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Andrew Hore – Quoted Micro 23 August 2021

AQUIS STOCK EXCHANGE

Adnams (ADB) says that trading has improved since 17 May with strong demand for hotel accommodation. Interim revenues were flat at £20.5m, while the loss dipped from £3.87m to £3.34m. Net bank debt was £13.4m at the end of June 2021.

GP software provider DXS International (DXSP) increased its full year revenues from £3.28m to £3.61m, while pre-tax profit improved from £239,000 to £254,000 even though the amortisation charge was significantly higher. There was £1.24m of cash generated from operations, although that is less than the £1.5m of capitalised research and development spending.

Good Energy (GOOD) continues to reject the 340p a share bid by Ecotricity because it undervalues the company. Management believes that the company can grow significantly as an independent entity. They also point out that Ecotricity is loss-making.

Oscillate (MUSH) has made a pre-IPO investment in Psych Capital, which would be one of first quoted psychedelic healthcare companies. Oscillate has acquired a 10.4% stake for £300,000. The Oscillate finance director is also finance director of Psych Capital. Richard and Charlotte Edwards have increased their stake in Oscillate from 5.94% to 8.31%. Oscillate has a 24.6% stake in Igraine (KING) which says that the report on the ARCADIA trial – relating to a potential treatment for people with diabetes suffering from Covid-19 – will be published by Excalibur Medicines on 6 September. Igraine has a 2% stake in Excalibur Medicines and also a co-investment agreement.

Yooma Wellness Inc (YOOM) is making the first of its promised acquisitions. It is paying up to £10.2m in cash and shares for Birmingham-based Vitality CBD, which sells its products through Boots, Tesco and Asda. Revenues were £1.6m in the first half of 2021.

Clarify Pharma (PSYC) has also made its first acquisition since joining Aquis. It has contributed $700,000 to a fundraising by Beckley Psytech. This gives Clarify a 0.26% stake. Beckley is developing psychedelic compounds to treat neurological and psychiatric disorders.

Dispersion Holdings (DEFI) has invested $200,000 in Blimp Technologies Inc, which has a platform that rewards homebuyers and sellers for contributing value to a tokenised network established by Home Network Foundation. Dispersion has made a second investment in Defi Yield Technologies Inc. The C$800,000 investment follows an initial investment of C$200,000, which was at a lower share price. This takes the shareholding to 2.24 million shares.

Watchstone Group (WTG) reduced its underlying admin expenses but there was still a £2.31m cash outflow in the first half of 2021. NAV was £15.4m at the end of June 2021. Watchstone has £14.1m in the bank and £1.8m more in escrow. The focus is on continuing litigation.

Eastinco Mining (EM.P) had a £528,000 outflow from operating activities in 2020. There was £52,000 of cash at the end of 2020.

SulNOx Group (SNOX) reduced its loss from £1.81m to £856,000 in the year to March 2021. SulNOx intends to move to AIM.

Coinsilium (COIN) has invested £300,000 in shares in financial services firm Greengage Global and is subscribing for up to £200,000 in convertible loan notes.

Evrima (EVA) has completed its investment in Eastport Ventures Inc, which is planning a flotation.

Abdelatif Lachab has increased his stake in Helium Ventures (HEV) from 5.94% to 6.23%.

AIM

Floorcoverings distributor Likewise (LIKE) switched from The International Stock Exchange to AIM last week and raised £10m at 25p a share. The cash raised will provide working capital for growth and cash for acquisitions. There will also be investment in further distribution centres, including a larger site in Manchester. Likewise chief executive Tony Brewer joined Headlam in 1991 and became chief executive in 2000. He left the company in 2016. The plan is to be a national distributor with revenues of more than £200m and an operating margin of more than 5% are targeted. Trading has been ahead of budget in the first half of 2021. Daily revenues exceeded £250,000 in each of May and June. The share price has risen to 31p.

Interim figures from plastic packaging manufacturer Robinson (RBN) led to a sharp downgrading of the 2021 pre-tax profit forecast. Raw material prices have soared, and volumes have not grown as fast as expected. Interim revenues were 19% higher at £21.2m – there was modest like-for-like growth excluding the Schela acquisition. A slump in gross margins meant that the business fell into loss. An interim dividend of 2.5p a share has been announced.

Piling contractor Van Elle (VANL) lost money last year, but it should return to profit this year.  In the year to April 2021, revenues were flat at £84.4m, which was a good outcome because revenues were sharply lower in the first quarter due to lockdown. The underlying loss was one-third higher at £1.2m. The cold winter also held back progress. Van Elle plans to pay a dividend next year if trading goes to plan.

SkinBioTerapeutics (SBTX) had more cash than expected at the year end and it has set the price for its AxisBiotix-Ps food supplement. In the UK, the psoriasis treatment will cost £1.50 per sachet, which is higher than expected. There was £4.6m in the bank at the end of June, compared with expectations of £3.4m.

Intelligent Ultrasound (IUG) AI technology has yet to make a significant contribution to revenues. GE is offering ScanNav Assist as an option on its SWIFT ultrasound machine, but first half revenues were minimal because of Covid-19 restrictions holding back marketing. Even so, interim revenues increased by 36% to £3.6m due to higher sales of training simulators. That growth is continuing and AI revenues will build up over the longer-term.

