Small Cap Feast

Small Cap Feast – 13 February 2020

Set Menu AIM:

Total number of AIM Companies (Incl Susp):

Total number of AIM Companies trading: *
* As at

Set Menu NEX Growth:

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

Total number of NEX Growth Market Companies trading: *
* As at

Set Menu Standard List:

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

Total number of Standard List Companies trading: *
* As at

Dish of the Day:

No Joiners Today

 

Off the Menu:

No Leavers Today

 

Dish of the Day:

Off the Menu:

What’s Cooking in the IPO Kitchen?

AIM

Inspecs, a UK designer, manufacturer and distributor of eyewear frames to global retail chains announces its intention to IPO onto AIM raising £94m with a market cap of £138m.  Admission expected 27th February.  FY Dec 2018 numbers show revenue of $57m and underlying EBITDA of $11m

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)

DRI Healthcare—investment company focused on investments in healthcare Royalty Assets  looking to raise $350m. Due 11 Mar.

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.

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.

NEX Exchange

Zapp Scooters, a developer and manufacturer of electric two-wheeled vehicles announced its intention to IPO on the NEX Exchange Growth Market.  The Company intends to raise up to £3.5m. Admission is expected to occur on NEX in February 2020.

 

Breakfast Buffet

Agronomics (ANIC.L) 7.625p £25.3m

 Further subscription of US$ 1m in the form of a SAFE (Simple Agreement For Future Equity)  in VitroLabs, Inc. This will be paid using cash from the Company’s own resources. The Subscription will increase Agronomics existing potential equity position of 3.79% to 6.15%, subject to converting at the valuation cap of US$ 25m at the time of VitroLab’s Series A funding round.

Richard Reed, Chairman of Agronomics, provided comments on the investment: –

 “We continue to be impressed by the strong developments VitroLabs is making as the only company in the world to be using this technology to create real leather, without the requirements of raising animals and the issues surrounding animal welfare, sustainability and efficiency. We are excited for the next 12 months where we expect to see VitroLabs launch their first leather goods to the market.”

 

Diurnal (DNL.L) 28.5p £24.7m

Diurnal announced that its New Drug Application (NDA) for Alkindi® (hydrocortisone granules in capsules for opening), to be known in the US as Alkindi® Sprinkle, has been accepted for review by the US Food and Drug Administration (FDA). Diurnal is seeking approval of Alkindi® Sprinkle as a replacement therapy of adrenal insufficiency (AI) in infants, children and adolescents (from birth to <17 years old) in the US.

Paediatric AI is a condition characterised by deficiency in cortisol, an essential hormone in regulating growth, metabolism and the response to stress. Paediatric AI has been identified as an orphan disease in the US where there are estimated to over 4,000 sufferers under the age of 17. Untreated, the disease is associated with significant morbidity and increased mortality.

The NDA for Alkindi® Sprinkle was submitted in November 2019 following a positive meeting with the FDA in Q1 2019 which confirmed Diurnal’s clinical and regulatory pathway for the product in the US. The PDUFA date set by the FDA, which would be the earliest date at which approval could occur, is 29 September 2020.

 

Polar Capital (POLR.L) 535p £517m

 Polar Capital  has reached agreement to acquire from Los Angeles based asset manager First Pacific Advisors, its International Value and World Value equity team led by Pierre Py and Greg Herr (“the Managers”).

 Polar Capital and the Managers share common philosophies, being specialist, investment-led active fund managers. Polar Capital offers the team a platform from which together they can build a significant US based international and global equity franchise.

As at 31 December 2019, the Managers managed approximately $1bn of assets in three pooled vehicles and three institutional segregated accounts.  The transaction is subject to all required regulatory, FPA Fund Board and FPA Fund shareholder approvals.

The material quantum of consideration for the transaction will be satisfied in the initial five years by Polar Capital delivering to FPA, from its standard 55% interest, a 25% share of the business’s revenues. On the existing $1bn of AUM, core EPS will benefit by circa 0.5p but during the period of the FPA revenue share the benefit to total EPS will be depressed by its existence .

 

LiDCO Group (LID.L) 5.3p £12.94m

The hemodynamic monitoring company, provides a pre-close update in respect of its performance for the full year ended 31 January 2020.

 LiDCO continues to make progress with developing a strong recurring revenue base through its “SaaS” High Usage Programme HUP business model and has achieved an excellent second half performance.

