Small Cap Feast

Small Cap Feast – 01 February 2019

Set Menu AIM:

Total number of AIM Companies (Incl Susp): 914

Total number of AIM Companies trading: 847*
* As at 24 January 2019

Set Menu NEX Growth:

Total number of NEX Growth Market Companies (Incl Susp): 89*

Total number of NEX Growth Market Companies trading: 87*
* As at 24 January 2019

Set Menu Standard List:

Total number of Standard List Companies (Incl Susp): 145*

Total number of Standard List Companies trading: 128*
* As at 24 January 2019

Dish of the Day:

Yesterday Starcrest Education (OBOR) joined the standard list raising  £4.2m. Through acquisitions, the Company intends to capture opportunities arising from the “One Belt, One Road” (“OBOR”) initiative, a foreign policy and economic strategy of the Chinese Government, to provide top quality education services and products to countries in Europe.  Mkt cap £4.3m.

Altona Energy (NEX:ANR)  has joined NEX from AIM.  Twofold strategy.  To introduce a vanadium mining project to  the Company and reinvigorate the coal to chemical project in South Australia

Off the Menu:

No Leavers Today

Dish of the Day:

No Joiners Today

Off the Menu:

No Leavers Today

What’s Cooking in the IPO Kitchen?

Main Market (Premium)

“Potential” intention to float from DWF, a global legal business. HY Oct 18 revenue of £133.4m.

Main Market (Specialist Funds)

The Global Sustainability Trust -aiming for attractive risk-adjusted returns by investing primarily in private market investments that are expected to have a positive environmental and social impact raising c.£200m. Due 31 Jan 2019.

AIM

United Oil & Gas (UOG.L) an oil and gas exploration and development company brought to the Official List (Standard Segment) in July 2017 by way of a reverse takeover of Senterra Energy plc. No capital to be raised, expected market cap of £17m and expected 28 Feb

Techniplas –global  producer and support services company providing highly engineered and technically complex components, making the supply chain to original equipment manufacturers more efficient.  FYDec17 rev $515m.

Circassia Pharma (CIR.L) – specialty pharmaceutical company focused on respiratory disease transferring from the Main Market. No funds being raised. Due 4 Feb. Mkt Cap c.£185m.

Chaarat Gold Holdings—RTO, the Company intends to acquire Kapan Mining and Processing CJSC, which owns the Shahumyan medium-sized polymetallic mine in Kapan in the Republic of Armenia. No raise, market cap of £110.1m, due early Feb

Breakfast Buffet

Path Investments (PATH.L) Suspended

The Company has entered into a binding Sale Transfer Agreement STA with Server Fatih Alpay regarding the sale of the Company’s Turkish interests to him.

Under the terms of the STA Path has transferred its 5% shareholdings in each of ARAR Petrol Ve Gaz Arama Uretim Pazarlama Anonim Sirketi and Alpay Enerji A.S. to Mr. Alpay. The consideration payable by Mr. Alpay to the Company is £0.4m.  In addition, Mr. Alpay has transferred his 357,412 Path Ordinary Shares to the Company to be held in Treasury and his 357,412 Path Deferred Shares to the Company for cancellation.

 

M&C Saatchi (SAA.L) 295p £253.37m

FYDec18 update.

M&C Saatchi anticipates that the results will be in line with the Board’s expectations. The Board expects the Group to make further good progress in the year ahead.

The Group has seen organic revenue growth in 2018 continue to outrun sector averages.

“The Group continues to deliver above industry average organic growth with our proven strategy of starting new businesses and winning new business. We have made a good start to 2019 with trading in line with expectations. “

FY2018E revs of £265m and EBITDA of £33.1m

 

Telit Communications (TCM.L) 138.5p £184.7m

Update on the sale of its automotive division which was due to complete on 31 Jan 2019.

TUS International Limited successfully received shareholder approval for both the transaction and the fundraising related to the financing of the transaction. Further TUS has confirmed that it is satisfied that the reorganisation has been completed and it expects to continue to proceed to completion in accordance with the agreed terms of the transaction. The parties are continuing to work to finalise the debt arrangements to support the transaction. To enable the parties to proceed to completion, Telit has agreed to grant a short extension, and considering the Chinese New Year holiday, completion is now expected to occur on or before 20 Feb 2019.

 

Springfield Properties (SPR.L) 122.5p £113.19m

The “housebuilder in Scotland offering private and affordable housing, announced that it has completed the acquisition of the entire issued share capital of Walker Holdings Limited, a Livingston-based housebuilder focused on private housing in Edinburgh’s commuter belt, for a net consideration of up to £31m.”

Expands land bank and sales presence to the popular, high-growth commuter belt surrounding Edinburgh

Earnings enhancing by low double-digit in the current financial year

Supports and enhances existing forecasts and visibility of future years

We could see no forecasts

 

Pressure Technologies (PRES.L) 94p £17.29m

The specialist engineering group, announces an update on the proposed sale of its wholly-owned subsidiary, PT Biogas Holdings Limited, trading as Greenlane Biogas to Creation Capital Corp (TSX-V: CRN.P), a capital pool company listed on the TSX Venture Exchange.

