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Andrew Hore – Quoted Micro 19 July 2021

AQUIS STOCK EXCHANGE

Good Energy (LON: GOOD) has rejected the bid from rival renewable energy supplier Ecotricity. It believes that the indicative offer of 340p a share in cash is too low even though it is a premium to the previous market price. Management believes that it has a clear strategy for the company. The focus is energy as a service and mobility as a service, particularly through Zap Map. A new tariff, called Green Driver, has been launched offering a choice of off-peak electric vehicle charging periods. The potential bid values Good Energy at nearly £57m. However, Ecotricity already owns 25.06% of Good Energy.

Voyager Life (VOY) has secured a preferred supply deal for its CBD and hemp oil products with independent pharmacy group Inphaserve, which supplies more than 30 independent pharmacies in England and Scotland.

Rogue Baron (SHNJ) reports another record month for its Bin 1301 bar. Sales were $95,000 in June, which is one-third higher than any pre-Covid month.

SulNOx Group (SNOX) has raised £2.59m at 30p a share. The cash will be used to build up the sales capability and finance the hiring of additional management and staff. There will also be further investment in R&D. There are 58 ongoing trials for its emission reduction product.

Hydro Hotel Eastbourne (HYDP) generated interim revenues of £186,000, but it lost £383,000. The hotel has been trading for a limited time in the six months to April 2021. Refurbishment of bathrooms was undertaken during the period. The hotel will fully re-open on 19 July.

Tectonic Gold (TTAU) has reached an agreement with White Prospecting to set up a joint venture to mine gold at the Mount Cassidy project. Tectonic will get a 7.5% gross production royalty. This deal will enable Tectonic to concentrate on Specimen Hill.

BWA Group (BWAP) reports positive sampling results at the 90%-owned Dehane rutile sands project. It is still early days, but the elevated levels of rare earths is a good sign.

Evrima (EVA) had £164,000 in the bank at the end of 2020, while the NAV was £461,000.

Chapel Down Group (CDGP) raised £6.88m at 59.5p a share, which includes £5.45m raised via crowdfunding. NQ Minerals (NQMI) has raised £35,000 at 7p a share. All Star Minerals (ASMO) has raised £257,000 at 0.02p a share and converted £54,000 of liabilities into shares. Ananda Developments (ANA) has raised £350,000 from an issue of convertible loan notes, with a conversion price of 1p a share, and a further £200,000 is committed by investors.

AIM

Building materials sector consolidator SigmaRoc (LSRC) acquiring Finland-based limestone supplier Nordkalk acquired for £402m, including debt. SigmaRoc has raised £260m in a placing at 85p a share, while a retail offer raised £1.6m. A new bank facility will help to fund the deal and £43m of shares will be issued to Rettig Group.

Energy efficiency as a service provider eEnergy Group (EAAS) has trebled full year estimated revenues to £13.5m. Organic growth was 75% and there was a small pre-tax profit. The smart metering service has been rebranded as MyZeRO and the first combined LightAsAService and smart metering contract has been won. Short-term profit growth is being sacrificed for longer-term growth.

Solid State (SOLI) marginally beat previously upgraded expectations for its figures for the year to March 2021. Revenues dipped slightly to £66.3m, but underlying pre-tax profit was 15% ahead at £5.4m following a reduction in overheads. The total dividend was 16p a share. Computing and communications products did well, but there was a decline in power products revenues. Acquisitions made a small contribution.

Glantus (GLAN) has made its first acquisition since joining AIM, but the software company still remains at a discount to its placing price. The $9.3m acquisition of Technology Insight Corporation led to an earnings up grade for 2022 from 6.4 cents a share to 7.1 cents a share.

Iodine producer Iofina (IOF) says iodine prices are back to pre-pandemic levels at $35-$37/kg. First half production is in line with guidance at 249.4Mt.

Kromek (KMK) had a better second half of the year to April 2021. Manufacturing had been closed in the first half and revenues improved. Full year revenues still fell from £13.1m to £10.4m. There is already 75% visibility over this year’s forecast revenues of £15m. Biodetection equipment for Covid-19 and other airborne viruses will provide a new market for the company. The medical imaging market is recovering.

