Small Cap Feast
Small Cap Feast – 04 April 2019
Dish of the Day:
No Joiners Today
No Joiners Today
Off the Menu:
No Leavers Today
No Leavers Today
What’s Cooking in the IPO Kitchen?
Rustranscom plc— specialised rail freight transportation in Russia and Kazakhstan, announced its potential intention to conduct an IPO of GDRs. The GDRs are expected to be admitted to the Official List of the FCA and to trading on the main market of the LSE. Offering is expected to comprise predominantly primary shares, in the amount of circa $300m.
Main Market (Premium)
US Solar Fund, a newly-established investment company focused on investing in solar power assets mainly in the US, looking to raise $250m at $1. Expected 16 April
Network International Holdings—Leading enabler of digital commerce across the Middle East and Africa region, operating across over 50 highly under penetrated payment markets that contain a total population of 1.5 bn. 2018 rev $298m, underlying EBITDA $152m. Due April. No new funds to be raised. Secondary sell down. Targeting free float of at least 25%.
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.
Loungers plc—the operator of 146 café/bar/restaurants across England and Wales under the Lounge and Cosy Club brands, announces its intention to seek admission on AIM, offer TBC
Forbes Ventures (NEX:FOR) 0.4p £1.8m
“The main activity for this year has been the rationalisation of investment holdings to properly align them with the corporate strategy and the investment in processes and people to facilitate the Company’s future. This has resulted in a financial loss of $532,000 for the year. We continue to be well-supported by our majority shareholder, Quanta Capital Ltd, as we build out a robust debt-based platform for investment.
No doubt, the year ahead will be transformative for the Group. We look forward to updating shareholders on a regular basis, as we roll out our investment strategy. I would also like to take this opportunity to thank my fellow Directors for their tireless efforts over the past year as we have developed our investment processes and infrastructure.”
“The Company’s remaining equity holding is in Allica Ltd (previously called Civilised Bank Limited), a new challenger bank start-up. The Company’s announcement dated 9 May 2018 provides further information about the current performance of this investment.”
Metal Tiger (MTR.L) 1.4p £21.41m
“Commencement of drilling at Pan Asia Metals Limited’s (“PAM”) wholly owned Reung Kiet Lithium Project (“RKLP”) in Phang Nga Province, Thailand. Metal Tiger holds a 13.6% interest in PAM.
The RKLP includes a historical pegmatite tin mine, where weathered pegmatite was mined until the limit of weathering, where the ground became too hard, reaching a depth of approximately 30m. The resulting historical pit measures around 450m long by 140m at its widest point, with the pegmatite body around 20m wide in the pit bottom.
Previous investigations, conducted jointly by the Thai/British Geological Survey in the 1960s, have shown the pegmatite to be lithium bearing, with lepidolite mica thought to be evenly distributed throughout the pegmatite.
The drill programme has commenced with initial confirmatory drill holes orientated to intersect the lepidolite pegmatite at around 20-30m below the historical pit floor. Depending on findings, it is intended that deeper drilling will then follow.”
Imimobile (IMO.L) 10.25p £14.30m
FY Mar 19 update from the communications software and solutions provider.
Revenue ahead of market expectations, with EBITDA marginally ahead.
Revenue for the full year is expected to be c. £142m (2018: £111.4m) an increase of 28% of which c. 18% is organic.
Adjusted EBITDA for the full year is expected to be over £17.8m (2018: £13.4m) an increase of over 30% year on year.
Cash conversion at c. 90% with net debt of £7.9m at 31 March 2019 (2018: net cash of £4.3m). This is after completion of the Impact Mobile acquisition during the year, acquired for cash of £16m.
The number of clients that provide more than £500k p.a. revenue increased to 40 (33 in FY18) and clients with revenues between £100k p.a. and £500k p.a. increased to 89 from 43 in the prior year.
NWF Group (NWF.L) 148p £67.7m
The specialist distributor of fuel, food and feed across the UK, announced it has acquired Consols Oils Limited, the second fuels acquisition in the current year. This is in line with the Group’s strategy to grow and consolidate the fuels distribution business, in which the Group is the third largest player in the UK.
Consols Oils is a 25m litre fuel distributor based in Redruth, Cornwall which expands the Group’s UK coverage by adding a leading supplier in West Cornwall, a new area for the Group’s fuels business. The acquisition supports the Group’s development in the South West.
The Group is also pleased to report that current trading is in line with the Board’s expectations for the full financial year ending 31 May 2019 after the completion of the important winter period. The Group expects to issue a year end trading update in mid-June in line with its prior year practice.
Proton power Systems (PPS.L) 12p £72.64m
The designer, developer and producer of fuel cells and fuel cell electric hybrid systems, announced the receipt of a confirmed order from ebe EUROPA of Memmingen, Germany, for 15 hydrogen powered fuel cells of 60kW of generating capacity each. ebe is an integrator and distributor of electric buses. The ultimate customers are four city councils in Germany (Frankfurt am Main, Mainz, Muenster and Wiesbaden). The total value of the order is EUR 4.1m, with secured payment conditions including a further eight years warranty. It is expected that the 15 fuel cells will be delivered within the next 12 months.
