April 2016

UK INVESTOR MONEY // SHARES // INTERVIEWS

ISSUE 11 // APRIL 2016

Amanda Van Dyke

UK Investor Show special

Ed Croft

Vin Murria

Nigel Wray

Jonny Hon

Evil Knievil

Tom Winnifrith

Mark Slater

Intro INSIDE 3 Dragon’s Den sessions 4 Angle Plc - a share tip from Beaufort Barry Gibb & Andy Senga 7 Watch Live Bearcast on the 30th Tom Winnifrith 8 Main Stage schedule 9 Breakout room schedule 10 Seven Black Swan events Tom Winnifrith 12 UK Investor Show floorplan 14 Global Group - show sponsor 16 Follow Tom’s schedule on the day 17 InterQuest Group - a profile Steve Moore 18 Win a week at Tom’s Greek Hovel

A Message from Tom Winnifrith Welcome to the Show Edition of UK Investor Magazine—our April issue. Whether you are reading it online ahead of the event or in your delegate pack on April 30th, I hope that you find plenty of interest in this issue. Of course it is mainly about the show which is our biggest yet and has a star-studded speaker line up.

Nigel Wray, Mark Slater, Ed Croft, Evil Knievil, Lucian Miers, Johnny Hon, Vin Murria, Mr Bagot (I do hope he can make it), Adam Reynolds, Paul Jourdan, Ed Croft, Chris Bailey, Malcolm Stacey, Matt Earl, David Scott, Nigel Somerville, Peter Hambro, Dominic Frisby… the list goes on and on.

And of course there are more than sixty breakout sessions with CEOs of listed companies presenting and there will be 25 CEOs turning up for five Dragon’s Den pitches with myself, Steve Moore and Brian Kinane. All in all it will be an action filled day and you can find out full details of what is happening and when so that you can plan your day well in advance.

21 Three sells - and a buy - for April Tom Winnifrith

You can find more details and book one of the last few remaining tickets at www.ukinvestorshow.com

23 The House View

The big name speakers at the show are masters of value investment and I hope that those attending will learn new skills and uncover new ideas, ways to make money from listening to them and chatting to them. I certainly plan to do so. But even the best fundamental analysis can be thrown off course by unexpected macro-events, black swans.

CONTACT US UK Investor Magazine 91 - 95 Clerkenwell Road London, EC1R 5BX E: info@ukinvestorshow.com

Thus, while this magazine also contains six share tips - three buys and three sells - it also contains a feature on black swans, big - but unexpected - macro events which could mean that all bets are off.

Tom Winnifrith

Doors open at 8.30 AM on Staurday 30th April at the QE2 Centre in Westminster. I shall be there from the off and until the last talk - myself and the bears - ends at 5 PM. I hope that you are reading this in hard copy on the day. If not you really are missing out!

Editor

Best wishes

W: www.UKInvestorShow.com EDITORIAL

Tom Winnifrith www.ShareProphets.com www.UKInvestorshow.com

UK Investor Magazine — 2 — April 2016

Welcome to the UK Investor Show Dragon’s Den Sessions

F

ive times today five CEOs will march onto the main stage at UK Investor Show to do a one minute Dragon’s Den pitch. The three Dragons are Tom Winnifrith, Tom’s longterm writing partner Steve Moore and Brian Kinane of Yorkville.

Each will make a £1,000 investment in one of the five companies pitching in each session—via brokers and session sponsors European Wealth—as soon as the markets open on May 3rd. So that is £15,000 of real money waiting to be invested.

So who is pitching?

In the first session at 9.55 AM it is Boohoo, Noricum, Eurasia Mining, Nostra Terra Oil & Gas and Fox Marble.

In session 2 at 10:40 AM it is Xtract Resources, Metal Tiger, BMR Mining, Asiamet and New World Oil & Gas. In Session 3 at 13:05 PM it is Forbidden Technologies, ECR Minerals, United Cacao, Berkeley Energia and Premaitha In session 4 at 15:00 PM it is Jubilee Platinum, Kefi Minerals, Ariana Resources, BlueBird Mining and ValirX. And in the final Dragon’s Den session at 16:00 PM it is Optibiotix, Distil, Red Rock Resources, Venture Life & Galileo.

All Dragon’s Den sessions take place in the main stage auditorium. It will be quick fire and fun, don’t miss out.

UK Investor December — 3 — April 2016

ANGLE plc – Revolutionary New Liquid Biopsy Approach to Detecting & Assessing Cancer

By Barry Gibb & Andy Senga Research Analysts, Beaufort Securities

L

ike most good ideas, this one is very simple.

AIM-quoted ANGLE plc is attempting to effect paradigm change by making it easier to isolate circulating tumour cells (‘CTCs’) from patient blood in order to quickly and simply identify a wide range of cancer indications. Using a competitively differentiated peripheral blood draw to harvest cancer cells its technology, Parsortix, is non-invasive, exceptionally accurate, easily repeatable and highly specific to each patient.

This product-based solution has a potential addressable market in the US alone estimated to be as large as US$14 billion by 2025. Already available for research use and collaboration projects, clinical application is where the giant global opportunity for Parsortix will be found. The FDA, of course, is the world’s hardest taskmaster, from whom seeking authorisation is often seen to take much longer and be more expensive than first anticipated. Positive evaluations in lung, prostate and breast cancer during H2’2015, however, support a very optimistic scenario for the product’s future development. Given also that US and European patents have already been granted for ANGLE’s separation technology, with other major economic territories also pending – which prospectively hands ANGLE a commercial monopoly over Parsortix’s international use – it’s potentially a very rewarding one as well.