ULS Technology (ULS) continues to invest in its DigitalMove platform, and it has net cash of £24m to complete its development. More services will be offered on the platform. Conveyancing completions fell last year and revenues declined 18% to £16.9m.

Zoo Digital (ZOO) moved into profit in the year to March 2021. A pre-tax profit of $900,000 was made on revenues of $39.5m with further improvements in profit expected in the next two years. Demand is increasing from subtitling and dubbing services for TV and film back catalogues and Zoo is also adding additional services. Zoo is extending its geographic reach in line with demand from customers.

Chains and transmissions manufacturer Renold (RNO) reported a 13% dip in revenues last year, but underlying pre-tax profit improved by one-fifth to £5.9m – that was due to £2.4m of restructuring costs the year before. Net debt was reduced to £18.4m. The cost base has been cut and efficiency improved through capital investment in facilities. In July, a £11m military contract was won by the torque transmission business.

Personal protection and insurance products provider CPP Group (CPP) says that trading in India has recovered in the past few weeks, but there had been a sharp reduction activity in April and May. The back books continue to generate revenues, although they are declining. Overall trading is in line with expectations.

MAIN MARKET

Standard list shell Hawkwing (HNG) has agreed to acquire ecommerce aggregator Internet Fusion Group, which owns nine speciality retail businesses. It has developed the Reactor platform which brings together retail businesses and brands. Trading in the shares has been suspended.

LED lighting and wiring accessories supplier Luceco (LUCE) has continued to improve its performance in the first half. Interim revenues are expected to be £108m and underlying operating profit of £19m. The second half will be even stronger. Luceco expects full year revenues to be at least one-quarter higher at £220m and underlying operating profit 30% ahead at £39m.

Maternity wear retailer Seraphine Group (BUMP) raised £61m at 295p when it joined the premium list last Friday. The cash will be used to pay off loans and finance growth. The share price started conditional dealings earlier in the week at 305p and subsequently fell back, opening at 280.05p when dealings were unconditional. The share price ended the day at 279.4p

HeiQ (HEIQ) has signed a collaboration agreement with LYCRA and the first product should be launched by the autumn. This will combine freshness and antiviral benefits with LYCRA stretch fabrics.

Nuformix (NFX) expects to develop a phase 1-ready formulation of its NXP002 inhaled treatment for idiopathic pulmonary fibrosis in the next 18 months. This could be a time to seek a partner.

Andrew Hore

Andrew Hore – Quoted Micro 29 March 2021

AQUIS STOCK EXCHANGE

New Apex segment entry Samarkand (SMK) has got off to a strong start. At one point, shares were changing hands at 142p, against the placing price of 115p, but they ended the week at 123.5p (120p/127p). There was £15.4m raised after expenses. The company has developed e-commerce software technology known as Nomad. There are a number of modules and these can be used by clients to sell their products in China. There are 105 special cross-border e-commerce zones in China. This market is expected to reach £138bn in 2021. Samarkand also sells its own brands in China and some of the money raised will be used to buy other brands.

Incanthera (INC) has raised £1.14m at 12p a share. This will provide enough cash until the middle of 2022. There are discussions ongoing with two potential partners for the Sol skin cancer prevention product.

Imperial X (IMPP) has announced its intention to gain a standard listing and raise up to £1.5m. The company will change its name to Cloudbreak Discovery.

Rutherford Health (RUTH) has secured a £40m investment from Equitix Investment Management. In return the freehold of the South Wales centre will be transferred and there will be other security. There will be an initial investment of £25m with the rest paid in three equal instalments. The cash will be used for investing in infrastructure. The current debt of £18.6m will be repaid.

Arbuthnot Banking (ARBB) generated flat operating income of £72.5m, while there was a £1.1m loss. Management is optimistic about a strong rebound if the government continues with its current roadmap out of lockdown. There is a growing demand for lending.

Capital for Colleagues (CFCP) had NAV of 57.97p a share at the end of February 2021. That is before the sale of the investment in Anthesis for £1.15m. That leaves the company with £2.64m in cash.

In the first 18 days of March Bin 1301, a bar in Washington DC where Rogue Baron (SHNJ) has a stake, generated sales of $35,330, nearly double the same time the previous year. That is despite Covid restrictions.

SulNOx Group (SNOX) has appointed A and S International as a distributor of lubrication and bioremediation products.

