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Quoted Micro 15 May 2023
AQUIS STOCK EXCHANGE
Third quarter revenues of National Milk Records (NMR) were 15% higher at £6.5m. The core milk testing revenues were 14% ahead, helped by price rises. Genomic testing revenues more than doubled. Milk prices have fallen, but they are still relatively high. Canaccord Genuity still expects a dip in 2023 pre-tax profit from £2.4m to £1.9m.
Watchstone Group (WTG) has been unsuccessful in its £63m claim against PricewaterhouseCoopers concerning a breach of confidentiality. It is considering an appeal.
TruSpine Technologies (TSP) admitted that it failed to inform shareholders that a loan announced in February included a fixed and floating charge over the company’s IP.
KR1 (KR1) has invested $500,000 into Web3 venture studio Code and State through a Simple Agreement for Future Equity.
Cadence Minerals (KDNC) investee company Evergreen Lithium, where it owns 15.8 million shares (8.74%), has identified significant and widespread lithium at the Kenny project. A further £1.86m worth of shares could be issued to Cadence Minerals.
Goodbody Health (GDBY) shareholders have agreed to the cancellation of the Aquis quotation on 16 May. The shares will then be traded on the JP Jenkins platform.
TAP Global Group (TAP) has appointed Kriya Patel as chief executive of its main subsidiary. He is an experienced executive of e-money and financial technology businesses. He will receive five million LTIP options, plus a further 10 million LTIP options which will vest when certain milestones are achieved.
Ananda Developments (ANA) says a study suggests that cannabidiol plus terpenes has a more positive effect on acne than cannabidiol on its own.
Mark Horrocks has taken a 5.8% stake in Semper Fortis Esports (SEMP), while Chris Akers increased its stake from 19.5% to 19.6%.
Trading in Yooma Wellness Inc (YOOM) shares has been suspended until account are filed and the cease trade order is revoked.
AIM
Power Metal Resources (POW) has spun-off its Nevada mining interests into Golden Metal Resources (GMET). Power Metal Resources has retained a 62.1% stake. There was £1.98m raised at 8.5p when the company joined AIM. Trading started at 8.75p and ended the first day at 8.125p. There were 1.12 million shares traded on the first day and a total of 488,000 shares in the following two days. The share price ended the week at 8.125p. There are four assets: three wholly owned plus an earn-in option over a fourth.
Purplebricks (PURP) says that the number of new instructions did not increase in the fourth quarter and that means revenues and EBITDA will be worse than expected in the year to April 2024. The company’s payment processor is withholding a portion of remittances and cash was £9.1m at the end of April 2023, compared with previous expectations of £15m. The formal sale process continues, and management says that it wants to conclude this as soon as possible so the future of the business is clarified. Strike Ltd has decided not to make an offer.
Online builders’ merchants CMO Group (CMO) increased like-for-like 2022 revenues by 2%, but the market remains tough. In 2022, revenues increased from £76.3m to £83.1m, helped by acquisitions. Gross margins held up at 19.9% as sales of higher margin products offset the decline at Total Tiles, where there were problems with pricing. Overheads were increased following flotation on AIM and that is why operating margin dived from 3.5% to 1.5%. There was a boost of around £200,000 to operating profit due to a reduction in deferred consideration for a past acquisition. Pre-exceptionals profit fell from £1.5m to £800,000. Overheads are being reduced. Employee numbers are 15% lower than the peak last year and delivery costs are being controlled.
A&E Television Network is cancelling its contract with video editing technology developer Blackbird (BIRD) at the end of June. Last year, this contract contributed less than 10% of 2022 revenues of £2.85m. Blackbird is growing its revenues, including from licensing, but this contract loss will hold back the overall rate of growth. Blackbird has £9m in cash, down from £10m at the end of 2022.
Fulcrum Metals (FMET) is ranking targets for its Big Bear property on the Schreiber-Hemlo project in Ontario. Additional mining claims have been acquired at Winston Lake, Ontario. Results from the magnetic surveying at Tocheri Lake, Ontario, should be available early in the third quarter.
Credit hire company Anexo (ANX) reported flat 2022 pre-tax profit of £23.9m even though housing disrepair work helping to improve revenues. There were additional costs for vehicle emissions litigation against VW, which has some way to go before it is settled. A decline in pre-tax profit to £18.1m is forecast for 2023 as new credit hire business is reduced. That should help to improve cash collection and reduce debt.
Marwyn Investment Management has decided not to invest in footwear retailer Unbound Group (UBG) because of concerns about current trading. Marwyn had planned to inject £10m into the business at a placing price of 10.5p. That was the same level as the withdrawn offer from WoolOvers Group. Unbound has admitted that trading has worsened in the first quarter of the current year. Cash flow has to be carefully managed and banking covenants may have to be waived. Additional funds will be required.
Mineral sands project developer Capital Metals (CMET) has signed a potential 100% offtake and investment agreement with LB Group, which is the largest manufacturer of titanium dioxide pigments and sponge. LB Group will fully fund the Eastern Minerals project in Sri Lanka up to the estimated cost of $81m in the preliminary economic assessment. After that the joint venture will fund additional costs on a 50/50 basis. The plan is to build up production to 1.65 million tonnes per annum. Most of the due diligence for the deal has already been done.
Coal miner Bens Creek (BEN) says shareholder MBU Capital has sold a 29.9% stake at 18p a share to Singapore-based Avani Resources, which trades raw materials for steel and power production.
Brazil-focused gold producer Serabi Gold (SRB) has signed a strategic exploration alliance with Vale, which will assess large scale copper projects on the Palito Complex. There are four phases during which Vale can earn up to 90% of the project. Serabi would have a put option to sell the other 19% for $10m and a 1.5% net smelter royalty. There will be an initial $5m investment in exploration.
MAIN MARKET
Packaging manufacturer and distributor Macfarlane Group (MACF) published an AGM statement Manufacturing revenues are 14% ahead in the first quarter and distribution revenues 4% higher. There are bank facilities to finance further expansion.
LED lighting and wiring accessories supplier Luceco (LUCE) says first quarter revenues were 5% lower. There is still some destocking in the current period. Lower freight costs will help margins. Finance director Will Hoy and related parties have been acquiring shares at up to 110p each.
Andrew Hore
Quoted Micro 24 April 2023
AQUIS STOCK EXCHANGE
Valereum (VLRM) has sold Bitcoin mining assets to Aquis new entrant Vinanz (BTC) in return for 27.3 million shares at 3p each. This gives Valereum a 23.5% stake in Vinanz, which plans to become a Bitcoin mining company with facilities operated by third parties in the US and Canada. The company will also consider mining other cryptocurrencies. The Vinanz share price ended the week at 3.5p. There was one trade of 30,000 shares at 3.26p a share.
E-commerce technology provider Samarkand (SMK) says 2022-23 revenues will be around £17m and the loss has been reduced. VSA forecasts a small positive EBITDA in 2023-24.
SulNOx Group (SNOX) says 2022-23 revenues more than quintupled to £203,000. There was £525,000 in cash at the end of March 2023.
Equipmake Holdings (EQIP) has agreed a partnership with H55 to develop electric aircraft technology. Switzerland-based H55 will use the company’s electric motors in its two-seater electric trainer for pilot training.
In the first three months of 2023, Guanajuato Silver (GSVR) reported record quarterly silver production of 938,000 ounces equivalent. VSA forecasts full year production of 4.7 million ounces of silver equivalent.
Goodbody Health Inc (GDBY) has decided to leave Aquis and the share price slumped 44.6% to 0.9p. It also reported a fall in full year revenues from £17.1m to £10m and an increased loss of £4.9m.