The Medical World Urgently Needs a New Approach Right now, the only alternative is for clinicians to carry out a solid tumour biopsy, by cutting out and analysing the cancer cells. This involves complex and costly invasive procedure, including mastectomy, lumpectomy, colorectal colonoscopy, prostatectomy etc., where repetition can be problematic or agitate the symptoms. The key USP found in Parsortix’s liquid biopsy approach is in its ability to robustly capture and then harvest for analysis as few as just one CTC in 1 billion blood cells.

A Pioneering Product in Cancer Diagnostics ANGLE’s lead product is the Parsortix cell separation system which, quite uniquely, can capture very rare cells from blood. This includes circulating tumour cells in cancer patients’ blood.

The resulting liquid biopsy (or simple blood test) enables the investigation of mutations in

the patient’s cancer for personalised cancer care.

ANGLE has launched a product for the research market and has secured CE Mark regulatory approval for the clinical market in Europe. The FDA approval process is underway for the clinical market in the US. UK statistics suggest that men have a 45% likelihood of suffering cancer during their life Women are only slightly lower at 41%. During treatment for the disease, particularly secondary (metastatic) disease, there are a number of challenges, including: How does the clinician know which drug will work most effectively on a patient?

How does the clinician track whether drugs are in fact working and having a positive impact? How do clinicians monitor patients who are in remission to pick up any return of disease? The above treatment challenges can be complicated further with the fact that the form of the disease can evolve over time meaning that a drug that would not have

UK Investor Magazine — 4 — April 2016

been effective at one point, may at a later point turn out to be effective and vice versa. In order to treat patients effectively, doctors need to deploy drugs that target the individual patient’s cancer at that point in time. This approach, known as ‘personalised cancer care’, has become accepted as the most likely way to improve long term patient outcomes.

size compared to other blood components.

Disposable Cassette

There is therefore a crucial need for ongoing information as to a patient’s cancer status. Primary tumours will be completely removed if possible and hence repeat biopsy is not an option. Biopsy of secondary disease sites tends to be far more difficult, it is also both highly invasive and costly.

Solid tumour cancers, such as breast cancer and prostate cancer, shed cancer cells into the patient’s blood stream. Being so rare, CTCs are very difficult to isolate. They are, however, extremely valuable cells since they contain information on the type of disease – which has the potential to inform on ‘personalised’ care decisions and targeted drug therapies.

Their presence and quantity has been shown to be indicative of patient prognosis. They are very likely to be the route by which primary (localised) tumours spread around the body so resulting in metastatic disease. The Parsortix system from ANGLE is able to capture and harvest CTCs from patient blood. This means that a simple peripheral blood test could be used to provide crucial medical information regarding the changing status of a patient’s disease.

ANGLE’s ultimate objective is the widespread adoption of the Parsortix system in the diagnosis and treatment of cancer patients. According to the World Health Organisation, there were an estimated 14 million new cancer cases worldwide in 2012, a marked rise on the 12.7 million cases in 2008. In 2012, there were an estimated 32.6 million people living with cancer (Source: http://globocan. iarc.fr/Pages/fact_sheets_cancer.aspx.

The incidence of cancer continues to grow as a result of demographic, lifestyle and environmental factors and it is estimated that one in two people in the UK will get cancer during their lifetime. There are a wide range of potential applications for harvested CTCs including diagnosis, prognosis, mutational analysis and drug selection, drug development, assessment of treatment effectiveness, and remission monitoring. ANGLE’s management estimate that this represents a potential global market for its Parsortix system worth in excess of £8 billion per annum. ANGLE’s major focus is on the cancer market. There is also a substantial market available in non-invasive foetal diagnostics, harvesting foetal cells from the pregnant mother and analysing for Down’s Syndrome and many other chromosomal and genetic conditions through a simple blood test.

The disposable cassette is placed in a clamp, and the Parsortix system then automatically processes the patient sample. CTCs are caught on a step that criss-crosses the microscope slide sized cassette.

Captured cells can be fixed and stained in the cassette to allow in-cassette identification and enumeration. Alternatively, they can be harvested from the system for analysis using established analytical systems. The Parsortix system is CE marked for use as an in-vitro diagnostic device in the EU, it is available for research purposes globally and is now seeking FDA approval for clinical purposes.

How the Parsortix System Works

Overwhelming Commercial Superiority

The Parsortix system from ANGLE uses a patented micro-fluidic technology in the form of a disposable cassette to capture and then harvest CTCs from blood. The cassette captures CTCs based on their less deformable nature and larger

There is extensive intellectual property protection around key elements of the system.

Successful evaluation by major cancer research centres has already been achieved. Widespread adoption of the Parsortix system in the clinical

UK Investor December — 5 — April 2016

market crucially depends on ongoing work with key opinion leaders. Accordingly, ANGLE has completed numerous pilot studies assessing clinical applications for CTCs from which the most promising were selected. Beyond this, the Group is planning to undertake larger patient studies providing fully documented evidence of how the system should be used for particular patient applications in routine treatment.

Clinical application progress to date by these key-opinion-leaders of the international medical fraternity has produced highly successful patient studies, with minimal false outcomes while demonstrating overwhelming superiority to competing systems: 1. Medical University of Vienna – 100% specificity in primary epithelial ovarian cancer 2. Barts Cancer institute – Harvested cancer cells from the blood of 100% of prostate cancer patients 3. University of S. California – Obtained the same genetic information from a simple blood test as the invasive solid biopsy of the secondary cancer site in breast cancer 4.