EPE Special Opportunities (ESO) had an NAV of 437.63p a share at the end of January 2021, which was a 38% increase on the year before thanks to the strong performance of the Luceco (LUCE) share price. EPE is considering raising more cash through a loan note issue. That would provide further cash for investment.

Altona Rare Earths (ANR) has secured a memorandum of understanding for the acquisition of a rare earths mining project in Mozambique. The plaln is to buy 70% of the Monte Muambe rare earths project, via an earn-in.

First Sentinel has resigned as corporate adviser to Block Commodities (BLCC) after less than one month in the position. Block has entered into an option in partnership with Century Cobalt Corporation to acquire two million seeds, which can be used to produce medicinal grade cannabis. Block would have to issue more than 142.8 million shares at 0.07p each if the option is taken up.

Chris Akers has increased his stake in Quetzal Capital (WENP) from 15.2% to 17.2%.

Upper Thames Holdings has changed its name to Valereum Blockchain (VLRM).

S-Ventures (SVEN) has applied for an OTCQB quotation in the US.

AIM

Hormonal disease treatments developer Diurnal (DNL) says that Chronocourt, also known as Efmody could gain approval in the EU by the summer and that could enable a commercial launch in some European markets in the third quarter. Chronocourt/Efmody is a modified release hydrocortisone used to treat adult and adolescent patients with congenital adrenal hyperplasia, which is caused by a block in cortisol production. Potential sales are greater than for Alkindi, which is aimed at children.

A potential management buyout for Cambria Automobiles (LON: CAMB) at 80p a share would value the motor dealer at £80m. This is a premium of more than one-fifth to the previous market price.

Digital healthcare company Cambridge Cognition (COG) substantially reduced its loss in 2020 and is on course to move into profit this year. Revenues increased and expenses were reduced. There is a strong order book. There was £3m in the bank at the end of 2020. Voice-based service NeuroVocalix is set to be launched this year.

Cyber security firm ECSC (ECSC) grew recurring revenues by 22% to £2.4m last year. Even so, total revenues fell 4% to £5.7m due to a tough second quarter. The loss fell from £639,000 to £153,000. Net cash is £1.1m. There has been a good start to the new year with a clutch of contract wins.

STM Group (STM) has sold its trust and company services business for £2.45m plus net assets at completion of around £570,000. This has been non-core for some time. This will reduce short-term earnings – although there could be some cost savings – but the company can focus on pension administration and life assurance.

Judges Scientific (JDG) continued its record of increasing the ongoing dividend with a 10% increase to 55p a share. Pre-tax profit fell from £17m to £13.7m in 2020 and it could recover to £16m this year.

MJ Hudson (MJH) managed organic revenue growth of 3.6% in the first half, even though there was a lack of new fund launches. Cross-selling is paying off. The North American operations are more significant following recent acquisitions. Further acquisitions will help to increase the scale of the business.

Chariot Oil and Gas (CHAR) is acquiring AEMP, an African renewable energy developer, for up to $2m. There are discussions with mine operators that require 500MW of electricity.

MAIN MARKET

Foams manufacturer Zotefoams (ZTF) almost maintained its pre-tax profit last year thanks to strong sales to the footwear sector. Revenues were 2% ahead at £82.7m, but pre-tax profit was 5% lower at £8.3m. The final dividend is 4.27p a share. The new factory in Poland has started production and capital investment should be lower this year. Net debt was £35.6m at the end of 2020 and this figure should fall this year. This year pre-tax profit should improve to £9.3m.

LED lighting and wiring accessories supplier Luceco (LSE: LUCE) more than doubled 2020 pre-tax profit from £15.8m to £34m, even though revenues barely increased. Margins improved significantly, but there is still potential to improve LED operating margins. A strong second half offset the more difficult first half. The dividend is 6.2p a share. Net debt has fallen to £18.3m.

Oxilio has decided to exercise its option with drug developer Nuformix (NFX) to licence NXP001 for oncology indications. A licence agreement is being worked on. Once completed it will trigger a second upfront payment. Future royalties for any commercial treatments are capped at £2m a year.

