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Andrew Hore – Quoted Micro 22 January 2018

NEX EXCHANGE

Capital for Colleagues (CFCP) reported a decline in full year revenues from £560,000 to £372,000 and there was no repeat of the realised gains on investments in the previous year. There was an increase in unrealised gains from £71,000 to £317,000. However, there was a £1.32m investment impairment. This meant that a profit of £158,000 was turned into a loss of £1.17m. There is £1.28m in the bank. The employee-owned businesses investor is focusing on managing its portfolio and the advisory business spun off into a joint venture. The NAV is 42.7p a share.

First Sentinel (FSEN) has invested the £1.4m it raised when it joined NEX last year. These investments include fellow NEX-quoted company NQ Minerals, where First Sentinel boss Brian Stockbridge is chairman, AIM-quoted UK Oil and Gas Investments and AIM-quoted Premier African Minerals. There is a £65,000 loan to unquoted tea cafés operator Yumchaa, where Stockbridge is 50% shareholder. The loan has an interest rate of 12% and lasts until October.

Block Energy (BLOK) has further delayed the planned move to AIM. The oil and gas company has a new expected admission date of end-February. Trading remains suspended on NEX.

AIM

Mark Watkin Jones intends to step down as chief executive of student and private rental accommodation developer Watkin Jones (WJG) but he will stay until a successor is identified. In the year to September 2017, revenues were 13% higher at £301.9m and underlying operating profit rose by a similar percentage to £42.7m. The dividend was 6.6p a share, equivalent to a 10% increase if Watkin Jones had been quoted for all the previous year. Investor demand for student accommodation and private rental residential property remains strong.

Van Elle (VNL) has an outstanding debt of £1.6m from failed facilities management and construction company Carillion. finnCap has also assumed lower second half profit of £1.3m relating to expected business from Carillion. The specialist piling contractor has a poor record since floating and this does not help.

Engineering and IT recruitment company Gattaca (GATC) says that most of Carillion’s debt to the company is insured with around £100,000 uninsured. Premier Technical Services (PTSG) says that it has £800,000 of annual revenues with Carillion with £300,000 still owed. Elsewhere, business is in line with expectations. Bilby (BILB) says that it does not think that the contract with CarillionAmey will be impacted.

Sinclair Pharma (SPH) directors have been buying shares on the back of the news that it has received regulatory approval of Ellanse pre-mixed bioresorbable collagen stimulating fillers in Brazil, one of the most important global markets. Ellanse will be soft launched immediately and the full launch is a matter of weeks away. Other Sinclair dermatological products are selling well in Brazil.

K3 Capital (K3C) reported interim figures that were better than forecast. This led to a £1m increase in forecast full year revenues but the pre-tax profit forecast is maintained at £5.4m because of additional costs required to accelerate the growth of the business. The business broker and corporate finance adviser announced an interim dividend of 2.85p a share and a total dividend of 8.2p a share is forecast for the full year.

Full year trading at Midwich (MIDW) was better than expected with revenues 28% ahead at £470m, helped by acquisitions performing ahead of expectations. The audio visual equipment distributor has also improved gross margin. The 2017 results will be published on 13 March.

Utilitywise (UTW) has changed its accounting policy relating to initial revenue recognition of new contracts.

LiDCO (LID) has signed up a new Japanese distributor. Merit Medical has a three year exclusive agreement and there is potential to significantly increase last year’s sales of £117,000. The LiDCOunity version 2 monitor has been approved in Japan.

African Battery Metals (ABM) is the new name for Sula Iron and Gold. Prior to the name change, £1.75m was raised and the Riverfort facility terminated with an associated buy back of shares. ABM is paying $100,000 ($50,000 is still outstanding) for a 70% stake in cobalt licences in the Democratic Republic of Congo. The other shareholder will retain its 30% stake up until a decision is made to mine, so ABM will pay the exploration costs.

Orosur Mining Inc (OMI) produced 7,052 ounces of gold at an average cash operating cost of $867/ounce in the second quarter and plans to produce at least 30,000 ounces in the financial year. Although the South America-focused gold producer and explorer generated $2.16m in cash in the second quarter, there was a $251,000 loss in the period because the all in sustaining cost was higher than the gold price received. Asset Chile has forfeited the 16% stake it earned in Anillo because it did not move into phase 2 of the project.

Shareholders have approved share buybacks by China New Energy Ltd (CNEL) until the end of 2019. Up to one-fifth of the shares can be acquired for less than 2p a share. The bioenergy technology developer and operator increased revenues from £8.85m to £24.7m in 2017 and the order book is worth £13.7m. The company was profitable last year and anticipates it will be in 2018.

Data software company WANdisco (WAND) says bookings increased 45% to $22.5m in 2017 with two-thirds generated by WANdisco Fusion software. There was cash of $27.4m at the end of 2017, with $4m from a new growth capital facility.

Thor Mining (THR) has had its stake in US Lithium diluted to 20.8% due to a A$240,000 fundraising at A$0.12 a share, which is four times the Thor acquisition price. US Lithium plans an ASX-listing.

Veltyco Group (VLTY) is acquiring a 51% stake in Varkasso, which has exclusive rights to use the crypto wallet technology platform 8Crypt, for £265,000 in cash and shares. Veltyco will incorporate the 8Crypt crypto wallet in all the gaming platforms it is involved with.

Newmont Mining has decided not to become involved in the Greatland Gold (GGP)-owned Ernest Giles gold project in Australia. It appears that the project was not in the right place or large enough for Newmont to go ahead with, although it took its time to make a final decision. Greatland benefits from the work conducted by Newmont, which has identified a large gold anomaly. Targeted exploration will be undertaken at Ernest Giles in the first quarter of 2018.

Kodal Minerals (KOD) says that the authorities have approved its exploration licences for the Bougouni lithium project in southern Mali. Triumvirat Mining Company will have a 10% economic interest in the licences, which are for an initial three year life. There has been positive drilling news concerning the Ngoualana and Sogola-Baoule prospects.

Electrical accessories supplier Volex (VLX) moved from the Main Market to AIM on 19 January.

Waste gasification technology business EQTEC (EQT) has partially repaid a five-year, £1.1m loan facility with an annual interest rate of 15%. The remaining balance of £621,000 is repayable in July 2020. The £2m of convertible secured loan note with Altair Group Investment Ltd has been extended until July 2020 and the interest rate doubled to 15%.

Renewable fuels technology developer Velocys (VLS) has raised £14m via a placing at 10p a share and hopes to raise up to £4.4m through an open offer at the same price. Last year, there was a £1.16m share issue at 45p a share. The cash will be used to finance initial development of the Mississippi biorefinery and fund the UK waste-to-renewable jet fuel project which has been around for many years.

Generic drugs supplier Beximco Pharmaceuticals (BXP) expects to complete the £18.2m acquisition of a 85.2% stake in Nuvista Pharma by the end of February.

Gama Aviation (GMAA) says last year’s trading was in line with expectations. The business aviation services provider has incurred $1m of costs relating to legal proceedings and there will be a similar amount to come. There will be around $2.5m of restructuring costs and write-downs. Net debt fell from $19m to $13m.

Although Blancco Technology Group (BLTG) says that first half sales declined this is due to the fact that certain contracts were not repeated in the latest period. The data erasure software business is expected to report continuing full year revenues 6% higher at £28.5m. However, higher overheads mean that there will be little profit.

Cyber security software supplier Crossrider (CROS) says that 2017 trading was in line with expectations and revenues improved 16% to $65.8m, while underlying EBITDA was 29% ahead at $8.3m. Profitability from the core activities more than doubled. There was $69.4m in the bank at the end of 2017.

Legend Gold Corp shareholders have agreed to the arrangement for Altus Strategies (ALS) to acquire the entity that owns the Legend gold projects in Mali in return for 41.1 million Altus shares. The mining projects investor is also applying for a dual listing on the TSX-V. Legend shareholders will be issued three Altus shares for each Legend share that they own, giving them 27.6% of Altus.

Toys supplier Character Group (CCT) says it has exited Christmas with “virtually no excess stocks”. International sales were poor but domestic sales grew. Pokemon products will be launched during the summer.

Caledonia Mining Corporation (CMCL) reported higher than guided annual production at the Blanket gold mine. The prediction was 54,000-56,000 ounces but the outcome was 56,135 ounces.

Sustainable pallets manufacturer RM2 International SA (RM2) had unrestricted cash of $4.1m at the end of 2017, but that could fall to $2m by the end of January. That means that there should be enough cash until the third week in February. Management continues to seek additional finance. There are plenty of potential customers but little in the way of orders.

Tiziana Life Sciences (TILS) has raised a further £150,000 at 150p. This is on top of the £150,000, £275,000 and £200,000 raised at the same price during November and December. There is a warrant with each new share and they are exercisable at 160p a share, although the most recent warrants last until January 2024. The cash is being invested in the phase IIa clinical trial for the Milciclib cancer treatment.
Remote tracking and monitoring products developer Starcom (STAR) says that last year’s turnover improved from $5.1m to $5.5m and lower operating costs mean that it will move from loss to breakeven. Strong orders mean that revenues and margins should improve this year.
Condor Gold (CNR) has obtained a TSX listing.

