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Andrew Hore – Quoted Micro 31 August 2020

AQUIS STOCK EXCHANGE

KR1 (KR1) has made two more investments. There is a further investment of $100,000 in the cross-chain finance hub Acala Network in return for 153,846.15 ACA tokens at 65 cents each. KR1 now holds 1.02 million ACA tokens. That stake is valued at $663,000. There is also a new investment in MetaCartel Ventures Decentralised Autonomous Organisation. KR1 received 4,938 MCV shares for its $199,000 investment.

Imperial X (IMPP) plans to buy mineral assets and investments and a placing is raising £750,000 at 2.5p a share. The purchases involve the issue of more than 245 million shares plus 8.71 million warrants exercisable at 5p a share. Trading in the shares has been suspended until the acquisitions are completed. Imperial X is buying Howson Ventures Inc, plus assets from Anglo African Minerals, Cloudbreak Discovery and Cabox Gold. Howson owns the Rupert Minerals property in British Columbia and an investment in Anglo African Minerals, which holds licences in bauxite projects in Guinea.  

Gunsynd (GUN) says that its investment in ASX-listed Eagle Mountain is “well in the money” and it has the cash it requires for its immediate needs even though the disposal of the stake in Oyster Oil and Gas has still not been completed. Gunsynd invested £110,000 in copper/gold explorer Eagle Mountain at A$0.13 a share and the price has risen to A$0.24. Rincon Resources has appointed stockbrokers for its proposed listing on ASX. Gunsynd has invested £138,000 in Rincon and has a 28% stake. Spirits company Human Brands also still hopes to float. Nickel project developer Sunshine Minerals is being acquired by Malachite Resources. Gunsynd will receive 1.26 million shares in Malachite with further deferred consideration of 1.64 million shares.

IamFire (FIRE) is raising £5.5m gross through a discounted capital bond and it is participating in a fundraising for social commerce platform WeShop ahead of a future listing. The bond is being issued at a discount of 78.73% and net proceeds of £4.4m have been received. IamFire is providing £4.5m of a £9m convertible loan to WeShop. This has an interest rate of 8% and lasts for 36 months. A flotation is one of the conversion events and the conversion would be at a 20% discount to the flotation share price. There is also an exclusive option to subscribe for a 10% stake in WeShop at a pre-money valuation of £25m. This would involve an investment of £2.78m.

Primorus investments (PRIM) has invested £875,000 in WeShop. Primorus has made realised and unrealised gains £3.55m in the six months to June 2020. Greatland Gold (GGP) is the main reason for this. The NAV increased to £8.1m compared with a £4.3m market capitalisation.

BWA Group (BWAP) has agreed to sell its investment in Kings of the North Corp to St George’s Eco-Mining Corp, which sold it for £4.66m. The convertibles issued to St George’s will be cancelled and they amount to £4.3m. St George’s will issue 1.5 million shares and transfer 2.5 million warrants to BWA. St George’s is keeping its 21% stake in BWA.  

There was a £673,000 cash outflow at Cadence Minerals (KDNC) in the six months to June 2020. A cash raising means that there was £2.38m in cash at the end of the period.

NQ Minerals (NQMI) plans to undertake exploration work at the Hellyer mine, possibly as early as October/November this year.

Inqo Investments (INQO) increased annual revenues from R23.8m to R24.4m, but the loss increased from R2.5m to R6.1m. That was partly down to an inventory write-down of R1.44m and higher depreciation. Last year’s Bee Sweet honey harvest was one of the largest ever. The lodge at the Kuzuko Private Game Reserve had high occupancy rates before COVID-19. All the other activities have also been hit since the end of February.  

Eurocann International (BUD) intends to amend its investing strategy and change its name just over one year since it changed it from Valiant Investments.

SulNOx Group (SNOX) has appointed Allenby as corporate adviser.

AIM

Vianet (VNET) says that customer pub sites that have resumed operations have increased from 56% to 80% over the past six years. Vianet continues to offer reduced recurring charges to both closed and reopened customers. Customer demand for data analytics is recovering. The smart machines division says two-thirds of customer vending machines are in operation and generating normal levels of revenue. There have been orders for more than 1,9000 new orders for telemetry and contactless units during lockdown.  

Hostels operator Safestay (SSTY) is taking additional cost saving measures due to the continued uncertainty. Occupancy rates are running at around one-quarter and it is higher in those hostels opened earlier. Safestay has available overdraft facilities but these could run out by early next year if all hostels are not reopened by October and occupancy levels fall below 20% later this year. An occupancy rate of 57% is required for a hostel to breakeven. Sales of freeholds or terminating loss-making leases are being considered. Interim results will be published on 24 September.

Integumen (SKIN) is making an all-share offer for Modern Water (MWG) that values the latter at £21.25m. Integumen plans a ten-for-one share consolidation and it is offering one of these new shares for every ten Modern Water shares. Integumen produces test kits for Modern Water.

Drug discovery company C4X Discovery (C4XD) says that Indivior has started a phase I clinical trial for C4X_3256 for the treatment of opioid dependence. The trial will last until the end of the year, but there will be no data until 2021. C4X is making progress in identifying a candidate for the treatment of IBD and it has reached the lead optimisation stage for the treatment of Psoriasis. A collaboration with the GEN-COVID consortium, which will use C4X’s Taxonomy3 mathematical analysis technology to assess the role of genetics in disease susceptibility.

Dekel Agri-Vision (DKL) says that milling equipment has been delivered to the raw cashew nut processing project in Cote d’Ivoire. The mill should be commissioned in the second quarter of next year.

Grant Thornton has managed to persuade the courts to reduce the damages owed to AssetCo (AST) from £29.8m to £20.8m. Including interest and costs the payment should be £25m.

President Energy (PPC) has formed a renewables division. There are opportunities in wind, solar, hydro and biomass in Argentina. President has commenced a workover programme on oil wells and there are plans to drill two new wells.

MAIN MARKET

Packaging supplier Macfarlane (MACF) reported a 2% decline in interim revenues to £105.6m. The second quarter decline was much lower than for the UK economy, helped by increasing exposure to ecommerce. Increased bad debts led to a 5.5% fall in pre-tax profit to £3.62m. An interim dividend of 0.7p a share is proposed. There could be a greater decline in full year profit, although the business will still be cash generative. Arden forecasts a fall in pre-tax profit from £14.4m to £11.1m.

BATM (BVC) has signed up its first tier 1 NFVTime virtual networking customer. The Asia-based telecoms company has signed up for an initial three years will provide a reference site for the technology. This contract could be a significant revenue generator in the years to come and follows the recent proof of concept trial with ARM and Vodafone.