Books publisher Quarto Group Inc (QRT) reported a dip in revenues from $135.8m to $126.9m, while adjusted pre-tax profit improved from $5.1m to $7.9m. Capitalised development costs were reduced from $23.8m to $20.3m, although the amortisation charge was higher at $28.6m. Strong cash flow combined with a share issue helped reduce net debt from $50.5m to $19.7m.

Dukemount Capital (DKE) is moving into the flexible power sector. A 50%-owned joint venture called HKSB will develop two 11KV gas peaking facilities that will produce 10MW for a total cost of £6.25m. The plan is to secure 15-year, CPI-linked contracts for each site.

Residential property developer One Heritage Group (OHG) had net assets of 9.25p a share at the end of 2020. There was an interim loss.

Andrew Hore

Andrew Hore – Quoted Micro 15 March 2021

AQUIS STOCK EXCHANGE

Rogue Baron (SHNJ) joined the Aquis Stock Exchange on Friday. The company is a spirits brand developer, and its focus is the Shinju Japanese whisky brand and specialist tequila Copa Imperial Tequila. The idea is to build these and other niche brands to the point where larger drinks companies will want to acquire the brand. There was £755,000 raised at 7p a share. The share price ended the first day of trading at 8p (7p/9p).

Gunsynd (GUN) has already more than trebled the value of its investment In Rogue Baron, which was worth more than £1.8m, including accrued convertible interest, at the time of flotation. Gunsynd holds a 28.5% stake. Chris Akers has increased his stake in Gunsynd from 5.36% to 6.19%.

Sativa Wellness (SWEL) has taken more than £1.1m of bookings for its Covid-19 testing clinic business. This has been achieved by the Bath clinic and a further clinic has opened, plus 13 in-pharmacy and two mobile clinics. There could be 30 clinics by the end of April, ready for the easing of lockdown.

KR1 (KR1) has invested $200,000 into Automata Network’s seed funding round.

IamFire (FIRE) made a loss of £162,000 in the six months to October 2020. During the period, investments were made in WeShop and Bio2pure.

Upper Thames Holdings (UPPT) has net liabilities of £83,000 at the end of 2020 and since then £516,000 has been raised. The board will seek approval to change the company’s name to Valereum Blockchain.

Quetzal Capital (WENP) is raising £3m at 4p a share and issuing enough warrants exercisable at 8p to raise a further £3m. This will help to fund a reverse takeover or investment. NQ Minerals (NQMI) has raised a further £255,000 at 7p a share. Bluebell Investment and Consulting has invested £25,000 in Wheelsure Holdings (WHLP) at 13.5p a share, which represents a 4.9% stake. Altona Rare Earths (ANR) has raised a total of £800,000 at 6.5p a share from placings.

Western Selection (WESP) has increased its stake in Bilby (BILB) by 698,737 shares at an average share price of 35.11p each. This takes the stake to 12.2%.

All Star Minerals (ASMO) has appointed SP Angel as broker.

AIM

AMTE Power (AMTE) raised more than initially expected in the flotation and this should provide the cash required for investment in the battery cells development business. AMTE raised £11.3m at 175p a share. The share price jumped to 233.5p on the first day of dealings. The battery cells nearing commercialisation are aimed at the high-performance vehicles, oil and gas equipment and energy storage markets. There are currently 16 potential clients that products are being developed for.

Engineer Avingtrans (LON: AVG) is raising £35m from the sale of the Peter Brotherhood business that came with the £52.7m acquisition of Hayward Tyler in September 2017. Peter Brotherhood was estimated to be worth £9.3m of that cost. Borrowings will be paid off. Net cash is expected to be £22m at the end of May 2021.

Kape Technologies (KAPE) is acquiring Webselenese for $149.1m. This provides the group with a consumer platform for privacy and security content, which will generate information and data on consumer trends. In 2020, the acquired business generated revenues of $64.5m and EBITDA of $30.7m. In 2021, Kape is expected to increase earnings from 15.8p a share to 25.4p a share.

Billing and customer relationship management software provider Cerillion (CER) has won a Middle East contract worth £5m over five years. The implementation will take up to 18 months.

Getech (GTC) is raising up to £6.25m via a placing and open offer at 22p a share. The cash will be invested in developing hydrogen products and services.