Tap Global Group (TAP) has increased revenues and users since reversing into an Aquis shell earlier this year. First quarter revenues were £1.2m, compared with £250,000 in the corresponding period last year. The regulated cryptocurrency app company increased users by 30% to 144,305.
Coinsilium Group (COIN) has raised £258,000 at 1.5p a share, with warrants attached that have an exercise price of 3p.
Chris Akers has raised his stake in Semper Fortis Esports (SEMP) from 4.57% to 19.5%. The share price jumped by one-fifth to 0.15p. The April 2021 floatation price was 1p. Chapel Down Group (CDGP) finance director Rob Smith bought 407,462 shares at an average price of 34.7p, taking his stake to two million shares. Hadron Capital, which was founded by Fenikso (FNK) non-exec director Marco D’Attanasio, has acquired 1.2 million shares at 0.6p each in Fenikso.
AIM
Sureserve (SUR) is recommending a bid from Cap10 4NetZero Bidco, which is a vehicle for private equity company Cap10 Partners. The 125p a share bid values Sureserve at £214m and that is the highest share price since the company floated as Lakehouse in 2015. Cap10 believes that taking the compliance and energy services provider company private will make it easier to focus on long-term goals.
Proton therapy cancer treatment developer Advanced Oncotherapy (AVO) announced a strategic review. A Nasdaq listing is being considered, which could involve selling the business to an existing Nasdaq company. There are no current discussions and cash is running out. Management hopes to obtain additional working capital by issuing more loan notes. That could extend the company’s cash until the end of May.
Pizza restaurants franchiser DP Poland (DPP) increased first quarter like-for-like sales in Poland by 19% and in Croatia by 16%. There are signs that food inflation is easing. However, additional investment in TV marketing will mean that the company will continue to lose money in 2023.
Business process outsourcing firm iEnergizer (IBPO) plans to cancel is AIM quotation and a general meeting will be held on 16 May to gain shareholder approval. As EICR (Cyprus) owns 82.7% that is a formality. The lack of free float has hampered liquidity and the costs of the quotation outweigh any benefits. Management expects to leave AIM on 26 May. There are plans for a matched bargain facility.
Unikmind has increased its bid for cyber security software provider Kape Technologies (KAPE) from 285p to 290p ($3.60) a share and some of the vendors of past acquisitions have agreed to accept.
Property bridging loans provider Vector Capital (VCAP) reported a slightly better than expected pre-tax profit for 2022. Management, though, is being cautious about lending this year. There was a £200,000 provision for doubtful debts, but the pre-tax profit was still £100,000 better than forecast at £2.8m. The total dividend is 2.53p a share. The average loan book was 27% higher than the previous year. This year the loan book could fall because of higher standards for new lending.
Woodbois (WBI) says that the lender to its Denmark-based Woodgroup timber trading subsidiary has given notice on a $6m lending facility. The facility provided by Sydbank is fully drawn, but there is also $3.1m in cash deposits with Sydbank, which wants a refinance plan by the end of May. Premier Miton subsequently sold its 9.96% stake.
Environmental and life sciences technology company DeepVerge (DVRG) says that revenues have been incorrectly recognised. That means that the 2022 figure will be 45%-50% lower than the £17.2m previously flagged. Some of the expected revenues have been delayed while others will not be recognised. The order book is more than £10m and this will be recognised in 2023 and 2024. There is £1m in the bank and more funding will be required.
Xeros Technology (XSG) is winning new business, but cash is declining. The 2022 figures were in line with expectations and cash was £6.5m. finnCap believes that the cash should last until the second quarter of 2024. That is despite the 2023 loss forecast being increased to £4.8m. The progress of the launch of a domestic washing machine using Xeros filtration technology by a partner has been slower than hoped. Breakeven could still be achieved late in 2024.
Dekel Agri-Vision (DKL) says that the quantity and quality of raw cashew nuts acquired for its new facility are in line with expectations and the pricing is better than anticipated. Average production rates have increased to 10 tonnes/day.
Tertiary Minerals (TYM) has commenced its latest exploration programme for the Lubuila copper project in Zambia following the ending of seasonal rains.
MAIN MARKET
Interim revenues at J Smart (Contractors) (SMJ) slumped from £5.16m to £2.12m, while pre-tax profit dived from £6.33m to £260,000, although the corresponding period included a £6.06m disposal gain. The interim dividend is 0.96p. Net assets are £123.7m, but this would have been lower if there had been a property revaluation at the end of the period.
Fourth quarter revenues for kitchenware retailer ProCook Group (PROC) were 10% lower than the same time last year, with high street sales flat – a new store was opened in Kingston-upon-Thames. There was a 65% increase on the previous quarter. Full year revenues were 10% lower at £62.3m and ProCook will breakeven.
Andrew Hore
Quoted Micro 30 January 2023
AQUIS STOCK EXCHANGE
Aquis Stock Exchange owner Aquis Exchange (AQX) says 2022 trading was in line with expectations. The 2022 results will be published on 30 March.
Electric vehicle drivetrain technology developer Equipmake Holdings (EQIP) has raised £6.235m at 5p a share. That was slightly more than initially indicated. A lease is being secured on additional premises. The contracted order book is worth £8.6m. Interim revenues were £1.05m and the full results will be announced on 15 February.
Invinity Energy Systems (IES) says existing contracts underpin growth in in 2023. There are £22m of vanadium flow battery systems due for delivery in 2023 and a further £7.4m order book for 2024. There was £5.1m of cash in the bank at the end of 2022. Pilot projects with Siemens Gamesa should begin in the summer and a next generation product should be available in the first half of 2024.
Cadence Minerals (KDNC) has completed the sale of its joint venture interest in Yangibana rare earths project for A$9m of shares in ASX-listed Hastings, which is equivalent to 1.9%. Evergreen Lithium is expected to list on the ASX on 10 March – Cadence Minerals owns 15.8 million shares, which are expected to be valued at A$3.96m.
A full year update from Chapel Down Group (CDGP) shows string growth in sparkling wine sales. Group revenues were 10% ahead at £15.6m with momentum increasing in the second half. Margins should have improved.
Ace Liberty & Stone (ALSP) reported a small dip in interim pre-tax profit to £731,000, partly due to additional charges relating to a property in Sunderland. There is available cash of £9.5m for further property investments and contracts have been exchanged on a Dorchester property.
Helium Ventures (HEV) had £157,000 in cash at the end of October 2022. The proposed acquisition of Vestigo Technologies, which supplies tracking software, continues to be progressed.
Goodbody Health (GDBY) is partnering with Datar Cancer Genetics to offer the Trucheck circulating tumour cell screening service.
Tap Global (TAP) has signed up its first client for its crypto app. Global cryptocurrency exchange Bitfinex will use the service to offer clients a prepaid Mastercard and convert cryptocurrency to Euros.
SuperSeed Capital (WWW) says the SuperSeed II LP has invested in eight SaaS companies and a further investment should be made in the first quarter of 2023.
RentGuarantor Holdings (LON: RGG) is licencing its software to Clever Student Lets to use on its student letting platform.
Guanajuato Silver Company Ltd (GSVR) has published fourth quarter production figures. Silver output was 401,000 ounces in the period, while gold output was 4,000 ounces. Full year production was one million ounces of silver and 11,000 ounces of gold.
AQRU (AQRU) has launched its lending pool via subsidiary Accru Finance. This allows investors to generate yield from tax credit receivables originating from the IRS in the US. Annual returns of up to 10% are indicated.
Good Energy (GOOD) was one of three energy suppliers criticised for not providing enough help to their prepayment customers to claim the £400 of support vouchers from the government.
Marula Mining (MARU) says that initial deliveries of 1,000 tonnes of high-grade lithium ore from the Blesberg mine will commence shortly and take four weeks. Processing of existing stockpiles is ongoing, while site infrastructure is upgraded.
