. The project area includes three former producing mines. There is potential for the discovery of further gold mineralisation.

Auxico Resources Canada Inc (AUAG) has raised $315,000 at 20 cents a share. This cash will fund geological work and the evaluation of opportunities in Colombia.

Healthperm Resourcing Ltd (HPR) is changing its name to SG Recruitment Ltd.

AIM    

Gresham House (GHE) is acquiring investment manager Livingbridge for an initial £30m. Up to £10m more could be payable depending on performance. This deal will help to widen the customer base and provide product development opportunities. The combined group will have assets under management of more than £2bn. A placing raised £11.7m at 448p a share. The deal is immediately earnings enhancing even before cost savings. Gresham House Energy Storage Fund has raised £100m and will invest £57.2m in a portfolio of energy storage assets in development.

Castleton Technology (CTP) increased interim revenues by one-fifth to £12.9m and there was a 5% improvement in earnings per share. finnCap forecasts an improvement in full year earnings per share from 5.2p to 5.9p. The provider of software and managed services plans to pay a maiden dividend for this financial year.

Transportation software and services provider Tracsis (TRCS) has reported figures in line with recently upgraded forecasts. In the year to July 2018, revenues improved from £34.5m to £39.8m, mainly organic growth, while pre-tax profit rose from £7.6m to £8.5m, helped by a one-fifth increase in software sales. There is £22m in the bank to finance further acquisitions.

AdEPT Technology (ADT) has acquired unified communication services provider ETS Communications for £2.5m less net debt at the end of October 2018. This deal will be immediately earnings enhancing. Thebank facility has been increased to £35m in order to fund further acquisitions.

International benefits insurance provider GBGI Ltd (GBGI) is recommending a $1.515 a share cash offer from Elm Bidco. This values GBGI at $131.8m (£101.6m). There has been modest growth in earnings per share since GBGI floated at 150p a share in February 2018. Adividend of 1.4 cents a share was paid in June.

Myanmar-focused social media platform operator MySQUAR Ltd (MYSQ) is investigating into the use of proceeds of two recent fundraisings. Approximately £900,000 was paid out of company funds to former directors and third parties. Staff are being made redundant and additional cash is required. Trading in the shares is suspended. The nominated adviser SP Angel and joint broker Daniel Stewart have resigned. Piers Pottinger has stepped down as a director.

Floorcoverings manufacturer Victoria (VCP) has reassured investors about trading and the share price has started to recover. Victoria is not issuing a bond to refinance its debt because the potential pricing was unfavourable. Invesco has increased its stake to 22.1% and The Spruce House Partnership has built up a 13.6% stake.

Estate agency Purplebricks (PURP) has grown interim revenues in the UK by one-fifth. Trading in Australia is tough, and it is still early days in the US. Net cash was more than £100m at the end of October 2018.

First Derivatives (FDP) increased its underlying interim pre-tax profit by 15% to £10.6m. The interim dividend was 10% higher at 7.7p a share. The software and consultancy company with the fastest growth coming from licences for Kx software.

URA Holdings (URA) has gained EIS approval for the funding for its proposed reverse takeover of personalised digital entertainment content provider Entertainment AI. Complexities of the deal have been solved and documentation is progressing. URA has until 20 December to complete a reverse takeover.

Interim revenues and pre-tax profit at Best of the Best (BOTB) will be better than expected and this has led to a full year pre-tax profit upgrade from £1.4m to £1.6m, which is the same as the year before. The online competitions operator will be hit by the increase in remote gaming duty from 15% to 21% from October 2019. This will mean that 2019-20 forecasts will have to be reassessed.

Polarean Imaging (POLX) says that its phase III non-inferiority clinical trial of its Xenon polariser is up and running. Enrolment should be completed in the second quarter of 2019. A new order has been received to upgrade the polariser at SickKids Hospital in Toronto.

Remote tracking technology developer Starcom (STAR) has signed a deal with a distributor in North Africa covering Helios Advanced and BIO CAN fuel sensors. This year’s group revenues are expected to improve from $5.4m to $5.9m. Starcom has raised £400,000 at 2p a share.

Broadcast software provider Pebble Beach Systems (PEB) has won two new contracts that will underpin forecasts for 2018 and 2019. The two orders have a total value of £2m.