Online merchandising technology provider Attraqt (ATQT) improved its full year revenues by 8% to £21m, helped by an initial contribution from AI firm Aleph. The loss was reduced from £4.4m to £2.6m. Annualised recurring revenues were £21.1m at the end of 2020. A £500,000 loss is forecast for 2021 before a move into profit in 2022.

Cloud-based PCI payment services provider PCI Pal (PCIP) is gaining momentum in the US. In the six months to December 2020, revenues rose by 56% to £3.2m. More of these revenues are coming via channel partners. Total annual contract revenues were 59% ahead at £8.3m. There should be enough cash in the bank to get the company to the point where it is generating cash.

Shoe Zone (SHOE) says that it does not expect to pay a dividend until at least 2025. The footwear retailer expects to continue to lose money this year. The stores are closed at the moment.ch

Online women’s fashion retailer Sosandar (SOS) has agreed to sell a specialist collection of its products through Marks and Spencer (MKS). This follows deals with Next and John Lewis.

Coral Products (CRU) is repaying its £1.6m property mortgage out of the proceeds of its recent disposal. The £2.5m valuation of the Haydock site is expected to be increased in the next accounts. Coral has also repaid £500,000 of its CBIL loan with the other £433,333 likely to be paid before the year-end.

Business restructuring company Begbies Traynor (BEG) is acquiring of David Rubin & Partners for up to £25m. This takes the group’s market share to 12%. There is an initial £12m payable and the rest depends on performance over five years. Begbies raised £22m at 105.5p a share to help finance the deal, which should be immediately earnings enhancing.

Arden has upgraded its Dekel Agri-Vision (DKL) forecasts due to higher crude palm oil and palm kernel oil prices. This means that Arden expects Dekel to be profitable in 2021.

MAIN MARKET

Avation (AVAP) is raising £7.5m at 110p a share and this provides additional cash at a difficult time for the airline industry. NAV was previously 174p a share. Avation could continue to lose money for the next two years Net debt will still be more than $1bn.

Challenger Acquisitions (CHAL) is entering into a deal to acquire Cindrigo Energy, which owns Cindrigo Ltd, the company where a previous offer lapsed. The business is a developer of renewable energy projects using Swedish expertise in waste-to-energy and biomass. The shareholders of the target company will own 96.5% of the enlarged business.

Kanabo (KNB) has signed a production and supply agreement with PharmaCann Polska for cartridges containing Kanabo’s medicinal cannabis formulations. The initial production capacity is up to 36,000 cartridges. FastForward Innovations (FFWD) has sold its stake in Kanabo for a profit of £140,000. FastForward has also sold its Cellular Goods (CBX) for a £54,000 gain.

Argo Blockchain (ARB) has raised £26.8m at 200p a share and this cash will fund the purchase of a further stake in Pluto Digital Assets. The £7.3m investment in Pluto will maintain the Argo stake at 25%. AIM-quoted Pires Investments (PIRI) owns 6.4% of Pluto.

The Financial Reporting Council has started an investigation into the audit of motor dealer Lookers (LOOK) by Deloitte for 2017 and 2018.

Wheaton Precious Metals (WPM) is increasing its first quarterly dividend by 30% to 13 cents a share. The strategy is to pay 30% of average cash generated by operating activities in the previous four quarters.

Pharmaceuticals developer Nuformix (NFX) is raising £1.565m at 2p a share. This cash will finance preclinical studies for the NXP002 inhaled formulation for lung disease and further research and development of formulations. Nuformix is waiting to see whether Oxilio will option the NXP001 cancer treatment. This option expires on 24 March.

Andrew Hore

Andrew Hore – Quoted Micro 10 February 2020

NEX EXCHANGE

Wheelsure Holdings (WHLP) is in discussions with providers of additional finance. Sales increased and costs were reduced in the year to August 2019. Two-fifths of sales come from Transport for London, where the Tracksure locking device is mandatory for one application.

The transfer of the exploration licence for the area surrounding the Hellyer gold mine to NQ Minerals (NQMI) has been approved.

Gunsynd (GUN) says that its 6.18%-owned investee company Brazil Tungsten is short of cash and needs to raise money at a discounted share price or go into administration. The value of the investment has already been written down and it is in the balance sheet at £400,000, which is 17% of Gunsynd NAV. This could be written down to nil.

