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Quoted Micro 15 May 2017
Newbury Racecourse (NYR) increased its revenues by 4% to £16.9m in 2016. Underlying trading profit was 8% ahead at £740,000 but there was also a £19.4m gain on the sale of land for housebuilding partly offset by £3.45m impairment charge. The NAV was £44.4m, which is around double the company’s market value. Net cash is £5.4m. The redevelopment of the racecourse continues with the latest phase due to be completed next year.
Good Energy Group (GOOD) has launched a corporate bond. It wants to raise £10m but could raise the subscription level to £20m. Existing bond holders can roll over some or all of their investment into the new bonds. The bonds have a coupon of 4.75% or 5% for customers.
Via Developments (VIA1) has sold all 26 apartments in Napier House in Luton. Deposits of £394,000 and £52,000 of non-refundable reservations have been received. The project should be completed in the first quarter of 2018.
AfriAg Global (AFRI) continues to seek acquisitions in the agricultural logistics sector. In 2016, revenues grew from £1.98m to £3.04m and the loss fell from £96,000 to £9,000. Directors’ fees were reduced from £108,000 to £19,000. The 40%-owned AfriAg (Pty) increased its revenues by 91% to £11.7m but its reported profit dipped from £359,000 to £104,000.
Walls & Futures REIT (WAFR) has completed its first supported housing sector investment. It has bought a grade two listed building in Stroud for £475,000. There will be further investment in improving the property over the next four months. The property will then be let on a 25 year lease to a UK care provider with rents adjusted each year by inflation.
Capital for Colleagues (CFCP) has invested a further £100,000 in space software and hardware developer Bright Ascension. The initial investment was £150,000 and Capital for Colleagues holds 250,000 A shares. The cash will be used for product development and building up the company’s sales infrastructure.
Anna Halpern-Lande, a cleantech sector expert, has joined the board of Milamber Ventures (MLVP). Two new partners have been appointed. Executive chairman Andy Hasoon has converted £50,000 of his director loan into 312,500 shares at 16p each. Two other individuals have taken shares for fees.
Coinsilium Group Ltd (COIN) has invested $75,000 (£60,000) in Coin-Dash, which is developing a social trading platform for cryptocurrency investors. Coinsilium also has an entitlement to an undisclosed number of Coindash crypto tokens.
MiLOC Group Ltd (ML.P) has raised £276,000 at 28.5p a share from four investors. NQ Minerals (NQMI) has raised a further £230,000 for working capital. Valiant Investments (VALP) has raised £22,000 at 0.1p a share, while 84.7%-owned apps developer Flamethrower has paid $25,000 for advertising revenues generating Minecraft Command website.
TyraTech Inc (TYR/TYRU) is splitting itself into two businesses so that they can each raise finance to accelerate growth. The separation should be complete by the end of the year. TyraTech used up $2.2m of cash in 2016 leaving it with $1.8m, thanks to cash management in the second half. Allenby expects cash to fall to $700,000 by the end of 2017 but in reality management would hope to have raised money for the two businesses before that time. Marketing spending is required to grow the human health business while further product development investment is required by the animal health business.
Musical instruments retailer Gear4Music (G4M) is increasing its market share in Europe. In the year to February 2017, revenues grew from £35.5m to £56.1m and pre-tax profit jumped from £600,000 to £2.7m. A new head office has been acquired for £5.3m and a German distribution centre is being opened.
Cosmetics supplier Warpaint London (W7L) has done particularly well since it joined AIM and its figures were better than expected leading to an upgrade for this year. In 2016, Warpaint made a pre-tax profit of £6.7m on revenues of £27m. A 2017 profit of £7.6m is forecast. Growth is coming from the UK and internationally with US revenues starting to build up.
RedstoneConnect (REDS) has raised £6.5m at 1.5p a share and £1.4m of this will be spent on systems integrator acquiring Anders + Kern. This will help the group to sell its OneSpace smart buildings software. A one-for-100 share consolidation is planned.
Motor dealer Vertu Motors (VTU) improved its full year pre-tax profit from £26m to £29.8m and its NAV is 62.3p a share. The share price is trading at a discount to NAV of one-fifth. Aftersales revenues continue to grow and used vehicle sales were strong. The new car market has declined but trading in March and April is in line with expectations.
Cambria Automotive (CAMB) has also performed well even though new and used vehicle volumes declined. Acquisitions helped its revenues to grow by 11% while its pre-tax profit was more than one-fifth higher at £5.6m. The full year profit forecast has been edged up to £11.2m.
The proposed energy price cap has hampered Flowgroup (FLOW) in its attempt to sell its energy business. It is still in talks but appears more likely to require to raise an additional £20m. This would be highly dilutive because it would be at 1.5p a share plus convertible securities. Losses will continue for the next couple of years and Flow is reducing its exposure to the microCHP business.
Arian Silver Corporation (AGQ) has completed initial sampling at its Mexican Salar project and this confirms the presence of lithium. Further tests are required to fully assess the mineralisation.
Savannah Resources (SAV) has lodged the Environmental Impact Assessment for the Mahab 4 copper mine development, having already done this for the Maqail South deposit. Savannah owns 65% of the company that has the licence for the block that includes Mahab 4. The approval process is expected to take three months. An economic study should be completed by July.
Active Energy (AEG) is reducing its exposure to Ukraine and dividing its operations into Advanced Biomass Solutions, which will own the CoalSwitch technology, and Timberlands International for the timber asset management operations. Supplying woodchip from Ukraine to Turkish fibreboard manufacturers is the main revenue generator but exposure to Ukraine has held back the share price. The company’s former chief operating officer may make an offer for the Ukrainian operations.
Draganfly Investments (DRG) has raised £500,000 at 0.5p a share. Pelamis Investments Ltd owns 11.26%.
Waterman Group (WTM) has recommended a 140p a share bid from CTI Technology, which has already acquired 30%. This means that the £43m bid is mandatory. CTI is one of the largest consulting engineers in Japan.
A strong performance in South Korea has fuelled a strong performance from window components manufacturer Titon (TON). In the six months to March 2017, revenues were 29% higher at £14m, while pre-tax profit was 61% higher at £1.18m. The dividend was increased by 20% to 1.5p a share. Net cash is £2.71m.
Storage and wireless semiconductors developer CML Microsystems (CML) says full year trading was ahead of expectations. Revenues grew by one-fifth to £27.6m – organic growth is estimated to be 16%. Pre-tax profit was £4.2m – 5% higher than forecast. There was £12.4m in the bank t the end of the financial year.
World Trade Systems (WTS) has appointed John Hoskinson as a non-executive director. He has experience of mining, energy, property and services sectors. Clio Lee has stepped down from the board. Trading in WTS shares continues to be suspended.
Richard Griffiths and Blake Holdings have acquired 11.2% of former AIM-quoted investment company Sarossa for £519,500 (1p a share). This takes the concert party’s stake to 51.9% so it has to make a mandatory bid at 1p a share but that is well below the most recent asset value. At the end of 2016, the NAV was £11.3m or 2.4p a share. That included £3.73m of cash.