MTI Wireless Edge (LON: MWE) has continued to grow its profit and demand is improving for its antennas with new contracts from space and naval customers. In the first half of 2021, revenues improved from $19.6m to $21.3m, while pre-tax profit rose from $1.83m to $2.05m.

Engineer Tricorn (TCN) has appointed administrators because it is running out of money and the board is trying to sell the trading operations. Trading in the shares has been suspended and Arden has resigned as nominated adviser.

DBAY Advisors has decided not to bid for credit hire and legal services firm Anexo (ANX). Trading has been ahead of expectations at Anexo.

MAIN MARKET

Trading in standard list shell Pineapple Power Corp (PNPL) shares has been suspended following the announcement of the reverse takeover of BVP Investments and its sustainability-focused investment portfolio.

Canadian Overseas Petroleum (COPL) has completed the reverse takeover of Atomic Oil and Gas. This adds producing assets. Oil production is expected to continue to increase. Other potential asset acquisitions are being assessed.

Tirupati Graphite (TGR) is acquiring Suni Resources SA, which has a portfolio of graphite interests in Mozambique. They include the Montepuez graphite project which is already under construction. The acquisition will cost £6.6m.

Andrew Hore

Andrew Hore – Quoted Micro 8 March 2021

AQUIS STOCK EXCHANGE

Installation services provider and engineer Field Systems Designs Holdings (FSD) reported a dip in interim revenues due to Covid-19 and lack of work in the water sector. In the six months to November 2020, revenues halved from £11.5m to £5.7m and the loss increased to £209,000. Net assets improved from £3.87m to £3.93m with cash increasing from £4.34m to £5.6m. There are signs of water projects being announced.

Gunsynd (GUN) says its investee company Rogue Baron should join the Access segment on around 12 March. Gunsynd will own 28.48% of the drinks company and retain £111,000 of convertible loan notes.

Forbes Ventures (FOR) says that a £40m tranche of two-year notes is expected to take place in Malta in the middle of March. A further £60m should be listed within two months of the first tranche. A subsidiary of Forbes will receive a one-off fee of 2% of the funds raised.

Capital for Colleagues (CFCP) had net assets of 57.96p a share at the end of February 2021. There was cash of £2.68m. It has subsequently sold the investment in Anthesis Consulting for £1.15m. This was previously valued at £705,000.

Upper Thames Holdings (UPPT) is changing its name to Valereum Blockchain. The company has initiated the launch of the first series of securitised derivative tokens on a regulated cryptocurrency exchange, which should happen within two months. This will enable trading in currency and other products.

KR1 (KR1) has raised nearly $256,000 by selling tokens in Stake DAO. KR1 still has the rights to more than 700,000 SDT tokens and these will vest over 23 months. KR1 has spent $75,000 of the cash on a stake in LazyLedger Labs.

Exploration by Wishbone Gold (WSBN) has identified high grade silver and base metals potential at the Cottesloe project in Patersons Range Western Australia.

Coinsilium Group Ltd (COIN) is linking with 10%-owned Indorse to launch a Non-Fungible Token development studio in Gibraltar.

Quetzal Capital (WENP) has appointed Peterhouse as corporate adviser and raised £432,000 at 0.7p a share. Chris Akers will own a 9.4% stake.

Block Commodities (BLCC) has appointed First Sentinel as corporate adviser and trading in the share has recommenced. Altona Rare Earths (ANR) has appointed Optiva Securities as broker, and it hopes to move to the standard list in the second quarter.

World High Life has changed its name to Love Hemp Group (LIFE). It has appointed Hannam and Partners as financial advisor. Chris Cleverly and Elias Pungong have left the board.

AIM

Coral Products (CRU) has completed the sale of two plastic mouldings businesses and acquired Customised Packaging for £1.25m in cash and shares issued at 11p each. If 2021 profit is greater than £250,000 the vendors will receive 30% of the excess profit (capped at £250,000). Customised Packaging generated revenues of £2.3m in 2020. The Manchester-based business designs plastic products using sheet extrusion technology and vacuum forming capability. WH Ireland has been appointed as nominated adviser and broker.

Interims from parcel and freight delivery company DX (LSE:DX.) showed a 7% rise in revenues to £182.7m with strong growth in freight offsetting a fall in the express division. That enabled DX to move from loss to a pre-tax profit of £3.8m. New depots are being opened because of the demand for the company’s services, while the document exchange business is being revamped. Non-executive director Paul Goodson has acquired 176,810 shares at an average price of 28.25p.

In 2020, Franchise Brands (FRAN) improved pre-tax profit from £4.07m to £4.84m, helped by a full contribution from Willow Pumps. The dividend was increased from 0.95p a share to 1.1p a share. Income returned to growth in the fourth quarter and there has been a good start to 2021. That sparked a forecast upgrade for pre-tax profit to £6.1m.

The bid for AFH Financial (AFHP) has been increased from 463p a share to 480p a share.

