Small Cap Feast

Small Cap Feast – 12 December 2019

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Dish of the Day:

Main Market Standard ADT1.L Adriatic Metals. ASX Lited dual listing in London. “The Vareš Project is projected to deliver a post-tax internal rate of return of 107.4% and a net present value of US$916.6m at a discount rate of 8%, for total capital expenditure of US$178.4m, including 30% contingency.” £158m mkt cap

MJ Hudson Group PLC, MJH.L  the financial services support provider to Alternatives fund managers and asset owners has arrived on AIM. Raised £31.4 million (before expenses) from institutional investors, including £29.3 million of new money for the Company,  at a placing price of 57p. The Company’s market capitalisation on Admission is £97.6 million.  FY Jun 19 underlying revenue £16.7m., operating loss of £1.1m.

 

Off the Menu:

No Leavers Today

 

Dish of the Day:

Off the Menu:

What’s Cooking in the IPO Kitchen?

 NEX Exchange

SulNOx Group  – The Group has developed a methodology and process capable of emulsifying hydrocarbon fuels such as diesel and heavy fuel oil . By January 2014, following preliminary laboratory testing, SulNOx was in a position to suggest that its products resulted in up to a 50% reduction of Nitrogen Oxide (NOx) and a 90% reduction in particulate matter Due 17 Dec, mkt cap £42.3m.

 

Breakfast Buffet

Base Resources (BSE.L) 12.25p £143.5m

DFS reinforces Toliara Project’s status as a world class mineral sands development

DFS outcomes consistent with PFS, with no material changes to any metrics

Post-tax / pre-debt (real) NPV @ 10% discount rate of US$652m, measured at FID

Average revenue to cost of sales ratio of 3.15. Stage 1 capex cost of US$442m – to establish a 13Mtpa mining processing operation

Stage 2 capex cost of US$69m – to increase the operation to 19Mtpa

Ore Reserves estimate of 586Mt @ 6.50% HM for an initial LOM of 33 years

Mineral Separation Plant recoveries of 94.6% ilmenite, 79.4% zircon and 58.4% rutile

Annual averages (excluding first and last partial operating years):

Production of 780kt ilmenite (sulphate, slag and chloride), 53kt zircon and 7kt rutile

Revenue of US$248.2m – 65% ilmenite, 32% zircon and 3% rutile

Operating costs of US$71.9m or US$76.9m incl. 2% Government royalty

Non-operating costs of US$7.1m

EBITDA of US$164.3m, NPAT US$110.2m. Free cash flow of US$132.4m

 

Altitude Group (ALT.L) 53p £36.7m

 “ The Board is pleased to report that the Group remains on track to deliver full year results for the 15 months to 31 March 2020 in line with market expectations.

The Group continues to grow the revenue base of the AIM Smarter business in the United States by focusing on engagement with, and service provision to both sides of the AIM Smarter marketplace. This has resulted in US revenue for the Period growing to $4.6m, representing a nine-fold increase versus 2018.  The Third Quarter, represents just the second full quarter of revenue since the acquisition of AIM and is delivering in line with management expectations. Group revenue for the Period was £8.1m compared to £5.3m in the same period last year.

The Group will issue a detailed trading update for the twelve months to 31 December 2019 in March 2020 after it has reconciled revenue for the period to 31 December 2019.”

 

Tekcapital (TEK.L) 5.375p £3.43m

 The UK intellectual property (IP) investment group focused on creating marketplace value from investing in university technology, is very pleased to announce that its 97.5 per cent. owned portfolio company, Salarius Ltd, has secured an agreement with a national food ingredient broker, Accurate Ingredients, Inc. (“Accurate Ingredients”) to market Microsalt® in the United States.

MicroSalt® is a proprietary salt, made with micron-size salt particles that dissolve in the mouth significantly faster than regular salt, delivering an increased sensation of saltiness with much less salt, and as a result, approximately 50% less sodium. MicroSalt is Non-GMO, all Natural, Kosher and Gluten Free.

The agreement with Accurate Ingredients compliments Salarius existing sales strategy which includes attendance at food trade shows and direct B2B customer outreach initiatives. As of today, over 20 new potential customers are in the process of testing and evaluating the applicability of Microsalt® on their products.

 

Braveheart Investment Group (BRH.L) 10.95p £2.95m

Further investment of £200,000 into Pharm 2 Farm Limited (“P2F”), increasing its holding in P2F from 33.33 per cent. to 51.72 per cent.

This further investment will enable P2F to open a new manufacturing facility in Nottingham and expand its sales team to take advantage of the rapidly developing opportunities in agritech and other innovative applications.