Quoted Micro 6 February 2017
Bondholders in US-focused oil and gas company Diversified Gas & Oil (DOIL) have overwhelmingly opted to take the cash alternative ahead of the flotation of the ordinary shares on AIM on 3 February. A total of £10.35m worth of bonds (97.1% of bonds in issue) are taking cash, while £198,000 of bonds will be swapped for 380,769 ordinary shares. There will be £106,640 worth of bonds remaining in issue but there will be no trading facility. The ordinary shares of Diversified Oil & Gas (DGOC) raised £39.7m at 65p a share, valuing the company at £68.6m. The share price slipped to 56.25p at the end of the first day’s trading.
Property investor Ace Liberty & Stone (ALSP) had a property portfolio worth £28.5m at the end of October 2016 and this generates annual rental income of £2.31m. The NAV was £18.25m at the end of October 2016 with a £500,000 revaluation gain partly offset by the final dividend payment.Net debt was £6.7m, down from £7.7m at the year end and there are assets held for sale worth £6.3m. Since October, a property was acquired at Hanley for £9m. The deal was financed by a £13.75m loan facility from Lloyds Bank with the rest of the cash used to refinance debt relating to five other properties.
DagangHalal (DGHL), which operates an e-marketplace for Halal verification, has parted company with its chief executive and trading in the shares has recommenced. Mohamed Hussain was paid the compensation that he was entitled to in his contract but he is claiming for twice his annual salary – equivalent to £195,000. Ali Sabri Sani Abdullah has stepped up from finance director to chief executive, while Jeff Teo and Derek Marsh have been appointed to the board. Cairn has replaced Arden as corporate adviser. The share price has not changed since trading recommenced.
AIM-quoted Metal Tiger (MTR) has sold its 28.2% in MetalNRG (MNRG) to Value Generation Ltd, a business associated with MetalNRG director Paul Johnson, and Gervaise Heddle, which each own 14.1% of the resources shell. The sales price was 0.26271p a share, whereas Metal Tiger had paid 0.2628p a share nearly one year ago.
BWA Group (BWAP) says it has been in talks with three potential acquisitions but none of the potential deals progressed. There was a £16,276 cash outflow from operations in the six months to October 2016, which was partially offset by the sale of an investment. BWA had a NAV of £562,000, with £41,593 in the bank, at the end of October 2016.
Botswana-focused oil and gas explorer Karoo Energy (KEP) says that exploration work on its two licences has confirmed the company’s geological model which predicts a deep sedimentary basin that could contain shale gas. In the six months to October 2016, there was a £326,000 cash outflow including capitalised exploration spending. Karoo had £168,000 in the bank at the end of October 2016, and £11,000 has subsequently been raised.
Property development and management services provider Formation Group (FRM) plans to consolidate its shares and shareholders will get to vote on the proposal at the AGM on 27 February. If the five-for-one consolidation is approved it will take place on 28 February.
Valiant Investments (VALP) has raised a further £34,000 at 0.1p a share. Valiant’s 84.7%-owned subsidiary Flamethrower has set up a new company called Slot Right In, which will be the social casino division and Flamethrower plans to acquire and trade domain names. Flamethrower continues to add to its portfolio of apps.
Property investor Ecovista (EVTP) says it is looking at investments in London, Essex and Hertfordshire. An offer of £275,000 has been accepted for a cottage owned by the company, while a house in Bishop Stortford, acquired for £665,000 last year, has been demolished and construction of a new building with a gross value of £1.35m will start in the spring. A planning appeal has been lodged for the development of car park site near Stansted Airport.
Grant Thornton will step down as corporate adviser to Chinese medical products and services provider MiLOC Group (ML.P) on 6 March.
AdEPT Telecom (ADT) is acquiring Our IT Department, an IT services provider in London and the South East, for an initial £4.75m with up to £3.75m more payable depending on performance. This is a profitable business that brings additional IT skills to the telecoms business. AdEPT has secured a £30m, five-year bank facility from Barclays and RBS, which will help to finance further acquisitions.
Everpower International is acquiring a 9.9% stake in Haydale Graphene Industries (HAYD) in return for a £3.26m cash payment – equivalent to 170p a share. This is part of an agreement that will enable Haydale products to be manufactured for the Chinese market. Commercial revenues from the Huntsman agreement are not likely to come through until 2017-18 and with other strategy changes this means that the revenues for the year to June 2017 will be lower than expected.
Automotive acoustics and thermal insulation designer Autins (AUTG) has shocked the market with a profit warning less than six months after joining AIM and the chief executive has resigned. First quarter sales have been in line with expectations but a major customer has reduced orders. The share price has fallen from the August placing price of 168p to 145p – but it had been as high as 240p. Miton had added to its stake in January.
Ascent Resources (AST) says the flow test at the Pg-10 well was better than expected. The maximum stabilised flow rate was 8.8 million cubic feet of gas per day.
LED lighting technology developer PhotonStar LED (PSL) says that its 2016 revenues will be slightly lower than expected and the loss will be higher because of a challenging second half. Revenues were around £5.4m and the pre-tax loss was £1.3m. There was £230,000 in the bank at the end of 2016 with £830,000 of invoice financing. Cost savings have been made and this helps to improve the outlook for 2017, although the poor second half trading has continued into January.
Eagle Eye Solutions (EYE) says that interim revenues have grown 72% to £5.1m, which is better than expected. The nationwide roll-out of the Asda contract has increased coupon redemption numbers. Cavendish Asset Management has increased its stake to 8.26%.
ECR Minerals (ECR) says that the Australian government has given consent to for drilling at the Byron target in the Bailieston project area. ECR has applied for two more licences and is awaiting news of the renewal of the Avoca licence.
Tissue Regenix Group (TRX) says that dermal allograft product DermaPure, which includes the company’s dCELL technology, has been included in the US Department of Veteran Affairs Federal Supply Schedule. This covers 152 hospitals and 800 outpatient units. This will boost the commercial prospects of the wound care product.
Prospex Oil & Gas (PXOG) is raising £850,000 at 0.5p a share and this will help to finance the evaluation of potential projects. The share price has slumped since the beginning of the year because of a disappointing result from a well on its Kolo licence area in Poland. The placing price is about one-fifth of the share price prior to the drilling news.
New management at Quantum Pharma (QP.) says trading is in line. This suggests that the pre-tax profit for the year to January 2017 will be £6.7m, down from £10m in the previous year, although there will be exceptional reorganisation charges. The loss-making NuPharm business has been closed. Net debt was £13.5m – after most of the reorganisation costs have been paid. The share price is less than one-third of its peak less than two years ago but it is higher than the 34p a share placing price in October.
Vela Technologies (VELA) is raising up to £550,000 from a bond issue via the UK Bond Network. There is already interest for £250,000 of bonds and the other £300,000 have been underwritten. The interest rate is 10% and the bonds can be repaid after one year, including interest. If they are repaid earlier than one year’s interest has to be paid. Vela will use £150,000 to increase its investment in Portr, the airline passenger facilitation and baggage transport service.