Smaller company investor Gledhow Investments (GDH) made a £110,000 gain on disposals after overheads. The NAV was £884,000 at the end of September 2019, compared with a market capitalisation of £500,000 at 0.95p/1.25p. There was cash of £125,000 at the end of September 2019. This was before the £95,000 gain (£220,000 proceeds) on the disposal of shares in Yolo Leisure and Technology, now Asimilar (ASLR), and the takeover proceeds of £81,000 for Netalogue Technologies.

Rutherford Health (RUTH) has treated more than 100 cancer patients at its proton beam therapy centres.

IamFire (FIRE) has reduced non-core costs and is seeking acquisitions that do not require a lot of capital. The hydrocarbon licences in Botswana have been relinquished. An interim profit was reported, but there was a £88,000 cash outflow from operating activities because trade payables were reduced.

Gowin New Energy 2% preference shares (GWPT) have been admitted to NEX. Up to £5m of preference shares will be issued. The cash will be loaned to the tea business of 15%-owned Goyoung International.

AIM

Telecoms hardware manufacturer Filtronic (FTC) reported lower interim revenues from continuing activities but margins improved because of a change in product mix. Capacity is being increased at the Sedgefield factory. There was £121,000 in the bank at the end of November 2019. That is before the $5.5m from the disposal of the antennas business. Growth is coming from defence and mmWave (X-Haul products) that are used in the 5G mobile market.

More good news from Touchstone Exploration Inc (TXP) as the results of the test well at Cascadura were better than expected. The rate during the test was more than 5,000 barrels of oil equivalent per day. There will be a pressure build up test. There should be further news in March. Shore has increased its risked NAV estimate by one-fifth to 48p a share.

Andalas Energy and Power (ADL) has appointed Leslie Peterkin as chief executive and Mark Rollins as chairman. They have experience in the oil and gas sector. Andalas also raised £525,000 at 0.15p a share, which was a 20% premium to the market price, and most of the cash came from the two men. Dr Robert Arnott and Simon Gorringe have stepped down from the board. The company is changing its name to Advance Energy.

DP Poland (DPP) increased system sales by 13% last year with 3% like-for-like growth. The pizza stores operator improved its performance during the year and there was an acceleration of growth in the second half. DPP has 69 stores with six opened last year. There was still £3.6m left in the bank at the end of 2019.

Volvere (VLE) has made another food manufacturing acquisition. Essex-based Indulgence Patisserie is in administration and the desserts maker is costing £1.25m. Freehold premises and equipment is being acquired. The business lost £230,000 on revenues of £3.3m. Volvere already owns pie maker Shire Foods, which has an overlapping customer base.

PCI-Pal (PCIP) says interim revenues were 70% higher at £2m. Total annual contract revenues are £5m. There is a small net debt figure with a further £1.25m of facilities. The PCI compliant payment services provider will still lost money this year.

Mergers adviser K3 Capital (K3C) reported improved interim figures even though trading conditions remained tough. A full year pre-tax profit of £7.4m, similar to two years ago, is forecast. The interim dividend was raised from 3.6p a share to 3.7p a share and the total dividend is expected to increase from 7.6p a share to 11.4p a share. If K3 can maintain its interim margins, then the full year outcome could be better.

Argentina-based oil and gas producer President Energy (PPC) had a disappointing 2019 with revenues declining by 13% to $41m because of an oil price cap. The company traded at breakeven. A return to a significant profit is expected in 2020.

Greatland Gold (GGP) says that maiden drilling at Derby North on the Warrentinna project in Tasmania has intersected high-grade gold mineralisation. This is more good news following the plans to announce a maiden resource for Havieron before the end of this year. NCM has spent enough money to earn a 30% stake in Havieron. This will be increased to 40% after another $10m of spending.

MAIN MARKET

Nuformix (NFX) says that it still has not received the £2.5m it is owed by NSB. Despite assurances the money has not been paid and the therapeutics company’s contact has been dismissed. Dave Tapolczay has resigned as chairman.

Standard list shell Stranger Holdings (STHP) had £100,000 in the bank at September 2019 and it has started the fundraising process for the reverse takeover of two companies with technology mineral assets in Africa and the US.