The order is a result of the first tender under the European funded JIVE PROJECT. The project consists of two tenders, together 290 buses will be deployed within the next two years.
Ramsdens (RFX.L) 179p £55m
“The Board reported that the Group has continued to trade well and in line with the Board’s initial expectations for the year. This performance again reflects the strength of the Group’s diversified business model with growth across the four key income streams of Foreign Currency, Pawnbroking, Jewellery Retailing and the Purchase of Precious Metals.
In March, the Group announced the strategic acquisition of 18 stores and 5 loan books from Instant Cash Loans Limited and we are pleased to report that the initial integration of these stores to our systems and processes has been successful. The acquisition is further expanding the reach of the Ramsdens brand and our trusted offering across communities in the UK, and demonstrates the growth opportunities available to the Group in the fragmented UK market.
The Board continues to have confidence in the Group making further progress on its strategic objectives in the forthcoming year.”
FY Mar19E rev £44.8m and PBT £6.5m. PE <11x and yield of c.4%.
Gresham House Strategic (GHS.L) 1,000p £35.1m
“One of the top-performing UK small-cap funds, delivering unaudited market-leading NAV total return performance of 8% to 1,253.9p/share vs FTSE Small Cap Index total return of -3.1% in the year from 1 April 2018 to 31 March 2019.
Three-year anniversary of management by Gresham House marked with strong NAV total return of 31.4% since inception and operational milestones achieved
Driven by strong performance of its strategic investments including Augean, Tax Systems, IMImobile and Northbridge”.
Share price discount to NAV reduced from 30% at 31 March 2018 to 22.6% at 31 March 2019. The GHS Board expects Gresham House Asset Management’s recently announced joint venture with Aberdeen Standard Investments, relating to its Strategic Public Equity (SPE) strategy led by Graham Bird and Tony Dalwood, to deliver significant positive benefits for GHS over the longer term
Serica Energy (SQZ.L) 107p £293.4m
Exploration well 22/19c-7, drilled to explore the Rowallan prospect has reached a total depth of 4,641 metres and will be plugged and abandoned. The well, operated by ENI UK Ltd., encountered a 182m section of sandstone and shale, but was not found to be hydrocarbon bearing.
“We are naturally disappointed that the well has not encountered hydrocarbons. We will now assess the valuable data acquired before deciding the forward plan for the remaining prospects on block 22/19c and adjacent blocks. This result justifies our policy of reducing financial exposure to exploration risk by means of farm-out. In this case we were fully carried and did not pay anything towards the cost of the well.
We remain fully committed to building on our balanced exploration, development and production portfolio.”
Water Intelligence (WATR.L) 265p £40.3m
The multinational provider of precision, minimally-invasive leak detection and remediation solutions for both potable and non-potable water announced the sale of franchise territory covering the middle and southern part of the state of Georgia in the US.
The purchase price for the territory is $0.17m. The territory represents the previously undeveloped southern half of the South Atlanta franchise that Water Intelligence reacquired in early March this year. The new franchise owner has experience with the American Leak Detection franchise system and is expected to put trucks on the road immediately.
Today’s sale of a franchise territory optimizes the commercial exploitation of the South Atlanta / Southern Georgia region and accelerates the unlocking of shareholder value. First, today’s sale of the South Georgia territory does not cannibalize the sales of the newly launched South Atlanta corporate territory. We still expect the baseline of $0.32m of 2018 sales for South Atlanta to grow during 2019; now, however, the effective purchase price for the reacquisition has dropped due to the sale of territory.
Concurrent Tech (CNC.L) 71.5p £53.08m
The specialist in the design and manufacture of high-end embedded computer boards for critical applications, announces results for the year to 31 Dec 2018.
Revenue for the year increased to £16.6m (2017: £16.2m)
Gross profit was £8.7m (2017: £9m)
EBITDA increased by 5.8% to £4.6m (2017: £4.4m)
PBT was £3m (2017: £3m)
Dividend increased by 4.5% to 2.30p per share for the year (2017: 2.20p)
Cash in business plus deposits was robust at £7.7m (2017: £8.4m)
The new fiscal year of 2019 has started with a very strong order book giving the Board confidence in the Group’s performance for the first half of 2019 and for the year as a whole. New and existing customers continue to require increasing levels of processing performance and additional product features including, in particular, increased security capabilities and encrypted storage.
0203 764 2344
*A corporate client of Hybridan LLP
This document, which does not constitute research, has been issued by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to any such action. This document has no regard for the specific investment objectives, financial situation or needs of any specific person or entity and is not a personal recommendation to any such person or entity. Recipients should reach an individual investment decision, based upon their respective financial objectives and financial resources and, if any doubt, should seek advice from an investment advisor.
