Small Cap Feast

Small Cap Feast – 05 April 2019

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What’s Cooking in the IPO Kitchen?

Main Market

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, expected late April.


Breakfast Buffet

Tricorn Group (TCN.L) 19p £5.41m

Tricorn Group, the tube manipulation specialist, provides the following pre-close trading update for the financial year ended 31 March 2019.

Revenue for the Year is expected to be around 2.5% ahead of the previous year. New business growth in the Transportation division more than offset the reduction in revenue in the Energy division which, as anticipated, saw significantly lower demand from the power generation rental sector. The Company’s joint venture in China continues to perform well.

Adjusted PBT for the Group is expected to be around 30% up on the previous year. 

Tricorn will provide a further update on current trading and prospects at the time of the release of its audited full year results, which is expected to be on 3 June 2019.


Oncimmune Holdings (ONC.L) 86.5p £54.4m

Oncimmune, a leader in the development, manufacture and commercialisation of personalised immunodiagnostics for the screening, detection and care of cancer, announced that it has signed an exclusive agreement for the distribution of its EarlyCDT-Lung test kit in Portugal with Sabartech S.L., its existing distributor in Spain. The agreement includes a minimum sales commitment of £0.7m over 5 years.

Every year in Portugal approximately 5,300 new cases are diagnosed and approximately 4,700 deaths occur from lung cancer. Lung cancer is the largest cause of cancer-related deaths in Portugal.

Oncimmune has also extended Sabartech’s agreement in Spain from three to five years, in light of the excellent progress made including the recently secured agreement to sell EarlyCDT-Lung as a screening test for the early detection of lung cancer through the hospitals and clinics of the Quirónsalud group. The extension adds a further £1.8m of minimum sales commitments over years 4 and 5.


Sirius Petroleum (SRSP.L) SUSPENDED

Sirius Petroleum, the Nigeria-focused oil and gas development and production company, announced that Shelf Drilling’s Adriatic-1 rig has reached Target Depth on its current operation and is concluding the testing and logging programme. The Company is awaiting a further update from Shelf Drilling regarding the release of the Adriatic-1, which is currently stationed in the adjacent licence to the Ororo field. As previously disclosed in the AIM Admission Document of 30 Nov 2017, in order to preserve its current licence, the Company is required to bring the Ororo field into production on or before 1st May 2019. Therefore, given the approaching timeline, the Company has taken the decision to seek a further extension to the term of the licence from the Department of Petroleum Resources in Nigeria, which has already been granted on two previous occasions. The Board will notify the market when further updates are received by the Company.


Urban Logistics (SHED.L) 116p £102.1m

Urban Logistics, the specialist UK industrial and logistics REIT, announced that it has sold a site located in Nuneaton for £8.1m. The 130,508 sq ft building was purchased as part of a portfolio in Sept 2017 for £6.7m.

The site is being sold to an owner occupier, Cofresh Limited, and realises a profit on cost of 21% and IRR on equity invested at the property level of 24%.

At the same time the Company has purchased a logistics property in Thatcham for a total consideration of £3.4m. The purchase price represents a net initial yield of 5.9%. The site has a rent of £7.97 per sq ft and a reversionary yield of c. 7%.

The Acquisition is consistent with the Company’s investment strategy of identifying well located and attractively priced stock with asset management potential; and the site sits within a location that is seeing strong rental growth, eight miles from the M4. The site comprises a 26,478 sq ft logistics warehouse let on a new five-year lease to DHL’s UK Mail, which uses it as a last mile strategic hub and a key part of its distribution network.


Scientific Digital Imaging (SDI.L) 49.75p £45.4m

The Board of Scientific Digital Imaging, the group focused on the design and manufacture of scientific and technology products for use in digital imaging and sensing and control applications, announced the acquisition on 4 April 2019 of MPB Industries Limited for a consideration of £1.58m.