Chris Akers continues to build up his stake in Asimilar Group (ASLR) and it has reached 8.01%.
AIM
Spectacles supplier Inspecs (SPEC) is expected to report slightly better than expected full year figures. The figures are still much worse than expected prior to the previous warning, where destocking and poorly performing businesses led to a significant downgrade. Sales were flat at $246m, although there was growth before currency movements. Pre-tax profit is set to more than halve from $17.9m to $7.7m.
Battery technology developer Ilika (IKA) has been awarded a UK government grant of £2.8m for taking a leading role on a 24-month Faraday Battery Challenge in collaboration with BMW and Williams. This will further the development of Ilika’s Goliath battery, which is designed to be cost-effective and recyclable. There were no surprises in the interims earlier in the week. In the six months to October 2022, revenues improved from £179,000 to £204,000, which all came from UK grants. Net cash outflow from operating activities increased from £2.19m to £3.84m. Net cash is £17.8m. The Stereax M300 miniature battery should be launched by the summer.
Results from aerospace composites kits supplier Velocity Composites (LON: VEL) were as expected following the trading statement at the end of 2022. In the year to October 2022, revenues were 22% higher at £12m, while the loss was flat at £1.5m. A further loss is forecast for this year, while the US deal with GKN Aerospace builds up later in the year. A full year contribution from the US GKN business should push the company into profit.
Fire Angel Technology (FA.) reduced its loss last year, even after higher procurement costs, and it expects significantly enhanced margins this year. The home safety products supplier increased 2022 revenues by nearly one-third to £57.5m. A further reduction in loss is expected this year with helpful currency movements providing potential for further upside.
Healthcare data analysis provider Diaceutics (DXRX) beat expectations with revenues 44% higher at £20m, helped by currency movements, and margins are being maintained despite inflationary pressures. Diaceutics has secured two agreements with top ten global pharma companies. The order book is worth £15.6m. Investment in data and technology is being increased.
Following the departure of the recently appointed chief executive Inland Homes (INL) has sold its greenfield strategic land portfolio. There was a £3.5m profit on the sale that raised £9.5m in cash. There will also be fees generated for assisting the purchaser. Despite the disposal, net debt has risen to £100m and trading conditions have deteriorated. The 2021-22 loss is expected to be £91m and NAV has fallen to 40p a share.
Fiinu (BANK), which offers the Plugin overdraft to individuals with accounts with other banks, has completed the core banking platform configuration and its testing. General testing of the service is continuing. There is £35m-£40m required to fund the bank and a staged fundraising will commence before Easter.
Piling contractor Van Elle (VANL) had already flagged the interims, but the pre-tax profit was still slightly higher than expected at £3.3m. The interim dividend is 0.4p a share. Full year pre-tax profit forecasts have been maintained at £5.2m, although next year’s figures has been trimmed to £6m.
Gaming Realms (GMR) has signed a brand licensing deal with Tetris Inc, the holder of the rights to the eponymous falling blocks game. Tetris Slngo mobile will be launched globally before the end of 2023.
MAIN MARKET
Oxford Cannabinoid Technologies (OCTP) is due to commence a phase 1 clinical trial for its lead programme OCT461201 for the treatment of chemotherapy induced peripheral neuropathy with the interim results due in the second quarter. Management says it has enough cash to get it into the first quarter of 2024. GHS Capital has reduced its stake to below 3%.
Motor dealer Pendragon (PDG) says fourth quarter trading is slightly ahead of expectations and this has offset inflationary pressures. Underlying full year pre-tax profit should be more than £57m, down from £83m for the previous year. Net debt is around £23m. There continue to be constraints in the supply of new vehicles.
One Heritage Group (OHG) expects a further impairment charge of between £750,000 and £1.25m. Martin Crews is being replaced as development director by Paul Westhead on an interim basis. The major shareholder loan facility has been raised from £9.5m to £11m.
Mode Global Holdings (MODE) is winding down its operations because it was unable to raise the cash it required to grow the business.
Andrew Hore
Quoted Micro 23 January 2023
AQUIS STOCK EXCHANGE
Oberon Investments Group (OBE) is acquiring 63% of Logic Investments Ltd, which provides back office services to investment managers. Logic has funds under management and administration of more than £275m and Oberon Investments will merge its own back office operations with Logic. A placing raised £1.75m at 3.5p a share. Chairman Alex Hambro subscribed for 1.14 million of the shares, taking his stake to 1.64 million shares. The cash will be used to accelerate growth.
GP IT systems supplier DXS International (LON: DXSP) reported a 2% improvement in interim revenues to £1.65m, while the loss was £131,000 due to higher depreciation and operating costs. There was £399,000 in the bank at the end of October 2022. Management options can be exercised if annual turnover reaches £5m in the next three years. Hybridan forecasts revenues 2022-23 revenues of £3.61m with a pre-tax profit of £86,000.
Cooks Coffee Company (COOK) says UK sales were 41% higher in 2022, while sales in Ireland were 91% ahead. The focus is generating better returns from existing café sites, although there will be some new openings.
Healthy snacks supplier S-Ventures (SVEN) says full year revenues were £8.7m, but the inability to obtain ingredients hampered sales income. The operating loss is £2.6m. The revenues were one-fifth down on initial expectations for the year to September 2022. Supply problems have eased, and price rises have helped to offset higher costs.
Marula Mining (MARU) has appointed Geofields Tanzania to commence copper exploration at the Kinusi copper project, where Marula Mining owns a 49% interest, and £80,000 has been raised from a warrant exercise. Initial exploration results should be published in the second quarter of 2023.
Hydrogen Future Industries (HFI) is investing in hydrogen production facilities developer Tower Green. It has spent £100,000 in cash and shares on a 20% stake and has the right to invest a further £50,000 for another 10% stake. Tower has an agreement with Element 2 to supply hydrogen fuel to fleet operators. Hydrogen Future Industries has developed wind-based hydrogen production systems.
Tap Global (TAP) continues to rise following the previous week’s completion of its reversal into Quetzal Capital last week. There was £3.1m raised at 4.5p at the same time, even though the market price had not been that high since May last year. Chief executive David Carr acquired 190,000 shares at 4.1p each and finance director Anthony Quirke bought 135,135 shares at 4.4p each.
Newbury Racecourse (NYR) lost money on the Great Christmas Carnival and the company is likely to make a small profit in 2022. The other parts of the business traded in line with expectations.
Quantum Exponential (QBIT) had £2.48m in cash out of net assets of £4.85m at the end of October 2022. There was a cash outflow of £313,000 in the previous six months.
Guanajuato Silver Company Ltd (GSVR) has restarted processing at the Cata mill at the Valenciana mine. The initial processing rate is around 8,000 tonnes/month.
Invinity Energy Systems (IES) says that its VFB technology has passed phase 1 requirements for UK government’s LODES competition, and it is submitting the application for phase 2. The competition offers £11m of funding to the winner.
AQRU (AQRU) says that Accru Finance is raising the threshold for minimum account deposits on its app to $250,000. This will reduce assets on the app, but hardly affect revenues. There will also be further cost cutting.
Rogue Baron (SHNJ) sold 930 cases of Shinju whisky in the fourth quarter of 2022. Revenues were $120,000.
Gunsynd (GUN) has raised £194,000 from partial disposals of stakes in three companies. Gunsynd has invested £150,000 in Strategic Minerals Europe, the holding company of Aberdeen Minerals, which is exploring for nickel-copper-cobalt deposits in north east Scotland. Shares were acquired at 2.5p each and Gunsynd has a 2.7% stake.
Hydro Hotel Eastbourne (HYDP) is paying a dividend of 23p a share, up from 21p a share last year.
