News blog

Quoted Micro 19 December 2022

BY: Andrew Hore |
POSTED: 19/12/2022 |

AQUIS STOCK EXCHANGE

Aquis Stock Exchange owner Aquis Exchange (AQX) says that the most popular stocks on the market will be available via IG Group’s IG.com platform. It was not stated which Aquis companies will be available via the platform. Equipmake Holdings (EQIP) has moved to the Apex segment.

Invinity Energy Systems (IES) is selling a 1.5MWh vanadium flow battery to partner Hyosung Heavy Industries and this system will be evaluated by Korea Electric Power Corporation. If the test is successful, then the battery system will be qualified for use in grid scale projects in South Korea. There will be an advanced payment in 2022 and the rest of the revenues will be in 2023. This is the latest deal in Asia. A $10m funding facility has been secured from Riverfort Global Opportunities and $2.5m has been drawn down to provide working capital. There were 2.7 million shares issued as part of the deal. The reference price for the initial advance is 44.9p a share and there are associated warrants exercisable at 67.35p.

Hydrogen Utopia International (HUI) is planning a move to the standard list, which it believes will attract international investors. This should happen on 21 December. Hydrogen Utopia International has an exclusive, non-transferrable licence for the distributed modular gasification technology developed by AIM-quoted Powerhouse Energy (PHE).

Silverwood Brands (SLWD) is acquiring a 19.8% stake in cosmetics retailer Lush, and it is also buying Japan-based skincare company Sonotas. Silverwood Brands executive director Andrew Gerrie helped to build up Lush, the retailer and manufacturer of handmade cosmetics and toiletries. He left the board of Lush at the end of 2014 after falling out with a co-founder. He is selling the 19.8% stake in return for 228.2 million Silverwood Brands shares at 95p a share. Two independent valuations were carried out. Lush has annual turnover of £406m. Sonotas is paying £16m in cash and shares for Sonotas and there is a deferred payment of £2m. There is an option to buy the minority stake for £1.6m in shares. There could be additional earn-out payments. Sonotas has revenues of £6.7m.

S-Ventures (SVEN) is acquiring the Juvela business, which manufactures gluten free products for £8m in cash, £1.5m deferred until September 2023, and five million shares. Shawbrook Bank is providing a £5.5m term loan and £500,000 revolving credit facility. This year Juvela is expected to generate revenues of £8.6m and should be profitable. The brand fits in well with the existing portfolio of brands and S-Ventures has a factory in Frankfurt.

Voyager Life (VOY) is buying the Polish CBD manufacturing operations of Goodbody Health (GDBY) for £1.5m in cash and convertible loan notes. Voyager Life has raised £550,000 at 12p a share to pay the cash element. In the six months to September 2022, Voyager Life revenues were £135,000 and the loss was £511,000. The acquisitions will significantly increase revenues.

CBD products supplier Love Hemp (LIFE) says annual results and the AGM have been delayed. Trading in the shares will remain suspended until the account are published. First quarter revenues were 42% higher at £1.05m. The invoice discounting provider has stopped providing the facility and this is holding back sales. Investors are providing a £1.5m loan with a term of five years and at an annual interest rate of 20%. The invoice discounting provider will receive £700,000.

Quetzal Capital (QTZ) has published the admission document for the acquisition of Tap Global for £20.25m in shares and a subscription raising £3.1m at 4.5p each.

Lower revenues from the Nomad software platform in China hampered progress at Aquis-quoted Samarkand (SMK), although there was a larger contribution from the brands that the company owns. In the six months to September 2022, group revenues improved from £7.17m to £8.25m, while the loss was reduced from £3.53m to £2.18m. Distribution costs and overheads were lower, and they could be further reduced in the second half. The Nomad division’s revenues were 10% lower, due to Covid lockdowns creating uncertainty in the market. A full year loss of £4.1m is forecast.

