Aquis weekly movers: ProBiotix Health fights off rebels
Rebel shareholders failed to win any of their three resolutions, including the removal of the chief executive, at the requisitioned general meeting of ProBiotix Health (LON: PBX). Broker Peterhouse said that major shareholder OptiBiotix Health (LON: OPTI) was not allowed to vote its shares at the meeting because of the relationship agreement from the flotation of the probiotics developer. OptiBiotix Health owns 53.5 million shares, and the votes were lost by less than 36 million shares. The ProBiotix Health share price recovered 45% to 7.25p. The recent £1.23m fundraising was at 3.36p/share.
Mendell Helium (LON: MDH) has sent a circular seeking shareholder approval for the sale of its cannabis operations. The meeting will be held on 11 November. The plan is to take up the option to acquire M3 Helium and seek readmission. The share price rose 14% to 3.25p.
Surgical treatments provider One Health Group (LON: OHGR) interim revenues were more than one-fifth higher at £13.4m. New patients increased by 29%. The second half is likely to better than expected. That means that full year EBITDA should be higher than £1.9bn. There was cash of £4.9m at the end of September 2024. A move to AIM is being considered. The share price firmed 7.69% to 210p.
KR1 (LON: KR1) had net assets of 62.15p/share at the end of September 2024. The income from digital assets was £592,000 during September. The share price increased 5.15% to 51p.
Aquis Exchange (LON; AQX) and Cboe Europe are assessing a joint bid to provide an EU consolidated tape of stock trades. The European Commission has decided to create a single entity to operate a real-time, trade consolidated tape. The European Securities and Market Authority will select the business to take on the role. The plan is for the two companies to set up a joint venture called SimpliCT, which will be based in the Netherlands, to bid for the role of equity consolidated tape provider. The share price is 2.8% higher at 330p.
Luxury prize draw organiser Good Life Plus (LON: GDLF) has achieved £330,000 in monthly recurring revenues. There are more than 40,000 subscribers and churn has been reduced. In the six months to July 2024, revenues were £1.69m. There was a £2.21m cash outflow from operating activities. There was a fundraising after the balance sheet date. Richard Johnston has been appointed as finance director. The share price edged up 2.38% to 2.15p.
FALLERS
Investment Evolution Credit (LON: IEC) raised £475,000 at 1p each and there is a broker option to issue up to three million more shares. The share price declined 68.8% to 12.5p.
Incanthera (LON: INC) is still waiting on the launch date for Skin + CELL products.This delay knocked 13.4% off the share price to 14.5p. .
Health IT provider DXS International (LON: DXSP) has won its first NHS commercial contract for its AI ExpertCare Clinical Decision Support product. In the year to April 2024, revenues were 2% ahead at £3.31m, There was an impairment charge of £4.38m. Even without that write-down the company fell into loss. Chairman Bob Sutcliffe bought 50,000 shares at 1p each and 133,333 shares at 1.5p each. He owns 1.74% of the company. The share price dipped 11.1% to 1p.
Marula Mining (LON: MARU) is stockpiling ore at the Kinusi copper mine. Samples have been sent to South Africa for test work and the results will help to design the first phase of the processing facilities. Three trial shipments are about to be sold. The share price fell 10.6% to 5.25p.
Hannah Haxby has resigned as a non-executive director of Hydrogen Future Industries (LON: HFI). The share price slid 7.14% to 1.625p.
Macaulay Capital (LON: MCAP) investee company Vale Foods has repaid a £125,000 loan and this has been reinvested in shares in the latest fundraising of £430,000. A £100,000 loan has been made to another investee company. The share price declined 5.26% to 18p.
Chris Akers’ stake in Oscillate (LON: MUSH) has been reduced from 5.94% to less than 3%. Peterhouse Capital has also reduced its stake below 3%. The share price slipped 4.35% to 1.1p.
Fenikso (LON: FNK) is launching a share buyback of up to 49.3 million shares. A further $404,000 has been received in loan repayments. The remaining loan is worth nearly $39m. The share price fell 3.45% to 1.4p.
Ananda Developments (LON: ANA) lost £1.21m in the six months to July 2024 and has net liabilities due to convertible loans that mature in November 2025. The share price edged down 1.54% to 0.32p.