Anglesey Mining (AYM) has raised £200,000 at 1.6p a share. The cash will be invested in studies for the development of the Parys Mountain zinc, copper, lead, silver and gold mine. Management is also assessing other projects.

Andrew Hore

Andrew Hore – Quoted Micro 18 May 2020

AQUIS STOCK EXCHANGE

Arbuthnot Banking (ARBB) says customer loan balances had increased by 4% in the quarter to March 2020. Customer deposits increased by 2%. There were net inflows to the investment management business despite the uncertainty in the markets.

Gunsynd (GUN) has extended the deadline for the Oyster Oil and Gas deal from 30 April to 30 October. If the conditions are not satisfied by October, then the sale of the Oyster shares can be terminated.

Inqo Investments (INQO) says that its February 2020 accounts may not be published until September because of delays to audits. The company’s investments have been affected by COVID-19. Kuzuko Lodge in South Africa was closed in early April and Inqo believes that it could take another two years to fully recover. Kentegra Biotechnology and South Lake Medical Centre in Kenya are both continuing to trade. Four One Financial Services could find trading difficult.

Eastinco Mining (EM.P) is completing the wash plant and starting operations at its tantalum mine in Rwanda. Cash is running out and management wants to raise cash through the exercise of warrants at 1.5p each. If 30% of warrants are exercised it will raise £700,000. If a shareholder exercises warrants, they will receive another warrant exercisable at 3p a share. The cash raised will finance capital investment and exploration.

NQ Minerals (NQMI) has raised £151,000 at 5.75p a share. SulNOx Group (SNOX) has raised £230,000 at 40p a share. Each share comes with a warrant exercisable at 40p.

Belvedere Leisure (BELV) says that the COVID-19 lockdown has stopped it obtaining additional subscriptions. Phase one of the company’s development will be split into two parts. The first 50 self-catering lodges are due to open next February.

Veni Vidi Vici (VVV) had cash of £354,000 at the end of 2019. The company is committed to paying A$300,000 towards initial spending of the joint venture that holds the Shangri La gold, copper and silver project in Western Australia.

Two directors and a managing partner of EPE have bought shares in EPE Special Opportunities (ESO) at 160p each. The total amount invested is £44,259. Boston Trust Company has increased its stake from 2.9% to 4.3%.

AIM

Amryt Pharma (AMYT) has moved into a positive EBITDA position in the first quarter, which is earlier than expected. The orphan drugs provider is on course to generate revenues of $172m this year. An underlying EBITDA of $19.5m is forecast for 2020 and that move above $50m next year. Amryt has cash on the balance sheet that is more than enough for its current requirements, but there is also debt, including convertibles. Net debt is expected to increase to $160m by the end of 2020 before reducing the following year.

Acquisitions helped Focusrite (TUNE) to grow in the first half. There was a decline in the revenues of continuing operations, although trading was strong in the corresponding period. Overall revenues were 24% ahead at £49.9m. there were first time contributions from ADAM Audio and Martin Audio (two months). Lower margins and higher interest charges meant that pre-tax profit fell from £7.15m to £6.38m. Focusrite has moved into a net debt position due to the money spent on acquisitions. Martin is likely to be hardest hit by lockdowns around the world due to its event-based customers, whereas demand for other products is holding up as people make music at home.

Payments platform provider Bango (BGO) has signed a new deal that should be worth £1.5m over three years and there is potential for it to be worth even more. Bango could move into profit this year.

Appreciate (APPS) says that the first 11 months trading was in line with expectations, but March trading was hit by COVID-19. Corporate activity has declined by around two-thirds, while Christmas savings have fallen 10%. There was still free cash of £30m at the end of March 2020. This year’s figures will be much harder hit by COVID-19 and profit is likely to plummet. Achieving a profit will be dependent on an upturn in the second half. Cash is also likely to decline.

MAIN MARKET

Diversified Gas and Oil (DGOC) moves from AIM to a premium listing on 18 May. Diversified has raised £69.4m at 108p a share. This cash will go towards financing two potential oil and gas asset acquisitions. Trident Resources (TRR) will be going in the opposite direction on 2 June.

Andrew Hore

Andrew Hore – Quoted Micro 13 January 2020

NEX EXCHANGE

NQ Minerals (NQMI) says that in 2019 the Hellyer mine in Tasmania produced 24,980 tonnes of lead concentrate, 15,646 tonnes of zinc concentrate and 77,853 tonnes of pyrite concentrate. Metal recovery has improved with average lead recoveries of more than 50%. The focus will be on generating lead revenues. Additional high-grade underground resources have been acquired from Bass Metals, which was subleasing the area. The purchase includes 1.175 million tonnes of underground JORC resources.

Inqo Investments Ltd (INQO) is investing natural insecticide developer Kentegra Biotechnology. The Kenya-based company produces pyrethrum, a natural ingredient from the chrysanthemum flower for use in the home, agricultural and pharma markets. There is a shortage of supply of pyrethrum, which can only be produced in a limited number of places around the globe. There is a move away from synthetic versions of the ingredient.

Panther Metals (PALM) has completed its move to the standard list.

Black Sea Property (BSP) has raised €4.79m via a placing at 1.1 cents a share. The cash will be used for property investments. Mamferay Holdings, which is owned by majority shareholder Phoenix Capital Holdings, is swapping €1.4m of debt for shares at the same price.

Equatorial Mining and Exploration has changed its name to Eastinco Mining and Exploration (EM .P).

Wishbone Gold (WSBN) says that the 100p-for-one share consolidation will take effect on 21 January.

EPE Special Opportunities Ltd (ESO) reported a NAV of 273.9p a share for the end of 2019.

AIM

Packaging equipment supplier Mpac (MPAC) says that the 2019 profit is going to be much better than expected. The pension deficit should be eliminated by 2024.

Ultrasound simulation equipment developer Intelligent Ultrasound (MED) expects its 2019 revenues to grow to between £5.7m and £5.9m. There will be a slightly higher loss due to higher development spending. There was £7.3m in the bank at the end of 2019. The agreement signed with FUJIFILM SonoSite Inc will help sales this year in the training market.

Shield Therapeutics (STX) has licenced its Ferracru/ Accrufer iron deficiency treatment to Beijing Aosaikang Pharmaceutical for an upfront payment of $11.4m. This means that there should be net cash of £7.5m at the end of 2020. A further $11.4m payment is due when the treatment gains approval in China, following a clinical trial funded by the licensee, possibly in 2023. There could be further milestone payments of up to $40m depending on sales. Ongoing royalties on sales will be 10% or 15%,

Biopesticide products developer Eden Research (EDEN) says that its three EU-registered active ingredients have been approved for use in organic farming. A one-year exclusive agreement with Corteva Agriscience, will give the company time to evaluate Eden’s Sustaine encapsulation technology for use with seeds. Coreva could be granted exclusive distribution rights in the EU, Turkey, Russia and Ukraine.