Spirits producer British Honey (BHC) has ended its strategic review and decided to accept £750,000 in additional funding from 14.3% shareholder Khaled Said. This is secured on the company’s assets and carries an interest rate of 10%. Further cash will be required in the next 12 months. This means that the 2021 figures and the 2022 interims should be published in the near future and trading in the shares can then recommence. The second half has been tougher for the business than the first half.

Education technology company Dev Clever (DEV) plans to leave the standard list which is bad news for Asimilar (ASLR), which owns 72.3 million shares and 35 million warrants exercisable at 25p each. Trading in Dev Clever was suspended at 30p in December 2021, and it believes that a lack of interest in smaller companies means it is not worth staying listed. The shares were suspended so that the company could publish a document relating to the reverse takeover of Veative, which has gone through without the readmission document. The company may return to the stockmarket in the future. The Dev Clever investment accounted for around two-thirds of the Asimilar net asset value of £30.9m at the end of March 2022 – based on a 27p share price. Oscillate (MUSH) has 2.5 million warrants with an exercise price of 1p each.

Guanajuato Silver Company Ltd (GSVR) is raising up to C$7.5m though an issue of units at C$0.425 each. The unit comprises one share and 0.5 of a warrant exercisable at C$0.60. The previous week the silver miner secured a $5m credit facility with Ocean Partners, which already provides a $5m facility. The cash will help to ramp up silver production and invest in processing facilities, as well as enabling additional exploration.

One Health Group (OHGR) reported interim revenues increased by 17% to £9.83m. Pre-tax profit was flat at £256,000. The NHS-funded medical procedures provider announced an interim dividend of 1.66p a share.

VSA Capital (VSA) reported a decline in interim revenues from £1.16m to £846,000 and the loss jumped from £235,000 to £841,000. The cash outflow from operating activities was £411,000. Like many brokers, VSA was hit by reduced activity levels in the market. VSA advised Lush in its dealings with Silverwood Brands, and this will significantly boost second half income, although it was received in shares in Silverwood Brands. A full year profit is likely because of this deal.

Wishbone Gold (WSBN) confirms that there is a hydrothermal gold and copper system at the Red Seter project in Wester Australia. The mineralisation is similar to the nearby Telfer system.

Altona Natural Resources (ANR) had net assets of £1.05m at the end June 2022, including cash of £283,000. There was a £1.7m cash outflow from operations and capital investment. A maiden mineral resource estimate for the Monte Muambe real earths project should be available in the first quarter of 2023.

Ecotricity has edged up its stake in Good Energy (GOOD) from 27.2% to 28.1%. SuperSeed Capital Ltd (LON: WWW) managing director Mads Jensen’s purchased 2,000 shares at 105p each. Paul McKillen has increased his stake in Marula Mining (MARU) from 5.82% to 9.38%.

EPE Special Opportunities (E.OP) announced that the November 2022 NAV was 241.17p a share.

AIM

Smarttech247 Group (S247) joined AIM on 15 December, having raised £3.67m at 29.66p a share. This valued the AI-based cybersecurity business at £36.8m. The share price ended the week at 30.5p. Smarttech247 provides cybersecurity services via a combination of automation and human analysis, and it is profitable. AIM-quoted investment company Pires Investments (PIRI) has a direct stake as well as an interest through venture capital fund Sure Valley Ventures 1. Fellow AIM company Riverfort Global Opportunities (RGO) holds a 6.16% stake, which is valued at £2.3m.

Blackbird (BIRD) announced that its major partner is Belgium-based live video technology developer EVS Broadcast Equipment, which has already announced a $50m, ten-year deal with a US broadcaster. Blackbird completed the development and integration of its technology with EVS earlier this year. This deal incorporates Blackbird’s video editing technology and provides Blackbird with a per-seat user licence fee, as well as maintenance and support revenues. Similar deals are likely to be secured from EVS’s customer base.