AIM
Pawnbroker Ramsdens Holdings (RFX) did much better than expected in the year to September 2022. Group revenues increased by 62% to £66.1m, while pre-tax profit jumped from £564,000 to £8.27m. Net cash is £8.84m. The total dividend is 9p a share. Earnings forecasts for 2022-23 were upgraded by 5% following a 6% upgrade in October.
Regional legal firm consolidator Knights Group Holdings (KGH) reported a 19% increase in interim revenues to £71.2m and underlying pre-tax profit was also 19% ahead at £9m. This was achieved in a flat market. Net debt was £35.6m at the end of October 2022. The interim dividend is 153p a share.
China-based Hainan Mining is funding the Bougouni lithium project that is wholly owned by Kodal Minerals (KOD). A $100m investment will be made into a joint venture providing Hainan Mining with a 51% stake. The work on the construction of the mine will be overseen by Kodal Minerals. Hainan Mining is also subscribing $17.75m for a 14.8% stake in Kodal Minerals and that money will be spent on other projects.
Mirriad Advertising (MIRI) is launching a strategic review and potentially putting itself up for sale. The board of the programmatic advertising business believes that Mirriad Advertising is undervalued even though it continues to make heavy losses. Revenues were £1.51m in 2022 and there was £11.3m in cash, which should last until the third quarter of 2023. The strategic review will consider how the business should be funded from then on. In-content advertising is set to grow significantly, but Mirriad Advertising has to have the funding to take advantage.
Legal services provider Gateley (GTLY) generated organic growth of 10% and improved profit by 12% in the first half. In the six months to October 2022, group revenues were 22% ahead at £76.1m, helped by contributions from the new patent activities, while pre-tax profit improved from £8.5m to £9.6m. The dividend has been raised by 10% to 3.3p a share.
Musical instruments retailer Gear4Music (G4M) grew revenues by 5% in the third quarter despite strikes and weak consumer spending. UK sales were flat, and the growth was in Europe. Gross margins declined. A full year pre-tax profit of £1.1m, down from £5m, is forecast.
Inland Homes (INL) chief executive Donagh O’Sullivan has resigned after little more than one month in the job.
Panther Securities (PNS) is paying a special interim dividend of 10p a share. The property investor says that it expects net assets to increase by £19m in 2022, mainly due to the removal of two derivatives liabilities relating to interest rates on debt. Loan-to-value is less than 40%. Debt refinancing discussions will begin later this year.
Online women’s fashion retailer In The Style (ITS) was hit in December by price cutting by rivals and difficulties in delivering orders. Revenues in the quarter to December 2022 fell by 22%. Full year revenues are expected to be £46m, which is not much more than the £44.7m generated in the year before flotation. The EBITDA outcome is likely to be a loss of between £4.25m and £4.75m. There was £3.2m in cash at the end of 2022. On 8 December, In The Style launched a strategic review and that continues.
Rockfire Resources (ROCK) has entered into a joint venture with Sunshine Gold for the Plateau gold deposit in Queensland. Sunshine Gold will fund all exploration for three years. Rockfire Resources will focus on the Molaoi zinc deposit in Greece.
Circle Property (CRC) intends to return at least £30m to shareholders by March 2023. Three-fifths of the portfolio has been sold in 14 months. At 220p, the shares are trading on a discount to NAV of around 18%.
Upgrades for Equals Group (EQLS) continue to push the share price higher. The forecasts had already been upgraded in December and earnings per share have been increased by a further 4% to 4.8p, up from 2.8p in 2021. There was £15m in the bank at the end of 2022.
Crimson Tide (TIDE) revenues were better than expected and that reduced the forecast loss. The mobile as a service technology developer is still on course to breakeven next year. Annualised recurring revenues are £5.8m, which is more than generated in 2022. The US provides additional potential.
Shanta Gold (SHG) produced 65,209 ounces of gold at an all-in sustaining cost of $1,270 at the New Luika gold mine in Tasmania, which is just below guidance. Capital investment means that it could produce 66,000-72,000 ounces of gold at an all-in costs of $1,200-$1,300/ounce.
MAIN MARKET
LED lighting and wiring accessories supplier Luceco (LUCE) as 2022 revenues and profit are at the upper end of guidance. Strong cash flow reduced borrowings with net debt one-third lower than expected at £24m. The finance director is leaving and being replaced with non-exec Will Hoy.
Medica Group (MGP) revenues and profit for 2022 should be in line with expectations. Improved radiologist capacity helped revenues improve from £61.9m to £77m, while pre-tax profit is set to improve from £7.4m to £13m. Acquisition opportunities are being evaluated.
Andrew Hore
Andrew Hore – Quoted Micro 11 February 2019
NEX EXCHANGE
Primorus Investments (PRIM) says that investee company Sport:80 has delayed its flotation because it has been tidying up its shareholder register. Fintech company Engage Technology is also seeking to float later in 2019 following new product launches. Engage raised £2.6m at £22 a share at the end of 2018, whereas the average buying price by Primorus was £20.03 a share. Investee company, AIM-quoted Greatland Gold (GGP) has published results from the second drilling campaign at Havieron in Western Australia. Every drill hole intersected mineralisation and they extend the overall mineralisation. Drilling will recommence in March. Primorus has raised cash by selling most of the stake in UK Oil and Gas (UKOG) and Primorus was debt free at the end of 2018.
NEX has decided not to suspend trading in the shares of VI Mining (VIM) even though its corporate adviser Daniel Stewart is no longer a member of NEX. VI Mining had little or no notice of its adviser’s withdrawal. A new corporate adviser is being sought.
Milamber Ventures (MLVP) has acquired apprenticeship training provider Astara Training for £16,666 in shares at 9p each. Milamber lost £179,000 in the third quarter and there was £30,000 in the bank at the end of 2018.
Panther Metals (PALM) has announced the initial results of exploration activity at the Bear Lake project in Ontario. There was gold in soil anomalies at four of the five areas tested. Four areas have quartz vein sample assays above 5g/t gold. Two samples had large grade samples. The next phase of exploration is being planned and could start in the second quarter of 2019.
Auxico Resources Canada Inc (AUAG) has signed a deal that could enable it to earn a 70% interest in a joint venture that owns the Palha tantalum property in northern Brazil.
AIM (February 2019 AIM Journal available here)
DP Poland (DPP) is running short of cash and is more than doubling its share capital through a heavily discounted placing raising £5.3m at 6p a share, with the possibility of an additional £500,000. The Domino’s Pizza franchisee for Poland has found competition is getting tougher and growth has slowed. The cash is required to cover losses and open more outlets. Peter Shaw is stepping down as chief executive at the end of June, nearly a decade after founding the business.
Ticketing and queueing technology provider Accesso Technology (ACSO) is reviewing its investment priorities although it says that 2018 figures should be broadly in line with expectations. These will be published on 27 March. A deal fell through and this cost $1.7m. Tom Burnet is moving from executive chairman to a non-exec role. The share price is less than one-third of last year’s high. BlackRock has cut its stake below 5%.
Midatech Pharma (MTPH) has launched a placing and 0.318-for-one open offer to raise up to £4.75m at 3.85p a share on top of the £8m subscription by former AIM company China Medical System Holdings, which will licence products for the Chinese market. The clinical trial for cancer treatment MTD201 will cost up to £7m.
Duke Royalty (DUKE) is acquiring its UK rival Capital Step and this will double the size of the portfolio to eleven investments and diversify it in terms of sectors. There is an initial £10m cash payment and the assumption of debt of £11.65m. There is performance related consideration of up to £1.5m. The deal is immediately earnings enhancing.
Visa has increased its bid for Earthport (EPO) from 30p a share to 37p a share, which beats the Mastercard offer of 33p a share. The latest bid values Earthport at £247m.