MAIN MARKET

Path Investments (PATH) is cancelling its standard listing even before finalising its acquisition of a 50% participating interest in the Alfeld-Elze licence and gas field in Germany. The plan is to cancel the standard listing on 19 February and raise money and apply for an AIM quotation in the first quarter of 2018. Path has previously been on AIM in a different guise but if the deal does not go ahead the plan would be to maintain the standard listing.

World Trade Systems (WTS) plans a transaction involving the sale of its assets to a new company that will float on the Channel Islands-based The International Stock Exchange. WTS shareholders will be distributed shares in the new company that will be used to acquire the assets.
Loss-making telecoms firm Toople (TOOP) did not publish a full set of figures on RNS. That is always a giveaway. It did announce that the operating loss declined by 23% to £1.31m in the year to September 2017. Cash flow is much more important for a colander company like Toople.

Technology investment company Sure Ventures (SURE) has joined the Specialist Fund Segment of the Main Market, having raised £3.31m at 100p a share. The main focus is augmented reality, fintech and the Internet of Things.

Challenger Acquisitions Ltd (CHAL) has invested $300,000 in a new giant observation wheel for Dallas, Texas. Challenger also has the opportunity to operate the wheel.

Andrew Hore

Andrew Hore – Quoted Micro 4 December 2017

NEX EXCHANGE

VI Mining is planning to join NEX this month. The Peru-focused miner is acquiring two gold mining assets in tandem with the flotation. VI will raise up to £10m in cash at 500p a share and issue a further £10m worth of shares as part of the initial payment, along with some of the cash, for the two mining assets at Rosario and Minaspampa. VI has debt facilities in place. There is a capital expenditure and working capital commitment of £30m for Minaspampa and the mine could be in operation by next August. Rosario requires £15m of capital spending and working capital and already has licences and infrastructure. Annual gold production of 83,720 ounces from the two mines could yield a $43.5m annual profit based on a $1,300/ounce gold price. That is expected to be the initial production and it could end up quadruple that level. Two tolling projects could also generate cash for the group and the first could be up and running in a few months time. VI would be valued at £535m at the flotation price. This is backed up by a Daniel Stewart estimated valuation of £557.8m. The board will retain 73% of the company. The plan is to move to the Main Market in 12 months or so. The free float will need to be increased in order for it to be at least 25% when the move is made.

NQ Minerals (NQMI) has published the competent person report on the Hellyer gold project in Tasmania. This indicates that the project has a NPV of $113.2m. The processing facilities are being refurbished and operations are expected to commence in 2018 following the approval of the environmental management plan.

Coinsilium Group Ltd (COIN) has acquired a 30% stake in Startup Token, which provides advice to start-ups undertaking token offerings. Coinsilium is paying £361,000 in cash and shares at 8.5p each. Coinsilium is also providing a six month loan of $100,000 that can be converted into a further 6.4% of Gibraltar-registered Startup Token.

IMC Exploration (IMCP) has started drilling on PL 3729 in County Clare, which adjoins the Kilbricken zinc deposit. A feasibility study has commenced on PL 3850 in County Wicklow. IMC’s partner Koza has completed an exploration targeting report on other licences and prioritised further exploration.

Ganapati (GANP) has agreed to supply online games to Bethard Group. Ganapati will initially supply eight games and then one each month.

Hearing and mobility products retailer DHAIS (DHAP) has delayed its figures for the year to June 2017 because it wants to ensure it has support from its main funder.

Welney (WENP) had a cash outflow of £19,000 in the year to June 2917 and most of that was covered by loans from related parties and a further £11,000 has been loaned since the year end. These loans will not be called in for at least 12 months. Net liabilities are £197,000. The board is assessing potential deals.

African Potash (AFPO) has entered into a joint venture with SG Inc to develop fertiliser opportunities in the Republic of Congo. A blockchain joint venture has also been announced with FinComEco Ltd and this will develop platforms for agricultural markets in Africa. There is a plan to offer microloans to farmers. The company intends to change its name to Block Commodities Ltd.

Forbes Ventures (FOR)

AIM

Pebble Beach Systems (PEB) continues to underperform and it is not likely to get the $1.75m it is still owed by xG Technology for the sale of Vislink. The broadcast software supplier requires its banks support and needs to appoint a new management team. Talks with potential bidders did not yield an offer. This year’s revenues will be slightly lower than last year

Versarien (VRS) has a strong balance sheet after the recent fundraising and it is generating interest for its Nanene graphene product. The carbide business has won a significant aerospace order. The 167% growth in revenues to £4.38m in the first half was mainly down to the acquisition of a plastics business. A US sales office has been established.

Mortice (MORT) reported strong revenue growth but cost pressures on a particular contract held back profit. The security and facilities management business reported a 17% rise in first half revenues to $106.3m. The contract is being sorted out and house broker finnCap still expects full year profit to improve from $5.4m to $7m.

Anti-microbial drugs developer Destiny Pharma (DEST) has secured a deal with former AIM company China Medical Systems Holdings Ltd (CMS), which is now listed in Hong Kong, for a £3m cash injection into the company and a strategic partnership that gives CMS rights to Destiny’s drug candidates pipeline in China and some other Asian countries. CMS will carry out research and development and the commercialisation of any drugs in its territories. Destiny will make a margin on manufacturing products and receive payments based on sales milestones.

Tri-Star Resources (TSTR) is investing a further $6m in its Oman joint venture. This is in the form of a mezzanine loan to the company where Tri-Star has a 40% stake. The interest rate is 15% and payable on redemption – the loan term is five years. The cash will help to finance the development of the antinomy roaster in Oman. The capital budget was recently increased to $96m.

Recruitment has started for a pharmacokinetic study into the Futura Medical (FUM) erectile dysfunction treatment, MED2002. This will help to determine dosages for a phase III study. The UK and Netherlands regulatory agencies have been supportive concerning a possible switch from prescription to over the counter.

Veltyco (VLTY) has yet again announced that its figures will be better than forecast. The online gaming marketing business says that profit is likely to be much higher than expected.

ECSC Group (ECSC) is the perfect example of how a share price can get carried away on the back of general news. The share price is one-quarter its peak after publicity about cyber security and hacking. Trading is in line with previously reduced expectations following cost cutting and the securing of two managed services contracts.

Belluscura has pulled its flotation after failing to gain the EIS/VCT approvals in time and because it could not get the valuation it wanted.

The founder of Focusrite (TUNE) and a relation have sold eight million shares at 315p a share. They still retain a 38.3% stake in the audio equipment supplier.

Active Energy Group (AEG) expects its Utah-based Coal Switch plant to be completed this month. The production capacity is five tonnes of the coal replacement fuel per hour. Once the plant is up and running and proves the viability of the process there should be other plants built in 2018. The plant is modular so it is easy to increase capacity.

Trading in the shares of Graphene NanoChem (GRPH) has been suspended ahead of the proposed acquisition of CG TekBuild, which is involved in modular buildings. The deal is dependent on £18.2m of debt being converted into shares. The proceeds of the sale of non-core activities will be used to pay other creditors. The company believes the acquisition will help it to apply it graphene technology in building materials.

ITM Power (ITM) has £20.2m of projects under contract and a further £22.4m in negotiation. The figure under contract is similar to two months ago but the under negotiations figure is one-third higher.

Defence and petrol stations structures supplier MS International (MSI) reported sharply increased interim profit from £610,000 to £1.64m as revenues increased by two-fifths to £34.6m. Net cash is £14.5m. Most of the growth came from the petrol station branding business and this more than offset the decline in profit from defence. The interim dividend was increased from 1.5p a share to 1.75p a share.

Precision optical components supplier Gooch and Housego (GHH) reported slightly better than expected full year figures. Revenues were 30% ahead at £112m and underlying pre-tax profit improved from £14.2m to £16.1m. Acquisitions helped to fuel significant growth in aerospace and defence. There was also increased demand from the subsea telecoms market and other industrial applications. The life sciences division still needs bulking up.

Timber supplier James Latham (LTHM) reported a 7% increase in interim revenues to £107.3m but a decline in margins meant that pre-tax profit was 12% lower at £6.7m. The interim dividend was unchanged at 4.5p a share and net cash declined to £11.6m due to capital spending. The pension deficit has fallen from £16.6m to £8.5m. A slight fall in full year profit to £13.4m is expected.

MAIN MARKET

Ingredients supplier Treatt (TET) is raising £21.6m at 410p a share to speed up its growth in the US and finance the relocation of facilities in the UK. The new facility will help to improve efficiency. In the year to September 2017, revenues were one-quarter higher at £109.6m and pre-tax profit improved by 46% to £12.9m.