Midatech Pharma (MTPH) is acquiring TSX Venture Exchange quoted Bioasis Technologies Inc and as part of the deal it will leave AIM but retain the Nasdaq listing. The purchase will be financed by the issue of 75.9 million shares and that valued the transaction at £4.4m when it was announced. There will be £8.2m raised through a fundraising via a share issue at 3.3p a share and the sale of units of ADSs and warrants at $1/ unit. Bioasis focuses on treatments for rare and orphan diseases of the nervous system. The lead product is a treatment for optic neuritis associated with MS. There are deals that generate milestone payments of up to $200m, but much of this cash could be paid many years in the future if ever. This will change the focus of the enlarged group from drug delivery to therapeutics. The group is changing its name to Biodexa Pharmaceuticals.

Business disposals and tax adviser K3 Capital (K3C) is recommending a 350p a share cash bid from a vehicle controlled by affiliates of Sun European Partners. This values K3 Capital at £272m.

Weak buyer confidence has prompted housebuilder Springfield Properties (SPR) to temper its expectations for 2022-23 and next year. Revenues will still grow, helped by the recent acquisition, but increasing building costs will hit margins. The six months to November 2022 will not be as affected, but it will show through in the second half. The full year pre-tax profit forecast has been cut from £27.5m to £17m and the expected dividend has been reduced to 4.6p a share, down from 6.2p a share.

MJ Hudson (MJH) following its recent disagreement with auditor EY has uncovered other issues and Peter Connell, who has already stepped down as a director, has been suspended. Trading in the shares has been halted at 12.5p while the issues are investigated. The audit will not be completed in 2022.

Engage XR (EXR) warns that the fourth quarter has been slower than expected and 2022 revenues will be below €4m, rather than the previously forecast €4.9m. The extended reality technology developer says customers have delayed contract decisions and this has put pressure on cash levels. Net cash should be €1.9m at the end of 2022 and there is a continued cash outflow. Cost savings are being considered to reduce the cash outflow.

Small business finance provider Time Finance (TIME) revenues are increasing, and this is falling through to profit. In the six months to November 2022, revenues are 27% ahead at £13.2m and pre-tax profit improved from £1.2m to £2m. This is well on the way to the full year forecast of £2.8m. The gross lending book is £152.7m.

Velocys (VLS) has been awarded two UK government grants. The larger one is a £27m grant for the Altato sustainable aviation fuel project in Immingham. This is being developed in partnership with BA. Velocys has to obtain matching funding from the private sector. Velocys will contribute up to £8m. A further £2.5m grant is for a new e-fuels project to make aviation fuel from carbon dioxide and hydrogen.

Helium One Global (HE1) has raised £9.9m at 5p a share, having initially sought at least £7m. The money is coming from new and existing investors. The cash will be spent on a single exploration well in the Tai prospect in the Rukwa Basin, Tanzania. This will help to prove up a working helium system. Management has secured a drilling rig for the first quarter of 2023.

Shareholders approved the PCF Group (PCF) plan to leave AIM on 19 December and Parsley Box (MEAL) shareholders did the same and it will leave on 22 December. The ready meals supplier has arranged a matched bargain facility for the shares through Asset Match.

Morses Club (MCL) has issued a practice settlement letter to scheme of arrangement creditors. This scheme will largely be financed through an equity issue.

MAIN MARKET

Carclo (CAR) admits that second half profit will be much lower than previously expected because of the loss of a contract. The lending bank remains supportive and there are discussions about amendments to banking covenants. Directors have been buying shares.

Argo Blockchain (ARB) is running short of cash, and it is trying to sell assets. Management hopes that it does not have to file for bankruptcy protection. Nasdaq says Argo Blockchain has until June to comply with the minimum bid price rule of more than $1/ADS.

Liberia-focused gold explorer Hamak Gold (HAMA) reported positive results from its first drill hole at the Nimba licence. The drill hole at the Ziatoyah prospect on the Nimba licence area intersected 20 metres at 7g/t. This suggests that there could be a significant mineralised system that is similar to the one at the Ity gold mine, which is a nearby gold mine in the Ivory Coast.

Data integrity software provider Gresham Technologies (GHT) says that full year earnings will be better than expected. Revenues should be £48m and EBITDA at least £10m.

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