Zoo Digital (ZOO) reported interims in line with expectations. Revenues were 17% ahead at $14.9m and the main growth has come from dubbing services. The loss was slightly higher at $159,000. A major subtitling customer will increase its demand in the second half. The full year, underlying pre-tax profit is forecast to improve from $500,000 to $1.8m.

Recruitment company Kellan Group (KLN) plans to cancel its AIM quotation and the general meeting vote already has backing from the owners of 70% of the shares. The shares are tightly held and liquidity is limited.

Fastjet (FJET) says that it can continue operating in November, but it will require more cash.

Crawshaw (CRAW) has called in administrators to itself and four subsidiaries. Thirty five stores have closed and 19 are still trading. Administrators have also been appointed to Flowgroup (FLOW) because it could not find a suitable acquisition.

MAIN MARKET  

Path Investments (PATH) says it is not proceeding with the farm-in for the Alfeld-Elze II licence having failed to raise the cash it required and reach agreement on the transaction structure. The deal would have led to a move to AIM. Trading in the shares remains suspended.

Beauty and personal care products supplier InnovaDerma (IDP) expects interim revenues to be similar to last year, while full year revenues are expected to increase from £10.7m to £14.4m. finnCap forecasts a rise in pre-tax profit from £700,000 to £1.7m.

Consumer goods supplier UP Global Sourcing (UPGS) reported revenues for the year to July 2018 fell by one-fifth to £87.6m and underlying pre-tax profit decreased from £10.7m to £5.6m. The main decline was due to discount retailers seeking tougher terms and delayed sales to a European retailer. Online sales increased and this helped to maintain margins. Brands include Salter kitchenware and Constellation luggage. The Kleeneze brand is being relaunched. Non-executive chairman Jim McCarthy has acquired 135,000 shares at 39.3p each. Equity Development forecasts a rise in earnings per share from 5.4p to 5.6p, while dividend per share should rise from 2.7p to 2.8p.

Trading in Blockchain Worldwide (BLOC) shares has been suspended ahead of a proposed acquisition of Chorum Group.

Shareholders have agreed to Titon Holdings (TON) moving to AIM on 10 December.

Andrew Hore

  

Ian Pollard: Fastjet On The Brink

Fastjet plc FJET admits that it has not received the additional funding which it needed by the end of October if it was to continue operating, It has however been able to continue operating beyond that deadline due to some improvement in trading and cash generation. This has allowed it further time to continue discussions with its major shareholders and creditors and these have in part been positive. However without a successful conclusion “in the coming days” it will be unable to continue trading as a going concern.

Next plc NXT is maintaining the full year sales and profit guidance issued 5 weeks ago, despite full price sales growth in quarter 3 slowing substantially to 1.3% compared to the average of 3.1% over the first nine months. Retail sales were the problem with a third quarter fall of 8% whilst online helped to save the day with a rise of 12.7%.

Standard Chartered plc STAN significantly increased its profitability during the first nine months of the year, with underlying profit before tax of $3.4bn rising by 25%. In quarter 3 to the end of September this rose further to 31% whilst on a statutory basis the increase was 37%. Income from Africa & Middle East was down 5 per cent or 3 per cent on a constant currency basis. Macroeconomic and geopolitical headwinds continued to impact performance in the third quarter particularly in the UAE. In Europe & the Americas things were better with income rising by  6 per cent. Management takes credit for the fact that the bank now makes as much profit in a quarter as it did in all of 2016

Computacenter CCC is having to find excuses as to why quarter 3 saw a decline. The only thing it can come up with is that 2017 was better or in technical jargon the comparatives were significantly more challenging. Thus overall Group revenue for the third quarter declined year-on-year by three per cent to £900 million both in real and in constant currency. The UK was particularly hit in the third quarter with a 9% decline in overall revenue although this has still  lead to a year-to-date increase of 17 per cent. Germany and France also suffered from third quarter declines. The International sector on the other hand grew by 13%. Expectations for the fourth quarter are for improved growth but not at the levels seen in the first half of the year.

