Small Cap Feast

Small Cap Feast – 10 September 2018

Set Menu AIM:

Total number of AIM Companies (Incl Susp): 939

Total number of AIM Companies trading: 873*
* As at 31 August 2018

Set Menu NEX Growth:

Total number of NEX Growth Market Companies (Incl Susp): 90*

Total number of NEX Growth Market Companies trading: 88*
* As at 31 August 2018

Set Menu Standard List:

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

Total number of Standard List Companies trading: *
* As at 31 August 2018

Dish of the Day:

No Joiners Today

Off the Menu:

Dalradian Resources—cancellation of quoting on AIM following the acquisition by Orion Mine Finance.

Weatherly International—cancellation of quoting pursuant to AIM rule 1

Zamano PLC—cancellation of quoting on AIM after remaining suspended for a period of six months after failing to complete a potential reverse takeover transaction

Dish of the Day:

No Joiners Today

Off the Menu:

No Leavers Today

What’s Cooking in the IPO Kitchen?

Main Market (Premium)

Smithson Investment Trust—New Fund from Fundsmith LLP  established by Terry Smith. focused on a global basis on small and medium sized companies between £500m and £15bn in market cap . Due 19 Oct.  Seeking £250m raise.

Funding Circle—SME loans platform seeking raise of up to £300m plus a secondary sell down. Reg doc published but no prospectus as yet.

Aston Martin— Reg document submitted by the iconic producer of hand-crafted luxury sports cars. Any prospectus would be published around 20 Sep. Targeting 25% plus free float. H1 results rev+8% to £445m, EBITDA £106m.

Mobius Investment—exploring the launch of a new UK investment trust. The trust will invest in small to mid-cap companies in emerging and frontier markets with an absolute return focus. Due September.

AIM

Green Man Gaming—pure play e-commerce and technology company in the digital video games industry. revenue CAGR growth of 26.7% in the last three years to £47.5m.  Due late Sep.  EBITDA Profitable. Offer TBA

Crossword Cybersecurity PLC* (NEX:CCS)—the technology commercialisation company focusing exclusively on the cyber security sector is exploring its options in relation to a potential move to the AIM market of the London Stock Exchange which, if it were to proceed, would likely take place over the next few months.

Path Investments (PATH) -RTO of  a 50 per cent. participating interest in the producing Alfeld-Elze II gas field located 22 kilometres south of Hannover in Germany. Seeking £10m. Offer TBA. Due Mid September

Kropz PLC-Intention to float by the  emerging plant nutrient producer with an advanced stage phosphate mining project in South Africa and exploration assets in West Africa

Breakfast Buffet

GAN PLC (GAN.L) 67p £51.88m

GAN announced the Company has launched Internet sports betting in New Jersey delivered for Paddy Power Betfair plc’s FanDuel Group, GAN’s first US client to operate Internet sports betting via the GAN Platform.

The partnership with the FanDuel Group for delivery of Internet sports betting serving New Jersey residents via the GAN Platform was previously announced on July 18, 2018.

FanDuel Group is a subsidiary of Paddy Power Betfair PLC, a leading international sports betting and gaming operator

GAN has completed the integration of FanDuel’s nominated Internet sports betting software which is a combination of IGT’s sports platform and Paddy Power Betfair’s leading pricing, trading and risk management technology, along with a user interface designed for the US customer by the FanDuel team

On Sept 1, 2018 FanDuel soft-launched a FanDuel-branded website and accompanying mobile app offering Internet sports betting, leveraging GAN’s enterprise software. The FanDuel website and mobile apps are now available 24/7

Sports betting has been delivered as an integrated extension into GAN’s enterprise software Platform and GAN participates in the incremental sports betting revenues.

OptiBiotix (OPTI.L) 103p £86.05m

OptiBiotix, a life sciences business developing compounds to tackle obesity, high cholesterol, diabetes and skin care, announced that it has entered into a three year non-exclusive licence agreement with Bened Biomedical Ltd., Taiwan. The agreement grants Bened a non-exclusive license to produce, package, promote, market, and commercialise products containing OptiBiotix’s cholesterol and blood pressure reducing strain, LPLDL®, in Taiwan, with the aim of maximising the financial return for both parties.

