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Quoted Micro 18 July 2016

  • BY: Andrew Hore |
  • POSTED: 18/07/2016 |

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ISDX

Milk recording and lab services provider National Milk Records (NMRP) was hit by the weak milk price and losses in its developing businesses in the year to March 2016. Revenues improved from £20.2m to £20.6m, while pre-tax profit increased from £2.42m to £6.02m, but that includes a £5.16m pension-related credit. The underlying operating profit fell from £1.92m to £1.1m. Disease testing services and the Inimex Genetics businesses made lower revenue contributions and the latter was loss-making. There was £777,000 generated from operating activities and cash in the bank at the end of the period was £2.4m. The pension deficit has fallen from £9.7m to £3.5m, mainly due to a switch from RPI to CPI when calculating pension increases. NMR has gone from net liabilities to net assets of £2m. NMR believes that increased milk demand from China could help the UK milk price to recover. At 75.5p (74p/77p) a share, NMR is valued at £5.7m.

Hydro Hotel, Eastbourne (HYDP) reported a reduced interim loss in the six months to April 2016 thanks to a better Christmas and New Year period and lower costs. However, trading has been tougher in recent months due to a change in general manager. Revenues edged ahead from £1.31m to £1.33m, while the loss was cut from £167,000 to £99,000. There is just over £1m in the bank and cash flow is stronger in the second half. Refurbishment plans were put on hold until after the appointment of Jonathan Owen as general manager in May. At 775p (750p/800p) a share, Hydro is valued at £4.7m.

B2B ecommerce platform supplier Netalogue Technologies (NTLP) was hit last year by pulling out of hosting and the termination of business with Spicers. New customers have been won, including Bunzl. In the year to March 2016, revenues declined from £1.38m to £1.12m, while pre-tax profit fell from £202,000 to £70,000 even though the amortisation charge was reduced. There was £549,000 in the bank at the end of March 2016. The NAV is £738,000, while, at 4.75p (4.5p/5p) a share, the company is valued at £2.3m. A three year plan has been developed and the initial benefits should come through this year.

Commercial property investor Ace Liberty & Stone (ALSP) has drawn down a five year term loan of £3.4m. This provides Ace with a cash reserve of £4m to help finance further property acquisitions in a market that management believes offers attractive opportunities.

Via Developments (VIA1) has acquired its third project at Plymouth Grove in Manchester.  This residential block has planning permission to increase the number of floors from four to seven. The original plan was for 42 units but the layout is being reconfigured. Management is confident about future acquisitions. A further £350,000 has been raised from additional debenture issues.

Blockchain technology investor Coinsilium (COIN) chairman Laurent Kssis has acquired 120,000 shares at an average price of 3.2p each. This takes his stake to 620,000 shares. Mark McDonnell has been appointed as chief executive of investee company Magnr.

Gledhow Investment (GDH) has cut its stake in Hellenic Capital (HECP) from more than 18% to less than 3%.

AIM

Antibiotics developer Motif Bio (MTFB) has started the process for a listing on Nasdaq. Motif will stay on AIM but the Nasdaq listing will provide additional cash and access to more investors. It also raises the company’s profile in the US prior to the launch of iclaprim. Early backer Amphion Innovations (AMP) still owns 26.1% of Motif, which is worth more than Amphion’s market value and there could be an uplift in the valuation of Motif following a US listing.

Amino Technologies (AMO) has reassured investors by reporting interims in line with expectations and strong cash flow. Net cash is £3.1m and this is set to continue to grow even though the interim dividend was increased to 1.39p a share. The weakened pound will be good news to Amino because of its significant dollar revenues. The full year profit is expected to jump from £5.1 to £8.7m.

Bilby (BILB) reported good figures for the year to March 2016 even though work has been slow in coming through from the SEC framework agreement. There is caution about any significant contribution from the SEC framework this year and if contracts are won there is scope for upgrades. There have already been upgrades following recent acquisitions. Underlying profit is expected to grow from £3m to £5.7m this year, while earnings per share are estimated to improve from 7.6p to 11.2p.

Begbies Traynor (BEG) continues to be hit by a lack of insolvencies but the uncertainty surrounding the exit from the EU may increase the opportunities for the company. In the year to April 2016, revenues grew from £45.4m to £50.1m, while underlying pre-tax profit improved from £3.6m to £4.5m. However, this partly reflects a full year contribution from the Eddisons acquisition in December 2014. The growth cam from the property services businesses, while the insolvency division made a lower contribution. The total dividend is unchanged at 2.2p a share.

Iain Ross has taken over as executive chairman of drug discovery group e-therapeutics (ETX) following the departure of chief executive Professor Malcolm Young. Ross was appointed non-executive chairman at the beginning of 2016. Professor Young was a shareholder in Searchbolt, which has rights over IP related to the company and has been reacquired by e-therapeutics in an all share deal, and he received 3.35 million shares, taking his stake to 24 million shares (8.94%).  He also owns a further 2.44 million options.  Finance director Steve Medlicott becomes chief operating officer and a new chief executive will be recruited. Meanwhile, another director, Trevor Jones, will review the existing range of projects. Net cash was £24.8m at the end of January 2016.

Faroe Petroleum (FPM) is acquiring Norwegian assets from DONG E&P Norge for $70.2m and the deal should be completed by the end of 2016. Faroe raised £62m from a placing at 70p a share, which will also finance the development of the Brasse discovery. Faroe is acquiring stakes in five producing oil and gas fields in the Norwegian North Sea and this should add 2P reserves of 19.8 mmboe and additional production of 8,000 barrels of oil equivalent per day.

Healthcare software and services provider EMIS Group (EMIS) says that trading has been in line with expectations even though contract awards in larger NHS procurements continue to be awarded more slowly than expected. EMIS has moved into a net cash position.

Allergy Therapeutics (AGY) says that its full year revenues grew from £43.2m to £48.5m, including a cull contribution from June 2015 acquisition Alerpharma. The allergy vaccines supplier would have grown by 19% on a constant currency basis. Market share has increased to 12% and strong revenue growth is expected for several years.

Main Market

Highlands Natural Resources (HNR) has called of the sale of its helium assets to fellow standard list company Opera Investments. Highlands plans to develop the Helios Two project in Montana by itself.  Opera reported a £97,000 cash outflow in the six months to June 2016, following the repayment of £219,000 of due diligence and other costs for the failed acquisition of SoloPower Systems. There was £716,000 left in the bank. David Proffitt has sold his 750,000 shares in Opera.

David Barry of Value Investments Ltd has taken a stake of more than 3.6% in Tex Holdings (TXH). AS Atlantis Vest had previously sold the 200,000 shares it owned. Value Investments Ltd recently took a 3% stake in motor dealer Caffyns. David Barry has historically been an investor in a number of small companies. Other recent investments of more than 3% have been in investment company ARGO Group Ltd and Local Shopping REIT.

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