BlueRock Diamonds (BRD) has raised £1.5m at 40p a share. This cash will be used to complete the weather delayed installation of the new processing plant at the Kareevlei diamond mine so that annual production can be raised to one million tonnes. There have been 29 production days lost to rain. The first two diamond tenders of 2021 have achieved an average diamond price of $423/carat, which is higher than the average price assumed for the full year.

Maestrano (MNO) has taken advantage of its strong share price to raise £2m at 13p a share. This will help to grow revenues of the Corridor.ai digital surveying platform for the rail sector. There is still manual rail survey business that can be done digitally.

In 2020, the revenues of MTI Wireless Edge (MWE) rose by 2% to $40.9m, while pre-tax profit jumped from $3.41m to $4.06m. The net cash position was better than expected at $9.44m. The dividend has been increased by one-quarter to 2.5 cents a share. The antennas business is winning larger 5G orders and the electronic components division is converting design wins into production orders.

Virgin Wines (VINO) ended the week at 225.5p a share, having floated at 197p a share.

Prospex Energy (PXEN) has completed the purchase of a 49.9% stake in the El Romeral gas and power operation in Spain. There is potential to increase production from the three producing gas wells and this could also help increase the amount of electricity generated from the 8.1MW power station, which is running well below capacity. An offshore gas well should start production later this year.

Safestay (SSTY) has sold the smallest of its three hostels in Barcelona for the book value of €900,000. Safestay is due to the final consideration of €1.18m for one of the other Barcelona hostels.

MAIN MARKET

Caerus Mineral is acquiring New Cyprus Copper and joining the standard list. A placing has raised £2.25m at 10p. There is a portfolio of exploration licences in Cyprus. There is potential for near-term mining of resources on closed copper mines and extensions of existing orebodies.

Argo Blockchain (ARB) says from this month chief executive Peter Wall will be paid in Bitcoin and other employees will be given the chance to follow suit. Argo held 599 Bitcoin at the end of February, having mined 129 (equivalent to £4.34m) during the month.

Emmerson (EML) plans to switch from the standard list to AIM ahead of the commencement of construction of its mine at the Khemisset potash project.

HeiQ (HEIQ) is acquiring 51% of Chrisal NV, a profitable industrial biotechnology company that has developed a symbiotic interior cleaner called Synbio with enhanced cleaning performance.

Castillo Copper (CCZ) expects the modelling of a JORC resource for the Big One deposit should be completed shortly. Drilling will resume when the wet season ends.

Boston International Holdings (BIH) is not going ahead with the reverse takeover of invoice factor Alexanders Discount. The shares remain suspended.

Starcrest Education The Belt and Road (OBOR) says that the purchase of 60% of The London School of Science and Technology is unlikely to happen before June.

Andrew Hore

Brand CEO Alan Green talks Volga Gas #VGAS, i3 Energy #I3E, MTI Wireless Edge #MWE & Bidstack #BIDS on Vox Markets podcast

Brand CEO Alan Green discusses Volga Gas #VGAS, i3 Energy #I3E, MTI Wireless Edge #MWE & Bidstack #BIDS with Justin Waite on the Vox Markets podcast. Interview is 9 minutes 34 seconds in.

Brand CEO Alan Green talks MTI Wireless Edge #MWE, RA Intl #RAI & Tertiary Minerals #TYM on Vox Markets podcast

Brand CEO Alan Green discusses MTI Wireless Edge #MWE, RA International #RAI & Tertiary Minerals #TYM with Justin Waite on the Vox Markets podcast. Interview is 20 minutes 20 seconds.

Andrew Hore – Quoted Micro 26 November 2018

NEX EXCHANGE        

Blockchain venture builder Coinsilium Group Ltd (COIN) says that RIF Labs is acquiring RSK Labs, where Coinsilium owns 65,000 series Seed-1 preferred shares. The cost of the investment was $83,750. The acquisition is a share for token swap and Coinsilium will end up with 1.95 million RIF tokens, which is the equivalent of 139.4 bitcoins, currently valued at $773,000. However, an initial 12.5% of the consideration will be released six months after the deal is completed and then 2.5% each month for 42 months.

NQ Minerals (NQMI) has entered into an additional marketing and off-take agreement with Traxys Europe. The deal covers the production from the Hellyer project in Tasmania for the first five years. This includes a facility for prepayment.

Tectonic Gold (TTAU) says that its Australian subsidiary has received a A$590,000 tax rebate from the Australian government. A 43.5% rebate is due on qualifying technical expenditure and so far more than A$2m has been received. Spending continues.

Gowin New Energy Group Ltd (GWIN) chief executive Chen Chih-Lung is lending £40,000 to the company for 12 months at an annual interest rate of 2%.

AIM    

Music and audio equipment supplier Focusrite (TUNE) is continuing to grow internationally although Asia is growing at the fastest rate. Full year revenues grew by 14% to £75.1m, while pre-tax profit improved from £9.51m to £11.3m. The dividend is 22% higher at 3.3p a share. There is £22.8m of cash in the bank and this could be used for add-on acquisitions. Tariffs on Chinese exports are being used as a way of testing out price rises for the US market. Forecast profit growth is modest but there is potential for outperformance.