Social media company Iconic Labs (ICON) is generating revenues and has relaunched the Gay Star N website, which is trading better than expected. Icon is still trying to sort out its historic financing agreements and difficulties. Additional facilities have been provided by the existing finance provider, which has agreed to reduce previous amounts owed by 30%. Again, though, the new finance is in the form of convertibles, so yet more shares are likely to be issued.

Landscape Acquisition Holdings (LAHL) expects the proposed acquisition of AP WIP Investment, which generates rental income from wireless telecom assets, in early 2020. There is $501m in the bank and the acquisition should cost $333m.

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 15 April 2019

NEX EXCHANGE

High Growth Capital (HASH) is increasing its stake in Sentiance to 15% and is negotiating an option to acquire a majority stake in the artificial intelligence and machine learning business. The additional 5% stake will cost £7m in shares issued at 0.8p each. The option would enable an increase in the total stake to between 51% and 84.8%. The company would offer 100,000 of its own shares for each Sentiance share and the option is subject to High Growth Capital raising at least £25m. High Growth Capital has also acquired the intellectual property of Malta-based BDD, a company founded by Chris Akers, for £4m in shares at 1p each. The project involves an annual blockchain raffle that would raise money for social impact and environmental initiatives.

EPE Special Opportunities (ESO) had a net asset value of 205.2p a share at the end of January 2019, which was 12.5% lower than the year before. The stake in fully listed LED lighting products manufacturer Luceco (LUCE) is a significant part of the portfolio and its valuation fell by 27.7%. There has been a recovery in the Luceco share price since the end of January, even though there was a decline of three-quarters in 2018 pre-tax profit to £3m. The EPE NAV had risen to 232.8p a share on 9 April on the back of Luceco share price rise. The EPE share price is 180p.

Angelfish Investments (ANGP) is subscribing £150,000 for a 9.14% stake in Just Bee Drinks and is also providing a loan facility of up to £100,000 at a annual interest charge of 10%. Just Bee has developed a natural juicy water drink sweetened with honey. This means that there is no added sugar. More than one million bottles were sold last year, and revenues doubled. The drink is already sold in Waitrose and Boots. Just Bee had net assets of £83,000 at the end of March 2018. Angelfish has also provided a £100,000 debt facility at the same interest rate to Wallet Ads. The previous loan of £150,000 was converted into a 20% stake.

NQ Minerals (NQMI) nearly doubled zinc concentrate production at the Hellyer mine in Tasmania to 3,015 DMT in the first quarter of 2019, while lead concentrate production increased by 18% to 4,712 DMT. Pyrite concentrate production jumped by 331% to 18,488 DMT.

AIM  

Video games developer and services provider Sumo (SUMO) reported better than expected 2018 revenues of £38.7m and pre-tax profit of £9m. Sumo has been acquiring businesses to give it extra capacity as well as opening new studios. There is plenty of demand for Sumo’s services so utilisation rates are high and there is further upside from performance-based royalties and its own IP.

Destiny Pharma (DEST) had £12.1m in the bank at the end of 2018 and this will last into 2020. That should be long enough for the phase IIb study of XF-73 for the prevention of post-surgery infections.

Maiden full year results from legal services and credit hire business Anexo (ANX) have led to an upgrade by its broker Arden. The 2019 pre-tax profit forecast has been edged up from £17.8m to £18.1m, up from £16.1m in 2018, and the 2020 figure is 4% higher at £20.1m. Net debt is expected to increase from £17.3m to £26.3m in order to finance the growth of its legal business.

RA International (RAI) continues to win contracts, but larger contracts are taking longer to secure. RA provides services to remote locations in nine countries in Africa and the Middle East. Having joined AIM last summer, RA has $27.8m in the bank and this is helping it to tender for and win larger contracts. The average contract term is 4.4 years. This makes revenues relatively predictable and they are expected to rise by 10% this year to more than £60m.

Property investor Safeland (SAF) intends to leave AIM and secure a matched bargain facility on Asset Match. It is tendering for shares at 42.5p each, which compares with an NAV of 140.2p a share at the end of September 2018.

Having sold the RTLS SmartSpace business, the continuing revenues of geospatial software and services provider IQGeo (IQG) fell from £16.5m to £9.98m, although recurring revenues were 22% higher, and gross margin improved. There were lower software revenues, but the main decline was in the sale of third party products. There is a significant market for the company’s products and new modules are being launched. However, the full benefits of changes being made by management will probably not show through until next year. There is £30.9m in the bank and some of this will be returned to shareholders after a capital reorganisation is completed.

