Small Cap Feast

Small Cap Feast – 03 February 2020

Dish of the Day:

No Joiners Today


Off the Menu:

Just Eat Takeaway has begun trading on the LSE Main Market (Premium) following a £6bn merger


What’s Cooking in the IPO Kitchen?


Intention to float by Gemfields Group. No Capital Raise. Currently listed on JSE. (GML:JNB) at circa £122m.  The Group’s key producing assets, the Kagem emerald mine in Zambia  (believed to be the world’s single largest producing emerald mine) and the Montepuez ruby mine in Mozambique (one of the most significant recently discovered ruby deposits in the world), are both expected to have long mine-lives with potential for expansion. Also owns the  Faberge brand. Due Valentines Day 2020.

Main Market (Standard List)

The Proof Of Trust has announced its intention to list on the Standard Market.  The Blockchain based business, owns patents to a protocol which facilitates dispute resolution based upon smart contract disputes.  Transaction details TBC.

Main Market (Premium)

Ninety One –proposed demerger and public listing of  Investec’s  global asset management business on LSE and JSE. 30 Sep 2019 AUM £121bn. Sale of existing shares. Expected free float of >60%. Due 16 march.

Cabot Square—Closed ended investment fund focussed on alternative assets and asset manager. Looking to raise £200m.  Will target investment opportunities that are expected to generate an attractive risk adjusted return and that can also make a positive ESG impact by focusing on some of the biggest challenges facing societies and economies.  Due 14 Feb.

Calisen Group. Potential Intention to Float. Owner and manager of essential energy infrastructure assets through its subsidiaries Calvin Capital and Lowri Beck . Consolidated FY Dec 18 revenue £162.1m and operating profit £25.4m. Raising up to £300m in primary plus partial vendor sale.  Expected Admission February 2020

The Global Sustainable Farmland Income Trust will invest in a diversified portfolio of operational farmland assets located in major agricultural markets including the United States, Europe, New Zealand, Australia and certain countries within Latin and South America. Raising up to $300m.   Due 28 February.

Investment firm Nippon Active Value fund is seeking to raise up to £200m at an issue price of 100p per share via an IPO.   The company aims to invest in a portfolio of quoted Japanese stocks with market capitalisations of up to $1bn.   First day of dealings expected early February.


Breakfast Buffet

Pennant International (PEN.L) 83.5p £30m

 Preliminary unaudited assessment of the Group’s trading for FY2019 indicates that Pennant will report:

  • Revenues of circa £20m;
  • Underlying earnings before interest, taxation and amortisation (EBITA) of circa £1.6m;
  • Underlying earnings before interest, taxation, depreciation and amortisation (EBITDA) of circa £2.4m;
  • Net debt at year-end of £2.2m;
  • Three-year order book at year-end of £33m of which circa £16m is scheduled for delivery in 2020.

2 contract awards announced today.  1) The supply of Pennant training aids and associated services for aviation technician training for the Australian Defence Force at a new training facility in Nowra, Australia. 2) An order valued at circa £1.5m for the provision of additional training aids to the Middle East.


Directa Plus (DCTA.L) 75.5p £46.05m

The producer and supplier of graphene nanoplatelets based products for use in consumer and industrial markets, announces that the Company’s subsidiary Setcar S.A. has signed a contract to supply environmental services to GSP Offshore, part of the Romanian oil services group GSP.


This is the second major contract win for Setcar since the completion of the acquisition by Directa Plus of 51 per cent of the company on 26 November 2019. The value of the contract to Setcar is estimated to be approximately 700,000 per annum over a period of seven years for a total value of 5m.


Scancell (SCLP.L) 8p £37.2m

The Investigational New Drug (IND) application to the Food and Drug Administration (FDA) for SCIB1 has been approved. As a result, Scancell will initiate the US arm of the Phase 2 clinical trial of SCIB1 in patients with metastatic melanoma also receiving the checkpoint inhibitor pembrolizumab (Keytruda), using Ichor’s TriGrid® 2.0 electroporation delivery device.

The Phase 2 study is designed to assess whether the addition of SCIB1 to pembrolizumab will result in an improvement in the tumour response rate, progression-free survival and overall survival in 25 patients with advanced melanoma, who are also eligible for treatment with pembrolizumab. Patient screening was initiated in the UK, with Professor Poulam Patel, Professor of Clinical Oncology at the University of Nottingham as the Chief Investigator for the global study. US site initiation activities and patient enrolment will commence alongside clinical site expansion in the UK.