Cancer Research UK & Christie Hospital – Harvested cancer cells from 100% of lung cancer patients Parsortix - Path to Commercialisation

Source: ANGLE The Ability to Assess Severity as well as Detect Cancer?

In March 2016, ANGLE announced potentially ground-breaking results from its ongoing with Barts Cancer Institute. Its patient data suggests that the Parsortix system may be used both to detect prostate cancer and also to assess its aggressiveness, all through a simple blood test. This is crucial because it means that men with low level disease could avoid unnecessary and potentially harmful solid biopsy and surgical intervention instead having ‘active surveillance’, whereas men with an aggressive form of disease could be fast-tracked for further investigation and treatment. The current gold standard for detection is the prostate-specific antigen (‘PSA’) blood test, which is known to have

low sensitivity and low specificity (i.e. high levels of false positives) and the digital rectal exam (‘DRE’ which is less effective than the PSA test). Where the PSA level is high or the DRE indicates an enlarged prostate, a solid prostate biopsy will be undertaken to detect cancer and assess the aggressiveness of the disease. This process results in many men having invasive biopsies unnecessarily.

This is genuinely exciting news! Its opens the door for Parsortix to meet a key medical need, with the ambition to provide a more accurately defined patient treatment, while ensuring availability for those who need it. ANGLE now intends to work with BCI and other leading cancer centres to develop and implement clinical studies to validate the use of the Parsortix system as a clinical application in the routine detection, assessment and treatment of prostate cancer patients. The multi-centre clinical studies still need to be specified, but realistically might be expected to take at least 18 months to complete. As a product-based solution, Parsortix’s potential addressable market in the US alone, has already been estimated to be as large as US$14 billion by 2025. Barts’ results suggest its true commercial opportunity, through further and additional further medical application, is even larger still.

So what are the Challenges ANGLE Now Faces?

These must focus on Parsortix gaining regulatory authorisation, while also challenging claims from emerging competitive technologies of their ability to deliver similar therapeutic outcome.

FDA authorisation for its use as a general platform for detection and identification of cancer will require it to routinely and unchangingly deliver diagnostic results with minimum occurrence of false negatives or positives. Proving such an outcome through extensive clinical trials will undoubtedly be a long and financially demanding exercise for ANGLE. The Group’s balance sheet presently holds cash sufficient to see it through to H1’2017; assuming further clinical progress is made with Parsortix’s first selected indication, ovarian cancer, it should not be difficult to attract new funding, from both ordinary shareholders or industrial collaborators. That assumes, of course, that credible new competition does not suddenly complicate the competitive landscape. Recently, for example, there has been press from UCLA in relation to a saliva based cancer diagnostic. Unlike Parsortix, however, this is many years from market and is limited only to cancer detection for a small number of indications. By contrast, ANGLE’s Parsortix system is already in the market, and works for a wide range of cancers, not just for detection but also for therapy selection.

At Beaufort Securities we offer a bespoke advisory service. Our people are dedicated to the markets day in and day out for one reason and one reason only - to help our clients profit. To discuss your strategies with a broker, please call us on 020 7382 8384.

Beaufort Securities Ltd is authorised and regulated by the Financial Conduct Authority, registered number 155104 and is a member of The London Stock Exchange and ISDX.

UK Investor Magazine — 6 — April 2016

Lunchtime at UK Investor Show: Enjoy a drink as Tom Winnifrith records a live bearcast

T

here are some people who believe that Tom Winifrith makes detailed notes before recording a Bearcast on ShareProphets. Think again. Now and again a few numbers are jotted down on the back of an envelope but the rest just flows live and from memory in whatever order it comes out. You want proof? And a drink?

On Saturday 30 April at UK Investor Tom will record his daily bearcast live at 12.25 PM to 12.40PM at stand 72 which is that of the Mitchell Brothers, a team of brokers Tom himself uses, who curently operate as a self managed unit under the Cornhill umbrella.

Decent fellows that the Mitchells are they will be prividng small samles of free booze during that lunchtime slot to anyone who wants to pop along to listen.

Last year Tom co-wrote an e-book with the Mitchell Brothers “25 tips for trading shares”. If you pop alog to the Mitchell’s stand (72) and let them swipe your badge they will send you another copy of that book first thing on the Tuesday after the show.

Meawhile if you want a free drink and a chance to witness the live recording of a bad language bearcast special, head to stand 72 on the 3rd floor at UK Investor for 12.25 PM on April 30. See you then.

Hot Stock

ROCKETS Stocks Ready to take off hotstockrockets.com UK Investor December — 7 — April 2016

UK INVESTOR SHOW 2016 Main Stage 08:55 - 09:25

09:25 - 09:40 09.40 – 09.45 09:45 - 09:55 09:55 - 10:00 10:00 - 10:50 10:50 - 11:30 11:30 - 11:35 11:35 - 12:15 12:15 - 13:05 13:05 - 13:10 13:10 - 13:55

13:55 - 14:30 14:30 - 15:00 15:00 - 15:05 15:05 - 15:30 15:30 - 16:00 16:00 - 16:05 16:05 - 16:15 16:15 - 17:00