Torotrak (TRK) has been unable to secure the finance it requires. The vehicle technology developer is considering selling its technology and IP or it may have to appoint an administrator.

Andrew Hore

Quoted Micro 17 July 2017

NEX EXCHANGE

Renewable electricity supplier Good Energy (GOOD) says rival Ecotricity, which owns 25.3% of Good Energy, has requisitioned a general meeting to get two directors, Dale Vince and Simon Crowfoot, on the board. Ecotricity founder Dale Vince believes that because of the significant stake he deserves representation on the board but Good Energy argues that it would not be in its interest to have a rival on the board with access to group information. Vince has been critical of contracts between Good Energy and chief executive Juliet Davenport’s husband. Ecotricity also owns Forest Green Rovers which was promoted to League Two at the end of last season. Annual revenues £126.5m, including £1m from football club. In the year to April 2016, revenues were £126.5m, including £1m from the football club. In 2016, Good Energy generated revenues of £90.4m. Both companies are profitable. Ecotricity had net debt of £97m at the end of April 2016, while Good Energy had net debt of £55m at the end of 2016. Gary Peagram (former Good Energy finance director between 2010 and 2014) was appointed as Ecotricity finance director on 6 April 2017 but he left on 6 July.

MetalNRG (MNRG) has acquired 18.18% of US Cobalt and an option to purchase the rest. The main interest is the Columbia Pass high grade cobalt exploration and development project in Nevada. The initial stake will cost $200,000 (£118,000) and the option cost $50,000 (£30,000) in shares at 1.5p each. If it takes up the option, MetalNRG will pay £724,000 in shares at 1.5p a share. The vendors will also receive 40 million warrants exercisable at prices up to 10p a share. MetalNRG has also set up an Australian cobalt subsidiary. MetalNRG chief executive Paul Johnson has bought 300,000 shares at 1.5p each, taking his family’s stake to 11%.

Hydro Hotel, Eastbourne (HYDP) is starting to benefit from its new general manager’s strategic programme. Interim revenues grew from £1.33m to £1.52m but the loss increased because of repair costs. The second half generates all the profit.

Milamber Ventures (MLVP) has launched the Milamber Education Technology Fund in partnership with Innvotec. This is a hybrid EIS and SEIS fund. Milamber will help to identify potential education technology investments and Innvotec will raise funds and manage the fund.

Global Halal verification e-marketplace operator DagangHalal (DGHL) says it is taking longer than expected to penetrate markets. Management is considering widening the scope of the business. This could mean the acquisition of producers of Halal products.

Bulgaria-focused property company Black Sea Property (BSP) has gained the official approvals to acquire the UniCredit building and the purchase should be completed by the end of September. A deposit of €1.04m has been paid out of the total purchase price of €10.5m and Black Sea Property is raising the rest of the cash. If the cash is not raised then the deposit will be forfeited. Phoenix Capital Management is taking over from AG Asset Management as investment adviser but the same team will be handling the task. Phoenix owns Mamferay Holdings, which owns 28.65% of Black Sea Property and has lent it £100,000 in the form of a convertible which has to be repaid by 31 July.

AIM

Nostra Terra Oil & Gas (NTOG) has withdrawn its general meeting requisition at Magnolia Petroleum (MAGP) after it became clear that it had no chance of winning any of the votes.

Chisbridge Ltd has received acceptances totalling 49.6% for its 42p a share cash offer for InterQuest Group (ITQ) and the bid has been extended until 31 July. This means that independent shareholders owning 6.92% of the company have accepted the bid, which is up from just short of 3% previously.

First half trading at Pennant International (PEN) was strong and the order book was more than £42m at the end of June 2017. The order book stretches out into 2020 and there is a pipeline of other potential orders. Full year pre-tax profit is forecast to increase from £2.2m to £2.4m. There is a possibility of a return to paying dividends but that might have to wait until next year.

In the year to March 2017, AdEPT Telecom (ADT) reported a 19% increase in revenues to £34.4m, while underlying pre-tax profit improved from £5.5m to £6.9m. Net debt was £15.5m at the end of March 2017, following spending on acquisitions. The total dividend also rose by 19% to 7.75p a share. The growth in managed services is helping margins to improve. A profit of £7.4m is forecast for this year.

Premier Technical Services Group (PTSG) has increased its revolving credit facility from £10m to £12m and doubled the overdraft facility to £8m. This will provide additional working capital and funds for acquisitions following the recent purchase of Brooke Edge Industrial Chimneys Ltd for £14m.

Savannah Resources (SAV) has raised £1.3m at 5.25p a share and there is one warrant for every two shares issued exercisable at 6p. Two directors have subscribed for £500,000 worth of shares, including chief executive David Archer, and Al Marjan Ltd has subscribed £520,000 to take its stake to 29.3%. The money will be used on the lithium project in Portugal, the Mutamba heavy mineral sands project in Mozambique and the copper project in Oman.

The sale by Stanley Gibbons (SGI) of part of its interiors division to Millicent has been delayed. The buyer has not obtained the £2.25m initial payment because of a change in financial backers. Millicent has until the end of July to complete the acquisition.

Arian Silver Corp (AGQ) has raised £600,000 a 0.5p a unit, which is one share and one warrant exercisable at 0.6p. The cash will be spent on exploration of the three lithium projects where Arian has an option.

Botswana Diamonds (BOD) has discovered a group 2 kimberlite pipe on the Ontevreden licence held by Vutomi joint venture. A 1.5 hectares to 2.5 hectares area is thought to contain high levels of garnet. Drilling will help to better understand of the kimberlite and to find out if it is diamondiferous. A refined grade estimate has been published for the Frischgewaagt project in South Africa. This estimate has a range of 64cpht to 110cpht. The dyke system covers 7.5 kilometres.

Interim revenues will grow by two-fifths at cloud-based software provider Cloudcall Group (CALL) and recurring revenues will be 61% higher. The second quarter was the strongest quarter ever for new orders. Annualised revenues are £7m.

Camper & Nicholsons Marina Investments Ltd (CNMI) is raising £3.3m via a one-for-four open offer at 8p a share, a premium of 33% over the market price. The NAV was €0.154 a share at the end of 2016.

DX (Group) (DX.) has announced that its chief executive and finance director are leaving. The business is being reorganised into two divisions. Revenues are expected to be £292m in the year to June 2017. Net debt was £19.1m.

Sphere Medical (SPHR) is in discussions with potential investors in a share issue. A shortage of sensors has hampered first half sales of blood monitor Proxima 4.

Ramsdens Holdings (RFX) admits that there has been unauthorised access to its IT system but there should be minimal disruption to the pawnbroking business. Trading continues to be strong.

House broker Northland has increased its profit forecasts for online gaming marketing services provider Veltyco Group (VLTY) following its interim trading update. The 2017 pre-tax profit forecast has been upgraded from €4.62m to €5.82m, up from €1.74m in 2016. The 2018 profit forecast is €7.63m.

Rich Pro Investments Ltd has launched a 2.1p a share cash bid for ASA Resource Group (ASA) but the mining company has yet to recommend the offer. The bid values ASA at £35.5m. Rich Pro argues that the high level of creditors and other uncertainties makes its bid attractive.

Angling Direct (ANG) raised £9m at 64p a share when it joined AIM. The group has 15 stores and the retailer wants to be a consolidator in the fishing tackle market.

Venture Life Group (VLG) says that interim revenues will be 28% higher at £7.8m and like-for-like growth was 18%. New product listings will help further growth in the second half.

An interim trading statement by ClearStar Inc (CLSU) suggests that it should be able to meet expectations this year. The employee background checks provider says that the improving employment levels in the US and international growth are helping growth, as is the demand for medical testing. Interim revenues are expected to increase by 12% to $8.9m. A full year loss is still expected.

Sunrise Resources (SRES) is starting drilling at its CS pozzolan-perlite project and it should take around one week to complete. Eleven trenches have been excavated and ten of them contain pozzolan and/or perlite. Sample results will be available in fewer than ten weeks.

Housebuilding infrastructure services provider Nexus Infrastructure (NEXS) has joined AIM. Although £35m was raised by existing shareholders via a placing at 185p a share, the company, which was valued at £70.5m, is not raising any new money. There is already cash in the bank. The share price ended the first week at 188p. In the year to September 2016, revenues grew from £130.9m to £135.7m. That growth appears modest but a change in the mix of business helped underlying pre-tax profit improve from £9.4m to £11m. However, the latest interim profit was lower because of delays to contracts for earthworks business Tamdown. At the end of May 2017, the group order book was worth £187m.

Abzena (ABZA) has secured another licensing deal for its ThioBridge antibody drug conjugate linker technology with a Taiwan pharma company. The value of the deal could be up to £128m in development and commercial milestones.

House broker finnCap has upgraded its 2016-17 forecast for Mortice Ltd (MORT) after a positive trading statement by the security and facilities management services provider. The pre-tax profit forecast has been raised from $5m to $5.3m. Trading in the first quarter of the current financial year shows a 12% increase in revenues even though currencies have moved against Mortice and there were similar increases for each part of the group. Like-for-like growth was 5%.