AIM weekly movers: MicroSalt gains new orders
MicroSalt (LON: SALT) has received an initial purchase order for 50,000lbs of low-sodium salt from a major food and drink manufacturer for one of its product lines. Annualised volumes should be 200,000lbs and there could be orders for two other products. There is also a follow-on order from a B2B customer and the 63,860lbs will be delivered in January. Two other B2B orders have been won. The share price soared 90% to 95p – the highest it has been since July. Tekcapital (LON: TEK) owns 69% of MicroSalt. Another investee company Innovative Eyewear has launched the first ANSI-certified smart safety glasses for all-day wear under the Lucyd®, Nautica®, Eddie Bauer® and Reebok® brands. The Tekcapital share price rose by one-quarter to 10p.
United Oil & Gas (LON: UOG) has completed its exit from Egypt, although it still requires government approval. The company should receive $620,000 from the disposal. The share price jumped 76.7% to 0.265p.
At the beginning of the week, Emmerson (LON: EML) said it had filed an appeal against the unfavourable recommendation for its ESIA application for the Moroccan potash project, but the regional authorities say that they cannot examine the ESIA submission again. Emmerson subsequently notified the Moroccan government of an investment dispute and argues that the government is violating an agreement between the UK and Morocco. The dispute can be submitted to the International Centre for the Settlement of Investment Disputes. Prior to this, the company is seeking cash compensation from the government. Emmerson is trying to reduce its cash burn, but that will mean that there will be no progress with the development of the project. Two non-executive directors are stepping down and the two remaining non-executives will take fees in shares, while the chief executives pay will be reduced by two-fifths. The share price bounced back 56.6% to 0.88p.
Red Rock Resources (LON: RRR) has been meeting with the Democratic Republic of Congo authorities concerning the court judgement in the company’s favour, as well as new opportunities. A framework agreement has been signed with Koto DRC for an equal joint venture once a suitable asset is secured. The share price improved 38.5% to 0.045p.
FALLERS
Tlou Energy (LON: TLOU) is seeking shareholder approval at its AGM to leave AIM. The shares will still be traded on the ASX and the Botswana Stock Exchange. Interest in the company has dwindled and the departure will save money. UK shareholders are offered the chance to transfer their holding to the ASX depositary in exchange for ASX-listed shares at no cost. Tlou Energy released a first quarter update indicating progress with the Lesedi CBM gas-to-power project in Botswana. First electricity sales are expected in the middle of next year. There was an operating cash outflow of A$800,000, plus A$1.7m of capital investment in the period. The share price slumped 44.9% to 0.875p.
Property developer and investor Caledonian Trust (LON: CNN), which has been on AIM for more than 29 years, also announced the proposed cancellation of the AIM quotation. The direct annual cost of the quotation is £100,000 and liquidity is poor. A general meeting to gain shareholder approval will be held on 18 November. The cancellation is expected to be on 26 November. The share priced dived 36.8% to 60p.
Armadale Capital (LON: ACP) is set to leave AIM on 13 November. The share price fell a further 44.4% to 0.075p.
Mosman Oil and Gas (LON: MSMN) generated revenues of A$186,000 in the year to June 2024.The outflow from operations was A$529,000. The company is focusing on helium activities. The share price is one-quarter lower at 0.0375p.
Shield Therapeutics (LON: STX) generated $7.2m from 43,500 ACCRUFeR prescriptions in the third quarter, which was slightly lower than forecast. The average net selling price is $167, and this could rise to $192 in the fourth quarter. Total nine-month revenues are $20m and the 2024 figure should hit $31.5m. Management admits that more cash will be required, and costs are being reduced. Sallyport is providing a $15m facility, up from $10m previously, and AOP Health has agreed to subscribe $10m for shares at 4p each. The share price slipped by one-quarter to 3p.
IQE (LON: IQE) chief executive Americo Lemos is leaving the semiconductor wafer manufacturer after three years in the role and Mark Cubitt becomes executive chair. Finance director Jutta Meier will become interim chief executive. The focus will be on cash generation and the proposed flotation of the business in Taiwan next year. The share price dipped 21% to 11.74p.
FTSE 100 surges as oil spikes higher, Non Farm Payrolls signal rate cut
The FTSE 100 surged higher on Friday amid a spike in oil prices and a broad recovery from yesterday’s induced wobble in UK-focused shares.
London’s leading index was 1% at the time of writing, shortly after the release of the October Non-Farm Payrolls report revealing the US economy only added 12,000 jobs last month compared to estimates of 100,000.