Tristel (TSTL) is buying its distributor in Benelux and France and this will enhance earnings. The maximum payment for Ecomed will be €6.8m (£6m) with €5m paid up front. The deal also provides an additional warehouse in Europe. A full year contribution in 2019-20 will increase pre-tax profit by £700,000 to £6.5m.

Sustainable timber supplier Accsys Technologies (AXS) has increased its capacity for Accoya production by 50% and this will help production in the second half. Demand for Accoya is strong and sales increased from €28.3m to €31.1m in the six months to September 2018. The development of the Tricoya plant in Hull is progressing. Construction could be completed in the middle of 2019 and it will breakeven at 40% of capacity. Tricoya, which is used in MDF-type panels, is currently produced from Accoya and this plant will free up Accoya production for other customers. Numis forecasts a rise in full year revenues from €60.9m to €73.1m and a decline in loss to €5.1m. Net debt is expected to be €46m at the end of March 2019 and it will continue to rise because of the capital investment programmes. If partners can be secured in the USA and Asia then this could provide a significant boost to the company.

Initial drilling results at the Havieron licence area in Western Australia provided good news for Greatland Gold (GGP) with two wide zones of gold and copper mineralisation intersected. This significantly extends the known mineralisation.

Immunodiagnostic System Holdings (IDH) is up to its old tricks. The interim figures were published at 5.04pm on Friday 23 November. To be fair this is 14 minutes earlier than the half year trading statement so maybe the company is improving. Here’s hoping. Interim revenues were flat at £18.5m but the company fell into loss. There was £27.8m of cash in the bank (net cash of £26.5m) at the end of September 2018. Maybe some of this should be spent on an alarm clock so management can get up in the morning to release its results.

Chris Jagusz has stood down as chief executive of Redcentric (RCN) as revenue growth has been hard to come by. The latest interims have sparked downgrades for 2018-19 with revenues cut by 5% to £94.2m.

SIMEC AtlantisEnergy (SAE) has singed a joint venture with AD Normandie Developpement and this will enable the commencement of tidal energy projects between France and Alderney. A capacity of 3,000MW is being targeted and there is potential for EU grants.

Innovation software provider Imaginatik (IMTK) has achieved annualised cost savings of £1.2m, but the strategic review held back revenues and new orders in the first half. The cash outflow declined. Trading levels are picking up.

There are no competition concerns about the Ebiquity (EBQ) disposal of its advertising intelligence business to Neilsen Media Research. The business has been underperforming because of the uncertainty and this will enable the deal to go ahead. Ebiquity says that 2018 operating profit will be lower than expected.

Positive news about the Wressle oil project, where the planning officer for North Lincolnshire has recommended approval. The original application was refused two years ago. Operator Egdon Resources (EDR) owns a 30% interest in Wressle, Europa Oil and Gas (EOG) has a 30% interest and Union Jack Oil (UJO) has a 27.5% interest. Humber Oil and Gas owns the other 12.5%.

Integumen (SKIN) has raised £355,000 from a placing at 0.44p a share. This cash will support the development and commercialisation of Labskin. Integumen is paying €40,000 and six million shares to former chief executive Declan Service.

Sutton Harbour (SUH) returned to profit in the six months to September 2018, although the corresponding period had a hefty asset write-down, and it is raising cash for pre-construction funding. An open offer of 77-for-786 at 29p a share will raise up to £3m and close on 6 December. Planning approvals have been received for the Sugar Quay and Harbour Arch Quay schemes in Plymouth.

Electronic and battery products supplier Solid State (SOLI) is starting to improve its performance, although there may still be a decline in full year profit. In the six months to September 2018, revenues were 5% ahead at £23.6m and pre-tax profit improved from £1.55m to £1.66m. The interim dividend was 5% higher at 4.2p a share. The order book was worth £29.6m at the end of September 2018.

TomCo Energy (TOM) has appointed Turner Pope to replace SVS as broker and trading in the shares has recommenced.

SEC (SECG) is acquiring France-based public and corporate affairs business CLAI. An initial 10% stake, but with 50.1% of voting rights, will cost €490,000 in cash. A further stake of 40.01% will be acquired in the second half of 2020 and another 10% in the second half of 2023. The shareholders can ask SEC to buy the remaining shares between 30 July 2025 and 30 November 2025. The final payments are based on an earnout although the maximum will be €8.8m. In 2017, CLAI made a pre-tax profit of €551,000 on revenues of €4.49m. The acquisition could be earnings enhancing. CLAI will continue to be run by existing management.

Majestic Wine (WINE) is finding the UK market tough and margins are coming under pressure. Peel Hunt has reduced its 2018-19 pre-tax profit forecast by £2m to £12.8m, partly due to increased investment in Naked.

Kestrel has increased its stake in Pebble Beach Systems (PEB) to 22.2%.

Another disappointing trading statement from Fire Angel Safety (FA.) has led to a 2018 profit downgrade. Stock problems and delays to orders have hit the smoke alarms supplier. Scottish legislation due to be passed next year should provide a boost to demand. Fire Angel will be loss-making in 2018 but should make a small second half profit.