Taptica (TAP) has launched a recommended bid for RhythmOne (RTHM) and this will create one of the largest video advertising companies in the US. The offer is 28 Taptica shares for every 33 RhythmOne shares. Taptica shareholders will own 50.1% of the enlarged group. A $15m share buyback programme is planned after the merger. Ofer Druker will become chief executive.
Polemos (PLMO) has finalised the details of its reverse takeover of Digitalbox Publishing for £10m in shares and it is also acquiring the owner of the Daily Mash satirical news website for up to £1.2m in cash and shares. The model for the Entertainment Daily website will be used to improve the performance of the Daily Mash. A placing will raise £1.02m at 14p a share. The company will change its name to Digitalbox.
Hardide (HDD) is raising £3.6m at 1.5p a share so that it can move to new premises in the UK and invest in additional equipment. The surface coatings company is experiencing increasing demand from the oil and gas sector and there is potential for orders from aerospace companies. It will take two years to fully equip and move into the new facility. Hardide also intends to consolidate 40 shares into one new share.
finnCap has raised its forecasts for Tracsis (TRCS) following recent acquisitions. There is a 3% increase in earnings per share for this year and an 11% rise to 30.5p next year.
Stride Gaming (STR) has traded in line with previously downgraded expectations. Cost cutting continues to cover higher regulatory and tax costs. The online gaming operator will report a lower profit in 2018 and it is set to fall again in 2019. Net cash was £22.1m at the end of 2018.
Bowmark Capital has offered 110p a share for Tax Systems (TAX) and discussions continue. Tax Systems reduced net debt from £20.5m to £13.9m by the end of 2018. Pre-tax profit of £5.8m is forecast for 2018.
Victoria (VCP) has sold surplus land in Kidderminster for £2m. The land was in the books for £100,000 but it has obtained planning consent for housing.
Starcom (STAR) has renegotiated its agreement with Xplosive in South Africa, having originally announced it in October 2017. Xplosive has signed a 36-month agreement to pay a monthly fee for each of the Kylos units supplied for the monitoring of cattle. The fees are higher in the first six months and then reduce. The agreement should be worth $500,000.
Strix Group (KETL) has offered to acquire most of the assets of HaloSource (HAL) for $1.3m. Strix has provided working capital of $100,000. Due diligence is being carried out on the water filtration technology and if the deal goes through the cash will pay creditors, but there will be nothing for shareholders.
Prospex Oil and Gas (PXOG) has announced that the Selva gas field in northern Italy has net 2P reserves of 13.3bcf and there are 2.26bcf attributable to Prospex, which has a 17% stake. Selva could start production in 2020 at a rate of up to 150,000 cubic metres/day.
Tau Capital (TAU) plans to raise cash via a placing through Peterhouse and then a capital distribution will be made to all shareholders. This will enable Tau to seek an acquisition. It has until 18 April to secure a deal or trading in the shares will be suspended. Armstrong Investments has increased its stake from 11.7% to 15.7%.
Evgen Pharma (EVG) says that the SFX-01 clinical trial for subarachnoid haemorrhage is on course having completed recruitment and the primary endpoints should be available in the second quarter. Partners Investment Company has acquired at 3.15% stake.
Sports Direct International (SPD) made a £15m offer to buy Patisserie Valerie from the administrator, but this was not deemed enough. Even a higher selling price won’t provide anything for Patisserie Holdings shareholders.
MAIN MARKET
Solicitor DWF plans to raise £75m via a March flotation an some of the cash will repay members’ capital contributions as well as invest in the business. Existing shareholders will also sell shares and partners’ remaining stakes will be locked up until April 2024.
Two former AIM-quoted companies are coming together to join the standard list. Daniel Stewart Securities, which is closing its broking business, is making an offer for Atlantic Carbon, which was previously known as Atlantic Coal, where Adam Wilson, who has had connections with Daniel Stewart, is executive chairman. Singapore-based backer Epsilon Investments refused to put more money into the broker and that is why it is closing. Epsilon holds a majority stake in Hyde Park Holdings, which owns broker Novum Securities. Last October, SeeThruEquity research suggested that Atlantic had an equity value of $86.8m and $68m of debt. In 2017, Atlantic was the largest producer of anthracite in the US with a market share of one-third based on 1.18 million tonnes produced. Atlantic is expected to have moved into profit in 2018, although it did generate cash from operations in 2017. The owners of more than 50% of Atlantic shares have agreed to accept the bid of 1.5587 shares for each Atlantic share.
Thalassa Holdings (THAL) is offering 14.64p a share in cash and 0.26 of a share for each share in The Local Shopping REIT. Thalassa already owns 25.5% of the bid target, which is valued at 32.8p a share. The bid is an alternative to the winding up of The Local Shopping REIT.
Blockchain Worldwide (BLOC) is no longer acquiring blockchain technology developer Chorum Group because of political uncertainty affecting the UK equity markets. Former Avanti Communications boss David Williams is the director of Chorum. Blockchain Worldwide has more than £1m in the bank and is also looking at other technology sectors for acquisitions.
Drilling of the Colter appraisal well in Dorset has commenced and United Oil and Gas (UOG) has a 10% interest. The drilling should take three weeks. The Selva gas field in Italy has net 2P reserves of 2.7bcf attributable to United, which has a 20% stake. Selva could start production in 2020. United intends to move to AIM.
Oil and gas producer Zenith Energy (ZEN) has raised £607,000 in Canada and the UK at C$0.05 a share and 3p a share respectively.
Motor finance provider S and U (SUS) has confirmed that its figures for the year to January 2019 will be in line with expectations. The Aspen property bridging loan business had a loan book of £18m at the end of January 2019. Cautious lending criteria means that new business has slowed in recent months and this has led to a 5% 2019-20 earnings downgrade to 230.1p a share.
BATM (BVC) has won a $3.2m cyber security contract and this takes contracted revenues from this government customer to more than $10m. The latest contract will be delivered this year.
Chesterfield Resources (CHF) is expanding its exploration programme in Cyprus. Initial drilling in an area near historic mining has shown gold, copper and zinc mineralisation. Chesterfield is also applying for licences to extend its licence area.
Dev Clever (DEV) has launched pay per play multi-player, virtual reality game Vanguard: Fight for Rudiarius in Harlow shopping centre. The game will be rolled out to other UK sites.
Bluebird Merchant (BMV) has applied for a grant to help finance drilling at the Kochang project in South Korea and there should be news by the end of the month. There has also been a permit application to develop Kochang.
Andrew Hore
Ian Pollard: Trakm8 Expects Second Half Profit + Updates on DX Group #DX Taptica International #TAP Versarien #VRS and Firestone Diamonds #FDI
Trakm8 Holdings plc TRAK Confirms that for the third quarter of the year ending 31st March 2019, the Group has seen orders grow in challenging markets as well as implementing a rigorous cost saving programe. The final quarter has benefited from a strong start with a revamped sales team. The Directors anticipate that the second half will now be profitable, even though full year revenue will be 25% to 35% below last year.
DX ( Group) plc DX has continued to make encouraging progress with its turnaround in the half year to the 31st December and is in a good position to drive further improvements. Positive EBITDA is expected for the full financial year.
Taptica International Ltd TAP, announces it is to merge with RhythmOne Plc a global leader in advertising technologies for performance-based mobile marketing and brand advertising. The combination of the two businesses is expected to create one of the leading video advertising companies in the US, delivering significant economies of scale, customer base and supply chains to compete with the industry leaders. The merger will be effected way of a recommended offer by Taptica for the entire issued and to be issued ordinary share capital of RhythmOne. Each RhythmOne Shareholder will be entitled to receive 28 New Taptica Shares for every 33 RhythmOne Shares held.
