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Andrew Hore – Quoted Micro 28 January 2019

NEX EXCHANGE

Full year figures from AFH Financial Group (AFHP) show how successful its acquisition strategy is with revenues 51% higher at £50.7m and pre-tax profit that nearly doubled to £6m. Despite the additional shares issued to part-finance these acquisitions, underlying earnings per share were one-third higher. The dividend is 50% higher at 6p a share. Acquisitions have continued since the year end. Management believes that it can double funds under management to £10bn in three to five years.

Startup Giants (SUG) has commenced a programme to raise up to £3m. There will be an initial share placing to raise £200,000. The company has launched its 2019 accelerator round for pre-seed capital tech entrepreneurs. Funding of up to £100,000 can be received by successful applications.

KR1 (KR1) has invested $200,000 in Rlay, a data collaboration framework for crowdsourcing. KR1 will receive an undetermined number of discounted tokens. This will be a discount to the lowest price paid by any investor in the tokens. KR1 has spent £50,000 in 50,000 Nash tokens.  These are the first tokens issued out of Liechtenstein.

MiLOC Group Ltd (ML.P) has signed a deal with Master Kingdom Ltd in order to create a range of body care and body wash products, which will be sold under the Artist’s brand name.

MetalNRG (MNRG) says that the Kyrgyzstan authorities have granted the application for a mining licence for the company’s uranium project in the country. The in-situ value of the uranium reserves is $253m and there is potential exploration upside.

Johnny Martin Smith is joining the board of VI Mining (VIM) and trading in the shares has resumed. Smith is a former mining analyst.

NQ Minerals (NQMI) has raised a further £142,000 at 11p a share. Bryan Smart has resigned from the board.

BWA Group (BWAP) had nearly £45,000 left in the bank at the end of October 2018. Elections have delayed progress with the potential licence acquisitions for rutile sands deposits in Cameroon. Investee company Prego International is moving from Guernsey to Norway and it may merge with another business.

Milamber Ventures (MLVP) is seeking a replacement for First Sentinel Corporate Finance as its corporate adviser.

AIM   

Mporium (MPM) has signed a partnership deal with claims management firm Allay, which will use the company’s technology to generate leads for its business. Allay will be issued a 25% stake in Mporium in return for the revenuesthat will be generated, which could be worth millions of pounds. The stake could be increased to 29.9% if Mporium is successful in winning leads for Allay.

Mastercard has launched a rival bid for Earthport (EPO) and Visa is considering its position. The new bid is 33p a share and this values the company at £233m. That is a 10% premium to the Visa bid.

Aquaculture business Benchmark (BMK) has expanded its production capacity and is launching new products. Revenues were 8% higher at £151.5m and it would have been higher at constant exchange rates. It made an underlying pre-tax profit of £5.6m last year, up from £4.7m, and that could nearly double this year. Net debt was £55.7m.

Sureserve (SUR) has been restructured and non-core businesses sold. This enables it to concentrate on compliance and energy support services. Full year revenues from the continuing operations were 5% higher at £191m and underlying pre-tax profit improved from £5.4m to £6.6m. This was better than expected and net debt was £11.4m. The dividend has been halved to 0.25p a share.

K3 Capital (K3C) was expected to report lower figures in the first half due to the timing of larger corporate finance deals and the mergers and acquisitions achieved interim revenues 4% lower at £7.2m and an even larger decline in profit. The second half should be better and revenues could be slightly higher than last year at £16.6m, but full year pre-tax profit is forecast to fall from £7.3m to £7m.

Wynnstay Group (WYN) reported record full year results. The higher milk price has led to increased demand for dairy feed. Revenues grew from £390.7m to £462.7m and pre-tax profit moved from £7.9m to £9.5m. The agriculture and retail divisions both improved their profit and the latter added additional sites in the second half that were not profitable in the period. There was the normal second half cash inflow but it was not as great as in the past, so net debt was nearly £1m. The dividend has been raised 6% to 13.4p a share.