MPB designs and manufactures flowmeters and process control instrumentation, with applications in water treatment, oil and gas production, medical anaesthesia, scientific analysis and many other areas

MPB will become part of the Group’s Sensors & Control operating segment

For the year ended 31 Dec 2018, MPB achieved revenues of £1.9m, gross profit of £1.28m and PBIT of £0.31m0

The Acquisition marks a continuation of the Group’s strategy of acquiring profitable complementary businesses characterised by their leadership in niche segments of the scientific and industrial instrumentation sector, with good presence in export markets together with strong management

The Acquisition is expected to be earnings enhancing in SDI’s next financial year commencing 1 May 2019


Bilby (BILB.L) 25.7p £10.64m

Bilby, a leading gas heating, electrical and building services provider announced the appointment of David Bullen as CEO who will join the Company on 15 April 2019. Simultaneously David Ellingham, the current CEO of Bilby, is stepping down to pursue other career opportunities.

David Bullen joins Bilby from Boleyn International Ltd, a strategic management consultancy he founded in 2016. Mr Bullen brings an impressive track record of creating substantial shareholder value as CEO at Anpario plc. David joined Anpario in 2007, moving on to become COO in 2009. He was the CEO between 2011 and 2016 where he oversaw growth in revenue and profits, delivering a four-fold increase in the share price. Prior to Anpario, David spent eight years at Novartis, where he held several senior positions both in the UK and abroad.

Bilby also announces as part of its ongoing efforts to meet the highest Corporate Governance standards, it has commenced a search for an additional NED to further enhance the Board.


Begbies Traynor (BEG.L) 62.5p £69.6m

Begbies Traynor announced the acquisition of the entire issued share capital of BSMH Limited, which trades as Barker Storey Matthews for an initial consideration of £1.6m. BSM is one of the largest independent firms of chartered surveyors in Eastern England with offices in Cambridge, Huntingdon, Peterborough and Bury St Edmunds.

The firm has 38 employees and is led by an experienced and well-regarded management team, who will join the group. BSM will be integrated with the Group’s existing Eddisons property services division.

The core services offered are commercial property agency, property management, building consultancy, professional services (including valuations) and planning services, consistent with those offered by the existing Eddisons business. As ranked by EG, BSM has strengths across the office, industrial, retail and investment sectors.

The acquisition is in line with our strategy to develop our property services business through selective acquisitions to enhance our expertise and geographical coverage. In the financial year ended 31 March 2018, BSM reported annual revenue of £3.1m and pre-tax profits of £0.6m. It had gross assets (excluding cash at bank) of £0.7m as at 31 March 2018.


Seeing Machines (SEE.L) 3.12p £70.92m

Seeing Machines, the advanced computer vision technology company that designs AI-powered operator monitoring systems to improve transport safety, has partnered with National Transport Insurance (NTI), a leading Australian specialist insurer, to develop mutually beneficial programs to promote the Group’s Guardian solution to NTI policyholders.

Developed specifically for the Australian market, NTI and Seeing Machines will establish a range of programs to promote the benefits of Guardian, the Group’s Fleet solution that detects fatigue and distraction related driver events in real time, to complement a range of road safety improvements.

NTI has a major share of the Australian commercial fleet insurance market and will partner with Seeing Machines to provide their clients with a range of differentiated commercial offerings. The partnership will extend to a collaborative approach around the interrogation of an extensive naturalistic driving data set, collected by Seeing Machines, with a view to extracting key insurance and risk related statistics and insights.


Starvest (SVE.L) 2.4p £1.35m

Starvest, the specialist mining and resources investment business, announced that investee company Kuwait Energy plc (KEC) has been acquired by Hong Kong listed United Energy Group Limited (UEG) in an all-cash transaction. Starvest realised a total return of approximately 25% on its investment in KEC, which Starvest initiated in 2005 through a stake in Concorde Oil and Gas a company which was eventually taken over by Kuwait Energy in 2011.

UEG has paid $1.464 per share, or a total consideration of approximately $477m

Transaction received all regulatory approvals in late March 2019

Starvest has received approximately £123,800


IG Design Group (IGR.L) 544p £416.4m

IG Design, one of the world’s leading designers, innovators and manufacturers of gift packaging, greetings, stationery, creative play products and giftware, announced that Impact Innovations, acquired in August 2018, was recently awarded Supplier of the Year 2019 for Seasonal and Celebration Products by Walmart, the world’s largest retailer.

The criteria for this award included strength of execution, innovation and design capabilities, as well as team experience, knowledge of the business and partnership shown across the Company. Commercial measures such as sales, sell through, inventory, and profit were also taken into account.


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