Bened is a leading probiotic research and marketing companies in Asia developing microbiome based products for neuropsychological, allergic, immunological, metabolic and aging-related disorders.

This agreement expands OptiBiotix’s sale into Taiwan with the potential to broaden the opportunity within the Asia Pacific region. Cardiovascular disease is the second leading cause of death in Taiwan, behind Cancer, and is seen as a major public health issue. The Taiwanese supplements market is predicted to grow by a 27% growth by 2021. The agreement creates a pathway to access territories in the Asia Pacific region with a total probiotic retail value of $16.1bn, of which supplements are $700m.

 

System1 (SYS1.L) 230p £29.3m

System1 announced that it is preparing to launch its new Ad Ratings subscription service later in the current financial year. This service will provide clients with access to a large database of adverts broadcast in the UK and the US which are rated using the Company’s advertising effectiveness measures. It will enable clients to compare the effectiveness of their adverts with those of competitors and to correlate advertising effectiveness with media spend.

The Company is investing a significant amount in developing this service, which it views as having strategic importance both in supporting the current business and in broadening the use of its core intellectual property to create new scalable revenue streams.  Over H1, the Company will have invested some £1.8m and further material investment is planned in H2.

This investment is being undertaken at a time when current business revenues are stabilising, albeit at a slower rate than anticipated.  As a result of lower operating costs (excluding Ad Ratings) a return to growth in operating profits vs H1 prior year (again, excluding Ad Ratings) is anticipated.  The Company believes that revenues from the Ad Ratings service will begin towards the end of H2.

 

Amryt Pharma (AMYT.L) 17.3p £47.6m

Amryt, a biopharmaceutical company focused on rare and orphan diseases, announced that the FDA has granted Investigational New Drug (“IND”) clearance for AP101. This enables the Company to begin opening US clinical trial sites as part of its ongoing global EASE Phase III clinical trial in Epidermolysis Bullosa (“EB”).

EB is a rare genetic skin disorder that can cause skin to blister and tear from the slightest friction or trauma and can, in some cases, cause blistering and erosion of the epithelial lining of internal organs. EB is chronic, potentially disfiguring and life limiting. There are approximately 500,000 people living with EB worldwide and there are currently no approved treatments.

AP101 is currently in a Phase III clinical trial (EASE), the largest ever global Phase III study conducted in patients with EB. Trial sites are already open across Europe, Australasia, Latin America and the Middle East and an interim efficacy data readout is due later this year with the top-line data readout expected in Q2 2019.

 

Maintel Holdings (MAI.L) 795p £110m

Maintel Holdings, a leading provider of communications cloud and managed services, announced its interim results for the six months to 30 June 2018.

The IFRS 15 adoption has resulted in a reduction in H1 2018 revenue and profit before tax of £1.5m and £1.2m respectively (H1 2017: IFRS 15 adjustments resulted in a reduction of £5.6m and £2.1m respectively). Timing of cash flows is not impacted.

Revenue up 14% to £66.5m (H1 2017: £58.2m)  with recurring revenue at 70%

Gross profit increased to £18.2m (H1 2017: £17.4m)

Adjusted EBITDA at £5m, down  2% (H1 2017: £5.1m)

Adjusted earnings per share  at 25.9p (H1 2017: 27.1p)

Strong cash performance with underlying cash conversion of 80% of adjusted EBITDA

Net debt at £26.1mreduced from £27.7m at 31 Dec 2017

Interim dividend per share proposed at 15.0p (H1 2017: 14.7p)

 

Urban Logistics (SHED.L) 122p £104.99m

Urban Logistics  announced that on Friday 7 Sept it completed the second of two portfolio acquisitions totalling £36m from LondonMetric Plc.