The process to spin-out Greenlane Biogas and list the business on TSX-V, via a sale to Creation Capital and a Private Placement by them, is well underway and making good progress. The transaction timetable is being actively managed and the Board now expects final closing of the transaction with approvals before the half-year end on 30 March 2019.

Details of the transaction were set out in the Proposed Sale announcement released on 10 Dec 2018.  Further progress updates will follow in due course.

 

 

Comptoir Group (COM.L) 10p £12.27m

The owner and/or operator of Lebanese and Eastern Mediterranean restaurants, announced a pre-close trading update for the 52-week period ending 31st Dec 2018.

The Directors are pleased to report that trading for the 52 weeks to 31 Dec 2018 was in line with market expectation with the expected strong finish to the second half of the year.

Two additional Comptoir Libanais sites successfully opened in 2018; Birmingham (March) and London Bridge (Nov). The Company also opened its second franchise site with HMS Host in Cheshire Oaks (Nov). The Company ended the year with 27 managed restaurants and 4 franchise sites.

The Company retains a strong balance sheet and the Directors continue to be excited by the prospects of the Group. FY2018E revs of £33.7m and EBITDA of £2.1m

 

Begbies Traynor (BEG.L) 61.4p £67.8m

Acquisition of the entire issued share capital of MMXI Limited, which trades as Croft Transport Planning & Design. The ten strong Manchester based team, including management, will be integrated with the Group’s existing Eddisons property services division. 

Croft was established in 2010 by its existing management and the business provides highways, transport and traffic advice on commercial, residential and mixed use schemes to a corporate client base, which includes developers, house builders and land owners. In line with our strategy, the acquisition will strengthen the Eddisons professional services business, through expanding the consultancy services offered to real estate developers and corporate clients.

In the financial year ended 30 Sept 2018, Croft reported annual revenue of £1.8m and
pre-tax profits of £0.7m, when reported on the same basis as the Group. It had gross assets of £2.2m as at 30 Sept 2018.”

 

Sumo Group (SUMO.L) 128.5p £192.84m

“The award-winning provider of creative and development services to the video games and entertainment industries, announced that yesterday the Group completed the acquisition of Red Kite Games Limited , a work-for-hire studio focusing on engineering and code support services, for a total consideration of circa £2m. The net consideration is circa £1.5m, as Red Kite has been acquired with circa £0.5m of cash on the balance sheet.” In the year ended 31 Jan 2018, Red Kite reported EBITDA of £0.4m on revenue of £0.9m. These figures are unaudited. Both revenue and profit are expected to be lower in the year to 31 Jan 2019, due to the application of resource on an own-IP project. Red Kite is expected to contribute circa £0.2m to Sumo Group EBITDA in the 11 months to 31 Dec 2019.

FY2018E revs of £36.3m and EBITDA of £10.2m

 

Kingswood Holdings (KWG.L) 12.25p £18.97m

The integrated wealth management group, has continued its expansion with the acquisition of Thomas & Co Financial Services an Oxfordshire based financial advisory firm. Furthermore, Kingswood has also announced the launch of its enhanced Managed Portfolio Service,  a range of discretionary managed, risk-rated model portfolios. For each risk profile, Kingswood are offering a choice of strategies such as income generation, passive investment and ethical investments.

Kingswood has acquired the Thomas & Co book of business for a maximum cash consideration payable of £3.3m. The Consideration comprises an initial cash payment of £1.5m and a further deferred sum of maximum £1.8m which is subject to the achievement of revenue and profitability metrics over a three-year period.  For the year to 31 Dec 2017, Thomas & Co generated a PBT of £0.46m. The Acquisition is expected to be immediately earnings accretive to the Group, with future income growth anticipated from additional revenue enhancement and cost synergies.

 

CML Microsystems (CML.L) 310p £74.06m

Trading update from the semiconductor specialist. Since the half year announcement, we have seen the tangible effects of a softening of the Chinese economy along with on-going geopolitical issues and can report that a number of our customers have exhibited weaker demand and remain in an inventory correction period. As a result, new order bookings have not met with internal management expectations.

With only two months of the financial year remaining, the Company now expects second half revenues to be below those achieved during the first 6 months and full year revenues to be approximately 12% lower than the prior 12-month period. Given the expected sales performance, the Company therefore expects revenues and PBT to be materially below current market expectations. Gross margin has continued to track above last year due to product mix and the cost base has remained stable.

Whilst this is disappointing to report, the Board believes that medium to long term growth drivers for our products remain particularly strong and we are focussed on driving the business over this period and our strategy remains unchanged.

 

Head Chef:

Derren Nathan
0203 764 2344
derren.nathan@hybridan.com

*A corporate client of Hybridan LLP

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