BP Marsh (BPM) has subscribed for a 30% cumulative preferred ordinary shareholding in Stewart Speciality Risk Underwriting Ltd, a Toronto-based start-up headed by a boss with 25 years of experience. Stewart specialises in insurance for the construction, manufacturing, onshore energy, transport and public sectors. A £480,000 loan facility is also being provided.
Reconstruction Capital (RC2) is returning €17m of cash to shareholders. This equates to €0.115 a share.
Engineering and environmental consultancy Waterman Group (WTM) says that its interim revenues and profit will be in line with last year. Net cash was £6.7m at the end of 2016. This will enable Waterman to continue to increase its dividend.
Publisher Quarto (QRT) is on course to increase its pre-tax profit from $14.1m to $15.5m. Net debt was $62.2m at the end of 2016. A buyer has been identified for the Australian distributor Books and Gifts Direct. This will raise $1m in cash with the other $4.75m of the disposal price in loan notes. Even after a 46% increase in the share price, the 2016 multiple is less than eight. There are plans to change the way that the backlist of titles is valued.
Rainbow Rare Earths (RBW) commenced trading on the standard list and the share price ended the week at 12p, compared with the placing price of 10p. Rainbow has issued £260,000 worth of shares at the placing price to cover a majority of the costs of its flotation.
Challenger Acquisitions Ltd (CHAL) has sold Starneth less than two years after buying the designer and engineer of giant observation wheels. Challenger completed the acquisition of Starneth in July 2015 when an initial €1.25m was paid in cash and €825,000 in shares at 75p each. The second cash payment of €1.25m was delayed. Challenger will receive $6m in fees when the Jakarta wheel’s funding arrangements are finalised and the €1.25m payment will be taken out of that. There had been a third payment due but that does not appear likely to happen. This is a complicated deal but it is difficult to see this as a positive deal for Challenger but it will continue to work with Starneth and it will have a stake in the New York wheel. Acquisitions of businesses in the leisure and entertainment sectors that are close to revenues are likely.
Quoted Micro 12 December 2016
IMC Exploration (IMCP) and its partner Koza Ltd have started work on a mapping and rock sampling programme at the Goldmines River licence in County Wicklow and a licence in County Wexford. This work will help to prepare for the next phase of drilling.
African Potash (AFPO), which has lost its AIM quotation because of the resignation of its nominated adviser, has moved to ISDX, where Peterhouse is its corporate adviser. Dealings on ISDX commenced on 7 December. African Potash is attempting to build up a vertically integrated fertiliser mining, production and distribution business in the Republic of Congo.
Ashley House (ASH), which develops health and community care properties, is refinancing its loan from Rockpool through a £1.5m facility provided by Invescare Ltd, where Ashley non-executive deputy chairman Stephen Minion is one of the shareholders. The facility lasts until June 2018 and is secured against individual assets of the company.
Geologist Gareth Northam has been appointed to the board of Goldcrest Resources (GCRP). Goldcrest has raised £70,000 by issuing convertible loan notes to natural resources investor Pelamis Investments. The loan note is convertible into 28 million shares at 0.25p each – a price relating to after a planned 50:1 capital reorganisation.
Valiant Investments (VALP) has raised £40,000 at 0.1p a share in order to provide finance for 84.7%-owned apps developer Flamethrower. Kryptonite 1 (KR1) has raised £155,000 at 0.05p a share, while Imperial Minerals (IMPP) raised £35,000 at 2p a share.
AIM (Latest AIM Journal available)
Fairpoint (FRP) made a profit warning just prior to the close on Friday but there was still time for the share price to halve. Dividend payments have been suspended. The legal services business has not been trading as well as hoped in November and December. The closure of the debt services business is on course to be completed in early 2017 but overheads are still higher than the management planned that they would be.
MP Evans (MPE) has sold its Malaysian joint venture and intends to pay a special dividend of 10p a share. The disposal will raise $100m and the deal valued the plantations at $13,000/hectare. That is more than the remaining assets are being valued at by the current bid. Kuala Lumpur Kepong has received 12.9% acceptances for its 740p a share bid. The disposal means that one-third of the cost of this bid will be covered by cash.
Expect more shares to come on to the market following the announcement that a further £1.15m of loan notes in CloudTag Inc (CTAG) have been converted into shares by L1 Capital. The conversion price is 6p but the market price has risen to more than twice that level. There are £50,000 of loan notes left.
AB Dynamics (ABDP) is raising additional cash to give it a larger buffer as it invests in its new facility. The automotive testing equipment manufacturer already had cash in the bank but it has raised £5.4m at 475p a share and it is offering shareholders the chance to subscribe up to £1m at the same share price.
Northacre (NTA) has been on AIM for 19 years but it has decided to end its association with the junior market. This is not a surprise because the main shareholder owns 94.3% of the company. That shareholder is offering to buy any shares at 100p each – a 35% premium to the previous market price.
Formation Group (FRM) has also decided to leave AIM but it is switching to ISDX. A general meeting will be held on 4 January and the property developer could join ISDX as early as 12 January of shareholders agree to the AIM cancellation.
Clean room equipment manufacturer MayAir (MAYA) says that it generated revenues of $52.4m in the ten months to October 2016 and there is an order book worth $20.4m most which should be recognised this year. This provides some comfort that MayAir can achieve full year expectations. Management still hopes to be moving into a new factory before the end of 2017.
Vianet (VNET) reported lower interim revenues but stripping out discontinued fuel-related activities revenues grew slightly thanks to the vending division. The core operations grew their profit contribution but higher losses from the technology business held back overall profit growth. In the six months to September 2016, pre-tax profit improved by 9% to £1.13m. The US loss in the leisure division was halved and the number of sites continues to grow, unlike the UK where the number of sites continue to decline. The vending division offers good potential for profit growth now that it is covering its costs and more of the additional revenues drop through to profit. The uses of the technology for the Internet of Things should help to boost growth. Net cash is £1.98m and the interim dividend is unchanged at 1.7p a share. A full year profit of £2.4m is forecast.
Gas and electrical services provider Bilby (BILB) is restating last year’s results. This will reduce reported pre-tax profit from £1.37m to £718,000. This is due to additional costs and disputed revenues. The share price is less than one-third of the level it peaked at less than 12 months ago. The interim figures will be published later this month.
Share (SHRE) has sold 20,000 shares in London Stock Exchange for £540,000. Share retains 100,000 shares in London Stock Exchange.
TV technology developer Mirada (MIRA) says the roll-out of its technology by izzi Telecom will be slower than expected and demand in Mexico is uncertain. This means revenues, particularly higher margin licence sales, will be delayed. This year the expected underlying loss is likely to be around £1.4m higher at £1.8m. Capitalised development spending is rising so there will be a significant cash outflow even when amortisation is taken into account. A pre-tax profit is not expected until 2018-19.