Balloon debate: Andrew Bell (gold), Chris Bailey (UK Equities), Colin Bird (mining shares), Dom Frisby (bitcoin), Malcolm Stacey (UK Residential property), Tom Winnifrith (Rifle, ammo, & baked beans) “Why David Lenigas should be run out of town & kicked off AIM” - Tom Winnifrith BREAK Intro remarks Tom Winnifrith Dragons Den 1 Mark Slater Nigel Wray, Paul Jourdan, Chris Bailey - Value Investing Dragons Den 2 Ed Croft LUNCH Dragons Den 3 Mining session: Amanda van Dyke with Dominic Frisby, Ross Norman (Sharps Pixley), Peter Hambro (Petropavlovsk), John McGloin (Amara Mining) Tom Winnifrith quizzes Johhny Hon on Gate Ventures, China Fraud and the China Bubble Adam Reynolds & Tom Winnifrith discuss shells Dragons Den 4 Vin Murria, the Queen of Tech with Tom Winnifrith BREAK Dragons Den 5 Bear Macro Session: David Scott Bears session: Evil Knievil, Lucian Miers, Matt Earl, & Tom Winnifrith See you next year

UK Investor Magazine — 8 — April 2016

UK INVESTOR SHOW 2016 Breakout Rooms Capacity: 09:00 - 09:20 09:20 - 09:40 09:20 - 09.40 10:00 - 10:20 10:20 - 10:40 10:40 - 11:00 11:00 - 11:20 11:20 - 11:40 11:40 - 12:00 12:00 - 12:20 12:20 - 12:40 12:40 - 13:00 13:00 - 13:20 13:20 - 13:40 13:40 - 14:00 14:00 - 14:20 14:20 - 14:40 14:40 - 15:00 15:00 - 15:20 15:20 - 15:40 15:40 - 16:00 16:00 - 16:20 16:20 - 16:40 16:40 - 17:00

Breakout Room 1 50 Gallileo Resources plc Arria NLG InterQuest Group plc Red Rock Resources Falanx Red Rock Entertainment GLI Finance K3 Business Technology Orogen 1Spatial PLC Wishbone Symphony Environmental Eurasia Mining Teathers Financial Guscio Noricum Gold PrimaryBid.com BMR Mining Bluebird Mining Tern plc United Cacao Stockomendation Forbidden Technology

Breakout Room 2 75 Plastic Capital Plc ValiRx Ariana Resources Union Jack oil Distil Plc Westminster Group FinnAust Mining Coinsilium Kibo Mining Plc Venture Life Group Alliance Pharma React Group Obtala Resources Ltd Nostra Terra Oil Fastnet Equities Regency Fox Marble plc Premaitha Northcote Energy Minoan Group R4E Xtract Resources Metal Tiger ECR Minerals

Analyst Room 104 Amanda Van Dyke - Value of Mining Shares New World Oil and Gas Jubilee Platinum Plc Kefi Minerals Amara Petropavlovsk Plc Martin Luke - Vox Markets Asiamet Tom Winnfrith - Market Abuse explained, case study Chris Oil Boohoo.com Bitcoin with Dominic Frisby & Coinsilium Ed Croft - Stockopedia Optibiotix Ed Croft - Stockopedia Berkeley Energia Victoria Oil & Gas Stanley Gibbons MX Oil

UK Investor December — 9 — April 2016

Seven Black Swan Events that could de-rail the stockmarket

By Tom Winnifrith

A

t UK Investor Show most of the big name speakers will be explaining how they go about the process of individual stock selection, what is termed bottom-up analysis. That is, after all, how all great long term investors make money from shares. But what happens if there is a momentous event that throws all your calculations off course?And what black swans might we see?

Of course, by definition, black swans are unexpected. You expect swans to be white. But just for fun - or rather for a bit of gloom - here are seven potential black swans and my assessment of what they mean for us all.

1.

Brexit. This is perhaps the most likely of the black swans, all polls say that the referendum on June 23rd will be tight. I shall be voting for Brexit because the EU denies me my democratic rights. I also believe that in the long run, Britain will be far better off economically outside of the Evil Empire, perhaps the world’s least economically successful trading zone.

But short term Brexit will cause uncertainty and both the stockmarket and sterling may well fall. A weaker pound is, of course, great news for exporters and thus I’d use the initial market sell off as an opportunity to buy shares in quality companies - notably exporters - for the bounce.

As black swans go this is far from scary.

2.

An ISIS attack on London. I rather fear that this is a matter of when not if. We know that our security services have foiled a number of attacks planned by the Islamofascists but it seems that it is probably only a matter of time before one gets through. Fingers crossed that this is not the case but if, or rather when, it happens it will be a shock but not a surprise.

Shares will be hit by the attack although the mantra we will all chant is “that we will not be beaten.” In that case such an attack - unless it is truly ghastly on a dirty bomb scale - is a shock not a surprise and the effect on shares will, I suspect, be short lived. Look at the effect 9/11 had on the S&P to see what I mean. But one asset class where a major attack on London could be catastrophic is residential property in the Capital. On 10 times earnings, London housing stock is already a massive bubble and prices in the belief that it is a “safe” asset class in every respect. That could well be a mistake.

3.

China Meltdown. The Chinese stockmarket has already taken a big hit over the past year and there are signs of material slowdown in the growth of the real economy. It is hard to believe any official data coming out of China but what we do know is that there has been massive speculation based on a sea of new debt taken out in since 2008 which could just have created a series of mega bubbles. The mass layoffs in coal and

UK Investor Magazine — 10 — April 2016

steel planned for the next two years suggest that a bubble is bursting.

What impact would that have on commodity prices and on global growth and corporate earnings across the globe? It is hard to say but China is the world’s second largest economy. And the global stockmarket bull case is predicated on the China growth saga continuing. This could be a massive black swan and I suggest that it is in no way priced into Western equity market valuations.