The information contained in this document is based on materials and sources that are believed to be reliable; however, such information has not been independently verified and therefore it is not possible to confirm such information as being accurate. This document is not intended to be a complete statement or summary of any securities, markets, reports or developments referred to herein. No representation or warranty, either express or implied, is made or accepted by Hybridan LLP, its members, officers, employees, agents or associated undertakings in relation to the accuracy, completeness or reliability of the information contained in this document, nor should it be relied upon as such.
The content of this document includes market commentary and other information which we have prepared in relation to the company referred to in this document, which is our broking client. The provision of this document to you constitutes a minor non-monetary benefit which is capable of enhancing the quality of service provided by Hybridan LLP and which is of a scale and nature which could not be judged to impair the duty of Hybridan LLP to act in the best interest of its client falling within article 24(7)(b) of Regulation 600/2014/EU (MIFID II Regulation).
Any and all opinions expressed are current as of the date appearing on this face of this document only. Any and all opinions expressed are subject to change without notice and Hybridan LLP is under no obligation to update the information contained herein. To the fullest extent permitted by law, none of Hybridan LLP, its members, officers, employees, agents or associated undertakings shall have any liability whatsoever for any direct or indirect or consequential loss or damage (including lost profits) arising in any way from use of all or any part of the information in this document.
This document should not be relied upon as being an independent or impartial view of the subject matter and, for the avoidance of doubt, constitutes non-independent research (as such term is defined in the Financial Conduct Authority’s Conduct of Business Sourcebook to reflect the requirements of the MIFID II Regulation and Directive 2014/65/EU (known as MIFID II)). The individuals who prepared this document may be interested in shares in the company concerned and/or other companies within its sector, may be involved in providing other financial services to the company or companies referenced in this document or to other companies who might be said to be competitors of the company or companies referenced in this document. As a result both Hybridan LLP and the individual members, officers and/or employees who prepared this document may have responsibilities that conflict with the interests of the persons who receive this document. Hybridan LLP and/or connected persons may, from time to time, have positions in, make a market in and/or effect transactions in any investment or related investment mentioned herein and may provide financial services to the issuers of such investments.
In the United Kingdom, this document is directed at and is for distribution only to persons who (i) fall within article 19(5) (persons who have professional experience in matters relating to investments) or article 49(2) (a) to (d) (high net worth companies, unincorporated associations, etc.) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (SI 2005/1529) (as amended) or (ii) persons who are each a professional client or eligible counterparty (as those terms are defined in the Financial Conduct Authority’s Conduct of Business Sourcebook) of Hybridan LLP (all such persons referred to in (i) and (ii) together being referred to as relevant persons). This document must not be acted on or relied up on by persons who are not relevant persons. For the purposes of clarity, this document is not intended for and should not be relied upon by any person who would be classified as a retail client under the Financial Conduct Authority’s Conduct of Business Sourcebook.
Neither this document, nor any copy of part thereof may be distributed in any other jurisdictions where its distribution may be restricted by law and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions. Distribution of this report in any such other jurisdictions may constitute a violation of territorial and/or extra-territorial securities laws, whether in the United Kingdom, the United States or any other jurisdiction in any part of the world.
Where possible this document is made available to all relevant recipients at the same time. Dissemination of research by Hybridan LLP is monitored to ensure that it is only provided to relevant persons. Research prepared by Hybridan LLP is not intended to be received and/or used by any person who is a retail client.
Hybridan LLP and/or its associated undertakings may from time-to-time provide investment advice or other services to, or solicit such business from, any of the companies referred to in this document. Accordingly, information may be available to Hybridan LLP that is not reflected in this material and Hybridan LLP may have acted upon or used the information prior to or immediately following its publication. In addition, Hybridan LLP, the members, officers and/or employees thereof and/or any connected persons may have an interest in the securities, warrants, futures, options, derivatives or other financial instrument of any of the companies referred to in this document and may from time-to-time add or dispose of such interests.
This document may not be copied, redistributed, resent, forwarded, disclosed or duplicated in any form or by any means, whether in whole or in part other than with the prior written consent of Hybridan LLP.
MIFID II status of Hybridan LLP research
The cost of production of our corporate research is met by retainers from our corporate broking clients. In addition, from time to time we issue further communications as market commentary (such as our daily newsletter, Small Cap Breakfast), which we consider to constitute a minor non-monetary benefit which is capable of enhancing the quality of service provided by Hybridan LLP and which is of a scale and nature which could not be judged to impair the duty of Hybridan LLP to act in the best interest of its client falling within article 24(7)(b) of the MIFID II Regulation.
Hybridan LLP is a limited liability partnership registered in England and Wales, registered number OC325178, and is authorised and regulated by the Financial Conduct Authority and is a member of the London Stock Exchange. Any reference to a partner in relation to Hybridan LLP is to a member of Hybridan LLP or an employee with equivalent standing and qualifications. A list of the members of Hybridan LLP is available for inspection at the registered office, 2 Jardine House, The Harrovian Business Village, Bessborough Road, Harrow, Middlesex HA1 3EX.
If you would like to unsubscribe, please email firstname.lastname@example.org with “unsubscribe me”.