Legal services firm Knights Group (KGH) says that interim figures will be in line with expectations with double digit organic revenue growth. The interims will be announced on 15 January.

Maritime identification systems developer SRT Marine (SRT) had already flagged its 9% increase in interim revenues to £3.2m and increased underlying loss of £1.3m. There was little contribution from the GeoVS analytics system. There are expected to be significant deliveries in the second half, but timing cannot be guaranteed. A full year profit of around £3m is expected if the deliveries do take place. SRT is no longer considering investing in its own satellite constellation for this business.

FIH Group (FIH) reported flat interim profit, although there was a sharp improvement in contribution by the Momart art and museum logistics business. There was a decline in the performance of the Gosport ferry and Falkland Islands activities.

Lawyer Gateley (GTLY) says interim revenues will be one-fifth higher at £46.4m with around 50% of this organic growth. Full year revenues should be at least £102m. EBITDA margins should be maintained suggesting full year EBITDA of more than £19m. That is slightly higher than previous consensus.

Argentina-focused oil and gas producer and explorer President Energy (PPC) says the first Puesto Flores development well is producing at 600 bopd, having peaked at 1,000 bopd. This is as much as was anticipated from all three development wells. The results from the second development well appear positive and testing is about to commence. finnCap believes that the first well could have a post-tax NPV of $20m.

Pallett developer and manufacturer RM2 International (RM2) is raising £13m at 105p a share, following a 200-for-one share consolidation. This replaces the second tranche of a previously announced placing which would have happened at 1p a share (200p a share equivalent) but RM2 did not meet the performance requirements to spark the other placing. All but one of the investors set to buy shares previously will subscribe to the new placing. The cash will be used to fit track and trace devices to existing pallets, produce new pallets and cover admin costs. The cash will last until next April.

finnCap has sharply downgraded its pre-tax profit forecasts for telecoms services provider Maintel Holdings (MAI) due to project delays. The 2018 figure has been cut from £12.9m to £9.8m and the 2019 figure from £16.1m to £12.7m. The 2018 dividend is still expected to be 34.5p a share, although the cover will fall to 1.6 times. There is a move towards recurring revenues which will have a longer-term benefit for Maintel.

Restaurants operator Tasty (TAST) has revised its £7m term loan facility, which will be extended until March 2022. Quarterly repayments will be reduced from July 2019, by which time the amount draw down will be reduced by £1.1m. Net debt is currently £4.3m.

The NAV of value-focused investment vehicle Gresham House Strategic (GHS) has held up well considering the stockmarket decline. It grew to 1264p a share at the end of September 2018 and it was still 1243.2p a share on 16 November. The stake in IMImobile (IMO) has been reduced but it remains a strong performer. Cloud communications software supplier IMImobile improved its interim revenues by one-quarter and organic growth was 15%. The growth came from the European and American operations. Established customers are buying more services from the company and acquisitions are supplementing growth. Liontrust has increased its IMImobile stake to 21.4% but Kestrel has cut its to below 3%.

Payment protection software provider PCI-PAL (PCIP) is paying former boss William Catchpole his contracted entitlements plus £100,100 in settlement of his claims. The board unanimously asked Catchpole to leave in October. The final loan note repayment of £250,000 has been received from the buyer of the contact centre business.

Digital and media recruiter Nakama Group (NAK) reported flat interim net fees of £2.7m, but it managed to return to profit thanks to reduced costs. Further cost cutting is underway. There was a £558,00 cash inflow from operations and net debt was £488,000.

Antennas developer MTI Wireless Edge (LSE: MWE) has completed its merger with Israel-quoted majority shareholder MTI Computers and the initial benefits will show through in the second half. The interim figures show organic growth in revenues of 2%, but that growth should accelerate in the second half. Water management technology provider Mottech is winning new business and there are good prospects for the other divisions. The NAV is 17.8p a share and the full year dividend could be 1.25p a share.

Two directors have invested nearly £230,000 in shares in Condor Gold (CNR) at 22pa share. Non-executive Jim Mellon took his stake to 7%, while executive chairman Mark Child has reached 6%. Condor has been granted an important environmental permit for the development of a processing plant at its La India project in Nicaragua. SRK Consultants is preparing an updated mineral resource.

Juridica Investments Ltd (JIL) plans to leave AIM as part of the process of winding-up the company. The quotation will be cancelled on 21 December after liquidators from KPMG Channel Islands are appointed. Management fees will be reduced.

Online women’s fashion retailer Sosandar (SOS) continues to build up its sales, having been trading for two years, and they reached £1.84m in the six months to September 2018. The loss was nearly £2m. Returns were 52% but that was put down to a high level of dress sales in the period and it can be more difficult to get the right fit. The benefits of the move to the Magento 2 ecommerce platform and the investment in the website are showing through in the second half. October was a record month. A placing raised £3m after the balance sheet date so pro forma cash is £5.56m.

600 Group (SIXH) has rationalised its UK business and sorted out its pension problems. Interim revenues were slightly ahead but underlying margins improved from 5.1% to 6%. The machine tools and laser marking equipment supplier is expected to improve its full year pre-tax profit from $3.05m to $3.9m.

