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Andrew Hore – Quoted Micro 26 November 2018


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

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

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

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


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

Andrew Hore

Andrew Hore: Quoted Micro 22 October 2018


Sativa Investments (SATI) has signed heads of terms for an option on a lease for a 7.53 acre site in Wiltshire that would be used for medicinal cannabis production. There will be a 25-year lease. The cost of the development could be more than £10m. Sativa has already raised £3.75m at 6p a share.

AfriAg Global (AFRI) has made its first medicinal cannabis investment. A £61,000 investment has been made at $146.439 a share in 546 Tilray Inc.

Chapel Down Group (CDGP) chairman John Dunsmore has sold one million shares at 60p each, which has reduced his stake by one-quarter to 2.17%, and finance director Richard Woodhouse has sold 150,000 shares, which were options exercised at 10p each, for 60p a share. Michael Spencer has bought nearly 1.3 million shares, taking his stake to 27.4%.

Training services provider Milamber Ventures (MLVP) has decided to expense, rather than capitalise, development costs. In the year to March 2018, revenues increased from £449,000 to £755,000, while the loss jumped from £1.26m to £2.14m. The outflow from operating activities increased from £973,000 to £1.17m. Milamber is planning to acquire health and social care training provider Orchard Rock.

Wishbone Gold (WSBN) has raised £567,000 at 0.1p each. This is part of the process of terminating the equity sharing agreement with D-Beta, which sold 88.2 million shares. The final payment for the termination could be around £120,000. Directors have capitalised £233,000 of fees and expenses into 212.2 million shares issued at 0.11p each. Turner Pope has been appointed as joint broker.

Angelfish Investments (ANGP) has issued 2.35 million, 7.1% preference shares at 100p each. That means that there are 4.6 million preference shares in issue and due for redemption on 31 March 2021. Ken Hillen has been appointed as a non-executive director.

Tectonic Gold (TTAU) has completed the drilling of nine holes at the Specimen Hill gold prospect in Queensland. The first six holes intersected sulphide mineralisation. Drilling will be completed in the next few days.

VI Mining (VIM) has completed 1,150 metres of drilling out of a planned 6,000 metres at Rosario. Negotiations continue concerning the acquisition of the mining assets from the sellers. A company controlled by chief executive David Sumner and two other VI Mining directors has acquired 6.1 million shares at 257p each, taking the stake to 75.8%. Perko Ltd has reduced its stake to below 3%.


Immunodiagnostic Systems Holdings (IDH) has put out its latest trading statement at 5.15pm on Friday. No surprise there. Interim revenues continue to decline. Gross margins are also falling.

Futura Medical (FUM) has raised £5.6m at 7p a share (a 27.5% discount to the market price) via a placing and offer through PrimaryBid. Up to £1m more could be raised via an open offer to existing shareholders. The cash will finance further phase III clinical trials for the MED2002 topical gel for erectile dysfunction. Data from the first European phase III study is expected early next year.

Construction consultancy Driver Group (DRV) expects to report a 2017-18 pre-tax profit well above the forecast of £3.8m. Overall utilisation levels have been 80%. Net cash was £6.9m at the end of September 2018.

Juniper Networks has made a $2m (£1.5m) investment in Corero Network Security (CNS) and this will provide cash to get the cyber security software supplier nearer to breakeven. The subscription price is 8.9p a share.

Frontier IP (FIPP) says that investee company Molendotech (14.1% stake) has signed a collaboration agreement with fresh produce company G’s Group. Molendotech will create tests for bacteria in produce and water that could reduce the test time from two days to less than one hour. Molendotech already has a deal with Halma for faecal matter in bathing water.

Although the interims from musical instruments retailer Gear4Music (G4M) appear disappointing, the second half should be much stronger and the profit shortfall will be more than made up. Revenues grew by 36% to £45.5m, but there was a first half loss. Margins were reduced on branded instruments in order to win market share. Full year pre-tax profit is expected to increase from £2.4m to £3.8m on a similar rate of growth in revenues.

Disinfection products Tristel (TSTL) generated nearly all its growth in international markets. Revenues improved from £20.3m to £22.2m in the year to June 2018, while pre-tax profit increased from £4m to £4.7m. The dividend was raised by 14% to 4.58p a share. Net cash is £6.7m. FDA approvals in the US have been delayed further, although there could be a small contribution from some disinfectants the US this year.

Summerway Capital (SWC) raised £5.73m net at 100p a share. The shares ended the week at 102.5p. The shell is seeking a UK business in the household and consumer goods sector.

Trading in the shares of Fishing Republic (FISH) has been suspended and the proposed chief executive is not taking up the role. Some major shareholders are no longer willing to provide financial assistance. Rivals are taking advantage of the weakness of the group and it is suffering from strong competition.

Payment data collector PCI-PAL (PCIP) has won a five year contract with a Canadian client worth an initial C$280,000.

Trading in the shares of satellite communications equipment provider Global Invacom Group (GINV) has been suspended ahead of a potential reverse takeover.

ClearStar Inc (CLSU) will integrate its mobile background screening services with Virtual Badge, which has developed a smartphone ID badging system. The new services will be launched by the end of the year.

Vianet (VNET) says the improvement in operating profit in the first half will be in line with expectations. This is thanks to a good performance from the smart machines division. The interim dividend will be maintained at 1.7p a share.

Kape Technologies (KAPE) has acquired ZenMate for €4.8m. Berlin-based ZenMate has 50,000 subscribers for its security software. There should be a small uplift to earnings per share next year.

Customer engagement services provider Netcall (NET) reported a flat underlying pre-tax profit of £3.4m in the year to June 2018. That includes 11 months from MatsSoft and this helped cloud revenues to more than quadruple to £4.8m. There will be higher investment in product development and marketing this year so pre-tax profit is expected to decline to £2.1m.

AssetCo (ASTO) has been told by the Abu Dhabi customer for firefighting services that it will withdraw from the contract in three months. This is the only contract the company has.


French Connection (FCCN) is carrying out a strategic review that could lead to the sale of the company. Four interested parties are in initial discussions. Sports Direct International (SPD) holds a 26.2% stake in the fashion retailer.

Hemogenyx Pharma (HEMO) has entered a collaboration agreement with US biopharma company Orgenesis Inc. The deal involves the development and commercialisation of the advanced hematopoietic chimeras (AHC) mouse model. This could be used to test the safety and efficacy of drug candidates. Orgenesis will provide a convertible loan of $1m and this can be converted into shares in the Hemogenyx subsidiary that owns the technology. Orgenesis will have a non-exclusive licence for the technology and will pay a 12% royalty on net revenues generated by the technology. There is a separate collaboration with a Johnson and Johnson subsidiary t develop a mouse model for lupus.

Cadmium-free quantum dots producer Nanoco (NANO) reduced its full year loss from £9.1m to £6m. There was £10.7m in the bank at the end of July 2018. Commercial production revenues could start to be generated in 2019-20.

Standard list shell Spinnaker Opportunities (SOP) says that it has terminated discussions for the purchase of a supplier of cannabidiol oils from industrial hemp. Other potential cannabis-focused acquisitions are being considered. Existing shareholders have sold 4.2 million shares at 5p each.

Andrew Hore

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