Accrol Group (ACRL) management believes it has turned the fortunes of the toilet paper manufacturer around. Even so, it still lost £3m in the six months to October 2019. Net debt was £24.8m and this could fall to £20m by the end of April.

Telecoms services provider Maintel (MAI) has warned that public sector contracts continue to be delayed. finnCap has cut its 2019 pre-tax profit forecast from £10.4m to £8.1m, while the 2020 estimate has been reduced by one-quarter to £8.8m.

Software company CloudBuy (CBUY) wants to leave AIM and it expects to save £100,000 a year in overheads. Lyn and Ronald Duncan subsequently sold 11.1 million shares at 0.414p each. The share price has fallen but it is still 0.6p.

Promotional products software supplier Altitude Group (ALT) has signed a strategic alliance with the Advertising Speciality Institute, which will use its software platform.

Surface Transforms (SCE) expects more contract announcements with OEMs this year. In the seven months to December 2019, revenues were £1.45m, nearly treble the same period in the previous year, but lower than expected due to delays. The new financial year end is March. There was £768,000 in the bank at the end of 2019 and a further £425,000 has already been received.

Asimilar Group (ASLR) has raised £6.8m at 40p each. This will be received in two tranches. Formerly known as YOLO, the company will invest the cash big data, machine learning, telematics and internet of things businesses.

MAIN MARKET

Avation (AVAP) has started a strategic review, which could include the sale of the aircraft leasing business. Avation has 49 aircraft with an average fleet age of 3.7 years. It has also purchased a spare engine that can be leased.

InnovaDerma (IDP) grew interim revenues by 28% to £5m. This represents a slowdown in growth in the later part of the period and is slightly lower than expected. Skinny Tan was responsible for most of the growth. The second half will benefit from the launch of new skincare products in Superdrug.

Pembridge Resources (PERE) says its Minto Explorations business has received a $5.4m payment for copper concentrate produced during December. The Minto mine produced 2,247dmt of copper concentrate in the fourth quarter 2019.

BATM Advanced Communications (BVC) says that its molecular diagnostics business Ador Diagnostics has received its first commercial order from an Italian customer for meningitis testing.

Andrew Hore

Andrew Hore Quoted Micro 2 December 2019

NEX EXCHANGE

Coinsilium (COIN) has signed a memorandum of understanding with Devmons to set up a joint venture using Coinsilium’s existing Gibraltar subsidiary TerraStream. The company will offer blockchain software and systems development. Devmons supplies the technology development expertise. More details will be published when the agreement is signed, and it is hoped that operations will commence in the first quarter of 2020. The new venture should not need significant funds, due to advanced payments being requested when any contract is won.

Gunsynd (GUN) has entered an agreement to sell its stake in Oyster Oil and Gas to Sajawin Pty Ltd. There will be a payment of £20,000 after the signing of the term sheet and a further £240,000 to be paid in two tranches, the second of which will be payable 60 days after completion. Sajawin still has to complete due diligence and raise at least A$1.5m when it reverses into an ASX shell. Gunsynd will subscribe for A$200,000 of shares. The deal can be terminated if the conditions are not met by the end of April. Production sharing contracts for four blocks in Djibouti are not included in the transaction. George Garnett has resigned as a non- executive director of Gunsynd.

Sativa Group (SATI) is exploring the possibility of an AIM quotation. It has appointed Cenkos Securities as adviser. Management hopes that the move could happen early next year. The first batch of seedlings is being prepared for a move to the cultivation room with the first extract of medicinal cannabis set to be delivered to King’s College London before the end of 2019. That will be used in research on inflammation and respiratory conditions. Crops take 12 weeks to grow.

NQ Minerals (NQMI) says that production at the Hellyer gold mine in Tasmania is ahead of expectations, but there is room for improvement in 2020. NQ has made an additional investment of £150,000 in Tasmania Energy Metals in the form of a three-year convertible loan. NQ has an option to acquire the exploration licences and minerals processing facility that is being developed. The Barnes Hill nickel project mineral resource estimate has increased to 14.3 million tonnes grading 0.725 nickel and 0.05% cobalt.

Southern Africa-based social impact company Inqo Investments Ltd (INQO) increased its interim revenues but also made a higher loss. The Kazuko Lodge was hampered by the water shortage in the Cape Town area, but the weak Rand is boosting demand for holidays from Americans. There was an increase in honey produced by Bee Sweet Honey in Zambia. Cash in the bank improved from R12.3m to R21.2m. following a further cash injection by existing shareholders. The NAV was R179m at the end of August 2019.

AfriAg Global (AFRI) has completed the sale of its African operations. The share consolidation was completed on 29 November.

Dana Group International Investments Ltd (DANA) says that its NAV fell from $51.9m to $7.03m in the 12 months to June 2019. There was a small profit for the year and the decline in NAV came from write-downs. Trading has ended in London Capital Group Holdings and Queros Capital Partners 8% bonds 2025.

 

AIM

Sustainable wood products supplier Accsys Technologies (AXS) is raising €46.3m in order to fund the completion of the Tricoya plant in Hull and the fourth Accoya reactor in Arnhem. It will also finance the evaluation of an Accoya plant in the US. The cash will be raised at €1.05 a share via a placing and a one-for-seven open offer. The Hull plant could be operational in the second half of 2020.

STM Group (STM) warns that the rebranding of its UK pensions business has been delayed as it awaits regulatory approval to operate as a Master Trust for auto-enrolment. New pension applications have been lower than expected. The 2019 underlying pre-tax profit is forecast at £2.5m. Next year’s indemnity insurance payment will cost an additional £500,000.

Wilmcote Holdings (WCH) is raising up to £6.5m via a 31.199996 for one open offer at 1p a share in order to replenish its coffers while it seeks a suitable acquisition in the chemicals and other sectors. There was £7.5m in cash at the end of June 2019. Wilmcote will look at smaller acquisitions than in the past.

Online fashion retailer Sosandar (SOS) increased interim revenues by 53% to £2.82m with growth accelerating in the second quarter to September 2019. October revenues were more than £1m. Sosandar is still loss-making, but it could move into profit in 2020-21. The customer database has been significantly increased.

Parcel delivery firm DX (DX.) says its recovery continues to be on track. It expects to return to profit this year.

Cyber security services provider Shearwater Group (SWG) generated organic revenue growth of 11% in the first half. Overall revenues grew 262% to £16.3m. New managed service contracts provide revenue visibility. There was £1.68m in the bank at the end of September 2019.

A £5m fundraising at 0.15p a share will help Union Jack Oil (UJO) to finance the drilling of two appraisal wells at West Newton, where it has a 16.665% interest. There will also be a side-track well drilled at Biscathorpe.