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Ian Pollard – Fastjet #FJET fights to survive as losses fall

Fastjet FJET expects to become cash flow positive in the second half of 2018 which if it does will give the lie to the rabid and gleefull forecast of a speedy demise announced earlier in the week by one Tom Winnifrith who used to try and earn a living in the Isle of Man.The year to the 31st December saw the operating loss fall by 61%, load factor up by 17% and costs down by 48%. It restructured its operations, which it certainly needed to, in a relatively short space of time. It realigned its network, withdrew from loss making routes, reconfigured its fleet and significantly reduced its cost base. A major milestone was the purchase of the brand from easy Group. It is still Africa’s leading low cost airline.It also announces this morning a proposed capital raising of not less than US$10m

Serco Group SRP updates that profits are now beginning to grow as part of its five year strategy and first half underlying trading profit is expected to increase by about 20% at constant currency rates. The order book continues to be strong and 80% of orders will come from outside the UK. Full year revenue however, is expected to be down largely due to contracts ending in 2017.

Nighthawk Energy HAWK The demise of the company draws close with the approval of the US bankruptcy court to the sale of the company’s assets for US$18m. after which it will be wound up. Nothing is available for shareholders.

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fastjet says goodbye to Stelios and easyGroup Holdings

Fastjet FJET says it has made steady progress in implementing stabilisation efforts, including inter alia, a re-fleeting process, relocation of its headquarters from London to Johannesburg and a right-sizing of its operations in Zimbabwe and Tanzania. Accordingly fastjet aims to achieve a cashflow break-even position for the final quarter of 2017. The Company also announces that it has, on 29 June 2017, entered into an agreement with easyGroup Holdings Ltd to acquire all intellectual property rights associated with the fastjet brand for a total consideration of $2.5m, to be satisfied in cash, resulting in saving to the Company over the next 5 years. This agreement represents a major step forward as the Company continues with its stabilisation efforts under new management. Bye bye Stelios!

Angus Energy ANGS increases interim LBT of £(985,000) (2016: LBT £344,000). Says production guidance for the Lidsey Oil Field remains unchanged while production from the Brockham Oil Field could improve materially after bringing X4Z on stream from the Kimmeridge.

John Laing Group JLG says its investment portfolio as a whole is performing in line with expectations in a pre-close update for the half-year ending 30 June 2017.

Trinity Mirror TNI updates on trading and says group revenue is expected to fall by 9% on a like for like basis over the period. CEO Simon Fox said: “The trading environment for print in the first half remained volatile but we remain on course to meet our expectations for the year. I anticipate that the second half will show improving revenue momentum as we benefit from initiatives implemented during the first half of the year.”

Quoted Micro 9 January 2017

NEX / ISDX

 

Capital for Colleagues (CFCP) invested a further £2.44m in employee-owned businesses in the year to August 2016. Revenues improved from £523,000 to £560,000, although realised and unrealised gains fell from £459,000 to £228,000. Pre-tax profit fell from £426,000 to £158,000. Net asset value was £5.25m at the end of August 2016. The NAV dipped to £5.21m at the end of November 2016, which is equivalent to 54.1p a share.

Strand Hanson has resigned as corporate adviser to United Cacao (UCL) as well as its nominated adviser for AIM. Trading in the 7% secured convertible bonds 2019 has been suspended as has the trading in the shares on AIM. The Peru-based cacao plantation operator says that it has entered into an exclusivity agreement with existing investors in order to try to secure the long-term financial viability of the business. United Cacao has raised $150,000 from the issue of additional 7% secured convertible bonds 2019 at 60 cents for each $1 nominal value – the mid-price was $1 but there had been no trades – and a further issue of convertibles is likely as part of the longer-term strategy. Redundancies at the plantation will reduce monthly costs by $85,000 but the company has trade payables of more than $1.25m. Dennis Melka, Anthony Kozuch and Graeme Brown have all resigned from the board.  

Hot Rocks Investments (HRIP) had £14,000 in the bank at the end of September 2016. The NAV improved from £664,000 to £901,000 thanks to unrealised gains on the portfolio of resources investments.

IMC Exploration (IMCP) has raised £150,000 at 1p a share. Global Resource Investment Trust has subscribed £50,000 and IMC director Liam McGrattan has invested the same amount.