Interim revenues generated by LightwaveRF (LWRF) have more than doubled to £2.5m which is nearly as much as the £2.8m generated in the previous 12 months. Direct sales, e-commerce and telesales have contributed to the growth, as has the development of retail clients.

Legal firm Gordon Dadds (GOR) has acquired Gibraltar-based Rampart Corporate Advisers for up to £1.34m depending on performance. Rampart specialises in e-gaming, fintech and distributed ledger technology, and made a profit of £400,000 in the year to June 2018. Five former Ince network firms are joining Ince Gordon Dadds, although they remain independent. This would add £23m to existing group annual revenues of £77m. The firms are based in Hong Kong, Singapore, Dubai, Greece and Germany. This will boost profitability.

Strategic Minerals (SML) says the Cobre magnetite operations generated cash of $206,000 in the first quarter and the group cash balance was $1.24m at the end of March 2019. Volumes were lower because customers were undertaking plant maintenance and the continued suspension of a major client’s contract. There should be seven years of magnetite stockpile. The company expects to acquire the other 50% of the Redmoor tin/tungsten project by the end of May. This will cost £2.66m.

PhotonStar LED (PSL) says that it has enough cash for its immediate needs, but the blocking of the issuing of more shares by shareholders means that there is not enough cash to follow the strategy to find a reverse takeover target. The company may launch an open offer or ask shareholders for a second time for the authority to issue shares without offering them to existing shareholders a second time. Having become a cash shell, the company has been dropped from the FTSE AIM All Share index. It has six months to find an acquisition. A number of potential acquisition targets have been met by the board. Additional directors will be appointed.

Rose Petroleum (ROSE) has raised £275,000 at 1.1p a share in order to finance the appraisal of projects. The shares are being acquired by new executive chairman Robert Bensh, who has experience of the US oil and gas sector. Chief executive Matthew Idiens has more than doubled his stake to 2.52% by acquiring two million shares at 1.75p each. The finance director Chris Eadie has also more than doubled his stake to 1.2% at 1.67p a share. New non-executive director Tom Reynolds also bought shares.

Concepta (CPT) is raising £2.3m at 3p a share to finance marketing and further development of its myLotus fertility test.

MAIN MARKET 

Cadmium-free quantum dots developer Nanoco (NANO) had £6.2m in cash at the end of January 2019. There was a total cash outflow of £4.57m in the latest six month period. The main capital investment at the Runcorn site is almost complete. Non-executive director Chris Batterham has bought 125,000 shares at 47.354p each. Miton has reduced its stake to 4.96%.

Bonmarche (BON) says the mandatory cash bid of 11.445p a share by Spectre undervalues the retailer. Bonmarche is reducing costs. Cavendish Asset Management has edged its stake up to 10%.

Standard list shell Contango Holdings (CGO) has entered into an agreement to acquire the Lubu coalfield project in Zimbabwe for £6.45m in shares at 5p each. Once regulatory approvals have been gained the acquisition should go ahead and trading in the shares can recommence. That should happen by the end of June. There will be a placing to raise cash to fund initial trial mining.

Telecom services provider Toople (TOOP) says that it had more than £1.1m in the bank at the end of March 2019. That is a £1m reduction on the level at the end of September 2018, when there was also a shareholder loan, which was assigned a value of £572,000 in the balance sheet but has a cash value of £607,000. There is no indication if this loan has gone down. Last year, admin expenses were £1.55m, net of other income, and that was more than revenues. Revenues have grown but even if gross margin were to improve there will still be a significant first half loss.

Nuformix (NFX) has signed an agreement for cannabinoid therapeutics development, licensing and commercialisation for an initial upfront payment and other research and development and milestone payments that could total up to £51m. Canada-based Ebers Tech Inc will use Nuformix technology to develop a range of consumer and pharma products.

Zegona Communications (ZEG) has increased its stake in Euskaltel to 21%.

European High Growth Opportunities Securitization Fund has transferred 35.4 million shares in WideCells (WDC) to David Sefton and Linton Capital, which has promised to hold them for 12 months. European High Growth Opportunities still owns 18.2% of WideCells.

Andrew Hore

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