There will be a second half shortfall in revenues at Malvern International (MLVN) with little improvement on the same period last year. Delays in approving overseas students, plus poor trading in London and Malaysia. WH Ireland has withdrawn forecasts. Cutting out Malaysian losses could enable Malvern to make a profit in 2020.

CAP-XX (CPX) is acquiring supercapacitor manufacturing assets from Murata, which a licensee of CAP-XX IP. This will boost manufacturing capacity and should improve profit. CAP-XX has raised £2.75m and an open offer could raise up to £750,000 more.

Live data systems company WANdisco (WAND) is raising $16.5m at 425p a share, which was a premium of 23% to the previous closing price. This will provide additional working capital. An existing customer has extended its relationship with WANdisco and the contract is worth $500,000.

 

MAIN MARKET

Interim figures from Associated British Engineering (ASBE) show improved revenues and a lower loss. That is mainly down to a better performance by British Polar Engines. The business has been rationalised and surplus space will generate revenues in the fourth quarter. The pension deficit remains a concern.

Flavourings supplier Treatt (TET) reported flat full year revenues of £112.7m, but a 5% improvement in underlying pre-tax profit to £13.3m. There was a 10% decline in citrus revenues, which was made up for by growth elsewhere. The dividend was raised from 5.1p a share to 5.5p a share. There will be increased US capacity next year.

Nuformix (NFX) is raising £1.25m at 7p a share in order to provide funds while it negotiates deals in Asia and North America for NXP002, which is focused on the treatment for human idiopathic pulmonary fibrosis. There will also be additional money spent on two other treatment programmes.

Highway Capital (HWC) had net liabilities of £908,000 at the end of August 2019. It continues to seek a suitable acquisition.

Blake Holdings is making a mandatory cash offer for Hardy Oil and Gas (HDY) having taken its stake to 42.27%. The 5p a share offer values Hardy at £3.7m.

Andrew Hore

 

 

Andrew Hore – Quoted Micro 5 August 2019

NEX EXCHANGE

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

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

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

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

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

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

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

AIM  

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

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

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

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

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

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

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

MAIN MARKET

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

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

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

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

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

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

Andrew Hore

Andrew Hore Quoted Micro 29 July 2019

NEX EXCHANGE

Inqo Investments Ltd (INQO) is investing in the South Lake Medical centre in Kenya. Other investors include Johnson and Johnson’s social impact fund. The total investment is $950,000, but Inqo’s contribution is not quantified. The medical centre was previously owned by a flower growing business and it caters for its workers.

Clean Invest Africa (CIA) has issued £130,000 worth of 8% convertible loan notes. They expire on 24 July 2020. The conversion price is 2.75p a share. Creditors have also agreed to accept payments of £54,000 in shares.

Sport Capital Group (SCG) had nearly £22,000 in the bank at the end of June 2019. There is also a 15% stake in Mighty Oak Exploration, which has exploration licences for cobalt and lithium in Uganda, and 2.4% in KKME, which has nickel and platinum prospecting licences in Botswana. A freehold property is in the books for £204,000.

Panther Metals (PALM) has raised £130,000 at 0.3p a share and the cash will help to finance the development of the company.

AIM  

Parcel delivery business DX (DX.) says that figures for the year to June 2019 will be in line with expectations. That means that there will still be a small, but much reduced, loss. Revenues were 8% ahead at £322.5m. The loss of the passport delivery contract will hit this year but that will be offset by growth in the courier market. Net debt was £1.3m at the end of June 2019.

Cyber security services provider GRC International (GRC) has postponed its full year results because it is calculating deferred consideration payable for DQM Holdings. The expected deferred payment is £3.7m, which is higher than the original range. The deferred consideration should be 60% cash and 40% shares at 116.5p each. The share price has fallen to 49p. GRC wants to change the terms. GRC is loss-making and it wants to spread the cash payments. It may need to raise more cash.

Good news from Shield Therapeutics (STX) which has gained FDA approval for Feraccru in the US. The approval covers the treatment of iron deficiency, with or without anaemia, thanks to its high tolerability. This doubles the potential market for the treatment. Shield is in discussions with potential commercial partners. finnCap increased its target share price from 200p to 350p.

Safe credit card payments technology provider PCI Pal (PCIP) says that its full year loss will be in line with expectations of £4.6m. Total contract value in the US is £1.4m, which indicates that progress is being made in that important market. Net cash was £1.5m at the end of June 2019, although PCI Pal is awaiting a tax credit and some additional contract payments in the first quarter of this year. There could be scope to raise funds on the back of recurring revenues.

Document management software provider GetBusy (GETB) is growing its revenues internationally and its eponymous new software product GetBusy is reaching the point of a commercial launch. Net cash is £1.95m, which is plenty for the immediate requirements of the group.

Polarean Imaging (POLX) is raising £2.1m at 18p a share. Last December’s placing was at 14p a share. The medical imaging technology developer will use the cash to finance the phase III clinical trial for its technology, where patient enrolment should be complete in the third quarter of 2019, and preparations for a product launch. There will also be working capital to build polarisers for future orders.

Judges Scientific (JDG) says that order intake was 4% higher in the first half of 2019. Delivery times have also been reduced so the order book has fallen from 14 weeks to 132 weeks.  

Tristel (TSTL) has acquired 80% of its Italian distributor for an initial £600,000. This should be earnings neutral this year. The disinfection products supplier generated revenues of £26m in the year to June 2019, which were 17% higher than last year. Underlying pre-tax profit will be £5.5m. Management is waiting for a response from the FDA in the US for the usability and human factors pilot.

Tri-Star Resources’ (TSTR) 40%-owned SPMP has produced the first antimony metal from its plant in Oman. There is expected to be a slow ramp up of production until full production is reached in 2020. The gold recovery circuit has yet to produce commercial levels of gold. SPMP needs to raise additional debt in order to cover the upcoming months prior to antimony production reaching breakeven levels. There are negotiations concerning the conversion of mezzanine debt into interest-free shareholder loans or shares. Tri-Star is expected to lose £500,000 this year. Although SPMP is not being consolidated, there will be a share of profit. That could eventually be as much as £10m a year.

CCTV technology provider Synectics (SNX) says that results will be second half weighted this year. Interim profit fell from £1.5m to £1.2m, but Shore still forecasts a rise in full year pre-tax profit from £2.9m to £4m. Net cash was £5.3m at the end of May 2019. The interim dividend was increased by 8% to 1.3p a share.

Trading in United Oil and Gas (UOG) shares has been suspended ahead of the conditional acquisition of the Egyptian oil and gas business of Rockhopper Exploration (RKH) for $16m, with an initial cash payment of $11m. The main asset is a 22% working interest Abu Sennan and share of production was 813 barrels of oil equivalent per day in 2018. Net book value was $13.8m at the end of 2018. United needs to raise cash for the deal and it is not expected to complete until the end of this year.   