InfraStrata (INFA) has raised £1.5m at 1.2p a share. This will boost its balance sheet while it negotiates with investors in the Islandmagee gas storage project. One equity investor has appointed advisers to do due diligence work. The project will continue to progress as these negotiations continue and the cash will make sure that progress is made while the final funding package is secured.

Lighthouse Group (LGT) has secured a deal to transfer the members and assets of its pension trust to Smart Pensions Ltd. The IFA will protect itself from the rising cost of the administration and capital requirements of pension trusts.

Audioboom (BOOM) grew last year’s revenues by 92% to $11.7m, although this was a 13 month period, and it says that there was no cash outflow from operations in the final three months. That meant that there was $1.6m in the bank at the end of 2018.

Robinson (RBN) traded in line with expectations last year. The packaging manufacturer expects revenues of £32.8m, which is a 10% improvement. The fastest growth was in Poland. Even so, pre-tax profit will be lower, but it should bounce back in 2019.

A large localisation project has been cancelled and this will hamper the progress of Zoo Digital (ZOO) in the second half of its financial year. The legacy DVD business is also declining faster than anticipated. This means that ZOO will not be profitable in the year to March 2019.

Velocity Composites (VEL) increased its full year revenues by 15% to £24.5m, and there was a small loss, but business wins are slower than previously hoped. Revenues could be flat this year.

Another upgrade for audio visual products distributor Midwich Group (MIDW) following its latest trading statement. Pre-tax profit is expected to rise from £24.3m to £29.1m and then a further increase to £31.7m in 2019.

MAIN MARKET 

Robin Boyle has failed to get back on the board of Athelney Trust (ATY) but he was successful in removing the existing directors. David Lawman and Paul Coffin were appointed although the latter resigned at the end of the week and he was replaced by Frank Ashton. The proposed tender offer and placing was also passed.

Dev Clever Holdings (DEV) is the latest company to float on the standard list. A share issue has raised £898,000 at 1p a share, including £220,000 due to the conversion of debt. The software development company was valued at £3.73m. The share price ended the week a 7.75p.

Nanoco (NANO) has signed a contract extension with a US company and this lasts until the end of 2019. This underpins the current year forecast.

Ross Group (RGP) has issued the final 21.3 million shares for the acquisition of Archipelago Aquaculture, which plans to start producing Chitin to help to produce quality shrimp. The deal was announced last September, and 17.9 million shares were issued at 1p a share. Global Blue Technologies Inc owns 19.9% of Ross.

Interim figures from Haynes Publishing (HYNS) show a 23% increase in underlying pre-tax profit to £1.6m on a 7% rise in revenues to £18.3m. Digital revenues were 23% higher at £9.7m. The growth in revenues and profit was in the UK and Europe. The interim dividend is unchanged at 3.5p a share. Net cash was £2.6m.

Andrew Hore

Andrew Hore: Quoted Micro 29 October 2018

NEX EXCHANGE

Auxico Resources Canada Inc (AUAG) has added a NEX quotation to its year-old Canadian Stock Exchange listing. Auxico has mineral properties in Colombia and Mexico. There is already a UK investor base.

Chapel Down Group (CDGP) had a bumper 2018 harvest that was 125% ahead of the previous best, thanks to the hot summer. Some vineyards produced their first crops.

Ace Liberty and Stone (ALSP) is paying this year’s dividend in three instalments: October, April and July. The first interim will be 0.83p a share and the ex-dividend date is 25 October. The sale of Hume House in Leeds has been completed for £3.9m, compared to a cost of £1.67m in March 2014. A 37-storey building will be constructed on the site.

Eight Capital Partners (MORE) is investing £250,000 in AIM-quoted Imaginatik (IMTK) with £160,000 subscription for shares at 1.1p a share for a 29.7% stake, and £90,000 in convertible loan notes with an annual interest rate of 7.5%. Eight Capital is issuing up to £2.5m of convertible bonds at 95% of their nominal value. The annual coupon is 5%. One warrant will be granted for every two shares issued.