MAIN MARKET

Standard list shell Rockpool Acquisitions (ROC) floated on 12 July and the share price ended the week at 10.5p. Rockpool is raising £1.085m at 10p a share, having previously issued 1.875 million shares at 8p each.

Fandango Holdings (FHP) also joined the standard list on 12 July. The shell raised £840,000 at 1p a share and is seeking to acquire a company valued at between £1m and £20m. The share price ended the week at 1.25p (1p/1.5p).

PV Crystalox Solar (PVCS) is closing its silicon ingot block manufacturing facility in the UK in the third quarter. The blocks will be sourced from an external supplier. The judgement relating to a customer which failed to buy the amount of wafers it was supposed to is expected by the end of September.

Andrew Hore

Quoted Micro 10 July 2017

NEX EXCHANGE

Coinsilium Group Ltd (COIN) has sold its remaining stake in nanopayments software and blockchain company SatoshiPay to AIM-quoted Blue Star Capital (BLU) for €725,000 (£650,000), which has been raised through a placing at 0.2p a share. Blue Star Capital owns 31.1% of SatoshiPay. Blue Star Capital has granted Coinsilium 85 million warrants, of which 42.5 million are exercisable at 0.6p and 42.5 million at 0.8p. Coinsilium has made a gain of 362.6% on its initial SatoshiPay investment in less than two years, even before any longer-term upside from the warrants.

Via Developments (VIA1) has secured an exclusivity agreement to acquire land in Luton, Bedfordshire for £8.25m. The residential development site has planning permission for 200 apartments. A non-refundable deposit of £50,000 has been paid.

Capital for Colleagues (CFCP) has invested £400,000 in Employee Owners Group Ltd, whose main business is timber frame buildings supplier Carpenter Oak, in return for a 30% stake. The cash will be used to grow the business which currently supplies around 90 frames a year.

First Sentinel (FSEN) has raised £700,000 at 11p a share and made three investments, including £35,000 at 7p a share in fellow NEX-quoted company Milamber Ventures (MLVP). The two firms are already working on an investor event at the Century Club, Shaftesbury Avenue in London on 11 July. First Sentinel plans to sell the Milamber shares in the market. First Sentinel has also invested $300,000 in a 13%, one year loan note for Red Rock Resources (RRR) with two year warrants exercisable at 2.2p a share, compared with a market price of 0.75p. The third investment is in newly floated AIM copper mining company Phoenix Global Mining (PGM), where First Sentinel invested £81,000 at the placing price of 4p a share.

Blockchain investments company Kryptonite 1 (KR1) has raised £750,000 at 2p a share. Chinese medicines firm MiLOC Group Ltd (ML.P) has raised £99,000 at 28.5p a share.

AIM

Premier Technical Services Group (PTSG) is acquiring Brooke Edge Industrial Chimneys Ltd for an initial £14m, plus £1m in acquisition costs, and the building services provider has raised £15m in a placing at 120p a share. There is deferred consideration of £6m payable in three yearly instalments, which fits with the owners staying on with the business for at least three years. The acquisition made a profit of £2.1m on revenues of £10.6m last year. This consolidates Premier’s position in lightning protection services, while specialist earthing and surge protection will be added to the group’s range of services. Although the acquired business has similar margins to Premier, it has lower margins than the same businesses already owned by Premier. This means that continued growth in revenues could be complemented by improvements in margins providing even faster profit growth. According to Numis, he acquisition will enhance earnings per share by 5% to 8.7p in 2017 and 12% to 9.2p in 2018.

Blur Group (BLUR) has managed to raise £1.7m at 1.75p a share in an oversubscribed placing that more than trebles the number of shares in issue. There is one warrant for every four shares with an exercise price of 3.5p. Robert Keith has increased his stake to 25% following the placing. The need for the cash is reflected in the low issue price, which is more than 40% below the all time low market price.

Superyacht painting and maintenance services provider GYG (GYG) joined AIM on 5 July and the share price has already risen from 100p to 120p. GYG raised £6.9m before expenses.

Thor Mining (THR) will start a drill programme for the Pilot Mountain tungsten project in August. Thor expects the results in the near future from a 50 hole drilling programme on the Dundas gold project in Western Australia. Further opportunities are being assessed.

Portmeirion Group (PMP) says that its sales were 16% higher in the first half of 2017 but excluding home fragrance products manufacturer Wax Lyrical, which was acquired in May 2016, the sales are 3% higher due to a boost from sterling weakness. Churchill China (CHH) continues to grow it exports and this has been helped by weaker sterling comparatives in the first half of 2017.

Walker Greenbank (WGB) has received its final insurance payment of £2.4m relating to the flood of its fabric printing factory at the end of 2015. This takes the total payment to £19.3m.

Home improvement products supplier entu (UK) (ENTU) is undertaking a strategic review. There are already plans to cut costs and improve efficiency but entu needs to secure long-term financing to improve the balance sheet. There could also be disposals of businesses.

Sula Iron & Gold (SULA) has completed six holes of the phase 3 drilling at Sanama Hill at the Ferensola gold project in Sierra Leone. So far, 2,000 metres out of a total of 5,000 metres of drilling has been completed. Part of the drilling will include further exploration of the new southern target. The assay results will be available at the end of July.

Veltyco Group (VLTY) says that first half trading is significantly ahead of market expectations. This is not the first time that Veltyco has beaten expectations and even before this the full year pre-tax profit was expected to jump from €1.74m to €4.62m.

TechFinancials Inc (TECH) expects to make a first half loss. Senior management has taken a 20% pay cut. There is still $5.8m in the bank.

Safestay (SSTY) has acquired second hostel in Barcelona for €2m. Safestay has eleven hostels and acquisitions have gathered pace following a £12.6m sale and leaseback deal.

MAIN MARKET

Share trading will commence on 12 July in standard list shell Rockpool Acquisitions, which is seeking to acquire a Northern Ireland-based company. Rockpool is raising £1.085m at 10p a share, having previously issued 1.875 million shares at 8p each.

RockRose Energy (RRE) has raised £8m at 150p a share and it continues to progress the acquisition of oil and gas assets.

Gresham Technologies (GHT) says that revenues will be 26% higher in the first half of 2017. Eight new Clareti Transaction Control software clients have been signed up in the first half. Net cash is £7.7m.

Quarto Group Inc (QRT) has sold its New Zealand business, which was the last non-publishing business owned by the group. Quarto will receive $600,000 over two years plus 50% of debtor receipts for the next year. Quarto is also entitled to 15% of pre-interest profit for three years.

Andrew Hore

Quoted Micro 22 May 2017

NEX EXCHANGE

London and south east England residential property developer St Mark Homes (SMAP) says it will in the immediate future focus on homes for sale for less than £600,000, because this is the London help to buy limit. In 2016, revenues fell from £3.1m to £1.34m but the unchanged contribution from joint ventures and a release of negative goodwill of £150,000 – a non-cash item – meant that pre-tax profit improved from £549,000 to £652,000. There is still negative goodwill of £137,000 on the balance sheet which is likely to boost a future financial year. A lower tax charge helped earnings per share to rise from 14.8p to 16.6p. Total dividends were 11% higher at 5p a share. There was a cash outflow from operations in the period. The NAV is £5.8m, following a share issue that raised £690,000 net of costs via an open offer to existing shareholders. That is 131p a share. Finance director Sean Ryan acquired 4,912 shares at an average price of 94p each.

Markets operator WMC Retail Partners (WELL) benefitted from an increased valuation of its Luton market but trading was down on the previous year. In 2016, revenues dipped from £4.31m to £4.23m, including £100,000 of consultancy revenues, and a pre-tax profit of £13,000 was turned into a £58,000 loss. WMC is on course to reopen its Cornish site under the name Cornucopia in July.

Property developer Formation Group (FRM) moved back into profit at the interim stage based on continuing operations. Revenues doubled from £10.2m to £20.2m, while an operating loss of £84,000 was turned into a profit of £48,000. The corresponding period also included a £1.08m write-back of loans secured on past properties. There was £1.58m in the bank at the end of February 2017. The NAV was £10.4m.

Block Energy (BLOK) says that Schlumberger has completed the acquisition of three production sharIng contracts in the Republic of Georgia that are near to Bock’s own interests. This indicates the interest in the region. Roger McMechan has been appointed as technical manager for Block’s interests.

Investment company Early Equity (EEQP) increased its interim loss from £46,000 to £67,000. The NAV fell from £770,000 to £639,000 at the end of February 2017. The value of investments in BWA Group and Alpha Prospects declined and the investment in Devilfish Poker was written off, although it is hoped that there could eventually some value to the shareholding. Yicom Global, a healthcare products supplier primarily focused on China, has been increasing its number of sales agents and sales.

Coinsilium Group Ltd (COIN) says that nano-payments company SatoshiPay has linked up with PayPal so that 200 million users could potentially use its service. Coinsilium has a 12.1% stake in SatoshiPay.