Starcom (STAR.L) 1.25p £4.32m

The Company expects to announce its audited results for the year ended 31 December 2019 in early March 2020. The Company’s preliminary unaudited accounts for 2019 show an improvement over the previous year and in line with current market expectations: revenues are significantly higher at around $6.8m, an increase of 14% (2018: $5.99m) and gross margin remained stable at 41% (2018: 40%).  Subject to final audit, Adjusted EBITDA for the year is expected to be approximately $300,000 (2018: Adjusted EBITDA loss of $8,000).  

In addition to improved financial results, during 2019 the Company made significant progress strengthening its product offering and, through an improved product mix, has created the opportunity for faster growth


Nostra Terra Oil & GAS(NTOG.L) 0.8p £1.6m

The Board of Nostra Terra announces that, on 31 January 2020, it received a letter from Eridge Capital Limited requisitioning a second general meeting  of the Company’s shareholders. The Requisition proposes that shareholders be asked to consider resolutions to remove Ewen Ainsworth from the Board; and to remove any Directors that may be appointed in the period between the date of the Requisition and the proposed GM. The Board considers the Requisition to be valid.

The Company is considering whether to include the relevant resolution regarding the removal of Ewen Ainsworth from the Board in the circular to be posted to shareholders pursuant to the requisition request from Eridge, dated 15 January 2020, as announced on 17 January 2020 and 24 January 2020, or whether an additional GM will be required.


ADM Energy (ADME.L) 4.55p £2.8m

The oil and gas investing company quoted on AIM, has entered into a non-binding memorandum of understanding with Trafigura Pte Ltd (“Trafigura”), a market leader in the global commodities industry whose core business is the physical trading of oil and petroleum products and metals and minerals, to develop investment opportunities in the African energy sector.

Under the terms of the MOU, it is the intention of ADM  and Trafigura to create a strategic alliance where ADM will act as the sponsor for investment opportunities in the African energy sector which will be presented to Trafigura for consideration as a trading counterparty, or financing provider.


NAHL Group (NAH.L) 57p £26.4m 

The Group confirms that its guidance for 2019 underlying earnings will be within the range previously announced and is likely to be between 7.5% and 10% lower than Board expectations.

The Group’s Critical Care division traded well in 2019 and the Board expects this to continue into 2020. Despite the difficult backdrop for the UK property market, the Board expects its Residential Property division to grow, albeit from a smaller base. In Personal Injury, there remains considerable uncertainty surrounding key elements of the Government’s personal injury reforms, originally planned for April 2020. This continues the volatility in the Group’s Panel Law Firm relationships and is expected to delay growth in case processing within the Group’s wholly owned law firm, National Accident Law.

The Board is encouraged by the progress made in transforming the business. However, in order to de-risk the Group in the light of market circumstances, the Board has decided to slow the deployment of working capital in the PI business and to suspend the Company’s dividend.  Consequently, the Board’s outlook for 2020 performance is now significantly lower than previous expectations.


IronRidge Resources (IRR.L) 11.625p £39m

Multiple additional high-grade and broad gold intersections have been returned from remaining drilling assay results received for the first phase exploration programme completed at the Zaranou Gold Project in Côte d’Ivoire. The license borders with Ghana and is along strike from significant operating gold mines including Chirano (5Moz), Bibiani (5.5Moz) and Ahafo (17Moz).

Field work to date has identified over 8km strike length and up to 1.2km width of coincident hard-rock artisanal workings, surface sampling results up to 69.6g/t gold and geophysical anomalies which remains open along strike and has now been drilled along broad spaced AC traverses with initial exceptional results up to 6m @ 15.11g/t and 22m @ 3.39g/t gold.

“Importantly, high-grade gold mineralisation including 6m @ 6.44g/t from 132m and 4m @ 5.16g/t gold from 110m was intersected at depth within fresh lithologies below the base of oxidation and confirming continuity of mineralisation and tenor at depth.


Knights Group (KGH.L) 430p £319m

 Acquisition of Croftons Solicitors LLP bolsters real estate presence in Manchester.  In its unaudited accounts for the year ending 31 March 2019, Croftons achieved revenue of circa £2.8m with a corporatised PBT margin of circa 15%.  Following integration, including the delivery of cost synergies, the Board expects Croftons to deliver an earnings enhancing PBT margin of circa 20% in the first full financial year post acquisition. Total consideration of up to £2.8m in cash and shares.


Marlowe (MRL.L) 495p £227m

The specialist services group focused on developing companies which assure safety and regulatory compliance, announces that it has acquired Eurosafe UK Group Limited (“Eurosafe”) for an enterprise value of £2.5m.  

Formed in 1996, Eurosafe provides a range of safety consultancy services encompassing asbestos consultancy, construction design management and contractor safety accreditation. Eurosafe is headquartered in York and operates nationally.

For the year to 31 March 2019, Eurosafe generated revenues of £3.4m.


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Derren Nathan
0203 764 2344

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