Armadale Capital (ACP) has announced a JORC compliant resource of 40.9 million tonnes @9.41% graphite content for the Mahenge Liandu project in Tanzania. This is a particularly high grade and it should be easy to extract – and that could be confirmed early next year. There will be additional drilling and a further upgrade could happen in the first half of 2017.
Evgen Pharma (EVG) reported interim figures in line with expectations and there is £5.5m left in the bank. This is enough to push ahead with two phase II clinical trials for SFX-01 and to investigate other potential uses. The results of the trials should be available in the first half of 2018. The US Food and Drug Administration has given orphan drug status to the treatment for subarachnoid haemorrhage.
Premier African Minerals (PREM) has decided not to increase its stake in Casa Mining from 4.5% to 30%.
Project engineering consultancy Waterman Group (WTM) says that its performance has been in line with expectations in the first four months of this financial year. Exchange rates have helped to ensure a small increase in revenues in the period. This suggests that dividend growth will continue. Waterman has won work for the MoD, Brent Cross shopping centre and UK roads. The interim figures will be published in February. Michael Strong has been appointed as a non-executive director.
Quoted Micro 31 October 2016
Via Developments (VIA1) says the Canal Street project in Manchester should be completed next March, while another Manchester site is attempting to gain enhanced planning permission that would enable 71 apartments to be built. Via expects deposits of 15% of the purchase price of the eight flats in Canal Street before the end of 2016 and this should generate £329,000. The Napier House project in Luton has been granted permitted development for 26 one-bedroom apartments. Additional planning permissions for an extra floor and a change to the facade of the building have been submitted. Via has received firm commitments for £1m of additional 7% debenture stock. This will take the debentures in issue to £4.5m.
Ganapati (GANP), the developer of apps for social media and games, reported an increase in its interim loss from £7.47m to £8.41m following the opening of a London office. Revenues fell from £2.3m to £1.34m. A unrealised foreign exchange loss of £5.71m on Yen borrowings. Management hopes that the Yen bonds in issue will be extended when they come up for repayment. There was £1.5m in the bank at the end of July 2016 but Ganapati wants to raise more money via a share issue to invest in further research and development. .
Ashford Borough Council has granted planning permission for the new Curious Brewery on a 1.6 acre site in the town centre. The Chapel Down Group (CDGP) brewing subsidiary raised money to build the brewery through crowd funding.
Miton Asset Management has increased its stake in rail safety products developer Wheelsure Holdings (WHLP) to 10.2% following the latest share subscription. WB Nominees has increased its stare to 9.2%, while JM Finn Nominees has raised its holding to 8.5%. Chief executive Gerhard Dodl increased his shareholding by 500,000 to 4.215 million shares, giving him 2.4% of Wheelsure.
Symphony Technology increased its offer for the remaining subsidiaries of Bond International Software (BDI) and the 121p a share bid by Constellation Software Inc has lapsed after gaining total acceptances of 47.4%. Constellation says that it will vote in favour of the disposal to Symphony for £22.8m. The proceeds and the other cash held by Bond will be distributed to shareholders as part of a liquidation process. Between 127p a share and 129.5p a share should be distributed with an initial distribution of at least 126p a share. Constellation originally bid 105p a share and it had acquired the majority of its 29.9% stake in Bond at 75p a share back in 2010.
Cyprotex (CRX) is recommending a bid from German drug discovery firm Evotec AG. The 160p a share cash bid values the contract pharma research services business at £41.7m. The share price has not been at the level of the bid since 2014. Cyprotex believes that it needs a partner to help it grow its operations further and Evotec will help it to grow in Europe.
Sunrise Resources (SRES) has revealed details of the results for the phase 2 drilling at the Bay Street silver project in Nevada. There was no positive news from this drilling and further exploration and drilling is required.
Eastern Europe-focused oil and gas explorer Ascent Resources (AST) has raised £3.5m via a placing at 1p a share and a further £1m via a loan note issue. Some of the cash will be used to repay a £871,510 loan facility from Henderson, which has also deferred the redemption of £8.2m of loan notes to 19 November 2019. The rest of the cash will complete the drilling of two wells and connect them with a refurbished central treatment station. This should enable Ascent to commence gas production by next spring and the gas will be initially be sold to Croatia.
South Africa focused miner Ironveld (IRON) is raising £1.8 at 4.5p a share with some of the cash going towards the development of the 15MW DC smelter for the iron, vanadium and titanium project in the Bushveld complex. The cash should last until next June and the shares come with a warrant to subscribe for another share at 6.75p for 12 months after the shares are issued. The Industrial Development Corporation has approved facilities of R244m for the project and negotiations continue for the remaining debt requirements. The total finance required is R841m. An offtake agreement has been finalised for the high purity iron powder that will be produced over a five year period from the commencement of production. Offtake agreements were already secured for titanium and vanadium.
Workforce optimisation software provider eg solutions (EGS) has won its first direct contract in Asia. The £500,000 contract is with a Singapore-based financial business and 50% of this will be recognised in the year to January 2017. This underpins the current expectations.
There has been further good drilling news concerning the Hot Maden project in Turkey, including some improvements in grade, and Mariana Resources (MARL) expects to report the preliminary economic assessment in late November. This assessment will provide the first guidance about the economics of the project.
Futura Medical (FUM) has raised £12m at 57p a share in order to fund the development of its portfolio of products. This includes the commercialisation of erectile dysfunction treatment MED2002 and trials for pain relief products TPR100 and TIB200. There was £2.9min the bank at the end of June 2016. Henderson will maintain its stake in Futura at just below 20%. The CSD500 condom has received European approvals for an extended shelf life of 18 months for the products manufactured in India. The European supplier has applied for the same shelf life extension.
Arian Solver Corporation (ACQ) has extended the exclusivity period for the Notche Buena gold silver tailings project in Mexico until 27 December. Recovery levels have been poor even though gold grades have been commercial so more tests are required. Arian is assessing an advanced silver exploration project in the US.
Share (SHRE) has made another add-on acquisition of customer accounts and the existing business is trading in line with expectations. The purchase of a book of 8,000 customer accounts with £200m under administration should be completed in April 2017. The Share Centre has maintained its market share of a peer group of brokers revenues, excluding interest, at more than 10%. In the third quarter, revenues were 7% ahead, while customer assets have increased by one-third to £3.6bn. Dealing commission and fee income have both grown but interest income fell by more than one-third. Share is still expected to make a small underlying loss this year.
Nasdaq OMX-quoted AB Traction has increased its stake in engineering and environmental consultancy Waterman Group (WTM) to 14.3%. AB Traction went above 3% in April 2013 and has been building up the stake since then. AB Traction (www.traction.se) is an active long-term investor which does not focus on any particular sector. The strategy is to grow NAV.
Quoted Micro 17 October 2016
St Mark Homes (SMAP) has launched a one-for-three open offer at 105p a share, which could raise £1.3m. The open offer price is at a large discount to NAV of 137p a share. St Mark has said that the main constraint on growth is access to capital. The money is earmarked for two new developments in south west London. Longer-term, St Mark may move to AIM.