MAIN MARKET 

At the AGM of Trifast (TRI) the chairman said that the industrial fasteners supplier was growing strongly in the US, particularly in the electronics and automotive sectors. Debt facilities have been increased and management is seeking acquisitions. The uncertain economic environment in Europe has led to some delays in the production schedules of clients.

Pembridge Resources (PERE) says that its subsidiary Minto Explorations is getting a working capital facility from Sumitomo Corporation as part of an offtake agreement for 55,000 tonnes of copper concentrate. That lasts until the 55,000 tonnes is delivered or the end of 2020. There will be an advanced payment for 90% of the value of concentrate each month. There is an interest charge.

Zen Global has decided not to make a bid for World Trade Systems (WTS) because it could not come to an agreement with major shareholder Suzhou Weibao about buying its shares and convertibles in return for coins issued by ultimate holding company Zen Ltd. Zen wanted to use WTS to use as a shell in which to reverse its blockchain operations.

Spinnaker Opportunities (SOP) had cash of £880,000 at the end of June 2019. The company subsequently received a commitment to invest up to £1.4m from a single investor conditional on the deal to acquire medicinal cannabis company Kanabo Research. The deal documentation is being prepared.

Andrew Hore

Andrew Hore – Quoted Micro 25 March 2019

NEX EXCHANGE

Good Energy (GOOD) increased full year revenues from continuing operations from £104.5m to £116.9m, helped by last winter’s cold weather and a price increase, and pre-tax profit recovered from £700,000 to £1.7m. The renewable electricity supplier and generator has increased its dividend from 3.3p a share to 3.5p a share. Net debt was £40.1m at the end of 2018. Energy supply volumes increased by 3%, but domestic volumes were 1.2% lower in an increasingly competitive market. The growth came in the business side, which increased volumes by 23%. Good Energy generates energy from six solar sites and two wind farms. The company expects to continue to grow business volumes and invest in digital technology. Non-executive director Nemone Wynn-Evans has bought 9,500 shares at 105p each.

Trading in PCG Entertainment (PCGE) shares has been suspended because it is in talks to acquire VOX Markets and Align Research.

Karoo Energy (KEP) has been told by its potential nominated adviser does not believe its is suitable for an AIM quotation. This also means that the planned fundraising cannot go ahead. A refinancing is required. There are trade creditors of around £300,000. Trading in the shares has been suspended.

Primorus Investments (PRIM) has maintained its 3.4% stake in Fresho by participating in its latest fundraising, which was at a 76% premium to the price paid for the initial investment. The investment is worth A$673,000.

Dana Group International Investments Ltd (DANA) reported swing from loss of $129,000 to a profit of $95,000 in the six months to December 2018, due to other income of $276,000.

Tectonic Gold (TAU) says that roc chip samples from the Clermont project in Queensland show up to 8.01g/t gold, 140g/t silver and 6.32% copper.

Panther Metals (PALM) has completed the acquisition of Parthian Resources and its former shareholders own 16.1% of Panther.

Inqo Investments Ltd (INQO) has raised a further £225,000 at 90p a share.

Imperial X (IMPP) has changed its focus to medicinal cannabis. There was a small cash outflow in the six months to the end of December 2018. There was nearly £70,000 in the bank with net cash of £19,000. There are net liabilities and more cash will be required later this year.

Steve Howson is stepping down as chief executive of SG Recruitment Ltd (SGRL) and he will become a non-executive director. Majority shareholder David Sumner will be interim chief executive.

AIM  

Footasylum (FOOT) has recommended a 82.5p a share bid from JD Sports Fashion (SPD) which values the footwear retailer at £90.1m. JD Sports was buying shares between 50p and 75p and built up a 18.7% stake. The bidder promises to maintain the separate commercial identity. Footasylum floated in November 2017 at 164p a share.

Diaceutics (DXRX) ended the week at 97.5p, having floated at 72p. The company provides data analysis and advisory services to pharma companies seeking to develop and commercialise diagnostic tests. There were £15.2m of placing proceeds net of expenses and £5.5m will be spent on the acquisition of data, while the rest will be used to pay off debt and develop AI analysis technology. There is limited liquidity in the shares because they are tightly held.

Wynnstay Group (WYN) warns that trading in the second quarter is weak because of the warmer winter weather. There has also been a weakening in farmgate prices. Interim figures will be well below the first half of last year and the full year will be below forecast. Peel Hunt argues that it has already factored these elements into its forecast for rival feed supplier NWF (NWF) and it is not changing its forecasts.

Pelatro (PTRO) has launched a data monetisation platform with a revenue share contract with an existing client, which is worth $500,000 in the first year. This is a product that can be sold to other customers.

Financial trading platform Aquis Exchange (AQX) reported 2018 revenues ahead of expectations and it doubled its market share during the year. The subscription-based model means that higher trading levels by a trader lead to subscription income levels going up. Aquis will continue to be loss-making this year, but the relatively fixed cost base means that once this is covered the profit should grow significantly as revenues grow.

Scientific instruments supplier Judges Scientific (JDG) increased is cash generation from operations from £10.9m to £15.7m in 2018. There was 5.5% organic growth in revenues and underlying operating profit rose by just over one-third to £14.7m. The cash balance has increased to £15.7m, which provides firepower for acquisitions. Shore Capital has edged up its earnings per share forecast from 188.8p to 190p.

Volvere (VLE) says full year revenues from continuing operations will rise from £16.2m to £18.6m. There was a £23.1m gain on the sale of Impetus Automotive. There was an underlying loss on continuing activities, but the frozen pie maker Shire Foods improved its profit contribution. There is £34.1m of cash in the Volvere balance sheet.

Frontier IP (FIPP) says that the outcome for the year to June 2019 is likely to be ahead of management expectations. A deal by investee company Exscientia, which is involved in AI-based drug discovery, with Celgene Corporation should result in a substantial uplift in its valuation.

Science in Sport (SIS) had a 25-day contribution from the profitable PhD Nutrition business in 2018. The group’s underlying loss increased last year, but PhD will help to reduce the loss and the cash outflow from operations, which was £6.42m last year. There is £8m in the bank and even with capital investment requirements that should be enough to cover requirements this year.

Ceramic products supplier Portmeirion Group (PMP) increased its 2018 pre-tax profit by 10% to £9.7m and a further rise to £10.3m is forecast for this year. Online sales are growing rapidly from a relatively low base. The home fragrance business is doing well, and capacity is being added. The total dividend is 8% higher at 35.7p a share.