Motor dealer Cambria Automobiles (CAMB) has performed well considering the dip in the new car market. Used vehicles and aftersales offset some of the decline. There was a 2% decline in revenues to £630m and underlying pre-tax profit fell by 13%  to £9.8m. The capital investment programme for new sites has peaked and the benefits of that investment are still to come.

Veltyco Group (VLTY) is still finding it difficult to collect the money it is owed. This means that its cash is running low and this will impact its ability to promote its own brands.

Graphene materials supplier Directa Plus (DCTA) is confident that it will achieve 2018 revenues of €2.3m and this figure could double in 2019. Growth is coming from textiles, environmental and elastomers customers.

Ubisense Group (UBI) is selling RTLS SmartSpace for up to £35m, which is around two-thirds of the software company’s current market value. The group had cash of £6.8m in the middle of November 2018. Funds managed by Investcorp Technology Partners will pay an initial £30m. Liabilities of £3.1m and a loan of £1.75m will have to be paid out of the proceeds. The company’s name will be changed to IQGeo and it will focus on the myWorld product, which helps telecom companies to integrate their technology ecosystem. The myWorld business generated interim revenues of £5.7m but £3.2m was geospatial services from third party products. Some of the cash will be distributed to shareholders.

The decline in annual pre-tax profit at Stride Gaming (STR) from £18.9m to £14.8m was no surprise given the impact of regulation and tax. The online bingo and gaming company is likely to report a further fall in profit this year. A special dividend of 8p a share has been announced and in future 50% of net earnings will be paid in dividends.

MAIN MARKET  

Packaging and labels supplier Macfarlane Group (MACF) continues to grow revenues organically, supplemented by recent acquisitions. Organic growth has been 5% and overall growth is 13%. The fourth quarter is important, though. Full year pre-tax profit is forecast to improve by 47% to £13.6m and earnings per share by one-third to 7p. Acquisition payments should be offset by cash generated in the second half.

S and U (SUS) has increased its investment in Aspen Bridging from £20m to £30m. Aspen has been trading for less than two years and is already in profit.

Creightons (CRL) increased its interim profit by 44% to £1.38m on revenues one-third ahead at £22.3m. The main growth in sales has come from retailer own brands, while Creightons own brands raised their sales by 11%.

David Brown has sold his 4.55% stake in Associated British Engineering (ASBE).

Sealand Capital (SCGL) has formed a new subsidiary called ePurse (HK) Ltd, which is generating commissions from WeChat Pay activities in Hong Kong. Licences have been obtained in the UK and Dubai.

Andrew Hore

Andrew Hore – Quoted Micro 20 November 2017

NEX EXCHANGE

Clean Invest Africa (CIA) raised £530,000 at 0.4p a share and joined the NEX Exchange Growth Market on 14 November. The founders subscribed for shares at 0.25p each during September and October. The expected admission price was 1p and the share price ended the week at 1.45p (1.3p/1.6p). That values the company at £2.26m. There is £512,000 in the bank after expenses of £63,800. Clean Invest Africa is focused on renewable and clean energy projects and technologies that will aid the development of Africa. Executive coach Rene Carayol has a 6.28% stake.

Brewer Daniel Thwaites (THW) reported an improvement in interim revenues from £44m to £48m but pre-tax profit was flat at £5.4m, excluding movements on interest rate swaps. The interim dividend is unchanged at 1.1p a share. Net debt rose to £60.9m due to hotel acquisitions and capital investment. Most of the growth in revenues has come from the hotels and inns businesses. Management says that it is aware of some weakening in its consumer markets.

Metal NRG (MNRG) lost £59,000 in the six months to August 2017 but there was still £273,000 in the bank. The focus is cobalt and investments have been made in Western Australia and Nevada. There are further potential investments in Australia and North America. Management plans to announce how it will increase its profile and the liquidity of its shares.

African Potash Ltd (AFPO) is raising £400,000 at 0.025p a share and the cash will finance the development of the African fertiliser trading business and an eVoucher payment system using blockchain.

AIM

Science in Sport (SIS) has secured £14m via a placing at 70p a share in order to expand geographically and in terms of sports. A further £1m could be raised through a one-for-32 open offer at the same share price. The cash will be used to expand the company’s online presence in the US and new product development. The US expansion will be predominantly via Amazon initially and this will require additional stock levels. The SIS.com ecommerce platform will also grow. A move into football will increase the addressable market. Losses are expected to continue for at least two more years.

Zoo Digital (ZOO) is already getting the initial benefits from its film and video dubbing service ZOOdubs. This has widened the scope of the business and helped interim revenues to grow by 63% to $12.7m. A full second half from ZOOdubs will help achieve full year revenues of $26m and that should move Zoo digital into profit in the year to March 2018 even though costs are being increased ahead of expansion in revenues. Localisation services are generating more than two-thirds of revenues with subtitling service ZOOsubs also growing its revenues. ZOOscripts is being developed to provide scripts and metadata that can be used by the other services.

Floorcoverings manufacturer Victoria (VCP) has agreed to acquire floor and wall ceramic tiles manufacturer Keraben Grupo for £246.5m. A placing is raising £180m at 783p a share.