Versarien plc VRS is pleased with the impressive rate of progress which it has continued to make since entering into formal relationship towards the end of last year with Chinese provincial government bodies. Agreement has been reached with various Chinese partners to progress the use of Versarien’s graphene powders and inks for a number of new applications.
Firestone Diamonds plc FDI had a reasonable second quarter, although the demand for the smaller, lower value stones deteriorated further but then stabilised at the December and January sales The demand for larger, better quality stones remains strong. A slower start to the second half was experienced due to equipment failure during January, which is expected to impact tonnes treated and carats recovered for the third quarter.
Find beachfront villas & houses for sale in Greece; http://www.hiddengreece.net
Andrew Hore – Quoted Micro 17 December 2018
NEX EXCHANGE
Ecommerce software provider Netalogue Technologies (NTLP) moved into profit in the first half and had £648,000 in the bank at the end of September 2018. Revenues increased by £168,000 to £647,000, even though subscription-based pricing is reducing the initial revenues from B2B clients. A loss of £60,000 became a pre-tax profit of £142,000, helped by lower operating expenses.
Veni Vidi Vici Ltd (VVV) is acquiring a 51% stake in a licence in the Shangri La gold, silver and copper project in Western Australia for A$220,000, which is payable to Goldfields Consolidated in the form of 190,000 shares and A$20,000 in cash. The shares cannot be sold for three months. VVV will spend an initial A$300,000 over three years and Goldfields will receive a 10% management fee.
Coinsilium Group Ltd (COIN) has raised £367,000 at 4p a share and each new share comes with a two-year warrant exercisable at 7.5p a share. If the share price averages more than 15p for five consecutive days, then the company can require the warrants to be exercised.
Gastropubs operator Barkby Group (BARK) has signed heads of terms to acquire Northamptonshire-based upmarket car dealer Centurian Automotive Ltd. The most recent accounts were for a dormant company and shows £200 in the bank.
Quetzal Securities Ltd sold 6.75 million shares in Pelican House Mining (PHM) for 0.5p each and Eight Capital Partners (ECP) acquired 8.25 million shares at 0.491p each. Quetzal subsequently sold a further 6.75 million shares in Pelican shares, leaving a 13.2% stake, to Eight Capital at 0.5p a share, taking its stake to 15.3%.
Hydro Hotel, Eastbourne (HYDP) has declared an unchanged total dividend of 21p a share for the year to October 2018. An interim of 7p a share will be paid in January (ex-dividend 20 December) and a final dividend of 14p a share paid in May (ex-dividend 18 April).
Ace Liberty and Stone (ALSP) has appointed Northland as broker.
EPE Special Opportunities Ltd (EL.P) had a NAV of 200.95p a share at the end of November 2018. The shares are trading at 160p.
Construction consultancy Driver Group (DRV) reported a 2017-18 pre-tax profit of £3.8m, up from £2.5m, and it is returning to paying dividends with a 0.5p a share payment. Net cash is £6.9m, helped by a property disposal, and this could reach more than £10m by September 2019 even after dividend payments. The Diales expert witness business is becoming an increasingly important revenue generator and overall utilisation levels have improved. There has also been a focus on better margin work in the Middle East.
SigmaRoc (SRC) is in the process of acquiring precast concrete products supplier CPP Building Products for £15.2m, although the deal requires shareholder approval for share issues, so it will not happen until early January. CPP is based in north west England and fits well with the existing precast concrete business. In the year to August 2018, revenues were £20.9m and EBITDA was £2.6m. This year’s trading is in line with expectations. There are plans to refinance the convertible loan notes.
Nexus Infrastructure (NEXS) had already warned about delays to its utility connection contracts with housebuilders and the 2017-18 figures were slightly better than expected with flat pre-tax profit of £9.2m. Nexus has a strong order book and could increase its 2018-19 pre-tax profit to £10.4m. The new electric vehicle charging points division will take time to build up.
Advanced coatings provider Hardide (HDD) has benefited from an upturn in demand from the oil and gas sector. It is also getting nearer to obtaining its first aerospace orders. Hardide remains loss-making and this will still be the case next year as it continues to invest in increasing capacity in the UK and US as demand grows.
Curtis Banks (CBP) has purchased around 600 SIPPS with assets of £180m from Hargreaves Hale, which will continue to manage the assets. Curtis Banks will launch a new SIPP product in January.
Clinical trials manager Venn Life Sciences (VENN) is collaborating with Open Orphan DAC. The two firms will share resources in the orphan drugs market. Venn is raising £1m from a two-year loan note issue.
WH Ireland has upgraded its forecast for banknote authentication and brand protection technology business Spectra Systems (SPSY) for the second time. The underlying pre-tax profit forecast has been raised by 10% to $4.5m. The 2019 forecast, which had previously been upgrade by 16%, is maintained for the time being.
Kibo Energy (KIBO) says that its 60%-owned subsidiary MAST Energy Developments has an exclusive option to undertake due diligence and acquire three peaking power sites totalling 31.3MW. This would provide initial revenues for Kibo later next year. Kibo has renewed its memorandum of understanding with Mozambique-based electric utility Electricidade de Mocambique for the financing and operation of the Benga independent power project.
eServGlobal Ltd (ESG) says that 2018 revenues will be lower than expected due to weak trading at the PayMobile business and the failure to close orders. The PayMobile business may be sold and the focus will be the HomeSend remittances business.
NWF (NWF) says feeds demand was strong in the summer because of a lack of natural grazing. In contrast, the hot weather held back demand for fuels. A Solihull-based fuel distributor has been acquired. The food distribution business continues to trade at around capacity because of contract wins. The interims will be published on 29 January.
ReNeuron (RENE) has important clinical trial results coming up in the next 18 months. A retinitis pigmentosa treatment is in phase I/II trials and there should be data in mid-2019. A phase IIb trial for a CTX cell therapy-based treatment for chronic stroke is due to report by early 2020. There was £30.7m in the bank at the end of September 2018. Management is seeking partners to help it to make the most of its technology.
PhotonStar LED Group (PSL) has raised £100,000 at 0.02p a share and this will enable the board to assess new business opportunities.
Property adviser Fletcher King (FLK) is maintaining its interim dividend at 1p a share even though pre-tax profit has dipped from £148,000 to £132,000. Ratings appeals revenues were lower. There is £2.28m of cash in the balance sheet.
Kromek (KMK) has secured an initial contract with the US Department of Defense worth $2m over 12 months. The plan is to develop a proof-of-concept device for a vehicle-mounted biological threat identifier.
Crossword Cybersecurity (CCS) started trading on AIM on Friday and the share price ended the day at 272.5p. Crossword raised £2m at 290p a share.
Volex (VLX) is buying cable assemblies and connectors manufacturer GTK for £14.3m in cash and shares. in the year to July 2018, GTK generated a pre-exceptional operating profit of £1.7m. There was £1.3m in the bank. The deal is earnings enhancing.
African Battery Metals (ABM) has found it difficult to raise the cash it requires and trading in the shares has been suspended. The company wants to come to a settlement with creditors so that it could continue to trade.
Smaller company mergers and acquisitions business K3 Capital Group (K3C) is cautiously optimistic but the full year outcome will depend on the timing of deals. There could be a small dip in pre-tax profit to £7m this year and there could be a corresponding dip in dividend from 11.2p a share to 10.8p a share.
Telit Communications (TCM) says that it will not complete the sale of its automotive business until next year. Telit is expected to make a 2018 loss. Further cost savings are being made in the Internet of Things operations.
More bad news from Filtronic (FTC) with sales of Massive MIMO antennas lower than expected. The main customer has reduced its forecast demand. The capitalised development costs of £500,000 will be written off and options are being reviewed. The rest of the business is trading in line with expectations. Filtronic will be loss-making this year. Net cash was £2.3m at the end of November 2018.