Share (SHRE) improved its significantly improved its profitability in the second half of 2018, although trading levels weakened towards the end of the year. That weakness has continued into the early months of this year. Evan so, Cenkos forecasts a rise in pre-tax profit from £700,000 to £1.3m, upgraded from £1.1m, in 2019.

Clear Leisure (CLP) has placed its 50%-owned data mining operation in Serbia on a care and maintenance basis. This is due to the fall in the price of cryptocurrency. Legal actions and negotiations continue concerning a number of past investments. Clear has paid £76,000 for a 10% stake in PBV, which provides data services for the Italian legal sector. At the end of 2018, there were €2.1m of bonds converted into shares.

Andrew Perloff has increased his stake in 600 Group (SIXH) from 6.19% to 8.85%.

Midatech Pharma (MTPH) has changed the ratio of its ADRs from two shares for each ADR to 20 shares for each ADR. This is a way of getting the trading price of the ADRs on NASDAQ back above $1.

EQTEC (EQT) could be a beneficiary of the deal done by its largest shareholder EBIOSS with Urbaser for the collection, treatment and possible conversion of waste to energy. Urbaser is conducting due diligence on EQTEC’s gasification technology and this could be used for any waste to energy plant if all three parties come to an agreement on a specific opportunity. Projects could be in Bulgaria, Greece, Macedonia and Romania.

A local authority report has placed a five year reserve status on the Plymouth Airport site where Sutton Harbour (SUH) has a 135 year lease. The local authorities are keen that the site should be used for general aviation, but a viable business plan needs to be put together. Sutton Harbour would like to develop the site.

Tau Capital (TAU) has sent a circular to shareholders concerning a capital return of $1.19m or 2.42 cents a share, raise $150,000 via a placing at 0.1 cents a share and change its name to UK Onshore. Reverse takeover candidates are being assessed. Gerwyn Williams and Nigel Burton will join the board.

Synectics (SNX) has won a £1m order from the oil and gas sector. This is the largest order for its surveillance systems from this sector for a number of years. Synectics reported a rise in full year revenues from £70.1m to £71.2m and pre-tax profit slipped from £3.02m to £2.86m. The full year dividend is increased from 4p a share to 4.7p a share.

MAIN MARKET 

Athelney Trust (ATY) has responded to the letter from former director Dr Pohl, who wants to regain his place on the board along with Simon Moore and remove David Lawman. Dr Pohl has acquired more than 100,000 shares in the past month, and this means that five shareholders own more than 50% of the investment company putting its investment trust status at risk. As long as there is more than 35% of the company held by the public this is not a problem, but it would be if Dr Pohl joined the board. There have been £90,000 of extra costs because of disputes between the two major shareholders. The plan remains to bring Gresham House on board as fund manager

WideCells Group (WDC) is changing its name to Iconic Labs and moving into digital marketing and technology. The management of this business previously built up social publisher Unilad. In the first 12 months, an agency consulting division will be launched to assists clients to develop brands. There are plans to build up a distribution and publishing division through acquisitions and launch content licensing and e-commerce divisions. There is little indication of what will happen to the stem cell operations, although management appears to believe that the insurance business could be worth pursuing. Historic liabilities are being resolved. The convertible loan note holder continues to convert a proportion of the loan note that is below 30% and then sell the shares. There are 785.6 million shares in issue with more to come.

Bluebird Merchant Ventures (BMV) has raised £436,500 at 2.25p a share. The cash will be used for the pre-construction phase of the South Korean gold projects. An agreement has been made with a local landowner for the use of land outside the main entrance of the Kochang mine.

Highlands Natural Resources (HNR) has raised £1.56m at 8.5p a share via an offer through PrimaryBid.com. This cash will fund a move by the natural resources company into the organic cannabidiol market. It has established Zoetic Organics in the US and it believes that hydrogen produced by Highland in Kansas can be used as a fertiliser with potential to increase the size of the plant. First revenues could be achieved in the summer.

Standard list shell Stranger Holdings (STHP) claims that Alchemy Utilities Ltd has sabotaged the proposed reverse takeover by refusing to provide audited accounts. Stranger is trying to get back the £300,000 it lent to Alchemy as well as its reverse takeover costs of £450,000. Stranger believes that the Alchemy management team may have misrepresented its financial status. An alternative acquisition is being lined up, but Stranger had negative net assets at the end of September 2018 and there are additional costs since then.

Standard list shell Hertsford Capital (HERT) still had £2.88m in cash at the end of 2018.

Telecoms services provider Toople (TOOP) is growing its gross profit but EBITDA is similar to the same period last year, which was around £650,000.

PV Crystalox Solar (PVCS) has ended its wafer production activities in Germany and it intends to apply its wire sawing expertise to cutting non-silicon materials. There are plans to return £38.5m to shareholders, which is equivalent to 24p a share and that is not far short of the current market price. That could still leave more than €10m of cash. Management is considering whether to maintain a listing.

Sure Ventures (SURE) says 23%-owned Suir Valley Ventures has maintained its 10% stake in WarDucks, which is developing an AR game, by participating in a €3.3m fundraising.

Andrew Hore

Andrew Hore Quoted Micro 4 March 2019

NEX EXCHANGE

Proton Partners International (PPI) joined NEX on 28 February and from day one it became one of the largest companies on the market. The introduction price was 225p, valuing the proton beam therapy provider at £334m, and the share price ended the week at 2275p (210p/245p). Woodford-related interests own 41.9% of Proton (www.proton-int.com) and they invested £20m at 200p a share on admission and promised to invest up to £80m at a maximum price of 176p each. Woodford received a further £1m worth of shares at 200p each in consideration for these arrangements. Proton is four years old and it has completed three centres offering proton beam therapy for cancer patients with another planned in Liverpool. Each cancer centre has cost between £35m and £42m. There is also a cancer diagnostics subsidiary. In the eleven months to January 2019, revenues were £1.11m and the loss was £18.6m.

Formation Group (FRM) owns 4.35 million shares in Proton Partners International, which it acquired in March 2018 at 115p each. The 225p a share flotation price means that the value of the 2.85% stake has nearly doubled to £9.78m. At Formation’s AGM, the resolutions to reappoint Grunberg and Co as auditor and for the board to authorise its remuneration were not passed. Michael Kennedy has resigned from the board.

Trading in Dozen Savings (DS01) 5% secured bonds March 2020 commenced on 1 March. So far £91,000 worth have been issued. The plan is to raise up to £7m. The company has been created to offer the bonds to customers of its financial services-focused parent company, Project Imagine (www.projectimagine.com). The bonds cost £100 each and the price at the end of the first day of trading was £107.50 (£90/£125). The FCA has granted Project Imagine an e-money licence and an investment licence.

IFA consolidator AFH Financial (AFHP) says that trading is in line with expectations in the first four months of the year. Past acquisitions are achieving more than 90% of their deferred consideration targets.