4.

Overt war in the Middle East. The Sunni/ Shia war right now is being fought by proxy in Syria and Yemen. Regrettably we in the West find ourselves on the wrong side, that is to say the Sunni’s, the Saudis, those who fund AlQaeda. President Putin is backing the right side.

Or at least the less bad side in terms of extremism and human rights abuses.

The danger is that this brews up into a bigger conflict with the “big guns” on either side, Saudi (Sunni Muslims) and Iran (Shia), moving into direct conflict. That would see the oil price soar and most oil shares race ahead too. The wider market would tumble on worries about higher energy costs and regional instability. That is why you should always hold some shares in oil majors ( BP or Shell) as a hedge against this.

A variant on this black swan is the fall of the house of Saud which is - in terms of human rights abuses - easily the worst regime in the regime bar - perhaps - Iran and, of course, ISIS. Many of us in the West would actually welcome the toppling of this loathsome kleptocracy but it would none the less see the stockmarket fall as oil shares rise.

Defence stocks would fall out of bed as unethical Britain is a major supplier to this vile regime.

5.

Donald Trump winning the US P r e s i d e n c y.

Trump may get the Republican nomination and against either a liar and cheat (Clinton) or a socialist fruitcake (Sanders) he could win. The GOP might cheat Trump out of the nomination and as an independent in a 3 or 4 way fight he could still win.

That would create uncertainty and shares might fall on a Trump win. But as “The Donald” himself has noted, US shares are very fully valued anyway.

They merit a correction.

As a President facing, almost certainly, a Republican House and a Democrat Senate the ability of Trump to change that much is pretty

limited. Four years of gridlock would be a likely outcome. As such a Trump win would be a short term negative and a long term minor minus but the real issue is that US equity valuations are just crackers whoever is President.

6.

Bernie Sanders winning the US Presidency.

Mad Bernie might get the Democrat nomination given that the alternative is the tarnished and loathsome Clinton.

Or should Trump not get the GOP nod and run as an Independent so too could Bernie making it a four horse race and anyone could win that. So it might just be President Sanders who has an anti-business agenda which would be bad news for America. If he looks to be heading for the White House equities will tank and there would be no rush to bottom fish with Mad Bernie in charge. A Republican House would temper the madness but bonkers Bernie would still be bad news indeed.

7.

The bankruptcy of Greece/Euro meltdown.

Greece is still bust, the can is still being kicked down the road. And although interest rates in the Eurozone are zero or negative and QE continues apace the Eurozone economy is just not growing. Funny money is not working. At some stage this will blow up it is just a matter of when and what the domino effect is. Like many, I believe that large numbers of Europeran banks have terribly fragile balance sheets and another banking crisis could well happen. That could be the chicken or the egg in terms of a Eurozone crisis.

Those British firms that are heavy exporters to the EuroZone would clearly struggle and even were the UK to have left the EU our own economy would suffer.

Of course we might not see any black swans, shares could carry on rising forever, it could b e different this time, West Ham might in the treble next year and I might get a hot date or two with Cheryl Cole. Who knows?

UK Investor December — 11 — April 2016

UK INVESTOR SHOW 2016 st

UK Investor Magazine — 12 — April 2016

tands

UK Investor December — 13 — April 2016

Profile: UK Investor Show Gold Sponsor Global Group

Global Group is an international venture capital business and angel investor. It helps fast-growing innovative businesses access the resources and capital they need to grow and implement international development plans.

With offices in London, Hong Kong and mainland China, Global Group is ideally placed to promote British-Chinese business links. It assists ambitious UK companies to expand into Asia and helps Chinese firms looking to enter the UK and European markets.

Founded in 1997 by international venture capitalist and former banker Dr Johnny Hon, Global Group originally specialised in financing high-yield technology companies. Since then, the company has grown and expanded into private equity, venture capital, business angel investment and financial and corporate services. Global Group’s business interests span across a variety of sectors including banking, education, energy, media and entertainment, and property development.

The business also has a strong track record of bringing investors and promising businesses together. It has a family office arm that advises Asian high net worth individuals on their international business and lifestyle strategies, alongside other issues. Such clients have the opportunity to co-invest with Global Group on promising deals aligned with their long-term strategy and preferences.

The Global Group team pride themselves on providing working solutions to the complex problems presented by today’s globalised business. The team’s unique and extensive network of political and business contacts, which span the five continents, enables them to offer advice that combines a strategic global vision with in-depth knowledge of the situation on the ground in different regions.

UK Investor Magazine — 14 — April 2016

UK Investor December — 15 — April 2016

Follow Tom Winnifrith on April 30 at UK Investor Show It looks like a rather busy day for Tom Winnifrith so if you want to catch up with him to have a word about anything here is his schedule. In prior years you might have found him outside having a quick cigarette but Tom has been clean since February 15! So this year he will be inside the QE2 centre all day and can be found: Doors Open 8.30 - 8.45 AM 8.45 - 9.20 AM

Main hall floor one Main Auditorium, floor one

9.20 - 9.40 AM

Main Auditorium floor one Main auditorium floor one Main auditorium floor one Main auditorium floor one

9.45 AM - 9.55 AM 9.55 - 10 AM 10.50 - 11.30 AM 11.40 -11.45 AM

Balloon Debate - Tom is speaking for “a rifle, ammo, baked beans & farmland” against Andrew Bell, Colin Bird, Chris Bailey and Malcolm Stacey “Why David Lenigas should be drummed off AIM” Opening Remarks Dragon’s Den session 1 with Steve Moore & Brian Kinane Value Investing with Nigel Wray, Paul Jourdan & Chris Bailey