Milamber Ventures (MLVP) has paid £75,000 for a 15% in Essential Learning, which provides apprenticeship training. The UK Apprenticeship Levy is expected to generate £2.8bn to be invested in training. In the nine months to April 2016, revenues were £616,000 and lost nearly £30,000. Share placings at 16p a share and 20p a share raised a total of £75,000.

Wheelsure Holdings (WHLP) has raised £500,000 at 1p a share and it hopes to raise a further £50,000. Management says that the economic climate has delayed sales of its Tracksure rail safety components and Wheelsure is short of cash to develop the business. The cash is needed for marketing, product development and patent protection. There are trials of products in process. Wheelsure is focusing on generating more sales from existing customers while targeting longer-term sales from new customers.

Karoo Energy (KEP) has raised £465,000 at 3p a share. These investors will receive a warrant exercisable at 6p a share for each share they subscribed for. The warrants last for 36 months. The cash will be used for shale gas exploration in Botswana.

AIM

A strong end to the financial year means that Bilby (BILB) expects to report EBITDA of at least £3.6m, compared with a forecast of £3m. The building services provider says that demand was strong at the end of the financial year with some work starting earlier than expected. There is a cash balance of £2.5m. The figures for the year to March 2017 will be reported before the end of June.

Mortice (MORT) has sparked another profit forecast upgrade following a trading statement. House broker finnCap has increased its 2016-17 pre-tax profit forecast from $4.3m to $5m and next year’s forecast has been raised from $6.2m to $7m. Revenues are better than expected and costs have been kept under control. Net debt was $13.6m at the end of March 2017. The facilities management and security divisions both generated much higher revenues.

Gemfields (GEM) has received an unsolicited bid from 47.1% shareholder Pallinghurst Resources. The offer is not generous. Pallinghurst is offering 1.91 of its shares for each Gemfields share. That is equivalent to 38.5p a share or a total value of £211.5m.

Veltyco Group (VLTY) did even better than expected in 2016. Revenues were 7% ahead of forecast at €6.1m. Underlying pre-tax profit was €1.74m and Northland forecasts a 2017 profit of €4.27m, helped by recent acquisitions. The online gaming marketing business has started 2017 strongly.

RNA therapeutics developer Silence Therapeutics (SLN) has gained a European Patent Office grant for its chemical modification technology and expects to use this patent to generate revenues from specific medicines that are already undergoing clinical trials.

A recovery in oil and gas demand has helped Hardide (HDD) in the first half. Revenues increased by 59% to £1.51m. The underlying operating loss fell from £1.02m to £720,000. Production is building up at the new US facility. Sales are yet to come through from the approvals already given by Airbus Group. A $100,000 order has been received from General Electric.

LightwaveRF (LWRF) reported a slightly reduced interim loss on revenues that grew from £804,000 to £1.17m. The loss fell from £384,000 to £333,000. The home automation business has developed technology and it needs to generate higher sales in order to move into profit. A partnership with Google in the voice control area has propelled the share price upwards.

ImmuPharma (IMM) says that the latest clinical trial results show that Lupuzor, a potential treatment for Lupus, has a robust safety profile. The phase III trial of 200 patients has been going on for 52 weeks and the full results should be available in the first quarter of 2018.

Tiso Blackstar Group SE (TBGR) is selling its 22.9% stake in industrial holding company KTH back to the company. The payment of around £86m will be paid over 19 months with £7m due before the end of 2017 and the rest by the end of 2018. Tiso Blackstar will repay its debt of £23m and a special dividend of £2.3m. The rest of the cash will be reinvested in media investments. There are plans to move the listing in South Africa from AltX to the Main Market. The company is also moving its registered office from Malta to the UK.

Management has announced a potential bid for recruitment company InterQuest Group (ITQ) but the independent directors are not impressed. Chisbridge Ltd is offering 42- a share. The two independent directors say the offer undervalues the company.

Brave Bison (BBSN) has approached Zinc Media (ZIN) and merger discussions are underway. Herald Investments has stakes in both companies.

Edenville Energy (EDL), which operates the Rukwa coal project in Tanzania, has signed a letter of intent to supply 1,000t of coal/month and this could increase to 7,000t/month. This should hopefully be followed by a formal coal supply agreement so that deliveries can start in July.

Tissue Regenix (TRX) is in talks to acquire US-based regenerative medicine company CellRight Technologies.

MAIN MARKET

Flying Brands Ltd (FBDU) says that the prospectus relating to the acquisition of kidney stone analysis company Stone Checker Software has been approved by the authorities. A placing has raised £550,000 at 3p a share.

Andrew Hore

Quoted Micro 24 April 2017

NEX EXCHANGE

Chapel Down Group (CDGP) reported a one-quarter increase in group revenues to £10.2m in 2016, however, £3.44m of these revenues came from associate brewing company Curious Drinks, which is no longer consolidated following last year‘s fundraising. Chapel Down owns 49.79% of Curious Drinks voting shares but has a 90.2% economic share of the business. The continuing wine operations increased revenues from £5.56m to £6.79m, while the underlying pre-tax profit improved from £155,000 to £265,000. A further £1.6m of capital expenditure was mainly spent on additional vineyard acreage, which left cash of £1.2m. Wine exports to the US are growing.

African Potash Ltd (AFPO) is planning to acquire investment company Onshore Energy Ltd but it will still require more cash even if the deal goes ahead. Christopher Cleverly is a director of both companies. At the end of April 2016, Onshore Energy had shareholders funds of £1.16m and it has raised further cash since then. The most recent was on 6 April 2017 and the company has more than 100 shareholders. Trading in African Potash shares has been suspended.

NQ Minerals (NQMI) plans to buy the Hellyer gold mine in Tasmania for A$20m in cash and shares equivalent to 29.9% of NQ on a fully diluted basis. The deal will be financed by two loan notes totalling A$13m and a A$8.5m, three year secured loan facility with an interest rate of 12%. The facility provider gets options over 64.3 million shares at 8p each and can appoint a director the NQ board. There is still scope to raise secured loans of up to A$27.5m to repay the A$13m of loan notes and develop the mine. NQ director Roger Jackson is also a shareholder in the current owner of the Hellyer mine and he has a commission arrangement to help finance the project. The assets acquired include three tailings dams and a processing plant.

Goldcrest Resources (GCRP) is changing its name to Bloc Energy when it finalises the acquisition of Georgian oil and gas assets. The general meeting to gain shareholder agreement is being held on 5 May. There are plans to move to AIM in order to raise additional cash for the business and the development of the newly acquired assets. Goldcrest intends to sell its existing gold exploration assets.

Kryptonite 1 (KR1) has invested £100,000 for 1,279,840 Atom tokens. The total initial coin offering by the Cosmos project raised $16.8m within 30 minutes. Cosmos is a proposed network of interconnected blockchains and shouldbe the first bonded point-of-stake block chain in production. Atom is the cryptocurrency for Cosmos.

Ecovista (EVTP) chief executive Louise Stokely has bought 50 million shares – 1.39% of the property investment company.

First Sentinel (FSEN) director Tom Dignall has acquired a 3.85% stake at 11p a share – a total cost of £300,000.

AIM

Verona Pharma (VRP) has launched its public offering of ADSs and ordinary shares ahead of a listing on the Nasdaq Global Market. This followed news that the FDA had given authorisation to proceed with a clinical trial in the US for RPL554 in order to assess its safety and tolerance.

Veltyco (VLTY) is acquiring 51% stakes in two related businesses – Bet90 and www.tippen4you.com – for €2.5m. The same amount of cash has been raised at 39p a share. The acquisitions add further online betting brands to the group.

Motif Bio (MTFB) has announced positive phase III clinical trial data for Iclaprim when used for patients with acute bacterial skin and skin structure infections (ABSSSI). The REVIVE-1 data shows that the drug is reliable and safe. The drug was well tolerated with most adverse effects classed as mild.

FIH Group (FIH) has confirmed that second half trading was better than expected but the profit is still going to be at least one-fifth lower than the previous year. The underlying pre-tax profit will be between £2.3m and £2.5m. Trading in the Falkland Islands was below the record levels achieved the year before. Lower passenger numbers for the Gosport ferry were offset by price increases. Momart improved its profit. There was £15.1m in the bank at the end of March 2017 and this is likely to be used to help fund acquisitions in the UK – although a special dividend is still a possibility.

Immunodiagnostic Systems Holdings (IDH) has beaten expectations for 2016-17, helped by the movement in the sterling exchange rate. Revenues were approximately £40m, up 4%, but they would have been lower under constant currency rates. The full year figures will be published on 21 June.

ASX-listed Pharmanet Group has raised A$620,000 in order to provide cash to progress with the acquisition of the gold exploration assets that Keras Resources (KRS) intends to reverse into the company. The reversal is expected to happen by the summer and Pharmanet will change its name to Calidus Resources.

