Small Cap Feast

Small Cap Feast – 15 January 2019

Dish of the Day:

No Joiners Today

Off the Menu:

LB Shell has left the main market (standard)  and is due to enter a voluntary liquidation.

What’s Cooking in the IPO Kitchen?

Main Market (Specialist Funds)

The Global Sustainability Trust -aiming for attractive risk-adjusted returns by investing primarily in private market investments that are expected to have a positive environmental and social impact raising c.£200m. Due 31 Jan 2019.


Circassia Pharma (CIR.L) – specialty pharmaceutical company focused on respiratory disease transferring from the Main Market. No funds being raised. Due 4 Feb.

Greenfields Petroleum (TSX-V:GNF)  production focused company with operated assets in Azerbaijan seeking AIM dual listing including $60m private placement. Mkt cap $12.6m CAD. Expected late January 2019.

Breakfast Buffet

Itaconix (ITX.L) 6.9p £18.6m

Itaconix has signed an exclusive global supply agreement with Nouryon (formerly AkzoNobel Specialty Chemicals) for Itaconix’s innovative bio-based polymers with chelating properties for the detergents market.

This development follows Itaconix’s announcement in May 2018 that Nouryon notified Itaconix of its desire to enter into a joint marketing effort after completing a successful technical and regulatory evaluation of Itaconix’s polymers.

It is also the first supply agreement resulting from a joint development agreement signed by the companies in 2017 to explore opportunities for polymers made from bio-based itaconic acid using Itaconix’s technology.

Under the terms of the supply agreement, Itaconix will produce and supply certain proprietary polymers with chelating properties that Nouryon will market to its customers in household, institutional, and industrial detergent and cleaner applications.


The Gym Group (GYM.L) 209.5p £289.8m

FYDec18 update from  the fast growing, no contract, 24/7, nationwide operator of 159 low cost gyms.

Total year-end membership numbers ahead by 19.3% to 724,000 (Dec 2017: 607,000); Average Members of 693,000 (Dec 2017: 528,000) up 31.2%. 

Total revenue growth of 35.6% to £123.9m for the year.

Year-end net debt of £46m (2017: £37.5m) following the easyGym acquisition and investment in 17 new site openings.

“Looking forward we have a good pipeline of new sites and expect to open a further 15-20 gyms in 2019.”

FY Dec 18E  £125.2m rev and PBT £15.19m.

FY Dec 19E  rev  £151.68m and PBT £22.58m.


Forterra (FORT.L) 250p £501m

FYDec18E rev from the  UK producer of manufactured masonry products.

“Trading in the final quarter of 2018 was good, underpinned by the sustained strength of the new build residential market. Based on this, full year profit before tax is anticipated to be in line with the Board’s expectations.

Brick volumes for the year were modestly ahead of 2017, and we were able to meet demand through a double digit increase in output reflecting full year production at the Accrington and Claughton facilities, and the investment made in debottlenecking projects. This increase in output meant that brick inventory levels reduced at a lower rate than in 2017, and there was a better balance between sales and production.”  Net debt at 31 Dec 2018 was approximately £39m compared with £61m at the start of 2018.  FYDec18E rev £360.5m and PBT £63.36m.


Silence Therapeutics (SLN.L) 52.9p £37.6m

The specialist “in the discovery, development and delivery of novel RNA therapeutics for the treatment of serious diseases, announces that its lead medicine candidate SLN124 has been granted Orphan Drug Designation by the Committee for Orphan Medicinal Products (COMP), the European Medicines Agency’s (EMA) committee responsible for recommending orphan designations of medicines for rare diseases. This positive COMP decision has been adopted by the European Commission.

Following an application by Silence last year, the COMP concluded that SLN124 will be of significant benefit to those affected by the chronic and potentially life-threatening condition, β-Thalassemia.”


Eden Research (EDEN.L) 11.5p £23.8m

FYDec18 update from company that develops and supplies breakthrough biopesticide products and natural microencapsulation technologies to the global crop protection, animal health and consumer products industries.

The Company has delivered a pleasing year of growth with revenue for the year expected to be in the region of £2.8m, up 48% from £1.9m in 2017, with a loss before tax of approximately £1.0m (2017: loss of £0.8m). Operating profit, excluding share-based payment charges, exceptional royalties refund and amortisation, is expected to be c.£0.02m (2017: loss of £0.6m).

“We are pleased with the overall performance of the business in 2018 and believe that we have established an excellent platform from which we can continue to grow both in 2019 and, importantly, the medium and long term.”


Kape (KAPE.L) 107.3p £152.7m

The consumer security software business, provides an update on trading for the year ended 31 Dec 2018.

The Group performed strongly in the year following initiatives both to grow Kape’s product offering and user base, and to generate higher margin recurring revenues. Adjusted EBITDA for the year is expected to be slightly above market consensus at $10.4m (2017: $8.3m), representing an increase of 25%, with an anticipated increase in underlying Adjusted EBITDA of 70% (2017: $6.1m). This was achieved on revenues for the Group of $56.4m (2017: $66.4m), with the change in revenues anticipated, and as a result of the divestment of the Media business, enabling the Group to fully focus on delivery of cybersecurity solutions. FY Dec 19E rev $56.9m and PBT $9.45m.


Clinigen (CLIN.L) 747.95p £988.73m

FYDec18  update from the he global pharmaceutical and services company.

Revenues increased by around 24% on a reported basis and by around 25% on a constant currency basis compared to last year. Gross profit increased by around 25% on a reported basis and by around 27% on a constant currency basis in line with the Board’s expectations.

The Group completed two corporate acquisitions, CSM and iQone, in October 2018 and two product acquisitions, Proleukin® and Imukin®, in July 2018. Both of the acquired businesses have performed well.

FYJune19E rev £453.25m and PBT £88.1m.


Cloudcall (CALL.L) 95p £22.97m

In line FY  Dec 18 update from the cloud-based software business that integrates communications technology into Customer Relationship Management platforms.

Record orders taken in Q4 2018

End-users up 34% year-on-year

Recurring Revenue up 34% year-on-year

Total Revenue up 29% year-on-year

US revenues up 52% year-on-year

End-user growth accelerates through H2 2018, with 724 average monthly net new users added in the half (673 in Q3, 775 in Q4)

FYDec18E rev £9m, PBT loss £3.8m.


TP Group (TPG.L) 6.4p £48.5m

FY  Dec 18 update from specialist services and engineering group .

Following a strong performance in the first half of 2018, trading during the remainder of the year remained robust, delivering year-on-year growth in revenue, adjusted operating profit and order book.

The Group is therefore pleased to report that trading for the year ended 31 Dec 2018 has delivered revenue and cash ahead of market expectations, with adjusted operating profit in line with market expectations.

FY Dec18E rev £45.5m and PBT £2.8m.


Tlou Energy (TLOU.L) 11.5p £23.8m

The  Company focused on developing gas-to-power projects in southern Africa using coal bed methane  natural gas from its gas field in Botswana, announced that the Company’s operational team has recommenced Production Pod drilling at its advanced stage Lesedi CBM project.

Following drilling of the lateral wells, the Lesedi 3 and Lesedi 4 production pods will be completed prior to the installation of surface production facilities.  Dewatering and production testing can then begin.  Successfully flowing gas at Lesedi 3 & 4 has the potential to upgrade Reserves.


Head Chef:

Derren Nathan
0203 764 2344

*A corporate client of Hybridan LLP


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