Energy efficiency products supplier Sandal (SAND) says that its MiHome IOT home automation range has been integrated with the Amazon Echo product that is being launched in the UK. Amazon Echo is a voice activated smart home control product.
Valiant Investments (VALP) has raised £51,500 at 0.1p a share. Valiant owns 84.7% of Flamethrower has acquired more apps for its range. Navigation app Where am I at? has been acquired for $20,000 and Conversation Shaker, which provides questions and icebreakers, bought for $3,000. Additional casino games have been launched.
Former AIM company Doriemus (DOR) is planning a standard listing. The process for the listing will start once the open offer is completed. The oil and gas company says that investors, including broker Optiva Securities, have agreed to subscribe for all the open offer shares at the open offer price of 0.035p a share if they are not taken up be existing shareholders. Doriemus hopes to raise up to £865,000 via the open offer, which closes on 18 October. The bid offer spread is currently 0.042p/0.05p.
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Midatech Pharma (MTPH) has raised £16m at 110p a share and an open offer at the same share price could raise up to £2m more. Midatech was floated less than two years ago at 267p a share, when it raised £32m. Midatech joined Nasdaq at the end of 2015. There was an £8m cash outflow from operations in the first half of 2016. The new cash will go towards advancing its development pipeline and investing in manufacturing in Bilbao and its sales resources. New candidates for the pipeline have been identified. The focus will be on Q-Octreotide (MTD201), an existing treatment for metastatic cancer tumours which is being developed into a sustained release product, and MTX110/MTX111, which are potential treatments for a rare brain tumour disease suffered by children called diffuse intrinsic pontine glioma.
Constellation Software Inc has announced a final increased offer of 121p a share for Bond International Software (BDI). The alternative is the liquidation of Bond which may not generate as high a figure as the Constellation bid. The original bid was 105p a share.
Vertu Motors (VTU) continues to drive forward Revenues were 18% higher at £1.45bn, while pre-tax profit was 15% ahead at £19.5m. Acquisitions fuelled the growth in the period but even after spending money on new sites there was net cash of £12.9m. The interim dividend is 11% higher at 0.5p a share. Used cars and service operations were particularly strong in the period. The new car market was weaker than the year before but it remains relatively strong. Mercedes Benz and Toyota have been added to the distributorships while most of the Fiat operations have been sold or closed.
Vast Resources (VAST) has announced that the maiden JORC resource estimate for the Nkombwa Hill phosphate and rare earths project in Zambia. The total JORC compliant mineral resource estimate stands at 21.8mt at a grade of 7.06% P2O5 and 1.17% total rare earth oxides (TREO) at a 3% P2O5 cut-off grade and 2.78mt at a grade of 2.76% TREO and 6.43% P2O5 at a 1% TREO cut-off grade. This represents 5% of the potential area. Kilmire International has eared a 50.4% stake in the project, with Vast owning the rest, and plans a further investment of $1m. Kilmire wants to reach a 65% stake in the project. Northland raised $5m for Vast in a convertible loan note issue that is being taken up over two years by Bracknor Fund Ltd. This cash will help fund other projects.
AstraZeneca has decided to end the phase IIa trial for respiratory disease treatment AZD9412 because a low number of the patients have developed severe exacerbations, although the trial has show that the treatment is safe. AstraZeneca will reassess how to progress with the potential drug that is licenced from Synairgen (SNG). Once the results have been reassessed a new trial can be designed so this is a delay but not a failure.
Digital TV software and services provider Mirada (MIRA) says that the roll-out for izzi Telecom/Televisa in Mexico is going to plan since it started in July and this means that Mirada should meet 2016-17 expectations. There are a total of 4.2 million subscribers that could use the service and this is likely to be the largest deployment of Mirada’s technology. Allenby expects a smaller loss this year than last year and a profit in 2017-18.
Patient monitoring equipment developer Lidco (LID) grew revenues from £3.6m to £3.77m and the loss was reduced. Sales have restarted in Japan and there was growth in the US. There was a cash inflow and cash was £2.09m at the end of July 2016. A full year profit of £200,000 is forecast.
Engineer and environmental consultancy Waterman Group (WTM) reported a 50% increase in full year pre-tax profit to £3.6m on the back of an improvement in revenues from £83.9m to £91.3m. Net cash was £5.5m at the end of June 2016. The dividend has also been increased by 50% to 3p a share – 2.5 times covered by earnings. Over the next three years management wants to increase the underlying operating margin towards 6%, from the current level of 4%. Recent appointments include the residential development of the former Thames Television studios at Teddington. The order book is worth £130m, which is similar to the level at June 2015.
Copper concentrate trader and mine developer Bluebird Merchant Ventures Ltd (BMV) has received an offer of new capital, which would lead to the acquisition of a controlling interest. The proposed share issue would be at a premium to the market price – 1.7p at the time. The share price has risen to 2.375p (2.25p/2.5p), although it has halved since trading started six months ago. There is no mention of whether existing shareholders will be offered a chance to have their shares acquired by the investor.
Quoted Micro 8 August 2016
Chapel Down Group (CDGP) has exchanged contracts on the 1.6 acre site in Ashford that will be used for the proposed new Curious brewery. The deal will be completed when planning permission is obtained.
Valiant Investors (VALP) has raised £71,000 at 0.1p a share in order for it to finance the development of 83.3%-owned apps developer and marketer Flamethrower.
Milamber Ventures (MLVP) says that its grant application partner Private Shares has invested £25,000 at 16p a share and it will invest a further £25,000 at the same share price once Milamber holds a concept development workshop. Any grant writing services provided before 18 February next year will be paid for in shares at 18p each. Milamber non-executive director Barney Battles has invested £12,500 in shares at 16p each and also converted £12,500 of fees into shares at 18p each.
A positive trading statement from software robots company Blue Prism (PRSM) lead to a share price rise of more than two-fifths. The share price was already nearly double the flotation price of 78p and it reached 211p at the end of the week. A new contract has been won with a major bank and another large bank has renewed its contract for three years. This means that the full year figures will be better than expected.
Branded interior furnishings supplier Walker Greenbank (WGB) has received a second interim insurance payment of £3.2m relating to the flooding at the Standfast & Barracks printing factory in Lancaster at the end of 2015. A payment of £8m had already been paid. An £800,000 payment is expected soon and there could be more to follow. The factory is almost back to full production following the installation of new digital printers and the backlog of orders is being fulfilled. Overall group trading is in line with expectations. UK sales have fallen but overseas sales have grown. There could be a modest boost from the weakness of sterling.
Domain names wholesaler and services provider CentralNic (CNIC) has been awarded the contract to distribute the .FM domain by its owner BRS Media. CentralNIc plans to promote the top level domain to online streaming businesses. The deal also includes the launch of other domains including .AM.
Asset management software provider StatPro (SOG) continues to transfer customers to its StatPro Revolution SaaS-based service. In the six months to June 2016, revenues improved from £15.4m to £17.6m, while underlying pre-tax profit was slightly lower at £827,000. The real benefits of the transfer to monthly revenues for Revolution will show through next year. Edison forecasts a small increase in profit from £2.6m to £2.8m this year and then a 2017 profit of £3.7m.