Trading in the shares of Etaireia Investments (ETIP) has been suspended ahead of a potential acquisition of property assets from the Oyston family.

Gunsynd (GUN) will get a 4% stake in Human Brands when, or if, it floats on the standard list. Previously it would have been a 1% stake. Gunsynd has £289,000 invested in drinks distributor Human Brands loan notes.

Founder Sebastian Snow has resigned as creative director of pubs and inns operator Barkby Group (BARK) and Lana Snow has also left the group. Occupancy rates were good in September and there is significant demand for the Christmas period.

Ganapati (GANP) reported a reduction in interim loss from £4.54m to £3.56m, although total income was flat at £2.19m. There was cash in the bank of £2m at the end of July 2018. This could be added to by an initial coin offering by Malta-based blockchain subsidiary GanaEightCoin Ltd next spring.

NQ Minerals (NQMI) has raised £81,250 at 15p a share to provide further working capital.

The chairman and chief executive of DXS International (DXSP) have both bought shares in the healthcare technology company. Bob Sutcliffe bought 100,000 shares at 8.515p each, while David Immelman bought 20,538 shares at 8.66p each, which takes the chief executive’s stake to 10.3%.

Sativa Investments (SATI) has signed an option on a 298,806 square foot glasshouse for growing medicinal cannabis. Mark Blower is becoming a non-executive director.

Melissa Sturgess has acquired 590,000 shares in Ananda Developments (ANA) at 0.4496p each. The executive director of the cannabis-focused investment company owns 47.8 million shares. Ananda joined NEX on 4 July having raised £930,000 at 0.45p a share. The share price ended the first day at 0.975p and it has more than halved since then.

AIM

Chris Marsh has resigned as finance director of Patisserie Holdings (CAKE) having been suspended on 9 October. Previously undisclosed LTIP share awards have been revealed.

GB Group (GBG) has acquired Australia-based ID verification services provider Vix Verify Global for £21m. This has led to a 2.7% upgrade in the 2019-20 forecast earnings per share. Third quarter trading of the existing business was in line with expectations with organic growth in revenues of 11%.

Avingtrans (AVG) is acquiring Texas-based Tecmag Inc for $243,000. Tecmag manufactures instrumentation for magnetic resonance imaging and nuclear magnetic resonance systems. This fits well with Avingtrans’ magnets business in the sector.

Energy supplier Yu Group (YU.) has shocked investors with accounting changes relating to accrued income and increases in impairment charges for trade debtors. This will slash £10m for this year’s profit turning it into a loss. There is £11.5m in the bank at the end of September 2018.

1Spatial (SPA) reduced its loss n the first half and is on course to cut its full year loss from £1.5m to £1m. The geospatial data services provider should move into profit next year.

HaloSource Corporation (HALO) says it has sufficient working capital until the end of the year, but up to $5m is required to add a further 12 months. The company expects to generate revenues of $2m-$2.5m in 2018 and the target is to treble that figure in 2019, which would reduce the loss.

EKF Diagnostics (EKF) says the record date for the distribution of shares in Renalytix AI is 23 October and the shares will start trading on 2 November.

Nexus Infrastructure (NEXS) expects 2017-18 profit to be in line with expectations and order books are strong. Infrastructure services provider Tamdown’s revenues will be slightly lower due to planning delays with the growth coming from utility connections business TriConnex. Net cash is £20m.

RA International (RAI) has won a $9.1m contract with URS Group Inc. This is a new client. The contract covers construction services for an asphalt runway in Somalia and lasts for 11 months.

Data analysis software and services provider D4T4 Solutions (D4T4) trebled its interim revenues to £14m, although the comparatives were weak. Net cash is £12.2m.

Gfinity (GFIN) is raising £6m at 8p a share and this cash will further develop the esports activities and the UK Elite series. The 2017-18 revenues were 82% ahead at £4.3m and losses continue.

Angling Direct (ANG) is taking advantage of its strong position in the fishing tackle retail market by raising £20m at 92.5p a share, which compares to the July 2017 flotation price of 64p a share. The cash will finance the opening of 20 stores and the launch of European websites. This accelerated investment means that Angling Direct will fall into loss this year.