Main auditorium floor one Breakout Room 3 (the Analyst Room)

Dragon’s Den session 2 with Steve Moore & Brian Kinane Market Abuse explained - case study Chris Oil

Stand 72 on floor 3, Cornhill Main auditorium floor one Main auditorium floor one

Live recording of Bearcast

2.30 - 3PM

Main auditorium floor one

With the King of the Shells Adam Reynolds on AIM shells & RTOs

3 - 3.05 PM

Main auditorium floor one Main auditorium floor one Main auditorium floor one Main auditorium floor one

Dragon’s Den session 4 with Steve Moore & Brian Kinane On stage with the Queen of Tech Vin Murria

12 Noon - 12.20 PM 12.20 - 12.40 PM 1.05 - 1.10 PM 1.55 - 2.30 PM

3.05 - 3.30 PM 4 - 4.05 PM 4.15 - 5 PM

Dragon’s Den session 3 with Steve Moore & Brian Kinane On stage with Johnny Hon of Gate Ventures on Gate, China fraud and the China bubble

Dragon’s Den session 4 with Steve Moore & Brian Kinane On stage with the bears Lucian Miers, Evil Knievil and Matt Earl.

As you can see it is a rather busy day for Tom who is involved in a mere 15 sessions When not on the main stage or doing his lunchtime bearcast he will spend the lunch -break on the Cornhill stand getting a free drink from the Mitchell Brothers (see page 7). At other times when not on main stage he will be wandering around the 3rd floor chatting to a few CEOs. The best time to pin him down if you have a question is 12.40 to 1 AM on the Mitchell Brothers stand (number 72) or if you are a gold ticket holder at the after show drinks.

UK Investor Magazine — 16 — April 2016

company of the month

InterQuest Group

A share tip for 2016 starting to perform

By Steve Moore

I

nterQuest (ITQ) is a UK recruitment group looking to focus on the emerging ‘digital economy’ – currently including the likes of information security, analytics, telecommunications and change management.

Following an October 2014 announcement that it was “launching a review of options open to the company to maximise value for shareholders including a potential sale of the company”, the shares closed that month at 120p. However, the sale process was later terminated as discussions with interested parties saw the board conclude that it “does not believe that a sale of the company at this time would achieve maximum value for shareholders in the medium term, having regard to the opportunities, growth potential and inherent value of the company” – and by towards the end of 2015 the shares had fallen back to 80p.

to £6 million. With the statement adding that “we are witnessing acute skill shortages for technologies that will enable our clients to either augment or transform their operating model to capitalise on the new digital economy. This demand is having an upward impact on salaries as well as permanent and contract recruitment margins” and that “the new financial year has started positively”, a dividend of 2p per share has been announced to be paid on 13th May, with an ex-dividend date of 14th April. This takes the payout for the year to 3p per share, up from a prior year 2.5p.

Followed by a £19,800 purchase of shares at 80p each by Chief Financial Officer David Bygrave, the shares have now recovered to circa 90p.

With though trading and the outlook seemingly positive and the rating lowly, this led me to make the shares my first ShareProphets.com tip for 2016 – this at an 82p offer price.

However, this still means a prospective price/ earnings multiple of only circa 7.5x and prospective dividend yield of more than 3.5%. Although risks include new management (see boxes), they look to have good experience and I continue to consider the noted ratings a much too harsh assessment of the prospects here.

However, despite a January trading update reassuring that “trading for the financial year ended 31 December 2015 was in line with market expectations” and that the company was “encouraged by the continued growth we are experiencing”, by the end of February the shares were down to 76p. A recovery though has since been underway.

On 5th November 2015 the company announced that “following a comprehensive search, it has reached agreement with Chris Eldridge to become CEO of InterQuest”. Eldridge has more than 20 years’ experience in the recruitment sector having run both permanent and contract focused businesses and for the past 10 had been the Global Head of the Technology practice at fellow recruitment consultancy PSD. He started in the role on 4th January 2016.

By the time of the company’s announcement of results for the 2015 calendar year (on 9th March) the shares had recovered to 82p and the results showed an adjusted pre-tax profit of £5.01 million on net fee income 2.4% higher than in 2014 at £23.81 million, generating earnings per share of 10.5p, up from 9.6p.

After particularly a net £1.56 million on acquisitions and £1.09 million of dividends paid, there was still a £2.33 million reduction in net debt

On 19th November 2015, the company announced that “it has also reached agreement with David Bygrave to become CFO of InterQuest”. Having qualified as a chartered accountant and spent nine years with PwC, he also has extensive experience of CFO roles within the technology sector – most recently with Caplin Group. He commenced in the role on 1st December 2015.

Chairman Gary Ashworth has worked in recruitment since 1980 and founded the group in 2001. He remains the largest shareholder and is a Fellow and past President of the Institute of Employment Consultants.

UK Investor December — 17 — April 2016

TOM WINNIFRITH EXPLAINS HIS NEW BOOK - GET A FREE COPY NOW About fifteen years ago I penned an introduction to a book on how the brave new world of the internet was revolutionising the world of shares. Looking back at that book it all seems rather dated now.

Oh, and the book, though glossy, was pretty piss poor. It is no great surprise to me that it managed to avoid become a best seller.

One of the great novelties of share trading at the turn of this century was the Bulletin Board, then hailed as a forum where private investors could exchange ideas and analysis and also well sourced gossip.