Oil prices were one of the main drivers of trade on Friday amid a sharp jump in oil prices as tensions around the Middle East returned after Iran threatened further retaliation against Israel. BP and Shell were both higher by 1%.
“It’s been buoyed by energy stocks boosted by the higher oil price and a significant win for consumer goods giant Reckitt Benckiser in a case over its baby formula,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown.
“However, an element of wariness is set to remain. Worries continue to swirl about the UK Budget stoking inflation and adding to the debt burden, geo-political tensions in the Middle East have risen sharply and a highly fractious US Presidential election is coming up next week.”
The weak Non Farm Payroll report helped provide support for stocks ahead of the election next week with the slow pace of job creation almost nailing on a rate cut by the Federal Reserve next week.
“A 25bp cut next week remains on the cards, with further such cuts likely at every subsequent meeting, until the fed funds rate reaches a neutral level, around 3%, next summer,” said Michael Brown Senior Research Strategist at Pepperstone.
Although events overseas will be on traders’ minds, UK equities were driven by domestic occurrences on Friday. Corporate updates and recovery from yesterday’s budget-induced sell-off helped to drive the FTSE 100’s outperformance of other major equity indices.
Reckitt Benckiser was the top performer, with an 8% jump after a favourable court ruling regarding baby formula in the US.
“Reckitt Benckiser has shot to the top of the FTSE 100 leaderboard, with shares up sharply in early trade after it was cleared of liability in case over its pre-term infant formula, made by its US subsidiary Mead Johnson, by a state court in Missouri,” Susannah Streeter explained.
“The trial investigated if Reckitt and another manufacturer Abbott knew about disease risks linked with this type of formula. Investors are clearly relieved the manufacturers have been cleared by this court, but other trials are pending, and the companies were found liable in other cases. The companies’ overall liability was estimated at up to $2.5 billion.”
How to protect your portfolio from IHT and CGT after the budget
The new Labour Chancellor has launched a tax raid on investors and business owners that threatens to curtail the entrepreneurial spirit that drives our economy.
Capital gains tax, inheritance tax, and National Insurance were all targeted this week with freezes on thresholds or eye-watering increases.
Most investors’ main concerns will be the increase in capital gains tax, the shakeup of inheritance tax relief for AIM shares, and bringing pensions under inheritance tax.
However, while the tax changes will be a kick in the teeth, savvy investors still have various options to protect their savings from the tax man.
ISAs & SIPPs
An obvious place to start is using your ISA and Pensions allowances to protect your investments against capital gains tax. Investors have an ISA allowance of up to £20,000 and can put upto 100% of their income or a maximum of £60,000 into a a SIPP each year.
Thankfully, these were left unchanged by the chancellor. Ideally, these would have been increased to boost investment and sensible savings, but this wasn’t a budget for investors.
“The tax relief afforded to pensions and ISAs has survived the Budget, with the exception of the generous tax treatment of pensions on death. In particular, investments held within pensions and ISAs aren’t subject to capital gains tax, nor are the dividends they produce subject to income tax,” said Laith Khalaf, head of investment analysis at AJ Bell.
“A rise in capital gains tax, especially combined with an annual CGT allowance of just £3,000, means investors should prioritise pensions and ISAs if they’re hoping for growth on their investments.”
Khalaf continued to explain the tactics of ‘Bed and ISA’ or ‘Bed and SIPP’, which can bring investments into your tax wrappers to protect them from future capital gains tax.
“Those who hold unwrapped investments can perform a manoeuvre called a ‘Bed and ISA’ or ‘Bed and SIPP’ to move them inside a tax shelter. This does involve selling assets so there is potentially a capital gains tax liability at this point, though investors can mitigate this by judicious use of their annual £3,000 CGT allowance,” said
“Once inside the SIPP or ISA, any further gains are then free from tax. Investors who feel they might breach the £3,000 annual CGT allowance using this approach might consider pairing the sale of a profitable investment with a loss-making one. Losses can be used to offset gains, thereby reducing the capital gains tax liability, then either or both investments can be rebought within the ISA to avoid tax on future gains.”
Unfortunately, Pensions will now be included in individuals’ estates for IHT purposes, so those seeking to protect their portfolio on their death must consider alternative assets.
EIS & VCTs
More experienced investors with longer time horizons may want to consider VCTs and EIS. The schemes have generous tax benefits for investing in early-stage companies but come with much higher risks than listed equities.