LiDCO product revenues for FY20 were up 19% to £7.4m (FY19: £6.2m), in line with management expectations.  The growth in LiDCO product revenues more than outweighed the expected reduction in low margin third-party product sales. As a result, total revenues (including third party products) were up by 3% to £7.6m (FY19: £7.3m). The increased proportion of higher margin LiDCO revenues led to an increase in overall gross margin.

The Company now has a global contracted base of 286 HUP monitors (FY19: 164), generating total annualised contracted licence revenues of £2.2m (FY19: £1.4m) an increase of 57%. Expects to report positive adjusted EBITDA for FY20 (FY19£1.2m loss). 

 

Filta Group (FLTA.L) 165p £48m

FYDec19 update. The Company expects to report adjusted EBITDA for the full year in the order of £3.2m on turnover of approximately £25m. The Group intends to report its 2019 results on 21 April 2020.

.

Although still early in the new year, Filta is seeing strong interest from potential franchisees in North America, where we have added two new franchises and completed one resale, and in Europe we have added one new franchise each in Germany and Switzerland, which will drive higher revenues in the year ahead. This, together with the good progress made in the final quarter of 2019 in both reducing costs and improving productivity in the UK, gives the Board confidence that  Filta will deliver a much-improved performance in 2020.

 

The Property Franchise Group (TPFG.L) 231p £59.7m

Appointment of Gareth Samples as Chief Executive Officer Designate, further to the announcement on 31 July 2019 that Ian Wilson intends to retire in 2020. It is proposed that Gareth will join the board of TPFG as Chief Executive Officer in the second half of 2020, enabling an orderly handover period from Ian. Gareth has joined the Group to commence work immediately on key projects alongside the executive management team.  With 30 years’ industry experience, Gareth brings a wealth of Estate Agency, Financial Services and digital marketing knowledge to the Group. In his 21 year career at LSL Gareth was appointed Managing Director of the Your Move brand, which was the largest single brand estate agency in the UK at the time.  In this role he was responsible for Your Move’s franchise operation as well as having overall control of Financial Services and Lettings and the strategy of the brand.

 

accesso Technology (ACSO.L) 487.5p £134.8m

Positive momentum with renewals and new contracts.

The premier technology solutions provider to leisure, entertainment and cultural markets, saw positive momentum in 2019 with several noteworthy customer renewals and 43 new or expanded ticketing contracts.

accesso reached renewal agreements with several notable clients including Palace Entertainment; Washington State Fair; and Legends OWO, LLC. The contract renewals reflect the ongoing momentum and client loyalty towards the accesso product suite.

New accesso contracts in 2019 include ITV Broadcasting Limited, Mount Washington Cog Railway, The New York Botanical Garden and George Washington’s Mount Vernon, among others. The company also recognized increased cross-sell momentum across its product set with 10 new customers using more than one accesso solution.

 

Open Orphan (ORPH.L) 6.025p £32.1m

The rapidly growing specialist CRO pharmaceutical services company which has a focus on orphan drugs and is a world leader in the provision of virology and vaccine challenge study services, and has Europe’s only 24 bedroom quarantine clinic with onsite virology lab in Queen Mary’s Hospital London, announced the appointment of Leo Toole to the role of Group Chief Financial Officer with immediate effect. Leo was previously Interim Chief Financial Officer of Open Orphan plc and Finance Director of the Open Orphan division following the merger with hVIVO.

It is Open Orphan’s intention that Leo be appointed to the Board of Open Orphan as soon as possible, subject to the satisfactory completion of regulatory due diligence checks. Leo Toole brings over 20 years’ experience in senior finance roles in Pharma, MedTech & FMCG sectors.

 

Angling Direct (ANG.L) 68.5p £44.3m

 The UK’s largest and fastest growing fishing tackle and equipment retailer, has opened a new store in Warrington, Greater Cheshire, on Wednesday 12 February 2020. The latest store opening brings the total number of Angling Direct stores across the UK to 35 and further strengthens Angling Direct’s presence across the UK.

 

Altus Strategies (ALS.L) 8.25p £18.7m

The Africa focused project and royalty generator, announces that a high resolution ground magnetic survey has commenced at the Company’s Tabakorole gold project located on the Massagui gold belt in southern Mali, approximately 100 km southwest of the formerly multi-million ounce Morila gold mine owned by Barrick Gold Corporation.  

Head Chef:

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

*A corporate client of Hybridan LLP

Disclaimer

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 enquiries@hybridan.com with “unsubscribe me”.