Science Group (SAG) has ended its formal sale process because of stockmarket and exchange rate uncertainty. The strategic review continues. Trading is in line with expectations and the company will recommence the share buy back programme. Net cash was £6.4m at the end of November 2018.
Like-for-like sales growth has been slowing at DP Poland (DPP) and this means that progress in 2019 is unlikely to be as good as expected. This means that it will take longer to reach profitability. Rivals have been spending money on marketing and warm weather has also held DP Poland back. A full year trading update will be published on 29 January.
Taptica International Ltd (TAP) plans to spend up to $10m on buying back shares and it has already spent nearly £110,000. There was net cash of $42.1m at the end of June 2018.
Tristel (TSTL) says that the US regulatory process for its disinfection products is on track and interim pre-tax profit should be £2.2m.
TomCo Energy (TOM) has managed to secure £550,000 at 2p a share. The previous £532,000 placing at 8.5p a share was pulled. Laurence Read has become a non-executive director.
RA International (RAI) has won a five year contract worth up to $5.6m from a US corporate client in Central Africa.
MAIN MARKET
Circassia Pharmaceuticals (CIR) is moving to AIM and it has decided to exercise its option to acquire US rights to COPD treatment Tudorza from AstraZeneca. This deal should complete by the end of the year and it will trigger a payment of $5m. A further $20m is payable upon approval of Duaklir and then there is further deferred consideration of $100m.
Tex Holdings (TXH) has warned that second half earnings will be lower than anticipated due to delayed deliveries and reorganisation costs.
Cadmium-free quantum dots developer Nanoco (NANO) is on course to complete the expansion of its Runcorn facility by the end of 2018 with commercial volume manufacturing by the middle of 2019.
Lb-shell (LBP) is being wound-up because of potential litigation relating to before it became a shell. There is unlikely to be anything left for shareholders.
Giant Saint Technologies Ltd (GST) is installing a $1m data centre in Singapore.
Andrew Hore
Andrew Hore – Quoted Micro 10 December 2018
NEX EXCHANGE
TechFinancials Inc (TECH) is developing a blockchain-based sports ticketing business with Footies Tech Ltd. The new company will licence blockchain technology from TechFinancials, which will have a 75% stake in the company. TechFinancials will provide up to $500,000 to the company and this commitment is dependent on a client signing up within three months. The idea is to make the sports club take control of the initial sale and any secondary ticket transactions. Former Liverpool FC chairman Ian Ayre will be chairman of the new company.
Eight Capital Partners (ECP) has invested £60,000 in Pelican House (PHM) at 0.45p a share. Eight Capital will be issued 13.33 million warrants exercisable at 0.45p a share. Eight Capital is appointing John Treacy to the board of Pelican, which is changing its investment strategy from natural resources to sports and leisure.
Crossword Cybersecurity (CCS) has raised £2m at 290p a share and it will move to AIM on 14 December. The share price peaked at 430p in March. Crossword is valued at £13.6m at the placing price. Hargreave Hale AIM VCT has taken a 7.37% stake.
Early Equity (EEQP) is assessing additional investments that fit its strategy. There was £437,000 of cash in the balance sheet at the end of August 2018. The main investment is a 47.1% stake in healthcare products distributor Yicom Global.
Miton has increased its stake in Wheelsure Holdings (WHLP) from 15.5% to 17.8%. DXS International (DXSP) chief executive David Immelman has bought 20,002 shares at 9.9p each, taking his stake to 10.45%.
Welney (WENP) is considering a couple of proposals that can enable the company to move ahead. The loan note holders have agreed not to call in the loans for at least another 12 months. Net liabilities were £268,000 at the end of June 2018.
Block Commodities (BLCC) has launched the Farmer 3.0 (described as an integrated agri-business ecosystem) pilot project, which covers up to 1,000 Ugandan farmers. The plan is to expand the service to up 50,000 farmers.
AIM
Plastics Capital (PLA) has still to see the benefits of its investment in capacity and winning new business. In the six months to September 2018, revenues improved 11% to £40.6m and underlying pre-tax profit recovered from £1.2m to £2.1m. Net debt was £15.7m at the end of September 2018 to £14.5m by March 2019. Cenkos forecasts a 2018-19 profit of £5m, rising to £5.4m next year.
Broker finnCap (FCAP) joined AIM and completed the acquisition of Cavendish Corporate Finance last week. finnCap raised £3.75m at 28p a share.
The People’s Operator (TPOP) has the chance to receive an investment from the owner of LycaMobile. A share capital reorganisation is required before any shares can be issued. Every 2,000 shares will be consolidated into one share. An investment of £1.3m will be in shares (29.9%) and convertible loan notes – convertible at 10p a share.
Evgen Pharam (EVG) says that the final patient in the STEM:SFX-01 trial for metastatic breast cancer will take her last dose by the end of 2018. The final readout for the trial should be in March.
Ceres Power (CWR) has finalised its collaboration with Weichai Power. They will create a fuel cell manufacturing joint venture in China and technology will be licenced to the new venture, which could generate up to £30m in payments. There is also a £9m joint development agreement for range extenders for electric buses. Weichai will invest £28m at 164.5p a share.
Hagai Tal has resigned as chief executive of Taptica International Ltd (TAP) after he was criticised about his actions at a previous company. Rivi Bloch takes over as interim chief executive. The business appears to be changing with revenues not up to expectations but margins improving.
Panther Securities (PNS) is paying a special dividend of 15p a share after what it calls the best year it has experienced. Next year at least 12p a share will be paid.
Woodford has says that it will subscribe £8m in a fundraising for eve Sleep (EVE) and Channel 4 says that it will invest £900,000. Chairman Paul Pindar will invest £1m. Discussions continue with other investors in order to raise the £15m required.
Vianet (VNET) is growing its smart machines operations and it was responsible for the growth in revenues in the first half. The pubs market remains tough and smart zones revenues dipped, but there is the prospect of a large order in the US. Full year profit is expected to improve from £2.7m to £3m. The interim dividend is maintained and the total dividend for the year should be unchanged at 5.7p a share.
Versarien (VRS) has signed a supply agreement to supply a new graphene enhanced polymer range to AECOM. Interim revenues were 19% higher at £5.22m. There was cash of £6.07m at the end of September 2018. There was a £1.1m cash outflow in the six month period.
Omega Diagnostics (ODX) continues to lose money and net debt was £700,000 at the end of September 2018. The £2m overdraft facility should provide enough finance for the company’s needs. The commercialisation of Visitect CD4 is important to long-term progress for the company. CE marking for advance disease should be awarded soon. The timing of approvals and therefore revenues is difficult to predict.
Pebble Beach Systems (PEB) has resolved its dispute with xG Technology Inc over the disposal of its hardware business. No further liabilities are due by either party and the forecast cash balances for Pebble Beach will not be materially different.
Rose Petroleum (ROSE) has agreed an operational plan with the Utah authorities for its acreage in the Paradox Basin and this includes recently acquired acreage. A suitable drilling rig should be available in the first quarter of 2019. The plan is to secure funding for the drilling programme.
Zinc Media Group (ZIN) has appointed Mark Browning, who is currently boss of ITN Productions, as chief executive and he will start in the first half of 2019. He replaces former finance director David Galan, who became full-time chief executive in February.
Adam Formela has stepped down as chief executive of packaging manufacturer Robinson (RBN). Martin McGee has become interim chief executive.
Trading in the shares of MySQUAR (MYSQ) will end on 10 December. Additional cash is required and a sale of assets to a NEX-quoted company in return for shares could happen. The investigation of past financial transactions continues.
Fishing tackle retailer Fishing Republic (FISH) has appointed administrators.
MAIN MARKET
Cryptocurrency mining services provider Argo Blockchain (ARB) estimates that its current annualised revenues are $6.2m (£4.8m). Trading is ahead of expectations. Net cash was £15m at the end of November 2018.