What could possibly go wrong with this idea which was meant to give private investors a real edge allowing them to compete with City players on an almost level playing field when it came to share trading?

Fifteen years later we all know that Bulletin Boards have not really worked out that way. The playing field is not level, the City still has the edge. But perhaps that is in part because a good number of those attracted to Bulletin Boards display traits and repeatedly make mistakes which consign them to perennial loss making.

I am not saying that all bulletin board users act, in investment terms, like morons.

Most Bulletin Board users seem civil and sensible which only makes me wonder what they get out of exchanging ideas with complete lunatics. For Bulletin Boards clearly attract far more than their fair share of utter loons.

The vociferous minority, the true Bulletin Board Morons will over and over again demonstrate the biggest mistakes that investors make. And so if you want to avoid making the most common mistakes in the buying and selling of shares, I have written a new short book based on the collective lack of wisdom of those morons.

If you are reading this online you can get a complimentary copy of “The 22 mistakes all investors in shares must avoid (Don’t be a Bulletin Board Moron)” at ShareProphets.com

Tom Winnifrith’s

5 model portfolios: Growth Income Gold Recovery Pe n n y S h a r e s

S u b s c r i b e t o d ay

newsletters.advfn.com/tomwinnifrith UK Investor Magazine — 18 — April 2016

Win a week at Tom Winnifrith’s…

T

he 100 year old farmhouse in the Greek countryside owned by the wife of Tom Winnifrith is now within months of obtaining building permits and so by this time next year there will be bedrooms aplenty for folks to stay in. Fancy winning a free week at the hovel when finished (or before if you are a total masochist) or perhaps you would rather win one of six bottles of Blackwoods gin and vodka from Distil PLC? It is easy to enter our UK Investor Show prize draw....

At the entrance to the main auditorium you will see two women wearing Tom Winnifrith T-shirts - simply ask them to scan your badge and you have entered the prize draw. Alternatively as you head out of the lifts on the third floor towards the stands and the breakout rooms there will be aother two women in Tom Winnifrith T-shirts, just ask them to scan your badge.

We will let all lucky winners of the prizes know that they have won by email and oublish the names of the lucky winners on ShareProphets.

And whether you win a bottle or a free stay in the very South of Greece all entrants will be sent a report Tom has written with Galvan Securities on the four shares to buy from companies preseting at the show.

The pictures below are of the house as it is now ...a hovel. But by the time two winners and their families/partners arrive it will be fully renovated and might even have a pool. It is 30 minutes from the sea but in the middle of nowhere set among peaceful olive groves with not that many snakes (and land crabs, pictured) resident among them.

UK Investor December — 19 — April 2016

Greek Hovel plus vodka and gin

UK Investor Magazine — 20 — April 2016

Three shares to sell in April, one to buy & a hot footnote

By Tom Winnifrith

A

t UK Investor Show there will be almost 100 companies presenting, urging you to go and invest in their shares, and we own shares in a good few of them. However my overall take on UK equities is that they are overvalued and thus there are some cracking opportunities out there on the short tack as well.

Avanti has resorted to all sorts of uber aggressive accounting tomfoolery but the sharp fall in the share price and the fact that its bonds are now valued as junk-on-steroids really does tell you something. The company keeps on announcing what it deems to be good news but its shares just keep on sliding. The market is sending clear signals.

One macro trend which seems clear to me is that while the past few years of funny money and zero interest rates have made it really very easy for speculative ventures to raise cash for business plans which seem to involve cash burn and yet more cash burn that era is drawing to a close. And markets tend to operate in a way which sees equal - or indeed sometimes disproportionate reactions.

What the market is saying is that the company is running out of cash fast - whatever it says about EBITDA, or in its case EBITDA adjusted for ludicrous accounting policies which the FRC is looking at.

That means that those companies that have failed on their business models in the good times and now return to the markets seeking yet another bailout may well struggle. Either investors will demand a pound of flesh, that is to say mega dilution or they will just say thanks but no thanks, refuse to send good money after bad and the companies will go bust. So what sort of companies am I looking for which fit that bill?

I am very sure indeed that Avanti Communications (AVN) will feature in the bear’s session which starts at 4 PM at the UK Investor Show. Its shares were well over 200p when the bears last met up for a conference in late November but they now trade at just 92p. Avanti launches tin cans into space - that is to say satellites. These are incredibly expensive to build and launch and have a very finite useful life. The flaw in the business model is that Avanti has been unable to fill the capacity it has. Its answer: take on more expensive debt to launch more tin cans. You can see where this is heading.

Disguising its abject failure to generate free cash,

Meanwhile it is drowning in debt. At some stage this year it will need to secure additional funding both to simply meet ongoing PLC cashburn, including its hefty interest bills, and also to complete the fit out of its next tin cans.

That is a hurdle Avanti will struggle to cross, having missed almost every financial target it has ever set, merely promising jam tomorrow will not wash this time.

The 20+% yield to redemption on its bonds tells you everything. Folks owning that junk are now taking an equity type risk for a debt instrument.

They will not do so with fresh cash unless there is an equity type reward, that is to say a massive debt or equity swap. The best Avanti shareholders can hope for is a debt for equity swap seeing them almost entirely wiped out. The alternative is plain 100% wipeout - insolvency.

In an equal mess is Outsourcery (OUT) an AIM disaster story brought to you by self-publicist and serial business failure, the former Dragon’s Den star Piers Linney. Outsourcery shares now trade at just 11p (May 2013 AIM IPO at 110p) valuing the business at only £5.5 million.