Power electronic systems supplier Turbo Power Systems (TPS) is holding a general meeting on 5 June to gain shareholder approval to cancel the AIM quotation. The management team controls 89.4% of the share capital so this is a foregone conclusion.

MAIN MARKET

Former AIM-quoted Camden Town property developer Market Tech Holdings (MKT) is being taken private by its majority shareholder after less than two and a half years as a quoted vehicle at a discount to its original placing price of 200p. That fundraising was done at a significant premium to NAV and made it easier to add further properties in Camden Town. In July 2015, a further £200m was raised at 223p a share. Management hoped that the combination of property in a fashionable area and an online division would continue to provide a premium to NAV. That has not been true following MarketTech’s move to the standard list. The offer is 188p a share, which values MarketTech at £892.5m. Two years ago, the stated NAV was 140.76p a share but the directors said that the adjusted NAV was 300p a share, although that assumed that all the proposed development of the properties was completed at expected capital investment levels. LabTech already owns 71% of Market Tech so the cash cost of the bid will be less than £300m.

Andrew Hore

Quoted Micro 27 February 2017

NEX EXCHANGE

Capital for Colleagues (CFCP) says that one of its employee-owned investee business FJ Holdings has sold its businesses and been placed in administration. Capital for Colleagues had not been kept up to date with these moves. The loans to FJ and its subsidiary Ham Baker Adams plus the FJ share stake were valued at £1.3m at the end of November 2016, which included a £790,000 valuation for the share stake. That investment is equivalent to one-quarter of Capital for Colleagues’ NAV, suggesting a pro forma NAV of about 40.5p a share if the investment is completely written off. That is well below the current share price.

Ace Liberty & Stone (ALSP) says that the £3.55m sale of Hume House in Leeds announced in January 2016 has not been completed. Hume House was acquired for £1.67m in March 2014 and annual rental income is £188,000. Ace has raised £4.55m from the sale of Bridge House in Luton, which was acquired for £2.75m in November 2014, and been occupied by HM Revenue & Customs for more than three decades.

Middle East-focused investment vehicle Indigo Holdings (INGO) has made its first investment ten days after it joined NEX on 10 February. There was net cash of £818,000 at the time of flotation and €176,800 (£150,000) was spent on a 5% stake in Iranian car ride sharing app Carvanro. Indigo believes that the growing younger population in Iran will be receptive to the service. The app was launched in mid-2016 and registered users and completed rides are growing month-on-month.

Queros Capital Partners (QCP) has issued an additional £960,000 (£950,400 net) of 8% bonds 2025. That takes the bonds in issue to £2.625m. The cash will initially be used to provide bridging loans as Queros seeks to acquire social housing projects in the longer term. NQ Minerals (NQMI) has raised a further £82,000, having raised £128,750 at 0.8p a share last week. IMC Exploration (IMCP) has issued 2.5 million shares at 1p each to pay for professional fees and converted a Wilhan loan note into 3.2 million shares at 2p each. .

Peterhouse has replaced Grant Thornton as corporate adviser to Chinese medical products and services provider MiLOC Group (ML.P). Director Dennis Ow has satisfied a HK$500,000 loan by transferring 177,353 shares previously pledged as collateral, taking his stake to 0.44%.

Impact investing company Menhaden Capital (MHN) has decided to delist from the NEX Exchange Main Board in order to reduce costs but retain its premium listing on the London Stock Exchange.

AIM

Fishing tackle and products retailer Fishing Republic (FISH) is on course to increase pre-tax profit from £305,000 to £404,000 in 2016. Year-on-year revenues were 40% ahead, suggesting a figure of around £5.8m. A new store was opened in Mildenhall at the end of 2016 and another in Milton Keynes in January 2017. Two more, in Reading and Ipswich, are planned before the end of the fourth quarter. These stores will all be ready for the 2017 fishing season. Online sales have fallen but a greater proportion of them are direct through the company’s website which has improved gross margin. Last year’s share issue has diluted earnings per share but investing the cash in new stores will help to compensate for that. The 2016 figures will be published before the end of April.

Software robotics company Blue Prism (PRSM) says that its revenues were strong in the first quarter and it already expects full year revenues to be well ahead of expectations.

North Italy-based gas producer Saffron Energy (SRON) joined AIM on 24 January and ended the day at 7.38p. Saffron raised £2.5m at 5p a share. The cash will finance the development of three gas fields.

Gold recovery services and mining company Goldplat (GDP) increased its revenues in the first half even though gold sales were lower due to delays in selling gold from the Ghana plant, which did not get the required licence to sell the gold until the end of the period. The gold has been sold in the second half. First half revenues were still higher because of a 15% rise in the gold price achieved and currency movements. There was still £885,000 in the bank at the end of 2016. A full year pre-tax profit of £1.94m is forecast as the benefits from the investment in the Kilimapesa gold mine start to show through. Further capital investment will be required for the Kenyan mine and the gold recovery activities.

Conygar Investment Company (CIC) is selling its investment property portfolio to Regional Commercial Midco, which is owned by Regional REIT, for £129.8m – a few hundred thousand pounds ahead of its book valuation. Regional REIT will issue 26.3 million shares at 106.347p a share and assume bank debt and repayment of zero dividend preference shares. Shareholders will have to approve the transaction. Conygar will be able to focus on its development assets.

Vernalis (VER) made further progress in building sales of the Tuzistra cough treatment in the first few months of the cough season. In the six months to December 2016, revenues were one-third higher at £800,000 and the second half could be stronger. Growth in Tuzistra sales was not enough to offset declines elsewhere and total revenues fell from £6.1m to £5.6m. There could be two additional cough treatments on sale next year if the FDA approvals are achieved. Net cash was £74.2m at the end of 2016.

Security technology and services supplier Synectics (SNX) reported a 4% rise in revenues to £70.9m last year but higher margin gaming contracts meant that there was a sharp bounce back in profit. Net cash was £2.17m at the end of November 2016. This year’s underlying pre-tax profit is expected to grow from £2.6m to £3m, although this represents slower growth than originally expected.

Cairn is resigning as nominated adviser to CloudTag Inc (CTAG) on 10 April but the company has managed to raise £975,000 at 3.75p a share via Novum Securities at a cost of £58,500. Trading in the shares was subsequently suspended pending an announcement. CloudTag will need to find another nominated adviser to continue on AIM.

International benefits insurance provider GBGI Ltd (GBGI) joined AIM on 22 February when it was valued at £130.4m at 150p a share. The share price was unchanged at the end of the week. GBGI intends to pay a dividend equivalent to 60% of distributable profit.

Stellar Diamonds (STEL) is raising £324,500 from a placing at 5.5p a share and up to £250,000 from an open offer at the same price. Once the placing is completed the shares will return from suspension. The cash will help to pay creditors and be used to progress the Tonguma project in Sierra Leone. Further cash will be required.

Timber processing and renewable energy business Active Energy (AEG) is in discussions to acquire further timber assets in North America and Europe. AEG WoodFibre generated lower revenues in 2016 because of weak demand from MDF manufacturers in Turkey after the coup. A new softwood processing plant should be up and running in April. The CoalSwitch division will be the main focus of growth this year.

SigmaRoc (SRC) says that its maiden acquisition Ronez has been integrated more quickly than it expected. The new systems should be up and running by the end of April and the back office systems budget should be halved. January sales volumes were ahead of budget and the first quarter order book is strong for the Channel Islands-based construction materials supplier. SigmaRoc has secured a £2m revolving credit facility from Santander and a £18m term facility is being negotiated. These two facilities will last until 2021.

Northland has increased its profit forecasts for online gaming marketing business Veltyco Group (VLTY). The 2016 pre-tax profit estimate has been raised from €1.35m to €1.99m, which is in line with the recent trading statement. The 2017 profit forecast has been raised from €3.18m to €4.27m and for 2018 from €4.21m to €5.44m.

Savannah Resources (SAV) has raised £2.24m at 5.25p a share and it has letters of intent for a further £1.01m from the chairman and a major investor, Al Marjan, which will maintain its stake at 29.9%. Savannah has reduced its full year loss from £3.1m to £1.8m and there was £700,000 left in the bank at the end of 2016. This year Savannah expects to complete the scoping study for the Mutamba heavy mineral sands project in Mozambique, where it has signed a consortium agreement with Rio Tinto, and start mining copper in Oman. Savannah is also defining drill targets for Lithium in Finland.

Premier African Minerals (PREM) is on course to get production restarted at the RHA tungsten mine. Underground mining contract terms have been agreed with delivery of up to 16,000 tonnes of ore each month.

Edenville Energy (EDL) has raised £2m at 0.8p a share, with every two new shares eligible for a warrant exercisable at 1.08p a share over the next 18 months. The cash will be used to acquire capital equipment and finance other costs of developing the Rukwa coal project in Tanzania. Commercial mining should begin by the end of the first quarter of 2017. Edenville has relinquished its uranium prospecting licence to concentrate on Rukwa.