Sand U (SUS) says trading is in line with expectations. There has been a reduction in demand for finance for used cars. This means that the loan portfolio is growing more slowly than expected.
Standard list shell Spinnaker Opportunities (SOP) is evaluating opportunities in the cannabis market.
Andrew Hore
VectorVest UK MD Dr David Paul discusses UK Market Timing and suggests it may be due for a turn. Watch the video for top stocks on the VectorVest radar that are potential turn around situations.
VectorVest UK MD Dr David Paul discusses UK Market Timing and suggests it may be due for a turn. Watch the video for top stocks on the VectorVest radar that are potential turn around situations. Stocks include Hastings (HSTG.L), Taptica (TAP.L), Barratt (BDEV.L) and Cranswick (CWK.L).
Andrew Hore – Quoted Micro 10 September 2018
NEX EXCHANGE
Ananda Developments (ANA) is acquiring 15% of UK-based Liberty Herbal Technologies Ltd, which is the owner and developer of hapac, a technology for vaping cannabis. The investment cost £460,000 and Ananda has the right of first refusal for any further fundraisings in the next two years. The technology can be used to provide a measured medicinal dose. A commercial launch is planned in Italy before the end of the year and in Canada next year. Ananda is holding a general meeting to extend its geographical focus to the UK and Italy.
Chapel Down Group (CDGP) is leasing 388 acres of land adjoining its existing vineyards on the North Downs. This site will be vined between 2019 and 2021 and with the rest of the land that has already been planted it will be the largest vineyard in England.
DagangHalal (DGHL) intends to leave NEX after less than three years on the market. Trading in the shares has been limited but this is not surprising given the problems the company has had. Shareholders owning 84.7% of the company are in favour of the withdrawal from NEX and this will happen on 1 October.
Trading in Etaireia (ETIP) shares was suspended because the annual report for the year to March 2018 was not published by the end of August. The results were released on 5 September and trading was restored. The loss was increased from £622,000 to £857,000, following a £434,000 write down on the value of land at Dalry. The NAV was £1.81m at the end of March 2018.
Milamber Ventures (MLVP) remains suspended with full year results due to be published by the middle of September. The audit of Essential Learning still needs to be completed.
Hot Rocks Investments (HRIP) had nearly £17,000 in the bank at the end of March 2018. The NAV was £722,000. The majority of the loss of £219,000 in the year was due to share-based payments. Hot Rocks has a stake in Minergy Ltd, which has floated on the Botswana Stock Exchange and has been granted a mining licence for the Masama coal project. Production could start by next February. Another investee company, Block Energy (BLOK) has floated on AIM and more than two million shares have been acquired in standard list flotation Predator Oil and Gas.
Ecovista (EVTP) has raised £550,000 from a convertible loan note issue, which has to be repaid or converted (at 0.0005p a share) by the end of August 2019.
AIM
Bilby (BILB) founder Phil Copolo and his son Leigh have left the board of the building and gas maintenance services provider and sold more than 31% of the company to institutional investors at a discount of around 6% to the then market price. Janet Copolo still owns 7.2% of Bilby and cannot sell until 3 September 2019, according to an agreement with Stanford Capital Partners, which was sole book runner of the placing. Miton has increased its stake from 15.1% to 19.8%, while MI Discretionary Fund has bought 8.19% and Ruffer has acquired 8%.
TLA Worldwide (TLA) published its latest profit warning at 10.35am on 4 September. At least it was while the markets were still trading rather than after they had closed for Christmas. Numis has had enough and resigned as nominated adviser. Trading is weak and TLA is set to breach banking covenants. TLA needs to raise cash.
Microsaic Systems (MSYS) is still building he base from which it can grow over the next few years. The interim figures do not reflect the progress that is being made. Revenues doubled from a low base, but higher costs meant that there was a flat loss of £1.5m. There is £6.96m in the bank at the end of June 2018 so the mass spectrometry technology developer has plenty of time to build up its revenues. The venture with a global bioprocessing partner is progressing and is in an integration phase. Commercialisation should be completed by early 2020. New agreements with two manufacturers and four distributors augur well for growth over the next 18 months. The target is revenues of more than £17m in 2022.
A full first half contribution from the Carlton acquisition helped Michelmersh Brick (MBH) to increase interim revenues by 43% to £23.1m and underlying pre-tax profit by 57% to £3.8m. The interim dividend has been raised by 51% to 1.06p a share. Demand for bricks remains strong and there is limited production capacity.
Tax Systems (TAX) continues to reduce its net debt, putting it in a good position to make further acquisitions. Net debt was reduced by 15% to £17.5m over a six month period. Interim revenues grew by 14% to £8m and order intake is 22% higher. The corporation tax software provider is broadening its range of software in order to make the most of the move to a digital tax system in the UK.
Filtration systems supplier Amiad Water Systems (AFS) grew its interim profit even though growth in revenues was modest. Stifel Nicolaus expects a stronger second half with full year revenues improving from $112.3m to $116.8m and then a further acceleration in growth to $123.4m. Although underlying pre-tax profit is expected to be flat at $5.1m, it is forecast to jump to $6.8m in 2019. A jump in 2018 dividend to 6.5p a share is forecast, despite relatively flat earnings per share. The dividend would still be more than twice covered.
Performance-based mobile marketing services provider Taptica International Ltd (TAP) continues to grow internationally and, via a combination of acquisitions and organic growth, interim revenues were 119% higher at $144m. Underlying pre-tax profit improved from $12.3m to $18m. An interim dividend of 3.98 cents a share is being paid. Net cash was $42.1m at the end of June 2018.
Mobile location data services provider Location Sciences (LSAI) increased revenues from £49,000 to £234,000 in the first half of 2018 but there is a lot more to come. New products have been launched and it will take time for them to make a significant contribution. Even so, 2018 revenues of £702,000 are forecast, rising to £2.2m in 2019. The loss will reduce but a profit is not forecast until 2020. There was £720,000 in the bank at the end of June 2018 and more funding will be required to achieve the expected growth in sales.
Finsbury Food (FIF) is acquiring Free From bakery manufacturer Ultrapharm for an initial £17m with more dependent on performance. The business made a pre-tax profit of £800,000 in 2017. The acquisition is earnings enhancing.
Safestyle UK (SFE) has settled litigation with former employees who set up in competition. They will change their brand name from SafeGlaze and promise not to use confidential information.
IFA Lighthouse (LGT) continues to prosper. Interim revenues were 5% ahead at £26.9m and pre-tax profit 12% higher at £1.26m. Net cash was £9.6m. and the interim dividend is two-thirds higher at 0.2p a share. Growth has been coming from the affinity business.
MAIN MARKET
Commercial aircraft lessor Avation (AVAP) reported a 16% increase in revenues to $109.1m in the year to June 2018. However, pre-tax profit dipped by 6% due to a gain on aircraft sales in the corresponding period. The dividend was increased by one-fifth to 7.25 cents a share. The NAV was equivalent to 283p a share. Cannacord Genuity forecasts a rise in pre-tax profit from $18.9m to $23.8m this year.
Dukemount Capital (DKE) has entered into a 50/50 joint venture with Rascasse Developments in order to expand into the Midlands.
Kavango Resources (KAV) has received a permit for an airborne electromagnetic geophysical survey of the Kalahari Suture Zone area, which covers 12 prospecting licences.
Haynes Publishing (HYNS) increased full year revenues by 13% to £33.8m and underlying pre-tax profit by a similar percentage to £2.9m. The total dividend is unchanged at 7.5p a share. Net cash was £2.5m at the end of May 2018. Growth in the sales of digital products is faster than the decline in other revenues.
Andrew Hore