UK Investor December — 21 — April 2016

As I write we await FY results which are later than in 2015. That’s a bad sign. Perhaps the delay is because the new auditors are having a close butchers as to whether this company is actually solvent. I do not believe that it is. At 30 June 2015 the company had negative net current assets of £2.58 million and long term borrowings of £2.4 million. In July it got a new £4 million loan from Vodafone which it must start repaying in equal installments from the second year (i.e. July 2016 up to July 2019). And in September a new investor/financial masochist invested £1 million. Operational cashburn in H1 2015 was £1.85 million.

I am going to be charitable and assume operational cashburn of £1.3 million in H2 although I would expect it to be far worse. On the basis that c£680,000 of the Vodafone debt will be repayable in 2016 (i.e. within 12 months of the 2015 year end) and so counts as a current liability that would see net current assets at the year end of cMINUS £1.3 million with long term liabilities of £4 million. And the company is still loss making and burning cash.

Can you see any auditor on this planet signing off on that? Me neither. But with the current market cap and dismal outlook and track record of abject non-delivery can you see any way to get a bailout placing away to satisfy the auditors? Piers would need to raise at least £3million to be convincing.

Any shareholder who has ignored all the warnings should now be saying to the worst Dragon ever “I’m out”. The target price here is 0p.

Finally I turn, in this trio of shares to sell, to Fastjet (FJET) a low cost African airline originally set up by David Lenigas and pals - always a red flag. The past few months has seen a boardroom panto with plenty of goings but rather fewer folks wanting to join the sinking ship. Sir Stelios of Easyjet fame wants to take the company’s brand away from it and as a backdrop it seems very few folks out in Africa are actually using the planes.

That is a fundamental flaw in the business model.

truth will out. Having spunked $75 million raised a year ago at much higher prices, this company is friendless.

Who will back a company with a failed board and a failed business model? The answer may well be no-one. And that makes this stock a very good candidate for the 0p club.

And so I end with a buy, a stock we own and a company you can meet at stand 113 at the UK Investor Show, Petropavlovsk (POG) at 7.25p. The market cap is now £239 million. Debt at the end of 2015 was $610 million but even at $1150 gold the company sould be debt free by the end of 2017 given its output levels and grades.

At the current gold price that schedule advances by a couple of months. Every $100 on gold brings that great day forward by another couple of months. And at the point at which this company which has mines with a 10-15 year resource - is debt free it would trade on a PE of c1. that just looks far too low. On an EV/EBITDA basis as this company clears its debt with no re-rating the shares should see 20p.

If gold goes up, as I think it will do, there will be a re-rating and on that basis the shares could well be 30p plus witin two years. So we are very happy to own plenty of them!

As a footnote, at the stand next to the Petropavlovsk crew is our own Amanda van Dyke who now manages the Peterhouse Gold fund, a unit trust investing in gold companies. It is a tiny fund but I know Amanda well, know that she knows what she is doing and so as a basket based play on gold stocks it is worth looking at. For what it is worth, my wife is putting her 2015/16 ISA allowance into Amanda’s fund and if you wish to follow suit you can pick up a form from Amanda’s stand, No. 114.

Finally the company is almost out of cash. Net current assets are somewhere around zero and the company is burning cash. It is dong its best to hide the ghastly truth getting its fascist PR spinners at Citigate to smear journalists and threaten them with lawyers letters rather than answer basic questions. That in itself is another red flag. But the UK Investor Magazine — 22 — April 2016

the house view There are three ways listed companies treat private investors

D

o you feel loved by the companies you own shares in? Perhaps that over-eggs the pudding but a fair question is do you feel that they treat you with respect?

Some companies abuse their shareholders. That is to say they issue ramptastic RNS after RNS in an explicit attempt to get private investors to buy in the secondary market. After the shares have been sufficiently ramped the company places out new stock to City spivs who can then flip. A few months later the process starts all over again. Despite all the PR spin from such companies about how they place great emphasis on “communicating” with private investors the reality is that they treat them with contempt, explicitly exploiting them.

Category two are those who treat private investors with disdain. Post results the company presents to City institutions only. If it holds an event for investors it holds it in the City of London on a weekday evening. That may mean that it can say that it is trying to give access to private investors but in reality most private investors will just not be able to schedule an appearance at such events.

Since the share price of small caps is driven by secondary market buying and selling which is

almost entirely private investors, snubbing such folks seems sort sighted. It more or less obliges private investors to reciprocate.

Finally there are those companies that do reach out to investors and try to communicate in a non ramptastic and honest manner. They are to be commended for recognising that a business is owned by all its shareholders and for doing somethig that is not easy. In the short term one may gain a greater reaction by making exciting and exaggerated claims rather than reflecting the sober truth. In the long term, ramping and treating ones investors as cannon fodder can only end in tears.

Though the FCA wants us to believe that past performance is no guide to the future when it comes to deciding whether a company is promoting responsibly (category 3) or ramping ( category one) the past is usually a very good guide to the future.

What was this company claiming two or three years ago? If with hindsight, that was bullshit then what it says today will probably be so too. If, on the other hand, its past claims are shown to have been fair and responsible you may find yoursel speaking to a company that really does treat you with some respect as a private investor.

UK Investor December — 23 — April 2016

Proper pizza Craft beer 91 - 95 Clerkenwell Road, London, EC1R 5BX WedgeIssuePizza.com UK Investor Magazine — 24 — April 2016