Ultrasound simulation equipment developer and supplier Medaphor Group (MED) is acquiring Inventive Medical Ltd, which sells cardio ultrasound simulation products under the HeartWorks brand. Medaphor already has a relationship with Inventive Medical and the companies’ products are complementary. Medaphor is paying £3m in shares – at 43p each – for the company. Loss-making Medaphor has £3.5m in the bank and this should last until the end of 2017.
TechFinancials Inc (TECH) enjoyed a strong first half, which has reassured investors following the disappointment of its failed joint venture in Asia. Revenues grew by 30% to $9.6m, while EBITDA nearly doubled to $1m.Full year forecasts have not been changed but there could be scope for upgrades later in the year.
Cloud-based communications software and services provider CloudCall Group (CALL) is raising up to £3.77m at 57.5p a share – a 3.6% premium to the previous closing price. The cash will be used to expand sales activities, particularly in the US. This investment will be coordinated with its partner Bullhorn, which is starting to sell outside of its core recruitment customer base. CloudCall’s product is used by 12% of Bullhorn’s UK customers and 2% of its US customers.
MayAir Group (MAYA) has announced the commencement of a share buyback of up to 10% of its share capital. A maximum of £5.76m can be used for this buyback. This follows $17.7m of industrial and commercial clean air equipment contract wins in recent weeks.
Engineering and environmental consultancy Waterman Group (WTM) expects to report a full year pre-tax profit in excess of its target of £3.3m. Waterman had set itself the target of tripling its profit in the three years to June 2016. Net cash has increased from £3.8m to £5.4m. Trading continues to be strong. The results will be published on 10 October.
Quoted Micro 16 May 2016
Carduus Housing (CHPB/CHP2) has discovered that £1.43m of its cash has been paid to Carduus Finance Ltd and £875,000 to a third party. It is estimated that £1.675m of this cash did not conform to budgeted spending or the company’s investment strategy. Carduus Finance has subsequently sold its stake in Carduus Housing for £1. Pankaj Rajani owns 75% and Beaufort Securities 25%. Peterhouse has resigned as corporate adviser and Brian Gilmour, Drew Oswald and Luke Cairns have resigned as directors. Pankaj Rajani and Darren Edmonston have joined the Carduus board. Gilmour is one of the main shareholders in Carduus Ltd, the holding company for Carduus Finance. On 2 February 2016, in his capacity as sole director, he made a solvency statement for Carduus Ltd. Stuart Black who was a director of ISDX-quoted Etaireia Investments is a former director of Carduus Ltd and Carduus Finance. When Black was on the Etaireia board it claimed it had planning permission for a site in Scotland but this proved to be untrue. Carduus Housing joined ISDX on 30 September 2015 when £3.5m of 6.5% unsecured bonds were admitted to trading. It has subsequently raised £3.5m from the issue of 6.25% unsecured bonds. Trading in the bonds remains suspended pending clarification of its financial position. The strategy is to invest in affordable housing, with 37 properties currently owned, but this may be changed. There is still £1.9m in the bank. The company will try to recover the cash that has been paid out for reasons outside the remit of the corporate strategy. Carduus Housing may need to raise additional cash by 2020 in order to redeem the bonds.
Secured Property Developments (SPD) continues to seek a suitable residential development project and it has widened the scope of its search to outside of the M25. A property in Scarborough has been sold for £327,500 – it was in the books for £300,000 – and no other investment properties are owned. The NAV was £758,000 at the end of 2015. There should be more than £700,000 in cash after the disposal. At 19.5p (18p/21p) a share, Secured Property is valued at £400,000.
Leni Gas Cuba (CUBA) is linking up with Commercial Funded Solar Ltd (CFS) in order to install and operate renewable energy assets in Cuba. CFS was established as a limited company in February 2015. The directors include Dmitry Gavrilov, who joined the board in March 2016 and is a 10% shareholder, and Timothy Dobson, who owns 80% of the company. Cuba wants to produce 24% of its electricity from renewable sources by 2030. The funding for any projects will come from external investors. The income related to developing and installing the plant will be shared 50/50 while Leni Gas Cuba will receive 25% of the revenues from operational contracts. At 1.35p (1.2p/1.5p) a share, Leni Gas Cuba is valued at £6.7m.
Brett Miller has resigned as a director of Gledhow Investments (GDH), although he remains company secretary, and has sold his 2.2 million shares at 2.2472p each – a large premium to the market price. At 1p (0.75p/1.25p) a share, Gledhow is valued at £490,000. On 11 May, 170,000 shares were traded at 1.15p each. Peterhouse employee Guy Miller has joined the board. He owns 264,700 shares.
Online retailer of musical instruments Gear4music (G4M) more than doubled its underlying operating profit in the year to February 2016. Revenues increased from £24.2m to £35.5m, while underlying operating profit excluding flotation cots jumped from £376,000 to £895,000. There was a small pre-tax profit after interest charges. The cash raised in the flotation means that these interest charges will be significantly reduced this year. Net cash was £2.6m even after investing in higher inventories. The product range is being expanded by 20% each year. Instead of a London showroom, the company is planning to open up European distribution hubs. There is a chance of a dividend for this financial year.
AdEPT Telecom (ADT) is acquiring managed IT and telephony services provider Comms Group UK for £3.5m plus surplus cash. The management is remaining with the business which has long-term relationships with small business customers. The business made an operating profit of £500,000 in the year to March 2015 and that is estimated to have risen to £800,000 in 2015-16, so the deal should be immediately earnings enhancing. Further information on AdEPT can be found at http://www.hubinvest.com/AIMPDFMay2016_80.pdf.
Digital performance marketing services provider XLMedia (XLM) says current trading remains strong and it still has organic growth opportunities on top of the potential for consolidation. The strategic review has been completed and XLMedia still believes that it should remain on AIM. The company will continue to seek opportunities in new territories and sectors as well as further developing its technology.
Marble quarry business Fox Marble (FOX) has raised £2m at 10p a share and the directors have agreed to take their salaries in shares at the market price. The cash will help to finish the Kosovo factory where cut and polished marble slabs should be produced by the summer.
MediaZest (MDZ) has raised £250,000 through a share issue at 0.1p each and it has capitalised a loan of £50,000 at 0.15p a share. The audio visual company says that it made its best ever performance in the year to March 2016. The cash will help to finance working capital for projects with HMV, Adidas and Diesel. MediaZest is trying to build a recurring revenue base.
Telecoms services provider Toople (TOOP) made strong start to trading on the standard list despite the limited nature of its current business. One man who will be pleased to see the shares go to a premium is chief executive Andrew Hollingworth, who acquired his 26% stake for less than £20,000 when the company was formed on 2 March 2016and it is currently worth more than £2m. His shares were issued at 0.0667p each compared with the placing price of 8p a share and the current share price of 8.88p. Hollingworth has an annual salary of £120,000 –Toople will have to grow to generate revenues that high – and seven weeks holiday entitlement each year. Former Coms boss David Brieth sold the main operating businesses to the group for 39 million shares and he is paid £120,000 a year, which is effectively for a three day week.