Velocity Composites (VEL) has managed to trade in line with downgraded forecasts for the year to October 2018. Revenues will be slightly above £24m and there is net cash of £3.6m. The company is seeking a new chief executive and the former incumbent has left the board.

The cancellation of a contract and the failure to gain backing for an acquisition have hampered the progress of Image Scan Holdings (IGE) in the year to September 2018. Revenues fell from £5m to £3.5m, although the gross margin improved from 39% to 48%. Pre-exceptional profit will slump from £480,000 to £45,000. That was before the £245,000 cost of the failed acquisition. There was £780,000 in the bank at the end of September 2018. Sarah Atwell-King has been appointed finance director.

VR Education (VRE) has been hit by the delayed launch of its Titanic VR product on PlayStation. This should still happen this year, but 2018 revenues will be well below expectations. The timing of the launch will determine the outcome for the year. The ENGAGE platform will be launched before the end of the year as anticipated. Non-executive director Mike Boyce is helping out with sales.

SkinBioTherapeutics (SBTX) increased its research and development spending from £157,000 to £416,000 in the year to June 2018. The cosmetic application has started a human study and data should be available between November and April 2019. A clinical trial for an eczema treatment could start before the end of 2019. There was £3.2m in cash at the end of June 2018.

Rare books trader Scholium (SCHO) says it will move into loss in the first half, but it expects to make a higher full year profit than the £38,000 reported last year. Start-up Mayfair Philatelics is losing money but three auctions are taking place in the second half.

AfriTin Mining Ltd (ATM) is making progress towards production at its Uis tin project in Namibia. The first phase plant being constructed will be able to process 500,000 tonnes of pegmatite in order to produce 720 tonnes of tin concentrate a year. AfriTin has the cash required to reach production.

A strong performance from manned guarding meant that Croma Security Solutions (CSSG) increased its full year revenues by 59% to £35.1m and pre-tax profit was 400% higher at £2m. There were some one-off boosts during the year. Net cash was £2.1m. The dividend has been increased from 0.5p a share to 1.6p a share.

Property investment adviser First Property Group (FPO) has reduced its stake in Fprop Opportunities to 44.3% so it will no longer be consolidated in the group’s results. The plan is to lower the stake to below 30%. Fund management will be a greater contributor to profit.

More cash is required at meat and delicatessen products retailer Crawshaw (CRAW) for restructuring purposes and it also still needs a new nominated adviser.

Kemin Resources (KEM) will leave AIM on 29 October because it has not been able to find a replacement for Strand Hanson as nominated adviser. JP Jenkins Ltd will provide a trading facility.

OnTheMarket (OTMP) has signed up Belvoir Lettings (BLV) to its online platform. All Belvoir’s sales and lettings properties will be on the platform.

StatPro Group (SOG) says annualised recurring income has increased by 3% to £54.8m.

MAIN MARKET

Communisis (CMS) is recommending a 71p a share cash offer by consumer communications services provider OSG, which values the target at £153.8m. The combined business would be able to develop internationally because of OSG’s global strength.

WideCells Group (WDC) has signed a partnership deal with stem cell extraction and storage company Smart Cells. The deal is with the healthcare insurance subsidiary CellPlan, whose insurance plans will be offered to Smart Cells’ 60,000 clients.  

Hemogenyx Pharma (HEMO) has signed a second agreement with US biopharma company Orgenesis Inc. The deal involves the development and commercialisation of the company’s Human Postnatal Hemogenic Endothelial Cell (Hu-PHEC) technology, which could develop cancer-free, patient-matched blood stem cells after transplantation into a patient. Like the previous agreement, 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 pay a 12% royalty on net revenues generated by the technology.

North Midland Construction (NMD) says that full year revenues will be better than anticipated at between £340m and £345m, with net margins between 1.7% to 1.8%. The order book for delivery in 2019 is £222m. A new single identity for the group will be launched in November. HR director Karen Morris has bought 8,172 shares at 550p each.