MAIN MARKET

Small company-focused investment company Athelney Trust (ATY) has increased its dividend by 8.8% to 8.6p a share, although NAV growth was more modest at 2.5%. Last year, Athelney did not do as well as AIM or the FTSE Fledgling index which each grew by around 15%. Athelney is more exposed to the commercial property market than AIM or the Fledgling index. Property shares were hit by the EU referendum and did not clawback their falls by the end of the year. Athelney takes a long-term view and it has still outperformed AIM since 2005. The focus remains companies that are steadily growing profitability and dividends. Realised capital gains were £294,000 in 2016, helped by takeovers of Premier Farnell, UK Mail and Wireless. A stake was acquired in Lavendon last year and that is being taken over. The NAV was 251.1p a share at the end of 2016. Having raised £407,000 at 233.2p a share last April, Athelney still had invested most of the cash and had £59,000 left in the bank – slightly higher than a year earlier. The NAV had slipped to 250.4p a share by the end of January.

Standard listed and TSX Venture Capital Market-quoted Zenith Energy (ZEN) is selling its operations in Argentina so that it can concentrate on its operations in Italy and Azerbaijan. Production was suspended in 2015 because a storage tank owned by the state oil company collapsed so oil could not be transported. The operations are being sold for a nominal sum because investment is required and the buyers are taking on environmental responsibilities.

Standard list shell Sealand Capital Galaxy Ltd (SCGL) is acquiring SecureCom Group for 10 million shares and £1m in cash. Sealand had £600,000 in cash at the end of June 2016 and it is raising a further £1.4m (1.27m net of expenses) at 20p a share. The November 2015 flotation price was 10p. SecureCom also brings cash with it and pro forma cash is £3.26m and there is subscription money owed to the company of £8.58m. The pro forma NAV is 3.87m because of the heavy losses incurred by SecureCom, which has spent large amounts on sales and marketing of its instant messaging and communications products n the Asia Pacific region.

Andrew Hore

Quoted Micro 20 February 2017

NEX EXCHANGE

Forbes Ventures (FOR) has taken a 0.84% stake in potential challenger bank Civilised Investments in return for £200,000 in cash. The cash investment was raised through a placing of shares at 0.5p each with Gravity Investments, which owns 62.1% of Forbes. A further six million shares were issued at the same price to settle fees. Civilised is applying for a UK banking licence in June 2016. The strategy is not to have branches but local bankers will provide loans and business banking products by attracting personal savings.

Kryptonite1 (KR1) has invested £99,905 for 25,811 tokens in Melonport AG, which is building its own blockchain protocol for digital asset management built on the Ethereum platform. Melonport raised $2.5m in 14 minutes.

NQ Minerals (NQMI) has raised £128,750 at 0.8p a share. For working capital. Daniel Stewart has been appointed as corporate adviser.

FT8 (GFT) has failed to secure the agreed monthly payments from Billyst Holdings and this means that trading in the shares of FT8 has been suspended because of the company’s uncertain financial position.

AIM

Floorcoverings manufacturer Victoria (VCP) has moved into Continental Europe through the acquisition of Avalon and GrassInc for an initial £9.7m in cash with deferred and contingent payments of up to £12m over four years. This is an important part of the overall strategy for the group and it also takes Victoria into the artificial grass market. The deal should be immediately earnings-enhancing with the two businesses making a 2016 operating profit of £3.6m.

Construction dispute resolution services provider Driver Group (DRV) has raised £8m at 40p a share – a 15% discount to the market price – in order to reduce borrowings and grow the business. There is also a one-for-26p open offer at 40p a share that could raise up to £500,000 – closing on 8 March. Driver has negotiated new banking facilities of £8m, down from £12m, and this expires in 2020. Net debt was £9.9m at the end of September 2016. Driver made a loss in the year to September 2016 but it moved back into profit in the second half. In the past year, Driver has reduced annualised overheads by £1.3m, cut underperforming fee earners, improved cash collection and implemented more rigorous bidding controls. Driver plans to scale down the project management operations and the main businesses should be sold by the end of this financial year. South America and eastern Europe have been identified as growth areas. New non-executive director John Horgan has been appointed as a replacement for David Webster.

Fuel cell technology developer AFC Energy (AFC) has raised £6m, £5.5m net of expenses, at 10p a share – a 40% discount to the market price. Up to £2m more could be raised from a one-for-15 open offer at the same share price – closing on 2 March. The cash will be used to deliver commitments on the joint development agreement with De Nora, additional testing and a scoping study with Peel Environmental for potential projects. Jim Gibson has been appointed as chief operating officer.

Middlesbrough-based pawnbroker Ramsdens Holdings (RFX) joined AIM on 15 February. The placing will raise £15.6m at 86p a share, valuing the company at £26.5m. The share price ended the week at 95.5p.

Tracsis (TRCS) disappointed the market with a warning that delays in contracts means that this year will be even more second-half weighted and there is still uncertainty whether certain software contracts will complete in this financial year. The transportation optimisation software and services provider still believes it can achieve this year’s forecast profit but the market was not as sure. The share price fell by nearly one-third following the trading statement and Downing is one investor that has added to its stake having previously taken profits. Interim revenues will grow from £13.1m to £15.5m but pre-tax profit will only be slightly higher than last year’s figure of £2.9m. The full year outcome could depend on the rail franchise bid timetable.

Higher LED sales helped Holders Technology (HDT) to increase overall revenues by 2% to £11.4m but the LED business is still losing money and a German business has been closed. The underlying loss increased from £141,000 to £195,000, prior to restructuring costs of £183,000. An increases in trade creditors meant that cash improved to £781,000. A final dividend of 0.25p a share is proposed. There are signs of an improvement in demand for printed circuit board materials and new smart lighting products should boost the LED business.

Vela Technologies (VELA) has raised £550,000 from a bond issue via the UK Bond Network. This should enable Vela to complete the additional investment of £150,000 in Portr, the airline passenger facilitation and baggage transport service, taking its stake to 4.27%.

Collagen Solutions (COS) is raising up to £8m from a placing and one-for-five open offer at 5p a share and this will be topped up with a £4m bond issue to Norgine Ventures, which has a coupon of 10% and 6.77 million warrants exercisable at 5.911p each. The cash will finance the expansion of the medical collagen business, commercial medical device products and launch ChondroMimetic, which is a collagen-based implant to treat small cartilage and bone defects, later this year.

Online gaming business generator Veltyco Group (VLTY) says that its 2016 figures will be significantly better than expected. An EBITDA of more than €2m, up from the initial forecast of €1.4m, on revenues of more than €5.7m, ahead of a forecast of €4.9m, is anticipated.

Evgen Pharma (EVG) has signed a services agreement with APTrans, a Cheshire-based consortium of drug developers that can provide technical expertise, for the development of SFX-01. A US patent has been granted covering the manufacturing process for SFX-01. The patent lasts until 2033. Further patents are expected to be awarded around the world.

Ascent Resources (AST) raised £3m at 1.85p a share in its latest fundraising via PrimaryBid.com. The cash will be spent on developing the Petisovci gas project in Slovenia.

Self-storage operator Lok’nStore (LOK) says that self-storage sales were 3.9% higher, thanks to higher occupancy, and document storage sales 8.8% ahead in the first half. There is a pipeline of two owned and two managed stores, which will add 14% to capacity. NAV is expected to be 404p a share at the end of July 2017.

PowerHouse Energy Group (PHE) has raised £2.5m at 0.8p a share on the back of last week’s deal with Peel. Hillgrove will receive £2m as part-payment for its loan with £1.4m converted into shares at 0.5p each. A G3-UHt waste to energy unit is being shipped from Australia and should reach the UK in March.

Allergy Therapeutics (AGY) is starting a phase I clinical study for safety and tolerability of Acarovac MPL as a house dust mite allergy vaccine. The trial will be in Spain, covering 32 patients and lasting one year. The global market could be worth $1.5bn a year.

Patient monitoring equipment developer LiDCO Group (LID) says that its 2016-17 revenues will be slightly lower than forecast but it will make a small profit. The loss of a US customer held back growth with revenues 8% ahead at £8.2m, although revenues from group products were 14% higher this was partly offset by lower sales of third party products.

EP Minerals has terminated its lease over the County Line Diatomite project, so Sunrise Resources (SRES) will need to find an alternative method of commercialising the potential project.

Keras Resources (KRS) says that there is a JORC-based inferred mineral resource of 36,000 ounces of gold at a grade of 6.1g/t for the Copenhagen deposit. This means that the Warrawoona gold project has a JORC mineral resource of 410,000 ounces of gold at a grade of 2.2g/t. The focus will be the higher grade Copenhagen deposit, which has more potential.

Mariana Resources (MARL) has completed three of seven planned drill holes at the Ergama project in Turkey and two of these have found large but low grade deposits.