In the six months to March 2016, trickle ventilator and window components manufacturer Titon (TON) reported a dip in profit from £792,000 to £735,000 on flat revenues of £10.9m. That was due to weak Korean trading as competition increased. Net cash was £2.46m at the end of March 2016.
Engineering and environmental consultancy Waterman Group (WTM) says that revenues were 10% ahead in the first nine months of this financial year and is on course for a full year profit of £3.3m in the year to June 2016. Net cash will be better than expected. Waterman wants to improve its operating margin from 3.3% in 2014-15 to around 6% in 2018-19.
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Quoted Micro 30 November 2015
Hearing and mobility products marketer and retailer DHAIS (DHAP) slipped into loss last year after operating costs rose faster than gross profit because revenues did not grow as fast as expected. In the year to June 2015, revenues grew from £9.65m to £10.6m, while a profit of £161,000 was turned into a loss of £83,000. The interim profit had been flat but there was a larger second half increase in costs. However, there was a cash inflow after capital expenditure of £133,000, which helped to pay down debt – although this is mainly an interest free loan from a hearing aid manufacturer. Hearing aid sales were 15% ahead and mobility sales were 12% higher. At 30.5p (28p/33p) a share, DHAIS is valued at £19m. In May, Spain-based GN Hearing Care acquired the 4.76% stake previously owned by Eurohearingaids.com Ltd.
The new board at Lombard Capital Group (LCAP) has written down two investments in its portfolio by £141,000. At 4.5p (4p/5p) a share, Lombard is valued at £86,400. The NAV is £99,000 or 5.19p a share and that includes £16,000 in cash. Russell Darvill and Charlotte Argyle stepped down from the board and Mark Jackson, Graham Jones and Nigel Fitzpatrick were appointed to replace them early in November.
Miton Group took up all of the 15 million shares issued at 1p each by Wheelsure Holdings (WHLP), which gives it a 9.25% stake in the rail track safety products developer. Daniel Stewart, which became Wheelsure’s corporate adviser and broker in August, handled the subscription and has been issued warrants to subscribe for 1.4 million shares at 1p each any time in the next five years. At 1.125p (1p/1.25p) a share, Wheelsure is valued at £1.8m.
Titania Internet Ventures (TITP) has raised £25,200 from an issue of convertible unsecured loan notes maturing in November 2020. There is no interest income. The conversion price is 0.56p a share compared with the current market price of 2.5p (2p/3p) a share, which values the current share capital of the investment company at £44,000. The holder of the loan notes will not be allowed to have a stake of 30% or more in Titania on conversion. Titania is being run on a care and maintenance basis. Alexander David Securities has replaced SVS as corporate adviser.
Trading in the shares of Gowin New Energy Group Ltd (GWIN) has been suspended “due to a change in circumstances with its operating subsidiaries in China”. The suspension price is 0.55p (0.4p/0.7p) a share, which values the LED lighting products supplier at £2.5m.
Playtech has pulled out of its bid for Plus500 (PLUS) because of its failure to gain regulatory approval in an appropriate time scale. An interim dividend of $0.2121 a share has been announced – the plan is it to pay 60% of retained profit in dividend – and a share buy back programme of up to $20m will be put in place. Plus500 says that it had cash of $95m at the end of June 2015 and more has been generated since then. The dividend will cost $24.4m. Plus500 has had problems with regulators but it states that it “is not subject to restrictions imposed by any of its regulators”. Overall profit will be lower in 2015. Two non-executive directors have been buying shares but JP Morgan Chase has reduced its stake to 6.8%.
Motor dealer Cambria Automobiles (CAMB) reported slightly better than expected results, even after recent upgrades, and this has led to upgrades for 2015-16 and 2016-17. Underlying pre-tax profit improved from £5.4m to £7.7m in the year to August 2015. Cambria sold more new cars and made more profit on each of them. Used car and servicing revenues also increased. The dividend increased from 0.6p a share to 0.75p a share. Net cash was £1m and there is a £37m, five year bank facility that can be used for acquisitions. N+1 Singer has upgraded its profit forecasts by around 5% to £9m this year and £9.3m next year.
Pure Wafer (PUR) has agreed to sell its US wafer reclaim plant for $16m (£10.5m) and it will return the cash to shareholders. Pure Wafer had already decided not to rebuild the Swansea plant so it also has cash from the insurance claim. A decision on how much will initially be distributed will be made in December. WH Ireland believes that a distribution of at least 175p a share is possible. The company will leave AIM and be liquidated.
ASX-listed Tlou Energy (TLOU) raised £1.2m at 6.5p a share and joins AIM on 30 November. There is already £1m in the bank and no debt. Tlou has a coal bed methane project in Botswana, which has contingent recoverable resources of 3.3 trillion cubic feet. The Lesedi project in south east Botswana is 100%-owned but the Botswana government has an option to take a 15% stake when the mining licence is granted. The government will have to pay its share of the previous costs if the option is taken up, which could be around £6m. Broker Brandon Hill has already written a note on Tlou (http://tlouenergy.com/wp-content/uploads/2015/07/150721-Brandon-Hill-UK-Initiating-Coverage.pdf). First commercial gas sales could be in the second half of 2016. Botswana has a power shortage and expensive diesel generation can be replaced by gas. Tlou has been in discussions with a number of potential partners for power generation projects. The initial project would be a 10MW gas-to-power plant and then further generation plants would be developed. Tlou still has to secure government permits and approvals.
Kefi Minerals (KEFI) has raised £2.64m at 0.3p a share in order to provide cash to progress with its Ethiopian gold project at Tulu Kapi. Odey Asset Management has increased its stake to 26%. This will provide enough cash until the middle of next year. Construction of the project should start in 2016 and Kefi has managed to substantially reduce the cost of the project. Gold production could start at the end of 2017.
Waterman (WTM) says that its revenues were 8% higher in the first few months of the financial year and cash levels are better than expected. Public sector demand for infrastructure services is growing and property-based business is spread around the UK not just in London. The professional services business wants to reach an operating margin of 6% by 2018-19. Sanlam forecasts a rise in profit from £2.7m to £3.7m in the year to June 2016 and a 40% increase in dividend to 2.8p a share.
Bluebird Merchant Ventures Ltd plans to join the standard list in early December. Bluebird is involved in trading copper concentrate from the Philippines and has an option to acquire a 50.1% stake in Red Mountain Mining Singapore, which is developing a gold project. Clive Sinclair-Poulton, who has been a director of a number of AIM resources companies, is involved in Bluebird.