 

 

Andrew Hore – Quoted Micro 29 January 2018

NEX EXCHANGE   

Hydro Hotel, Eastbourne (HYDP) generated a 10% increase in turnover to £3.52m, but there was a decline in pre-tax profit from £224,000 to £156,000 in the year to October 2017. This is blamed on the increase in the minimum wage and the fact that more bookings are coming from online travel agents. The total dividend was unchanged at 21p a share. There is £1m in the bank. The public rooms’ refurbishment is complete and the hotel has gained 4* status. Exterior repair work and bedroom refurbishments continue.

Coinsilium Group Ltd (COIN) has launched a private fund for digital tokens. The Gibraltar-based fund will hold tokens issued to Coinsilium. The value of the digital tokens received in 2017 is $822,000. If digital tokens that will be received over the coming two years are included the total value is $5.34m. The advisory business has advised on four token issues and there are four more to be completed.

Capital for Colleagues (CFCP) says that its investee company Cotswold Valves has acquired Flow Capital Company Ltd. Capital for Colleagues has made a working capital loan of £300,000, on top of an existing £50,000 loan. Capital for Colleagues also owns 49% of Cotswold Valves.

Ganapati (GANP) says that its slot game Pikotaro’s Pineapple Pen has been selected as one of the ten finalists at the Global Gaming Awards. The result will be announced on 5 February.

Globe Capital (GCAP) has raised £100,000 from a 6% convertible loan note. The conversion price is 0.5p a share.

AIM   

MayAir Group (MAYA) is recommending a 120p a share cash bid from Poly Glorious, which is ultimately owned by Jiang Li. That is below the 130p a share floatation price less than three years ago. The air purification equipment manufacturer is valued at £50.4m. The current chief executive and other management are taking shares in the acquisition vehicle, which is already involved in air conditioning industry in China. MayAir has been hit by increased competition.

Learning Technologies Group (LTG) reports that 2017 profit and cash was much better than forecast. Pre-tax profit is set to more than double to £13m and net cash was £1m. The e-learning business appears to have made good progress integrating NetDimensions and it is assessing other international acquisitions.

The decline in underlying profit at compliance and energy services provider Lakehouse (LAKE) was slightly lower than expected. There was still a fall from £7.5m to £5.5m and a cut in dividend from 1.5p a share to 0.5p a share. Net debt was £1.3m but there might be additional working capital requirements this year. Profit is on course to recover this year but dividend expectations have been downgraded. Property services and construction remain the weaker parts of the business but the core operations are growing.

MYCELX Technologies (MYX) says that orders from Saudi Arabian chemicals company SABIC boosted 2017 revenues. These revenues were generated late in the year. This has increased estimates by 20% to 30%. This means MYCELX will be cash flow positive. This year’s revenues should at least be maintained at 2017 levels.

Castleton Technology (CTP) has won two contracts, one of which is a renewal with Places for People, worth £1.2m and both incorporate a range of the modules provided by the housing association-focused business.

Composite materials supplier Velocity Composites (VEL) sparked a 2017-18 earnings per share downgrade from 8.5p to 5.5p following its 2016-17 figures. This is due to cost increases with the concomitant revenues not set to show through for another year at least.

Ideagen (IDEA) grew revenues by 43% to £17.2m in the six months to September 2017. The document control and compliance software supplier is on course to increase full year profit from £6.9m to £9.7m.  Recurring revenues generated 63% of total interim revenues.

MAIN MARKET

Blockchain Worldwide (BLOC), the renamed Stapleton Capital, has changed its investing strategy to cover the blockchain technology industry. Management claims to have already seen a number of exciting blockchain opportunities.

Standard list cash shell Derriston Capital (DERR) still had £2.17m in cash at the end of 2017. Derriston has been seeking an acquisition for more than one year but it has not yet identified a suitable target.

Avocet Mining (AVM) has delayed completion of the sale of Resolute (West Africa) for a further five days to 30 January.

Andrew Hore

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