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Quoted Micro 21 December 2015


Asia-focused investment company DKG Capital (DKGP) is acquiring a 30% stake in Hong Kong-based Ronix Resource Co, which provides concierge VIP services for the travel and leisure sector, for £600,000 in cash and shares. Ronix is completing the acquisition of online betting and gaming business Global Media Ltd, which has an agreement with a Malaysian firm for the referral of VIP customers as well as jointly developing an online gaming services. DKG plans to raise £200,000 from a placing early in 2016. At 1.75p (1.5p/2p) a share, DKG is valued at £900,000.

Carduus Housing (CHP2) is acquiring 15 properties for £1.19m and £2.5m of 6.25% bonds 2020 have been admitted to ISDX. The freehold properties being acquired are two/three bedroom homes in southern Glasgow. The first seven properties have been bought and the others will be acquired in January. The homes will be rented out and managed by a housing association.

Investment company Gledhow Investments (GDH) has been hit by the decline in the value of its investments in resources companies. No new investments were made last year. The NAV fell from £626,000 to £497,000, including cash of £247,000, at the end of September 2015. At 0.75p (0.5p/1p) a share, Gledhow is valued at £370,000.

Investment company Lombard Capital (LCAP) has a new major shareholder. Mark Jackson has sold his 28.8% stake in Lombard at 10p a share to David Grierson. That is a large premium to the market price of 6p (5p/7p) a share.


Molecular diagnostics company Premaitha Health (NIPT) has secured a £5m loans and warrants investment from Thermo Fisher. Premaitha’s man product is the IONA test, which is used to screen the foetus to assess if there are any genetic disorders. Thermo Fisher supplies the DNA sequencing instruments used to assess the IONA pre-natal test. European countries are starting to offer reimbursement for the use of the test. The first country is Switzerland. The additional cash will be used to further develop the test. Premaitha had £6.6m in the bank at the end of September 2015. The Thermo Fisher deal provides backing for Premaitha’s IP litigation with Illumina, which could drag on for some time.

Tungsten Corp (TUNG) is selling its bank to concentrate on its trade finance operations. Tungsten will receive £30m for the bank, which is in the books for £25.4m. It could take up to 12 months to complete the disposal. Tungsten remains heavily loss-making and there was £15.9m in the bank at the end of October 2015 – excluding the bank. Even with cost savings, cash could be running low by the time the money comes in for the bank.

Fit-out and projects contractor Styles & Wood (STY) has been retained by TSB as contractor for branch refurbishment after the bank reduced the number of contractors in the framework agreement from five to two. This should generate at least £10m a year for Styles & Wood over the next five years. Group revenues were £97m in 2014. Even though the first half profit was small, house broker Shore forecasts 2015 earnings per share of 29.5p, rising to 37.2p a share in 2016. The balance sheet has been strengthened following a refinancing of Styles’ preference shares earlier this year. Net debt, including preference shares, was £6.42m at the end of June 2015 and cash flow should be strong from now on.

Business information provider Progressive Digital Media Group (PRO) intends to acquire healthcare business information provider GlobalData Holding and sell its non-core print assets to the owners of the GlobalData. An all-share deal is likely to leave the sellers with just over one-third of the enlarged group. Progressive will have three legs: healthcare, consumer and technology. In July, Progressive bought information assets from Informa for £25m.

NWF Group (NWF) says that trading is in line with expectations and net debt continues to be reduced. Lower milk prices continue to hamper the feeds division, while the food distribution division used overflow capacity and the fuels distribution division did better than expected in the summer months – although the warm winter could hold back second half progress. The interims will be published on 2 February.

Online video content revenues generator Rightster (RSTR) is raising £10m at 5p a share – a premium to the market price. The cash will help to finance the restructuring of the business and cover continuing losses. Rightster wants to focus on enterprise customers and create targeted channels to attract certain consumer groupings. Investment in production teams and other specialists will be required. The placing is being backed by Woodford and Invesco. The number of shares in issue will be increased by nearly 60%. Ashley Mackenzie, a founder of one of the companies acquired by the group, took on the role of chief executive in November.