Meat and dairy products supplier Zambeef (ZAM) achieved its downgraded forecast for last year but there has been a further downgrade for 2017-18. Revenues were 17% higher at $255.8m but profit slumped to £200,000. Sales are expected to be flat this year but a recovery in pre-tax profit to $4.2m is anticipated. Non-executive director Tim Pollock, who is investment director for food and agriculture at CDC Group, will take over as joint chief executive from Carl Irwin at the end of March.

President Energy (PPC) is beginning the workover programme of four wells on Puesto Flores, which will cost $2.2m. The payback should be less than 12 months, assuming an oil price of $55/barrel. This is one of the reasons behind the expected increase in forecasts sales from $20.6m in 2017 to $69.5m in 2018, which will enable a 2018 pre-tax profit of $10m.

SRT Marine Systems (SRT) expects a strong second half following a 10% rose interim revenues to £2.9m but a higher loss of £1.6m. That excludes a £1.5m impairment charge for a large Asian contract that has been delayed until 2018-19. finnCap expects the maritime awareness technology developer to report flat full year pre-profit of £1.5m but that requires £12m of revenues in the second half. That requires project milestones to be achieved.

AB Dynamics (ABDP) continued to grow its business at the same time as starting to move into new premises. In the year to August 2017, the automotive testing systems and measurement products supplier increased revenues by one-fifth to £24.6m. Underlying pre-tax profit improved from £4.72m to £5.94m. The total dividend has been raised by 10% to 3.331p a share. Net cash was £9.6m.

Versarien (VRS) wanted to raise £1.2m via institutions and PrimaryBid.com at 18p a share and it ended up accepting £2.9m. Back in March, £1.5m was raised at 15p a share in the same way. The advanced materials company has announced a collaboration with a global consumer goods company on the development of the Nanene graphene nano-platelets in polymer structures. The first purchase order has been made.

GCM Resources (GCM) has completed the appointment of Northland as nominated adviser and joint broker. GCM wants to raise £2m via an offer at 34.4p a share through PrimaryBid. The cash will be used to provide further funding for the development of a mine mouth power plant proposal and for working capital.

Serabi Gold (SRB) has announced the conditional acquisition of Chapleau Resources Ltd for an initial $5m, with a further $5m payable in three months and the final $12m when first gold is produced from the Coringa project in Brazil or 24 months from the initial payment. Coringa is relatively near to Serabi’s existing producing gold mine at Palito. Running the two together should reduce the costs of production. The initial payment can come out of existing facilities. Serabi generated revenues of $36.2m and a cash inflow from operations of nearly $7m.

InterQuest Group (ITQ) appears to have set in motion the first stage of plans to leave AIM. That is because it wants shareholder approval to allow it to issue additional shares equivalent to 75% of the issued share capital. The management behind the recent bid for the company own a majority of the shares but need the backing of 75% of the shares voted in order to cancel the quotation. By issuing additional shares InterQuest can dilute the stake of the shareholders that oppose the cancellation of the AIM quotation and management can get what it wants.

AdEPT Telecom (ADT) reported a 36% increase in interim revenues to £22.6m with managed services contributing more than two-thirds of the total. Pre-tax profit increased by 29% to £3.9m. The interim dividend was raised by 13% to 4.25p a share. Full year profit is expected to rise from £6.9m to £8.3m.

Boku Inc develops technology which enables people to pay for services via their mobile. The company is loss-making but it is highly operationally geared so after it covers its costs the profit should grow rapidly. At 59p a share, Boku will be valued at £125.9m. Existing shareholders will raise £30m and the company will raise £15m.

Belluscura has announced details of its plans to join its parent company Tekcapital (TEK) on AIM in early December. Tekcapital’s 47.5% stake in Belluscura will be diluted by a fundraising to generate between £7.5m and £10m. Belluscura has acquired non-core product lines from large medical device companies as well as new IP and technologies.

Keystone Law Group is the latest legal firm to come to AIM. A placing at 160p a share will raise £10m and value the company at £50m. The flotation is due to be completed on 27 November.

Beeks Financial Cloud Group is raising £7m at 50p a share, which values the company at £24.5m. The flotation date is 27 November. Beeks is a cloud-based provider of automated foreign exchange and futures trading.

Ten Lifestyle Group is a lifestyle and travel platform providing concierge services. Corporate clients provide Ten’s services to individual customers. It also expects to join AIM on 27 November.

Mirriad Advertising has developed native in-video advertising technology, which can insert branded advertising into existing content. Revenues are modest and Miriad is still heavily loss-making. IP Group currently owns 38.2%. The flotation is expected on 29 November.

Concepta (CPT) has confirmed a £600,000 order from China for its MyLotus product which provides measurements to help improve the chances of conception. On the back of this, Concepta raised £2m at 7p a share.

Amryt Pharma (AMYT) has signed an exclusive distribution agreement with El Seif in Saudi Arabia for its products.

Africa Oil Corp is subscribing for £8.46m worth of shares in Eco (Atlantic) Oil and Gas (ECO) and this will give it a 19.8% stake. The subscription price of 22.25p a share was at a 28% premium to the closing price on the previous day’s trading. The cash will be used to identify and acquire new oil and gas exploration assets.