AIM

fastJet (FJET) is raising even more money. This time it has raised £23.4m at 16.3p a share Last August £19.2m was raised at 50p a share. Loss-making fastJet has secured a deal with Johannesburg-based commercial aviation firm Solenta, which will provide three aircraft that fastJet will operate under its own name for five years and pay an hourly rate. The $19.2m cost of the lease will be paid through an issue of 95.6 million shares equivalent to 28% of fastJet. Cost savings have reduced the company‘s existing fleet and the number of routes has been reduced but the one-off costs have been higher than expected. The head office is being relocated to South Africa. By the first quarter of 2017, there will have been a one-quarter reduction in fixed costs and a one-third reduction in variable costs.

Churchill China (CHH) says that fourth quarter trading was better than expected, helped by export sales, and it has more cash than forecast. The overall 2016 performance is ahead of market forecasts and much higher than in 2015. The full year figures will be published on 28 March.

Low carbon energy business Cogenpower (CGP) has increased the heat output from its Borgaro power plant by 12.5% to 20.1GWh and the average selling price was higher. Cold weather helped to boost demand in the final quarter. Cogenpower is also improving efficiency and gas costs have been reduced. The exit from the retail division is almost complete. The Italian government still owes €1.3m to Cogenpower, including €900,000 of Green Certificates where the government is trying to change the basis of calculation. However, the Italian parliament is due to vote on a proposal that would stop any changes.

Crawshaw (CRAW) says that the decline in like-for-like revenues has abated but it is still going on. The reduction in the past five weeks was 3.8%, compared to 8.1% in the previous four week. Gross margins have fallen. Total sales were 13% higher in the past five weeks. Peel Hunt still expects a £1m loss for the year, plus a lower loss in 2017-18.

Mobile software provider Immobile (IMO) says trading is in line with expectations and the company’s largest customer has renewed its contract until 2018. A global contact centre business will be selling product licences for IMIconnect and IMIchat.

FinnAust Mining (FAM) has completed the acquisition of Avannaa Exploration from Cairn Energy following approval from the Greenland authorities. FinnAust is paying £500,000 in shares at 6.6p each. The two main assets are the Disko nickel sulphide project, where more than $50m has been previously invested, and the Kangerluarsuk high grade zinc, Pb and silver project.

Touchstar (TST) has been hit by delayed orders and a bad debt and this has led house broker WH Ireland to more than halve its 2016 pre-tax profit forecast to £215,000 on a £1m reduction in revenues to £7.7m. This comes at a time when the business is moving to a SaaS model. The bad debt relates to the access control business. At the moment the 2017 profit forecast of £600,000 is not being changed.

The cruise business owned by All Leisure has stopped trading as the financial difficulties of the formerly AIM-quoted leisure business continue.

MAIN MARKET

CIC Gold Group Ltd (CICG) says that is still in discussions with the UKLA about the standard list readmission prospectus for the acquisition of 80% of Gobi Minerals. The acquisition was announced in 2015 and it is nearly one year since the enquiry from the UKLA. CIC issued 280 million shares for the acquisition and 70 million of these will be sold at 1.45p a share in order to maintain a free float of at least 25%.

Andrew Hore

 

French Connection Strong in UK and Europe

French Connection FCCN Group revenue for the half year to 31st July declined to £69.2m from last years £75.8m as store closures continued but the loss before tax remained steady at £7.9m FCCN does its best in its half year report to point to the better statistics to justify its claim of a strong performance. Square footage fell by 15.8% but like for like sales were only down by 2.3% but the UK and Europes was strong with a like for like rise of 6.5% and the strong performance has continued during the first 6 weeks of the second half.

Kingfisher KGF claims it is starting to build solid foundations and has enjoyed a productive first half, driven by the UK and Poland. 52 of the 65 planned store closures have now been completed. On a statutory basis, pre tax profit grew by 10.6% for the six months to 31st July, on sales up by 4.7% whilst basic earnings per share rose by 3.7%.

Smart Metering SMS is raising its interim dividend by 25% to 1.37p per share for the 6 months to 30th June, after continued strong growth saw it pass the million mark for utility meter and data assets. The electricity meter portfolio rose by 28% but  combined gas and electricity metering saw a more modest rise of 10%. revenue for the half year was up by 25%, with underlying profit before tax and earnings per share rising by 15% and 23% respectively.