Thor Mining (THR) has agreed to sell its gold assets in Australia to PC Gold for A$3.5m. The deal includes the Spring Hill and Dundas gold projects. There is an initial deposit of A$150,000 with the rest of the first tranche of A$2m to acquire a 60% stake in the projects due early next year, followed by a further A$1.5m within 12 months to acquire the rest. There are also royalty payments of A$6/ounce unless the gold selling price goes above A$1,500/ounce when the payment goes up to A$14/ounce. The initial cash will pay off A$1.2m loan taken out to acquire the rest of Spring Hill. The rest of the cash will be invested in the company’s tungsten projects in Australia and the US.

Sunrise Resources (SRES) has signed a 25 year lease agreement with EP Minerals for its County Line diatomite project in Nevada. Sunrise will not have to spend any more of its own money developing the project. This project could be up and running and generating a royalty stream for Sunrise within 18 months. There is an initial payment of $450,000 in 18 months and then minimum royalty payments each year. Sunrise has acquired a second industrial minerals project in Nevada. The Pozz Ash project could be a source of natural pozzolan, which is an alternative additive to cement.


Standard list company General Industries (GNI) is paying £1.2m for Murja from founders Richard Murphy and Christopher Jack. Murja is a treasury management consultancy and the deal has been passed by the FCA. When the acquisition is completed Richard Murphy will become an executive director. General Industries has already acquired affordable housing adviser Altair Consultancy & Advisory Services and this should provide additional client for Murja. An interim dividend of 0.22p a share is being paid on 21 December.

Standard list shell Opera Investments (OPRA) continues to try and raise cash to enable it to complete the acquisition of SoloPower Systems but it is taking longer than expected. The original announcement of heads of terms was on 20 July and trading in the shares was suspended. US-based SoloPower manufactures solar photovoltaic cells and modules from thin-film copper, indium, gallium and selenium materials and its current owner is Hudson Clean Energy Partners. SoloPower believes that its thin film solar products are cheaper to produce and install than those of its competitors. The deal is valued at $220m based on an all share acquisition at 28p a share. The plan is to raise at least $40m. An initial £1.06m net was raised at 10p a share last April. Because Opera is not on AIM there is no limit on the time that the shares can be suspended.

Andrew Hore

Quoted Micro 19 October 2015


AIM-quoted Rare Earth Minerals (REM) has announced its intention to gain a secondary quotation on ISDX on around 28 October. Executive chairman David Lenigas says that the shares will continue to be traded on AIM. REM has increased its shareholding in ASX-listed European Metals Holdings Ltd, which owns the exploration rights to the Cinovec lithium/tin deposit in the Czech Republic, to 11.07%. REM paid £170,640 for two million shares in European Metals plus two million warrants exercisable at A$0.20 for a 12 month period. Lenigas is also a director of AfriAg (AFRI), an AIM company that has already started trading on ISDX, and Evocutis, which expects to start trading on 19 October. AIM-quoted Sefton Resources says that it investigated the possibility of moving to ISDX if, as appears inevitable, it loses its AIM quotation but says it was not a viable option. This shows that ISDX will not just take any AIM company that wants to move to its market.

Another David Lenigas and Donald Strang vehicle, Leni Gas Cuba Ltd (LGC), has launched a pathfinder prospectus. LGC has already raised £4.525m prior to the flotation. Most of this cash was raised at 2p a share but the majority of shares in issue at the end of July 2015 were issued at 0.01p a share. BVI-registered LGC intends to make investments in Cuban businesses. At this stage there is still a wide range of options in terms of sectors. LGC may also invest 25% of its funds in other Caribbean ventures. LGC has already invested in an oil and gas company and a travel company. The oil and gas investment and related options, which have subsequently been exercised at an additional cost of £100,000, are in the balance sheet at £690,000. The travel investment cost £39,000. If £500,000 of additional cash is raised in the proposed subscription at 5p a share this will provide £148,500 after costs and pro forma cash would be £3.56m. Global Investment Strategy (UK), which is owned by AIM-quoted Octagonal (OCT) where Lenigas and Strang are former directors, currently owns 4.1% of LGC.

Cash shell Chalkstream Investment Company (CHLK) intends to leave ISDX on 14 November. At 0.115p (0.1p/0.13p) a share, the shell is valued at £900,000. There was £621,000 in the bank at the end of May 2015. There was a six month cash outflow of £58,000. The ultimate beneficial owners of Chalkstream are property company director Robert Ware and former Numis media analyst Dominic Buch. Chalkstream joined ISDX on 17 May 2013 when it raised £330,000 at 0.1p a share. There was £754,000 in the bank at that point. Chalkstream was seeking to buy a UK business in the services sector.