The chancellor announced the schemes will be extended until 2035, signalling much needed certainty for investors using the schemes to shelter their investments from IHT and EIS.
“At a headline level Venture Capital Trusts have been left unaffected by this Budget. Investors will still receive upfront income tax relief of up to 30%, plus tax free dividends and capital gains tax (CGT) free growth,” said Nicholas Hyett, Investment Manager at Wealth Club.
“However, in relative terms the scheme has become significantly more attractive. With income tax thresholds frozen for years to come and CGT rising, the potential for tax free returns have become even more appealing.”
EIS provides investors with complete relief from income tax, CGT and IHT if unlisted shares are held for more than three years. However, the budget did cap the level of investments that are free from IHT to an allowance of £1 million in the budget.
“As shares in unlisted businesses, EIS qualifying investments qualify for Business Relief (BR). In the past this meant any amount of EIS investments could be passed on inheritance tax (IHT) free. Going forward investors could face a 20% IHT bill of EIS investments if they already have £1 million of BR qualifying investments,” Hyett explained.
“However, for individual investors, EIS has probably jumped up the list of investments worth considering. CGT free growth is more attractive now, and CGT deferral is more valuable in a higher tax world. Throw in 30% up front income tax relief and wealthy, sophisticated investors should certainly spend some time exploring the area. If the budget sparks significant inflows that would also be good news for British start-ups – potentially unlocking significant funding at lower cost.”
AIM movers: Emmerson seeks compensation and cyber security incident at Microlise
Emmerson (LON: EML) has notified the Moroccan government of an investment dispute and argues that the government is violating an agreement between the UK and Morocco. The dispute can be submitted to the International Centre for the Settlement of Investment Disputes. Prior to this, the company is seeking cash compensation from the government. The share price bounced back 98.8% to 0.825p.
Red Rock Resources (LON: RRR) has been meeting with the Democratic Republic of Congo authorities concerning the court judgement in the company’s favour, as well as new opportunities. A framework agreement has been signed with Koto DRC for an equal joint venture once a suitable asset is secured. The share price rose 21.4% to 0.0425p.
Minoan Group (LON: MIN) is converting £1.3m of creditors into 78 million shares. Management is still seeking to raise additional debt and equity to finance the development of the Cavo Sidero project. Discussions are ongoing with a potential strategic partner. The fundraising should be at 1p/share or more. The share price increased 19.2% to 0.775p.
Global Petroleum (LON: GBP) reported a full year loss of $1.04m, down from $1.28m. There was $193,000 in the bank at the end of June 2024. Since then, £503,000 has been raised. The share price improved by one-fifth to 0.21p.
FALLERS
Transport technology services provider Microlise Group (LON: SAAS) has been hit by a cyber security incident. This has disrupted services, and they are currently inactive. Cyber security specialists have been appointed. The share price slipped 12.2% to 115p.
Supercapacitors developer CAP-XX (LON: CPX) has raised £2.75m from a placing and subscription at 0.11p/share. A retail offer could raise up to £275,000 and this closes on 4 November. The cash will fund product development and boost sales resource. The share price declined 11.1% to 0.12p.
Litigation funder Manolete Partners (LON: MANO) has been named as a Financial Times Europe long-term growth champion 2025. It ranks 25th in the UK and 152nd in Europe. The share price fell 6.58% to 106.5p.
Hummingbird Resources (LON: HUM) is in discussions with its primary lender and largest shareholder Nioko Resources, which has the same owner as the lender, about liquidity and short-term waivers. The company wants to partially restructure its debt and reschedule payments. Payments of $30m due on 31 October have been deferred, pending a restructuring agreement by 6 November. Net debt was $155m at the end of September 2024.The share price decreased 5.51% to 6.35p.
Kodal Minerals (LON: KOD) has agreed the transfer of its mining licence for the Bougouni lithium project in Mali, which means that the Mali government will hold 35% of the joint venture. This is made up of a 10% free carry and the purchase of a 25% stake for $4.3m. This stake cannot be diluted when further capital is raised. Kodal Minerals will hold 49% of 65% of the Bougouni project. There will be a $15m cash payment to the government in two tranches. Canaccord Genuity describes the outcome as “mixed but net negative”. The share price is 3.49% lower at 0.415p.
Tekcapital shares jump as MicroSalt explodes higher, remains heavily undervalued
Tekcapital shares were firmly bid on Friday after a busy week for its portfolio companies, including significant updates for low-sodium technology company MicroSalt and Innovative Eyewear, the developer and manufacturer of smart eyewear.