Pure Circle PURE Despite challenging market conditions, the market for Sevia grew strongly in the year to the end of June, with sales rising by 9%, gross margins by 41% and operating profit by 90%. Net profit after tax soared by 257% and earnings per share following suit with a rise of 242%. The company claims that prospects for the next 4-5 years are also strong.

Fastjet FJET admits to a very difficult and challenging first half  as its problems seemed to increase,  with the six months to the 30th June producing a loss after tax of $15m as against last years profit of $6.4m. Revenue did rise slightly but the operating loss also surged with a rise from $12.8m to $31m. Action taken by the new CEO will see the fleet of five A319s  reduced to three by the end of the year and the head office will be relocated from Gatwick to Johannesburg which is a fairly sensible move for an African airline with its main base in Africa.

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Redrow Admits To Decades Of Under Supply

Redrow RDW managed to increase its average selling price in 2016 by over 10% which is not bad going in an economy parts of which are struggling with price deflation.  Redrow blames the continuing housing boom on decades of under supply, which raises the question of course as to why Redrow and all the other house builders kept the market under supplied for all those years. Why didn’t they build the number of houses which the market needed.

2016 pre tax profits are expected to beat analysts estimates. Private reservations rose by 46% and at the end of June the private order book was up by over 50% on a year ago. Annual turnover rose by 20% and legal completions by 17%.

Carpetright CPR Statutory profit before tax for the year to 30th April soared by 137% and basic earnings per share by 198%.  Despite a reduction of 5.4% in store space, revenue for the year only fell by 1.3%.  UK like for like sales rose by 2.8% whilst Europe did even better with a 4.8% rise. New store format and branding was completed within the year.  The current year got of to a very bad start in May with like for like sales collapsing by 7./6% but they recovered in June with a rise of 6.3%. No doubt we will read in the not too distant future about market volatility and challenging conditions.

Ocado OCDO Price deflation took its toll during the half year to 15th May, with the value of the average basket down by 2.2%. Volumes including Morrisons, on the other hand were up by 30% and the number of orders rose by 17.8% to 225,000 per week., which Ocado claims is steady progress.

Anglo American plc AAL De Beers saw a fall in sales in its 5th cycle of 2016 but claims it was nothing more than expected. Despite stable prices, it remains cautious about the future.

Fastjet FJET finds that the trading environment is still challenging with passenger numbers lower than expected and the load factor down to 47%.  The board believes that the new CEO will give the group a viable and attractive future but none of the present members seem to think that the mess created by their governance is anything for which they can be blamed.

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Fastjet Survived After All

Fastjet FJET Claims 2015 was a year of change and challenge but contrary to the hopes of some pundits who enjoy making a living out of predicting and helping to create, doom and disaster, it survived. Passenger numbers for the year to the end of December rose by 32% but the load factor for Tanzania fell 6.6% following the woes of the Tanzanian economy.

Year end cash rocketed from $1.4m to $28.9m and like for like revenue was up by 21%, helping to bring the loss for the year down from $58.5m to $16.9m and the loss per share down from 3.38 cents to 0.71 cents. Short term targets include continuing to reduce costs and to match capacity to the reduced demand,

Johnson Matthey JMAT  The usual story from a company which has not had a good year and feels that it needs to explain away, if it can, a 22% fall in profit before tax. It does not need much guesswork to expect that a dividend increase is on the way, and it is.  As soon as it claims a robust performance and that some markets have been particularly challenging, you can guess  the news is not too good and that one way or another the board will be seeking shelter.

So for the year to 31st March Johnson Matthey’s revenue rose by 7%,  and the dividend is to be raised by 5%. It suffered from falls in 3 out of its 4 main markets, precious metals being especially hard hit. To be fair improvement is expected for the current year, with strong growth drivers leading the way.

RPC Group RPC is raising its dividend for the year to 31st March by 20% after revenue rose by 34%. The company claims that the year produced good underlying growth and a strong business performance. Like for like net profit before tax was up from 67.1m to 75.6m and adjusted earnings per share rose by 14%.

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