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Quoted Micro 14 October 2019

  • BY: Andrew Hore |
  • POSTED: 14/10/2019 |

NEX EXCHANGE

National Milk Records (NMRP) increased its pre-tax profit by one-fifth to £2.4m in the year to June 2018. Revenues improved from £21.4m to £22.8m. The farm-based milk recording business grew, but the main growth came from the much smaller traceability and reproductive businesses. These figures are for the period before the recent virus attack. The dividend has been halved from 2.5p a share to 1.25p a share because management wants to invest in laboratories and IT. Net debt was £1.7m.

Good Energy (GOOD) has clarified its interim figures. The renewable energy supplier says that there was a misclassification of £4.9m relating to cash and current assets and current liabilities. The problem was the timing of payments. This does not change NAV and profit. There was a £20m in the bank at the end of September 2019. Good Energy has signed a technology platform agreement with Octopus Group, which could involve investment of £4m in order to improve efficiency. The existing technology will be written down over the 12 months to June 2019. Operating cost savings should cover the investment in 18 months of full implementation.

Vox has ended merger discussions with PCG Entertainment (PCGE) and Align Research saying that it is difficult to raise money for any business involving Align Research. Vox is concerned that this will hamper fundraisings for future deals, and it believes it could have a negative effect on its main business.

VI Mining (VIM) has acquired rights to near-surface oxide gold at the Aripuana project in Brazil. The company’s other assets are in Peru.

Reyker Securities has been suspended as a broker on NEX Exchange.

AIM

PCI-compliant payment services provider PCI PAL (PCIP) is making progress in winning new contracts in North America. Recurring annual contract value is £1.9m, compared with forecast revenues of £4.8m in the year to June 2020, up from £2.8m. PCI Pal will continue to lose money as it builds up revenues. Net cash was £1.5m at the end of June 2019. A new £2.75m facility will provide the working capital required to cover losses until the company starts to generate cash. Net debt of £1.5m is forecast at the end of June 2021, so this is well within the funding available.

Uhuru Corporation is a Japanese Internet of Things technology company planning to join AIM this month. Tokyo-based Uhuru (www.uhuru.co.jp/en) is involved in consultancy and engineering, as well as providing creative content and data analysis. Customers include NEC, Dentsu, Honda, Komatsu, Yamaha and Mitsubishi Heavy Industries.

Duke Royalty (DUKE) raised £461,500 at 44p a share via PrimaryBid.com, which takes the total raised to £16.55m. A two-for-51 open offer has been launched to raise a further £3.45m.

AIM shell Wilmcote Holdings (WCH) had discussions about the participation in the purchase of US-based speciality chemicals company Arclin Inc, but these have ended. The costs of the work done on this potential transaction have reduced the cash pile to £900,000. Wilmcote is holding talks with investors about how to fund expenses while it seeks another speciality chemicals acquisition. Trading in the shares has recommenced and the share price slumped from 97p to 65p.

Oil and gas producer Amerisur Resources (AMER) has issued revised bidding instructions to the potential acquirers that were provided data as part of the strategic review and formal sale process. The process will hopefully conclude before the end of the year.

Applied Graphene Materials (AGM) is focusing on the customers that are utilising its dispersion know-how and provide the best near-term revenue potential. That will enable the graphene producer to cut its operating costs and make the cash in the bank last at least another two years. Net cash was £6.1m at the end of July 2019 and a tax credit of £600,000 has since been received. Manufacturing will be streamlined, and the annual cost base could fall from £4.3m to £3.2m. Revenues remain modest.

Pawnbroker Ramsdens Holdings (RFX) will make a one-off gross profit of £600,000 from scrapping slow moving jewellery in order to take advantage of the rise in the gold price. Trading is in line with expectations. The interims will be published on 3 December.

United Oil and Gas (UOG) is on course to acquire Rockhopper Egypt for $16m before the end of 2019. A share issue is required in order to fund the initial cash payment of at least $11m. The rest of the payment will be in shares issued at the placing price. The main asset being acquired is a 22% interest in the Abu Sennan concession.

Time Out Group (TMO) has raised £17.1m at 127p a share. The June 2016 flotation price was 150p. The cash will be used to cut debt and roll-out more Time Out Market sites, with Chicago and Montreal due to open later this year and more contracted sites for the future. Net debt was £34.4m at the end of June 2019.

Investors give no quarter when it comes to profit warnings these days. Public housing software provider Castleton Technology (CTP) says recurring revenues are still going well, but there is a shortage of one-off revenues. This has led to a 15% cut in forecast revenues for the year to March 2020. That leads to a cut in pre-tax profit forecast from £6.4m to £5.3m. A similar reduction has been made in the forecast for 2020-21, which is £5.8m. The share price fell by more than one-third to 57p, which is less than ten times prospective earnings.

Trading in the shares of Solo Energy (SOLO) has been suspended ahead of a proposed acquisition of assets from ONE-Dyas for an initial €30.1m. That will be funded by debt and a share issue raising £20m, which will involve an open offer. The 14 gas fields are in the Dutch sector of the North Sea. Tom Reynolds is moving from non-executive to chief executive. The admission document should be published in November and the name will be changed to Scirocco Energy.

Dekeloil (DKL) is still being hampered by a low crude palm oil price but it is optimistic that the price will improve. There was a 11% decrease in third quarter crude palm oil production to 4,803 tonnes. However, there was a 30% increase in sales to 7,138 tonnes. The average price achieved was 16% lower at €456/tonne. The cashew processing project is on course for first production in 2020. The company is changing its name to Dekel Agri-Vision Ltd.

Managed services provider Redcentric (RCN) says that first half trading was on track. It is on course to improve pre-tax profit from £7.2m to £9.8m.

MAIN MARKET

Nottinghamshire-based nmcn (NMCN) is acquiring Lintott Control Systems (LCS), which designs and manufactures water and wastewater treatment systems and process software. The total cost of LCS could be as high as £3.76m. The initial payment is £1, plus up to £676,000 dependent on the receipt of payment for certain invoices. The rest is dependent on profit levels over the three years to the end of 2021.

Argo Blockchain (ARB) has increased third quarter revenues by 75%, compared with the second quarter. Revenues were £3.63m and the cryptocurrency mining margin is 73%, even though the bitcoin price has dropped. The number o machines in production should double to 12,000 by the end of the year.

Rainbow Rare Earths (RBW) used cash of £2.31m in operations in the year to June 2019. Rainbow generated revenues of £1.54m from trial rare earths mining at Gakara in Burundi, but production costs were double that level. Write downs mean that net assets were £3.37m at the end of June 2019. More exploration activity is required before production levels are increased.

Stranger Holdings (STHP) has agreed terms to acquire two mineral companies. One has assets in Cameroon and the other is in Idaho. Minerals include cobalt and nickel. Previous potential transactions have been terminated.

Standard list shell Auctus Growth (AUCT) is still seeking an acquisition. There is still £912,000 in the bank.

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