Tekcapital broke above 10p in early trade on Friday, trading at the highest levels since June. Yet, the gains this week in TEK shares still leave the technology investment company heavily undervalued compared to the net asset value of its portfolio.
According to our calculations, the total net asset value of the portfolio companies is a little over £51m. This doesn’t include any cash or convertible loan notes it has on its books.
The portfolio value alone would translate to a share price of 26p compared to a current Tekcapital share price of just 10.5p at the time of writing. Our portfolio valuation total was calculated using live share prices and is subject to change as underlying prices fluctuate.
One of the shares fluctuating on Friday was MicroSalt after the company released a bumper update on its orders from some of the world’s largest snack food companies this week.
MicroSalt shares had added another 26% to trade at 95p at the time of writing on Friday. In terms of underlying value for Tekcapital, MicroSalt is the company’s largest holding, with the value of their holding exceeding the entire market capitalisation of Tekcapital.
There is a clear disconnect between portfolio company valuations and Tekcapital shares.
This disconnect results from the macroeconomic environment being largely unfavourable for early-stage companies as higher interest rates increase discount rates and lower the perceptions of value in certain assets.
However, this discount is largely unwarranted for Tekcapital. Most of its portfolio consists of listed equities, which have clear indications of value attributed to them by public markets. The discount between Tekcapital shares and the NAV is more appropriate for a portfolio of privately held stocks with big question marks about their valuation. The market may remove this discount as sentiment improves.
Tekcapital also has the additional benefits of potential upside in portfolio companies.
MicroSalt could well have further run if the company revealed further commercial deals that cement its place as one of the major players in reducing sodium content in food to help fight against cardiovascular disease.
Recently listed GenIP is arguably undervalued after coming to market during a period of uncertainty around AIM shares. The Generative AI analytics firm has already announced orders that infer an annual revenue run rate that would dictate a valuation two or three times higher than the current share price should one apply peer group average price-to-sales multiples to the company.
Then we have Guident, the only current privately held company that may be Tekcapital’s jewel in the crown. The autonomous vehicle safety company operates in the popular urban mobility sector and is busy building out commercial relationships, one would assume, in preparation for a future listing.
Tekcapital also retains holdings in Innovative Eyewear and Belluscura, which are both scaling their models and increasing revenue.
As an AIM-listed company with a market cap under £50m, Tekcapital should be considered a higher-risk share. However, adventurous investors with a reasonable appetite for risk may benefit from the closing of the discount between the NAV and share price and any further appreciation of portfolio company values.
Frasers Group and boohoo Group – Lightning speed appointment of new boohoo CEO puts Frasers’ Ashley at a disadvantage
In a very quick snub for Mike Ashley’s demands, this morning it has been announced that the ailing boohoo Group (LON:BOO) has appointed former JD Sports and currently Debenhams CEO, Dan Finley, 41, as the Group’s Chief Executive Officer.
Finley has been involved in the boohoo Group’s fast-growing digital department store, since he was appointed Debenham’s CEO in January 2022, under his leadership, the business has been transformed into Britain’s leading online department store with a gross merchandise value annual run rate of some £800m, through a capital-light, cash generative and highly profitable marketplace model.
Group Deputy Chairman Alistair McGeorge stated that:
“The Board of boohoo was unanimous in its decision to appoint Dan Finley as CEO. Dan is one of the outstanding leaders in a new generation of digital retailers.
Dan and his team have successfully transformed Debenhams from a failed department store, creating a new business model that is a capital-light, stock-light, high-growth marketplace.
Before Debenhams, Dan had a track record of phenomenal success in online retail during his 10 years at JD Sports.
The Board looks forward to working with him, as we continue the review of options to unlock and maximise shareholder value.”
Current boohoo CEO John Lyttle, who recently announced that he was standing down from the role, will remain available to Dan and the group to ensure continuity through the change of leadership and a smooth transition.
It is expected that Dan will be appointed to the boohoo Group Board in due course.
Boohoo Group shares are currently trading at around the 29.62p level.
Mike Ashley, who last week demanded that he should be appointed CEO, representing his Frasers Group, boohoo’s biggest shareholder, might consider that he has been snubbed by this appointment.
Frasers Group (LON:FRAS) shares are 761p, down 23.50p.