Field Systems Designs (FSD) reported a lower profit in the six months to November 2018 because of delays in energy form waste business. Two of these projects have still not been completed. Sales to the water sector have been strong, but they are likely to decline as the latest water regulation AMP6 period. In the six months to November 2018, revenues were flat at £11.8m, but pre-tax profit fell from £168,000 to £46,000.

Sandal (SAND) reported a dip in interim revenues from £1.88m to £1.73m and that led to a swing from profit to loss. EnergieMiHome home automation product sales were lower than expected but the products are being sold in more outlets.

Ace Liberty and Stone (ALSP) has spent £6.17m on two properties that are both let to the Communities and Local Government department, as Jobcentre Plus centres, on leases with an unexpired term of 8.4 years. The property in Bolton cost £2.54m and has a net initial yield of 7%. The Northampton site cost £3.63m and has a net initial yield of 6.75%.

Milamber Ventures (MLVP) says that investee company Essential Learning has been placed in liquidation after problems with historic data led to the company losing its government-funded training contracts. Milamber invested £228,000 in Essential in a two year period and provided services worth £270,000. It also issued £100,000 worth of shares to Essential minority shareholder Goldvista Properties. Goldvista has loaned Milamber £310,000 and this is likely to be converted into shares. Goldvista’s £6,000 loan to Essential has been written off. The shares issued to Gravity Investment Group for a 15% stake in Essential have been cancelled. Milamber is conducting due diligence on apprenticeship training businesses.

Inqo Investments Ltd (INQO) has raised £1m at 90p a share and the cash will be used to invest in healthcare, education and eco-tourism businesses in Africa that are two-to-three years from profitability and have a positive social impact.

Trading in Via Developments (VIA1) debentures has been suspended because the accounts for the year to September 2018 have not been published.

Karoo Energy (KEP) says it intends to move to AIM “as soon as practically possible”. A general meeting has been called for 18 March in order to gain shareholder approval to issue shares at the time of the move.

Altona Energy (ANR) has left AIM and the board intends to visit a vanadium mine in China that could become part of a joint venture. Altona still intends to invest in the Arckaringa coal project in South Australia.

John Eckersley is stepping down as chief executive of Capital for Colleagues (CFCP) in order to focus on his role as managing partner of Castlefield Partners and Alistair Currie will become chief executive.

AIM  

Internet of Things products supplier LightwaveRF (LWRF) is raising up to £3m through a placing, subscription and open offer at 8.5p a share. Year-on-year growth in sales in the first quarter was 156% taking the figure to £1.15m.

Churchill China (CHH) and Portmeirion (PMP) have bought the stake in ceramic materials supplier Furlong Mills that was previously owned by Dudson. Churchill has paid £454,000 for 9.5%, which takes its stake to 55.6%. This means that Furlong will be consolidated in Churchill’s figures. In 2017, revenues were £8.6m and pre-tax profit was £500,000. Portmeirion spent £363,000 to take its stake to 44.4%.

President Energy (PPC) is raising up to £6.5m at 8p a share, including a £2.8m debt for equity swap by the chief executive, to invest in its gas infrastructure and accelerate its drilling programme.

Itaconix (ITX) has secured an exclusive global supply agreement with Nouryon for bio-based polymers used in hair care, skin care and cosmetics. This contract comes after a joint development agreement with Nouryon and follows the previous supply agreement for polymers used in detergents. Nouryon will sell the polymers to its own customers in the personal care sector for use in their consumer products.

Audioboom (BOOM) is raising £1.5m at 1.3p a share and this cash will enable the podcast company to make upfront payments for content. Audioboom says that it is on course to achieve higher revenues in 2019 than in the 13 months to December 2018. The success in generating revenues and orders is helping to attract content providers.

Parity (PTY) has won a two-year contract with the Department for Education for the digital transformation of the Funding and Contracting Service, which makes £6bn of payments each year. The deal could be worth up to £4.5m. Matthew Bayfield has taken over as chief executive of Parity from Alan Rommel, who is chief operating officer. Bayfield plans to focus more on the data consultancy activities.

Westmount Energy Ltd (WTE) is nearly doubling its shareholding in JHI Associates Inc to 3% and the investment is 81.8% of Westmount’s gross assets. JHI’s main asset is a 17.5% carried interest in the Canje block, offshore Guyana, which is operated by ExxonMobil. The first well could be drilled by early next year.

Verona Pharma (VRP) used up £18.1m of cash in its operating activities in 2018. There is still £64.5 in the bank. Verona generated positive data for ensifentrine (RPL554) used as a treatment for COPD in a phase IIb clinical trial. The focus is COPD and further trials for cystic fibrosis are unlikely in the short-term. Financial resources will be focused on progressing the nebulised ensifentrine to a phase III study. Verona is likely to seek partners for its dry powder and pressured meter dose inhaler formulations. The results of the part one of the dry powder inhaler clinical trial for COPD could be available before the end of the first quarter. The second phase should then commence with results expected in the second half of the year.

Trading in Herencia Resources (HER) shares has been suspended because it appears that pre-conditions for the financing that has been negotiated are not likely to be met. More cash is required to enable the company to continue trading.

Telematics supplier Quartix (QTX) increased its fleet sales, but insurance business fell and overall revenues profit are set to decline in 2019. In 2018, revenues were £25.7m and pre-tax profit was £8.1m, but that figure is forecast to fall to £6.5m this year.

VietNam Holding Ltd (VNH) has published a prospectus for its move to a premium listing, which should happen on 8 March.

Adamas Finance Asia Ltd (ADAM) has commenced a share buy back scheme for up to $500,000 of shares at a maximum price of 79 cents a share, which is a 25% discount to pro forma NAV. Adamas has separately agreed to buy back 730,529 shares at 10 cents each. The first tranche of 159,847 shares has been issued to China Aerospace for its stake in Hong Kong Mining.

NetScientific (NSCI) says that it will not get the required backing for the resolution to cancel the AIM quotation, so it has adjourned its general meeting. Shareholders owning more than 30% are against the plan.

MyCelx Tech (MYX) has raised $1.83m at 230p a share in order to finance the potential increase in demand for water treatment services.

Telit (TCM) has sold its automotive division for $105m and has received $67.5m in cash, but it has granted the buyer a loan of $38.5m for a six week period because other debt finance was not obtained in time.

MAIN MARKET 

Air Partner (AIR) says that its pre-tax profit will be at least £5.8m in the year to January 2019. The charter division was boosted by strong demand for freight and commercial jets. The consulting and training division has won new contracts.