Nodding Donkey (NODD) has raised £42,600 at 3p a share and this cash will cover the company’s overheads and help to finance the 86.95% owned subsidiary Equatorial Oil & Gas in its exploration activities in Botswana. The placing is at a significant discount to the market price of 7.75p (7.25p/8.25p) a share, which values the company at £11.5m. The most recent trade was on 1 October at 7.5p a share. At the end of April 2015, Nodding Donkey had £29,000 in the bank and there was a cash outflow of £114,000 in the previous 12 months – according to unaudited accounts. Last month, Equatorial was issued with three petroleum exploration licences in Botswana, which could host shale gas. One licence was issued directly to Equatorial and the other two to Equatorial’s 85%-owned subsidiary Tamboran Botswana. Equatorial has two licences for coal bed methane.

Diversified Gas & Oil (DOIL) has raised a further £1m from the issue of 8.5% unsecured bonds 2020. This will mean that there will be 2.2 million unsecured bonds in issue. The proceeds will be used to develop the company’s oil and gas assets in Ohio and West Virginia

Wey Education (WEYP) founder Zenna Atkins has sold her remaining stake in the educational services provider. The 1.4 million shares were sold on 14 October. The sale removes an overhang and could make the planned move to AIM easier. At 4.5p (4p/5p) a share, Wey is valued at £2m.


Recruitment services provider Empresaria (EMR) is acquiring Pharmaceutical Strategies for up to $12.1m and this has led to house broker Arden upgrading its 2015 forecasts. The acquisition takes Empresaria into the US healthcare market and boosts the contribution of the sector to the group. The Massachusetts-based recruitment company specialises in pharmacy benefit managers and nurses, which is an area of growing demand in the US. There has been a slight reduction in 2015 estimates for Empresaria but the 2016 pre-tax profit estimate has been raised by 8% to £8.6m, while earnings per share estimates have been increased by 5% to 10.8p.

Infection prevention products supplier Tristel (TSTL) reported better than expected figures for the year to June 2015. All parts of the business improved their revenues, particularly overseas.  Underlying pre-tax profit improved from £1.8m to £2.6m. There was a special dividend of 3p a share and even excluding that the total dividend improved from 1.6p a share to 2.7p a share.  A 2015-16 profit of £2.9m is forecast. Tristel is in the process of getting regulatory approval in the US.

Digital video content distributor Rightster (RSTR) is undertaking a strategic review. The options include a sale of the company, divestures, partnerships or acquisitions – although this will be difficult to finance given the cash outflow from the group. The main problem is the deferred consideration that has been payable in shares and been highly dilutive. There were 137.9 million shares issued in August for past acquisition Base79 and these can be sold from 12 November with the consent of Cenkos. The shares were issued at 15p each compared with the current market price of 10.5p. A further £3.6m worth of shares are due to be issued by the end of 2015. Rightster has already issued a further 6.2 million shares for the deferred consideration of another acquisition.

Staffline (STAF) has acquired Northern Ireland-based recruitment agency Diamond Recruitment for an undisclosed amount. This will enhance the group’s business in Ireland. This deal comes three weeks after the purchase of professional drivers provider Milestone.


Standard list shell Mithril Capital (MITH) has announced plans to acquire Agenda 21 Digital and move to AIM. Mithril has common backers with Satellite Solutions Worldwide (SAT), which was originally shell Cleeve Capital and followed the same route. Trading in Mithril shares was suspended at 3.6p. Mithril joined the standard list on 22 December 2014 and raised £3.32m net at 3p a share and the shares initially started trading at 6.5p each. Mithril subsequently switched its investing strategy from a focus on the resources sector to the technology sector. The purchase of digital media and analytics agency Agenda 21 marks the first step in a strategy to acquire digital focused marketing services and technology businesses. The initial consideration is £3.3m – 65% cash/35% shares – with up to £8.6m in deferred consideration payable based on performance over the next three years. Advertising industry veteran Peter Scott will become chairman of Mithril.


Surface treatments products and services Norman Hay has transferred its quotation from Britdaq to Asset Match. In 2014, revenues grew from £44.8m to £46.5m and underlying profit rose from £2.77m to £3.6m. Net debt was £494,000. Hay’s NAV was £18.9m at the end of 2014, just over one-third of which is intangible assets, whereas the current market cap is £14.8m – at 100p a share. That is equivalent to six times post-tax earnings in 2014.



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