Quoted Micro 14 December 2015
Netalogue Technologies (NTLP), which is an ecommerce platform developer, has announced its first dividend since 2012 when it paid 0.123p a share. The latest dividend of 0.246p a share and the shares go ex-dividend on 17 December. Netalogue had cash of £807,000 at the end of September 2015 and the dividend will cost around £120,000. Interim revenues fell from £689,000 to £552,000 and profit dipped from £165,000 to £38,000. Netalogue has withdrawn from the hosting business. At 3.95p (3.7p/4.2p) a share, Netalogue is valued at £1.9m.
Hydro Hotel Eastbourne (HYDP) is maintaining its annual dividend at 18p a share. A dividend of 6p a share will be paid on 14 January (ex-dividend 17 December) and the 12p dividend on 5 May (ex-dividend 21 April). A slight increase in profit is expected this year. At 750p (725p/775p) a share, the yield is 2.4%.
Titania Internet Ventures (TITP) is considering changing its investment strategy so that it can become involved in the renewable energy sector. The proposal involves entering into a relationship with a British wind turbine manufacturer. Titania had been involved in online penny auctions, but this business ceased more than two years ago, and before that it investigated a nursing home acquisition in Finland. The company was originally called Uranium Prospects. At 2.5p (2p/3p) a share, Titania is valued at £44,000.
Leni Gas Cuba (CUBA) had net assets of £4.1m at the end of September 2015. Since then, £200,000 was raised at 5p a share but that went towards paying the £326,000 cost of joining ISDX. The pro forma NAV is around 0.8p a share. David Lenigas has bought one million shares at 1.437p a share, taking his stake to 142 million shares (28.7%).
Lombard Capital (LCAP) has raised a further £122,500 at 3.5p a share via a share issue to one of its directors, Mark Jackson. His stake is 28.2%. At 4.5p (4p/5p) a share, Lombard is valued at £102,000.
Unmanned aerial vehicles (UAV) services provider Strat Aero (AERO) is acquiring communications, flight control and hardware technology developer Aero Kinetics for $1.2m plus the taking on of working capital commitments. This will be financed by the issue of a $775,000 convertible promissory note with a 7.5% interest rate and a 6p a share conversion price, with the rest in cash. There will also be $80,000 0f legal fees and $150,000 will be required to finance an application for FAA Certification, which could be achieved in the middle of next year. There is potential contingent consideration, including warrants depending on certification and achievement of sales targets. This deal is part of the strategy to develop a vertically integrated business, which can offer a full solution to global clients. It also brings Aero Kinetics founder W Hulsey Smith to the group and he will take charge of the group’s technology operations. The acquired operations made a loss of $269,000 on revenues of $246,000 but this is under US accounting rules and all R&D is written off – more than $5m has been invested so far. Strat Aero is also raising £1.6m at 6.25p a share.
Moving into software has helped to offset the volatility of the hardware division but it will not prevent Vislink (VLK) reporting disappointing 2015 figures. The broadcast and surveillance technology supplier has found market conditions for the hardware business tough and new product launches have yet to generate the hoped-for sales. Expected full year revenues will be in the range of £54m-£58m. The company’s debt facility has been increased from £10m to £15m because late hardware sales will increase debtors. Net debt is expected to be £5.8m at the end of 2015. The 2015 profit could be as low as £4.2m, down from £7.1m. There could be a partial profit recovery to £6.3m in 2016 – helped by cost savings. Standard Life trimmed its stake to 4.6%.
Begbies Traynor (BEG) is expanding its property services business in order to offset the weakness of its core corporate insolvency business. In the six months to October 2015, revenues improved from £20.8m to £25.5m, while pre-tax profit rose from £2m to £2.5m. That is after a contribution from property of £6.11m in revenues and £1.16m in EBITDA, compared with nothing in the corresponding period. Corporate insolvency revenues and profit were lower. The interim dividend was unchanged at 0.6p a share. Net debt was £11.9m at the end of October 2015. A full year profit of £4.6m is forecast.
Surface coatings developer Hardide (HDD) had a tougher second half as oil and gas demand declined. In the year to September 2015, revenues were flat at £3m and Hardide fell from profit to loss. The majority of revenues were in the first half. This year it is likely to be the other way round. The new facility in Virginia should be open soon. An £800,000 loss is forecast for this year and a much smaller loss expected next year. There was £2.33m in the bank at the end of September 2015, which provides enough headroom on current expectations.
Snoozebox (ZZZ) is raising £5m at a hefty discount to the market price. The placing price is 6p – a 28.2% discount. The cash is required for the 2016 events season plus the evaluation of other opportunities. Snoozebox has already said that it has established a partnership with Dutco in the Gulf region. An EBITDA loss of £5m is forecast for 2015. Further cash will be required to take advantage of growth opportunities.
Investment group Cathexis has taken advantage of the recent weak trading statement by construction and fit-out company ISG (ISG) and bid 143p a share. ISG believes that this unsolicited offer is too low. The bid values ISG at £70.8m. US=owned Cathexis has been an investor since 2012, when the share price was below the bid level, and it made a bid approach in June. It currently owns 29.6%. The current year profit forecast for ISG had been slashed from £17m to £11m. The bid is at two-fifths of the share price 12 months ago.
Educational services provider Wey Education (WEY) made its move from ISDX to AIM on Friday and it raised £1.75m at 3.5p a share. Wey is capitalised at £3.29m.
Retail stockbroker Share (SHRE) is taking on up to 3,000 nominee share dealing accounts from Barclays, which is exiting the services. The accounts will be transferred by the end of February 2016. Share previously took on nearly 8,000 certificated dealing customers from Barclays.
Property services provider Waterman (WTM) has set a 6% target for its operating margin by 2019. Waterman’s business is predominantly in the UK and both the property and infrastructure sectors are strong. Sanlam forecasts a rise in profit from £2.7m to £3.7m in 2015-16. If Waterman can achieve its margin target then pre-tax profit could be around £6m in 2018-19. A dividend of 2.8p a share is forecast for this year.
Bluebird Merchant Ventures Ltd, which plans to join the standard list,has a copper concentrate trading business combined with a stake in a potential gold mining project. The former can generate cash for investment in the mining project and other projects in the Philippines. Bluebird’s management lives in the Philippines so it has local knowledge. Bluebird’s trading operation is taking advantage of the difference between the price of copper concentrate in the Philippines and the international price. So far, 18MT has been shipped and once Bluebird is shipping 100MT /month then it should be generating enough cash to cover its corporate overheads. The plan is to increase monthly shipments to 500MT/month, which would provide a sizeable surplus of cash to invest in other ventures. This includes other commodity trading opportunities as well as mining projects that are near to production or have been in production in the past and can be reopened. The potential gold mine will cost $15m to bring into production. It will take around 18 months to construct the mine once the necessary permissions are obtained from the authorities. At a gold price of $1,160/ounce, the NPV of the project would be around $13m. That is based on production of 100,000 ounces over five years.
Challenger Acquisitions (CHAL) has finally completed its deal to acquire the businesses of Starneth, which develops observation wheels, and been readmitted to the standard list. AIM-quoted Teathers has sold its stake for an average price of 50.3p a share, raising nearly £72,000 – a gain of £21,000. The Challenger share price ended the week at 41p.
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