As previously announced, the Company’s recent acquisition comprised two portfolios. It has now completed the acquisition of Portfolio 2 at an aggregate acquisition price of £16.5m, representing a net initial yield of 5.8%. The gross consideration including costs for Portfolio 2 was £17.9m.

Portfolio 2 comprises three well located assets:

Northampton – a 45,243 sq ft warehouse let to Encon on an annual rent of £0.23m until Aug 2023; with a rent review due in Sept 2018;

Nottingham – a 113,717 sq ft warehouse let to Hillary’s Blinds on an annual rent of £0.57m until July 2027 (also included is a 2.2 acre land site to the north of the warehouse); and

Sheffield – a 54,556 sq ft warehouse let to Cogne UK on an annual rent of £0.23m, until Sept 2026, with a rent review due in Sept 2021.

 

TomCo Energy (TOM.L) 5.1p £3.17m

TomCo Energy, the oil shale exploration and development company focused on using innovative technology to unlock unconventional hydrocarbon resources, provided an update in respect of TurboShale Inc., in which the Company has an 80% interest, forthcoming field test programme on the Company’s Holliday Block in Utah (the “Field Test”).

The Company announced that Himes Drilling Company Inc., the appointed drilling contractor, has completed preparation works for the Field Test. These works included, inter alia, road surface works, site accommodation preparation and site clearance. The drilling of the bore holes and installation of the well heads for the Field Test, is expected to commence today.

The project team is expected to be on site from the week beginning 17 Sept 2018 with the RF generators expected to be delivered the same week, following which they will be commissioned ahead of commencing the Field Test in early October. The ‘live’ testing part of the Field Test is expected to last approximately four weeks.

 

Feedback (FDBK.L) 1.82p £5.07m

Feedback, the specialist medical imaging technology company, announced that its operating company Feedback Medical Ltd has received an order from its South Korean distributor for TexRAD®, its patented image texture analysis technology, for the Samsung Medical Centre in Seoul.

The order came via Feedback’s South Korean distributor, Korea Computer Motion ISG (“Korea ISG”). It follows the exclusive distributor arrangement announced on 8 June 2017 granting Korea ISG the ability to sell and distribute TexRAD® in South Korea for research purposes, performing advanced analysis of routinely acquired medical diagnostic images, such as CT and MRI scans.

To date, Korea ISG has obtained several orders for Feedback’s TexRAD® software technology in South Korea. This is the first order from Samsung Medical Centre, one of the nation’s leading hospital groups, founded by Samsung Group. Samsung Medical Centre has a strong focus on research, particularly in radiology and oncology.

 

Nakama (NAK.L) 0.78p £0.97m

Nakama Group, the recruitment consultancy working across UK, Europe, Asia and Australia providing recruitment and related services for the web, interactive, digital media, IT and business change sectors, announced its final results for the year ended 31 March 2018, together with the publication of its audited report and accounts.

Financial Highlights

Group revenue decreased by 25.4% to £16.8m (2017: £22.5m)

Net fee income reduced by 14.2% to £5.3m (2017: £6.19m)

Net fee income percentage increased to 31.6% (2017: 27.5%)

“After ceasing to trade with a high-volume client in Australia that location has struggled to deliver meaningful results as replacing such a large contract for services has proven to be far more challenging than expected. This has reduced the revenues significantly.

“We will embark on a journey to improve the development of our people as well as raise expectations around achieving better quality outputs, increasing levels of accountability in each unit”.

 

Harvest Minerals (HMI.L) 15.38p £29.04m

Harvest Minerals Limited, the fertiliser development company, announced the appointment of David Edghill to the senior management of the Company as CFO. 

Mr Edghill, who has held a number of senior financial roles over the past 15 years, including with Grant Thornton and Ernst and Young, joins from Bulk Logistics Group Ltd where he held the position of Finance Director. He is a fellow of the Association of Chartered Certified Accountants.

Mr Edghill’s appointment is effective immediately and he will be based in the Company’s UK office.

 

Head Chef:

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

*A corporate client of Hybridan LLP

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