MTI Wireless Edge (MWE) has won a $1m contract for military antennas. Along with previous contracts, the revenues will be recognised over the period until the end of 2019. There is potential for larger orders to come.

TLA Worldwide (TLA) reported its 2016 results at 7am on 15 November and the 2017 interims at 7.01am on the same day. That is much better than releasing the profit warning concerning the 2016 figures at 6.26pm on the last day of trading prior to Christmas 2016. Trading in the shares resumed at 2pm on 16 November after the 2016 accounts were posted. The 2017 loss was $9.26m. The interim loss was $3.86m and net debt was $25m with further contingent consideration of $12.2m. The share price slumped to 12p and then recovered to 14p.

Former chairman Michael Ellis has requisitioned a general meeting at Van Elle Holdings (VANL) so that he and his son-in-law Thomas Lindup can be returned to the board. Both men had left the board of the ground engineering services provider prior to its profit warning in March, which was five months after floating. Ellis also wants to remove chief executive Jon Fenton and senior independent director Robin Williams.

Utilitywise (UTW) has delayed publication of its results because of the requirements for further auditing.

Integumen (SKIN) has acquired the Stoer skincare range for men and its ecommerce platform. This brand complements the Visible Youth brand aimed at women. Integumen is issuing 12.6% of its enlarged share capital in payment for Stoer, which values it at £510,000 at a share price of 2.45p.

Interim revenues fell from £21.9m to £17m at Hornby (HRN) and the loss increased to £5.7m. Net debt was £4.7m at the end of September 2017. A £12m placing and open offer at 29.5p a share will provide cash for investment and to buy a 49% stake in the holding company of Oxford Diecast Ltd, which is controlled by Hornby chief executive Lyndon Davies.

Blue Prism Group (PRSM) has sparked another upgrade with its latest trading statement. The robotic process automation supplier has added more customers and has a 100% renewal rate so full year figures will be comfortably ahead of expectations but the loss will be in line with forecasts. The annual figures will be published on 25 January.

Fishing Republic (FISH) has been hit by increased competition in the fishing market, which has knocked profit margins. There was a decline in like-for-like store sales in October. That means that there will be a loss this year. This has led to the departure of the chief executive and other board members. Chris Griffin becomes acting chief executive and he will conduct a strategic review. His experience should be helpful with online sales, which continue to grow.

Angling Direct (ANG) has acquired North West Angling Centre and Tacklesaver for £450,000 in cash plus stock. They have annual revenues of £1.8m. That takes the number of stores to 20. Angling Direct has reassured the market that trading is in line with expectations.

Oracle Power (ORCP) and its partners have submitted plans to the Pakistan authorities for a 660MW power plant which would eventually become a 1,320MW plant. The coal for the power plant will come from Thar Block VI. If the regulator issues a letter of intent then the partners will have to submit an electricity tariff application and apply for a generation licence.

Film finance provider FFI Holdings (FFI) has acquired digital, post-editing machine rental business EPS-Cineworks for $9.54m. This business fits well with the Pivotal Post post-production business acquired earlier this year prior to flotation.

BOS Global Holdings (BOS) says that Innovation Corporation has asked for security to be provided against its convertible note. Innovation has converted £217,000 of convertibles at 16p a share. That left £1.06m available from the note. Former managing director Michael Travia, who has requisitioned a general meeting to change the BOS board, is associated with Innovation and they have a total stake of 18.9%. BOS admits that its cash position is tight.

MAIN MARKET

Packaging supplier Macfarlane Group (MACF) says it expects full year expectations to be met as the momentum of the first half has continued into the second half. The distribution division increased revenues by 11% in the four months to October 2017 which more than offset a small dip in manufacturing sales. Manufacturing profit will be flat this year but distribution profit will be much higher.

Standard list shell Spinnaker Opportunities (SOP) has viewed potential acquisitions but has yet to find one that fits with its criteria. It is seeking an energy or industrial acquisition valued at between £5m and £30m. There was still £1.1m in cash at the end of October 2017 and the NAV was 4.23p a share.

Telecoms business Toople (TOOP) has more than 1,300 small business customers and it says that “monthly revenues have consistently exceeded £100,000” between June and October 2017. Toople has decided to end its relationship with a third party sales agency and bring sales in-house. The current customer acquisition cost is said to be “within the range previously announced of £40 to £91 per customer” and that is the same as 12 months ago. In the first half, admin expenses were £662,000. There was a £82,000 gross profit on sales of £655,000. Management has tried to keep costs down but revenues do not appear to be significantly higher in the second half based on the above statement. The first half cash outflow from operating activities was £552,000. This may have been reduced in the second half but the outflow is still likely to be significant. There was net debt of just over £300,000 at the end of March 2017 but since then £1.26m net from a fundraising in June. The share price is 1.18p, compared with the 2p fundraising price.

Simian Global (SMG) says that the exclusivity period for the acquisition of media and advertising company GVC Holdings has been extended to the end of March 2018. A further £50,000, on top of £200,000 already lent, will be provided to GVC at an interest rate of 15%.

Andrew Hore

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