Executive chairman John Hawkins has been given the push by Pebble Beach Systems (PEB) as part of the closure of the group’s head office following the disposal of the Vislink broadcast equipment business. Hawkins received £260,000 a year as chief executive and £100,000 a year as chairman and his contract stipulates 12 months notice. John Varney becomes non-executive chairman. The bank apparently remains supportive and the 2016 figures will be published on 31 March.

Cloud-based telecoms software supplier CloudCall Group (CALL) says that customer relationship management software provider and corporate partner Bullhorn is deploying CloudCall’s software with its US staff. This will provide a reference for potential US customers of a combined software package. Full year figures will be published on 28 March and these will be in line with expectations.

MAIN MARKET

Simian Global (SMG) has signed a non-binding letter of intent to buy BVI-incorporated media and advertising business GVC Holdings Ltd. Standard list shell Simian Global floated on 10 January when it raised £769,500 at 15p a share. This valued the company, which was seeking a technology, media and telecoms sector acquisition, at £935,000. Trading in the shares was suspended at 17.5p.

Avation (AVAP) is trading at a discount of around one-fifth to its NAV of 249p a share at the end of 2016. In the six months to December 2016, the aircraft leasing company’s revenues were 43% ahead at $45.1m and pre-tax profit 50% higher at $8.4m. Bid discussions for 22 ATR 72 aircraft continue but management wants a significant premium to the NAV.

PRE-IPO / OTHER TRADING FACILITIES

Former AIM-quoted Clinical Computing, which is currently traded on Britdaq,has initiated a strategic review and this could lead to the sale of the healthcare IT company. In the year to March 2016, revenues fell from £1.67m to £1.5m but a loss of £204,000 was turned into a profit of £23,000. There is £825,000 in the bank and net assets of £654,000, which is more than its market capitalisation on Britdaq.

Andrew Hore

 

Quoted Micro 19 December 2016

ISDX/NEX

Hydro Hotel, Eastbourne (HYDP) has indicated an improvement in pre-tax profit for the year to October 2016 by raising its dividend payments. The first payment in January will be 7p a share and the second in May will be 14p a share. The total dividend has been increased from 18p a share to 21p a share. Hydro Hotel still has a significant cash pile. Company secretary Sally Gausden has been appointed as a non-executive director.

Netalogue Technologies (NTLP) has replaced its managing director. Richard Condon will become a non-executive director and he will be replaced in the role by development director Andrew Robathan. This follows a review of the company’s strategy and Netalogue will further develop its B2B functionality, which will help it compete against rivals and gain global strategic partners.

Trading commenced in property developer Formation Group (FRM) shares on ISDX on 15 December, although the AIM quotation will continue for the time being.

Gledhow Investments (GDH) made a number of new investments last year but disposals meant that there was still cash of £258,000 at the end of September 2016. The existing investments include a €40,000 convertible loan to Netherlands-based electric scooter developer AppScooter and investments in placings in virtual reality content developer EVR Holdings and Management Resource Solutions, which has run into financial difficulties. The NAV is £452,000, which is slightly higher than the market capitalisation based on the mid price of 0.75p (0.5p/1p) a share.

Black Sea Property (BSP) has signed a non-binding letter of interest to acquire Varna Project Investment, which owns six, almost complete, apartments and development land on the Black Sea coast. The acquisition will cost €130,000 and the assumption of debt of €1.02m – at an interest charge of 5% a year. The apartments will be marketed next May and the land should be sold within 18 months. The loan is repayable on 1 July 2020. The deal could be completed by the end of March.

Karoo Energy (KEP) has generated positive results from exploration on its production licences in the Gemsbok Basin in Botswana. Further exploration, including additional wells and extending the gravity survey data, will be undertaken in 2017.

AIM

It was a mixed first half for defence equipment and services supplier Cohort (CHRT) but the second half is expected to be better. Cohort reported a loss but there was a small improvement in underlying pre-tax profit from £3.51m to £3.86m on flat revenues. The mix of revenues has changed with acquisition contributions offset by lower contributions from SCS, which is being absorbed into two other divisions. The order book is worth £129.6m. Full year profit is expected to improve from £12m to £14.3m but this is down to acquisitions and earnings per share will dip slightly. Dividends should still be increased with a total of 7p a share forecast.

Shell company SigmaRoc (SRC) has secured the acquisition of Ronez Ltd from LafargeHolcim Group for £45m. SigmaRoc chief executive Max Vermorken should know the business because he was a consultant to LafargeHolcim until recently. Ronez owns two quarries and other construction materials operations in Jersey and Guernsey. In 2015, these operations made an operating profit of £4.32m on revenues of £26.3m. Ronez was acquired, as part of Aggregate Industries, by Holcim back in 2005. The markets are limited and market share is already high. Further acquisitions are planned as part of the buy and build strategy. There will be a 104-for-one share consolidation and £40m will be raised at 40p a share, while a further £10m will come from a convertible loan. When the company’s original assets were sold SigmaRoc raised £500,000 at the equivalent of 25p (0.24p pre-consolidation) a share. A listing on the Channel Islands Stock Exchange is planned following the reverse takeover.

Property management services provider HML Holdings (HMLH) is raising £2m at 37p a share and this will help to finance three potential acquisitions. These acquisitions could cost a total of £4.4m but there will be some deferred consideration. Four acquisitions have already been made this year and there are 62,000 homes under management. Interim pre-tax profit improved from £810,00 to £920,000. Net debt was £1.4m at the end of September 2016. The shares ae being issued at ten times prospective earnings.

Ultrasound training equipment developer Medaphor (MED) appears to have settled its patent dispute in the US. The agreement has yet to be put in writing but after this happens the lawsuit will be dismissed. Medaphor says that it will pay cash in settlement but it has enough in the bank to cover this. There was £3.5m in the ban at the end of June 2016 but this is likely to be less than £3m now.

A lack of insolvencies continues to hamper the profitability of Begbies Traynor (BEG). Interim revenues dipped from £25.5m to £24.5m but underlying pre-tax profit was flat at £2.5m because of a higher contribution from the property services side of the business – partly due to additional contributions from acquisitions. The interim dividend is unchanged at 0.6p a share. Bank facilities have been extended until 2021 and this will reduce the interest charge. Further add-on acquisitions are planned.

The news does not get any better at Redcentric (RCN). There has been an overstatement of net assets of £20.8m, which relates to overstated profit. Net debt was £34.4m at the end of September 2016, although that is lower than average monthly levels. Banking covenants are being waived but, unsurprisingly, there will be no dividend. Redcentric is attempting to improve the running of its finances and interim results are promised before the end of the year slimming tablets.

Veltyco (VLTY) says that it will beat the profit expectation of €1.38m for 2016. This helps to make the 2017 profit forecast of €3.17m appear to be more attainable. Veltyco’s business is generating players for online gaming and option trading websites.

First half trading has been tough for property adviser Fletcher King (FLK) but it is maintaining its interim dividend at 1p a share. Property prices have fallen by 5%-10% and transaction volumes are lower. There was some turmoil in the property market after the EU referendum, with some transactions falling through, but demand recovered after a few weeks. In the six months to October 2016, revenues fell from £2.96m to £1.68m, while pre-tax profit, excluding investment gains, fell from £597,000 to £163,000. There will be no one-off gains this year but there could be next year. Net cash was £2.64m. The decline in the pound has attracted foreign buyers, although uncertainty remains.

MAIN MARKET

Hair care and tanning products supplier InnovaDerma (IDP) has raised £800,000 at 110p a share to help fund higher stock levels. This follows a placing earlier in the month which raised £540,000 at 70p a share. Andrew Hore

 

What’s In A Name – Ask Balfour Beatty

Balfour Beatty plc BBY Any construction company which calls its transformation programme “Build to Last” has obviously got serious problems as the repeated use of the name just provides further reminders of past problems. The sooner it removes the blinkers and changes the name of the programme the better for the company. The first phase of the transformation is nearing completion but there are still 2 years to go before it can achieve industry standard margins so there is plenty of time in which to find a more marketable name for it and bury the past – even simply “transformation programme” would be enough if it is beyond the wit of management to find something more alluring.

Bellway plc BWY Robust customer demand has enabled Bellway to put in a strong performance over the 18 weeks since the first August which produced a 7% increase in the reservation rate. For the year as a whole volume growth of 5% is expected.

NCC Group NCC First half group revenue grew by 35% with strong like for like growth of 18% but the loss of profitability caused by 3the cancellation of 3 contracts and the deferral of a fourth will not now be made up for by the year end at the 31st May. Full year adjusted EBITDA is seen as coming in at 5%, less than earlier expectations.

Zytronic ZYT is increasing its dividend by 20% for the year to the end of September after a significant improvement in trading profits and making it the company”s third successive year of double digit dividend growth. Exports now account for 95% of total revenue. There has been an encouraging start to the new year with orders, revenue and trading all ahead of last year.

Veltyco VLTY Following strong fourth quarter trading, full year results are expected to be ahead of market expectations.

Treat the family for Christmas; Buy a villa in Greece – visit;   http://www.hiddengreece.net

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