G3 Exploration Ltd (G3E) plans its third demerger in its time as a quoted company. This time shares in Green Dragon Gas, which owns its producing assets, will be distributed to shareholders. Green Dragon Gas will then either be sold or float on the Hong Kong Stock Exchange.

Wealth manager Walker Crips Group (WCW) says that political uncertainty has hit broking commissions and the launch of new products, which means that the 2018-19 results will be lower than for 2017-18. Chief executive Sean Kin Wai Lam has bought 15,000 shares at 28p each.

Laura Ashley (ALY) has rejected the bid approach by Flacks and says that the indicative offer of 2.748p a share fails to provide a fair value for shareholders.

London Finance and Investment Group (LFI) has a 43.8% stake in NEX-quoted Western Selection. In the six months to December 2018, NAV fell from 65.4p a share to 62p a share. The interim dividend is unchanged at 0.55p a share.

BigDish (DISH) has launched a new restaurant bookings website and upgraded its technology. It is also widening its coverage to include Southampton.

Path Investments (PATH) says that the period of exclusivity included in its heads of agreement with ARC Marlborough has been extended to 29 March. The plan is to acquire ARC, which has a nickel and cobalt project in Queensland, via a share issue.

Oil and gas firm Curzon Energy (CZN) has raised £95,000 at 1.58p a share, which is a 21% premium to the market price. The cash will be invested in a gas project in Texas.

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

  

Andrew Hore – Quoted Micro 30 July 2018

NEX EXCHANGE        

Milamber Ventures (MLVP) has signed heads of terms for the acquisition of health and social care training provider Orchard Rock. Milamber will pay up to £1.9m in cash and shares. If the deal goes ahead then there will be an initial cash payment of £800,000. A further £200,000 is payable when the management handover is completed and up to £900,000 is payable in shares depending on EBITDA. In the year to April 2018, Orchard Rock achieved revenues of £980,000 and EBITDA of £374,000. The deal includes a 15% stake in digital learning business YourHippo in return for £100,000 in shares. At the AGM, shareholders voted through the authorities required for equity and debt funding for the Orchard Rock deal. Two new private investors have acquired 166,668 shares at 9p each.

Smart home products supplier Sandal (SAND) says that its smart home products revenues exceeded £1m in the year to May 2018. This growth did not quite offset the fall in the PowerConnections division due to destocking. Two product ranges have been discontinued at a stock write-off cost of £72,000. According to Equity Development, MiHome revenues could almost double this year and they would represent most of the growth in group revenues and help Sandal to move into profit. In 2019-20, MiHome should be generating the majority of group revenues.

Peru-based VI Mining (VIM) is acquiring the Cushuro gold project for $27.5m in (5.75 million) shares from Karmin Exploration. Karmin has restrictions on selling shares until 2 March 2020. Cushuro is in the same region as the existing two silver and gold projects.

MetalNRG (MNRG) is acquiring the Gold Ridge project in Arizona, which includes three mines that were previously producing gold. MetalNRG will pay $700,000 in cash and shares to Winston Gold Corporation.

South Africa-based social impact investor Inqo Investments Ltd (INQO) had R2.9m in cash at the end of February 2018. There are also loans of R784,000 to offset against that. Full year revenues increased from R17m to R23m, but the lack of other income meant that Inqo has fallen back into loss. The Kazuko game reserve is achieving better room rates and higher occupancy, helped by the weak Rand. Honey producer Bee Sweet Honey generated revenues from the May 2017 harvest but not from the November one because of bad weather. There was also an interest contribution from Four One Financial Services.

Crispin Freeman, non-executive director of Hydro Hotel, Eastbourne (HYDP), has bought 600 shares at 740p each, thereby taking his stake to 6,600 shares.

AIM  

Pennant International Group (PEN) has achieved three-fifths of its 2018 profit forecast in the first half. The defence training services provider expects to report a more than doubled interim profit of £2.1m on the back of a 30% increase in revenues. The order book is worth £30m. A full year profit of £3.5m is forecast. This is without a contribution from the potential Middle East contract.

Geospatial data technology developer 1Spatial (SPA) is raising £8m at 3.75p and this cash will be deployed to repay the overdraft, develop additional technology and win new customers.

APC Technology Group (APC) has raised £2.54m at 6.75p a share in order to help finance the £2.2m acquisition of Aspen Electronics, although £500,000 is being paid in shares. This has sparked a one-third upgrade in the Stockdale 2018-19 earnings per share forecast to 0.75p. Aspen distributes RF and microwave components.

Tern (TERN) is raising £2.9m at 26p a share. This cash will help to develop its investee companies, particularly cyber security business Device Authority. Tern has a 50% stake in Internet of Things business InVMA, which has acquired the IP of AMIHO Technology, which has developed technology for the connectivity for the smart energy sector.

Judges Scientific (JDG) continues to benefit from currency movements and operating profit will show progress at the interim stage. The interims will be published on 18 September. There should be less of second half bias this year. At the end of June 2018, the order book stood at more than 14 weeks.

Holders Technology (HDT) moved back into profit in the six months to May 2018 and both PCB and LED businesses increased their revenues. An interim loss of £53,000 was turned into a profit of £65,000. The interim dividend is unchanged at 0.25p a share. NAV is 96p a share, which is double the current share price.

Online gaming marketing services provider Veltyco (VLTY) has made consistent progress since reversing into an AIM shell but this has come to a halt. Marketing revenues continue to grow but the progress of 51%-owned Bet90 has been slower than expected, sparking the decision to spend more on marketing. This means that group EBITDA will be lower than expected. Altair Entertainment owes Veltyco €3.4m and it has agreed to pay €300,000 a month. Veltyco had €1m in the bank at the end of June 2018.

Financial services provider STM Group (STM) says first half trading was in line with expectations. The Harbour acquisition should be fully integrated with STM Malta by the end of August. STM is recruiting additional directors and management.

Wynnstay Properties (WSP) is acquiring units 10-15 in Petersfield Business Park for £3.83m. The current annual rent is just over £203,000.

Beximco Pharmaceuticals (BXP) is exporting its fourth product to the US. The latest product is an anti-diabetic drug, which is the generic equivalent of Bristol-Myers Squibb’s Glucophage.

MAIN MARKET    

Bioquell (BQE) increased its revenues by 9% to £15.7m in the first half of 2018. The bio decontamination services provider generated like-for-like revenues growth of 15% at constant currency rates. Pre-tax profit is two-fifths higher at £1.96m, although that includes a £76,000 gain on disposal. There is £15m in the bank.

Telecoms services provider Toople (TOOP) had a slightly more successful third quarter. Gross profit was 57% higher than the third quarter of the previous year. That follows flat gross profit at the interim stage. However, gross profit needs to be much higher to cover overheads.

Laurence Orbach has stepped down as a director of book publisher Quarto Group (QRT).

Andrew Hore

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