P2F has developed a process to manufacture and coat nanoparticles which have been proven to increase the bioavailability of trace minerals in plant feeds. These trace materials enable plants to grow much more quickly and can be used by growers with their existing fertilisers, for both indoor and field crops. Traditionally, hydroponic plant growing has focused on crops like lettuce, micro-greens, strawberries, tomatoes, etc. In the future, high nutrition crops like chickpeas will need to be grown more quickly with multiple crops each year. The benefits of hydroponics include the ability to grow products closer to consumers, using less energy and producing less pollution, all of which can assist in balancing the needs of the world’s population. P2F is also developing applications for the use of its technology in other areas, for example the pharmaceutical and medical sectors.

 

Oakley Capital (OCI.L) 253p £513m

 Oakley agrees sale of WebPros (a leading provider of web hosting automation software) to CVC Fund VII and follow-on investment

  • Proceeds: OCI’s share of proceeds is approximately £110m – a 92% premium to the 30 June 2019 interim carrying value
  • NAV increase: The sale results in an uplift of 26 pence per share – an 8.2% increase in the total NAV per share at 30 June 2019
  • Returns: The WebPros exit generates a gross return on investment of 6.7x MM, c.140% IRR
  • Follow-on investment: Fund IV to invest $200m alongside CVC Fund VII; OCI’s share of this investment is expected to be £43m

 

Keller Group (KLR.L) 663p £478m

FYDec19 update. Michael Speakman, interim CEO and formerly CFO, has been appointed permanent CEO with immediate effect. Trading for 2019 in line with market expectations. APAC will return to profit in 2019 following its successful restructuring

As anticipated 2019 net debt/EBITDA is expected to be at or below 1.5x (on an IAS17 basis). Expects the group’s strong cash flow to result in further deleveraging

The group now has a more focused strategy which defines more clearly the core activities of the group and will drive the withdrawal from non-core markets.

North America reorganisation is now anticipated to deliver materially netter financial performance by 2022. The Board announces it will return excess cash to shareholders as dividends for the financial years 2019 and 2020

 

Superdry (SDRY.L) 480p £393.4m

 HY Oct 19 results. “Reset underway with full price stance protecting margin and brand “. Revenue decline of 11.0% reflects an expected year of reset, as we address a number of legacy issues across the business. Retail sales decline moderated through first half. ·    Focus on full price sales and reducing promotional activity drove a total underlying gross margin increase of 250bps, offset by 180bp foreign exchange headwind ·

  • Underlying profit before tax pre-IFRS of £0.2m includes the expected benefit of £15.9m from lower depreciation and utilisation of the onerous lease provision and impact of one-off charges.

 Encouraging early start to Q3 peak trading with strongest online Black Friday day ever, but a substantial amount of peak trading period still to come.

 

Rockfire Resources (ROCK.L) 1.875p £10.4m

Further assay results from drilling the new discovery zone (‘Central Breccia’) at the Company’s 100%-owned Plateau Gold Deposit in Queensland, Australia.

BPL015 intercepted another excellent interval of 7 m @ 2.3 g/t Au, within a broader interval of 12 m @ 1.3 g/t Au and a larger interval of 29 m @ 0.63 g/t Au (from surface);  BPL016 has returned a similarly pleasing 5 m @ 1.3 g/t Au (from 14 m depth) within a broader zone of 18 m @ 0.7 g/t Au;   These new results include an individual intercept of 1 m @ 7.8 g/t Au (BPL015);    These holes now take the total confirmed mineralised length of the new discovery at the Central Breccia to +150 m; Gold mineralisation remains open at the Central Breccia in all directions; Further results over next two weeks.

 

NWF Group (NWF.L) 160p £78m

The specialist distributor of fuel, food and feed across the UK, today announces a trading update for the half year ended 30 November 2019 . The Group expects that overall trading for the half year will be ahead of prior year, with net debt as at 30 November 2019 in line with the Board’s expectations. The Board remains confident of delivering its full year expectations.  Two acquisitions in Fuel. Food – positive trading momentum maintained alongside significant new contract win.

 

Robinson (RBN.L) 80p £13.3m

The custom manufacturer of plastic and paperboard packaging, today issues the following trading statement, prior to the announcement of its final results for the year ended 31 December 2019, which are scheduled to be released on 27 March 2020. Revenues for 2019 are anticipated to be £35m, which represents a 7% increase on last year. The directors anticipate profits for 2019 will be ahead of current market expectations, reflecting the benefit of falling resin prices in the current year.

 

Head Chef:

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

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