Small Cap Feast

Small Cap Feast – 18 June 2019

Dish of the Day:

No Joiners Today

Off the Menu:

MBL Group,  a cash shell as defined by AIM rule 15, has left AIM after failing to complete a transaction as defined by AIM rule 14 (Reverse Takeover)

What’s Cooking in the IPO Kitchen?

Main Market (Premium)

Trainline—Seeking £75m raise. Proceeds to target a net debt at IPO of c.2x LTM Adjusted EBITDA). In FY 2019, Trainline achieved net ticket sales of £3.2bn, and revenue of £210m.  Due June

Airtel Africa Limited — provider of telecommunications and mobile money services, with a presence in 14 countries in Africa, primarily in East Africa and Central and West Africa, looking to join the premium segment of the main market. Offer TBC, expected TBC

ReAssure Group plc  –  The Group is a leading closed book life insurance consolidator in the United Kingdom with 4.3m policies, £68.7 billion of assets under administration on a Post-L&G Illustrative Basis. It is considering a premium listing segment of the main market.

Main Market (Standard)

IMC Exploration Group (NEX: IMCP), focused on acquiring and exploring prospecting licence areas which have high potential for natural resource, is looking to admit its shares to the standard list and will withdraw for the NEX Exchange. TBC


Alumasc Group plc, the premium building products, systems and solutions group, has announced its intention to move from the Premium Segment of the main market to AIM. Expected market cap of £33.4m. Expected 25 June 2019

Argentex a UK-based forex service provider founded in 2011 by its current management team which operates as a Riskless Principal for non-speculative and forward foreign exchange as structured financial derivatives is looking to join AIM. Offer TBC, expected 25 June

Rumours & Speculation

Neptune Surf Technology plc*, a vertically integrated lifestyle accessory group focused on the surf market, designing its own high-performance wetsuits and surfing hardware and distributing these together with third party brands globally with key markets being Europe, Australia and USA and Brazil, is looking to join AIM and ‘is planning an £11m float’ according to The Sunday Telegraph.

Breakfast Buffet

Pelatro (PTRO.L) 76.5p £23.1m

Pelatro, the global Multichannel Marketing Hub software specialist, announced that the Company has been selected by a large telco in Asia to implement its Contextual Marketing Platform, on a license fee model. Furthermore, the Company continues to contract for significant Change Requests. The collective value of the new contract and recent Change Requests is about $1.5m.

This latest contract win further strengthens the Company’s client base, which now stands at 18 clients across 17 countries. providing further earnings growth and additional cross selling opportunities.

Frontier Developments (FDEV.L) 1,156p £426.1m

Frontier Developments, a developer and publisher of videogames, provided an update on trading for the 12 months ended 31 May 2019.

Frontier expects to report record annual revenue of approximately £89m for FY19, which is more than 2.5x the previous financial year (FY18: £34.2m). This substantial growth in revenue reflects the success of Jurassic World Evolution, Frontier’s third self-published title, which launched in June 2018, combined with the ongoing performance of Frontier’s first two self-published titles, Elite Dangerous (2014) and Planet Coaster (2016), which each benefitted from Frontier’s strategy of supporting and nurturing existing titles. Frontier expects to report an operating profit margin of approximately 21% for FY19 (FY18: 8%) when full financial results are announced in early Sept 2019.

Marlowe (MRL.L) 429p £191.27m

Marlowe, the specialist services group focused on developing companies which assure safety and regulatory compliance, announced its audited results for the year ended 31 March 2019.

Group revenue up 59% to £128.5m. Current 12 month run-rate revenues of approximately £175m

Adjusted EBITDA up 53% to £11m

Adjusted PBT up 53% to £8.9m

Adjusted EPS up 34% to 18.8p

Adjusted EBITDA for Risk Management & Compliance and Water Treatment & Air Quality up 37% and 75% respectively

Underlying cash conversion 83%

Pro forma net debt now <1x EBITDA following oversubscribed placing to raise £20m as announced on 22 May 2019

Castleton Technology (CTP.L) 107p £87.72m

Castleton Technology, a leading supplier of complementary software and managed services to the public and not-for-profit sectors, announced a new four-year managed service contract with existing customer, Grand Union Housing Group (“GUHG”), valued at £1m.

Alongside our document management solution, Castleton will provide a number of multi-cloud hosting and unified communications services to strengthen operations within the organisation, to ensure GUHG remains on track to deliver their customer 2020 vision.

Work is now underway with completion expected in late summer 2019.  

Elegant Hotels Group (EHG.L) 71.5p £63.06m

The Board of Elegant Hotels Group, the owner and operator of seven upscale freehold hotels and a beachfront restaurant on the island of Barbados, can confirm that it has successfully refinanced all of its loans and facilities following the commitment from lenders announced in May 2019.

Prior to the refinancing, the Group’s loans and facilities were due to expire in May 2020.  These consisted of $59.4m of term loans, $5m of revolving credit facility, and a Bbds$20m ($10m) overdraft facility.

As a result of the refinancing, the loans and facilities have been extended to 2024 at similar commercial terms to those currently in place:  the Group now has $64.4m of term loans consisting of $59.4m and Bbds$10m ($5m), and  it also retains its Bbds$20m ($10m) overdraft facility. The remaining repayment period of the term loans has been extended from 10 years to 15 years.

First Derivatives (FDP.L) 3,465p £896m

FD announced it has completed the acquisition of the minority shareholdings in Kx Systems, in line with the terms announced on 2 July 2018. Completion of the transaction takes the Group’s ownership of Kx Systems to 100% for consideration of $53.8m in cash, which has been paid from FD’s available facilities.

“Since we acquired a controlling stake in Kx Systems in October 2014 we have invested heavily to deliver the performance advantages of our combined solutions, branded as Kx technology, to a range of end-markets. We are making exciting progress as we demonstrate our ability to transform our customers’ operational performance by unlocking the value in their data. Full ownership of Kx Systems is an important milestone as we continue to commercialise our technology.”

Thalassa (THAL.L) 81p £13.97m

The board of Thalassa notes the announcement made by The Local Shopping REIT plc (“LSR”) this morning regarding an irrevocable undertaking pursuant to which, amongst other things, Thalassa has agreed to support proposals to return capital to LSR shareholders by way of a capital reduction and share buy-back tender offer to be effected at a price per LSR share equal to the net asset value per LSR share (to be set out in LSR’s unaudited consolidated interim results for the six months ended 31 March 2019 to be published on or around 20 June 2019), subject to a cap of 31.5p per share.

LSR expects to publish a circular to LSR shareholders, which will contain, amongst other things, further details in respect of the proposals, a notice of general meeting as well as the formal terms and conditions applicable to the Proposals following their interim results.

Scancell (SCLP.L) 6.25p £25.98m

Scancell, the developer of novel immunotherapies for the treatment of cancer, announces that, further to the Company’s announcement on 13 June 2019, Martin Diggle, Co-Founder and Portfolio Manager of Vulpes Investment Management, has been appointed to the Company’s Board of Directors as a NED with immediate effect.

Mr Diggle has over 30 years’ experience in investment banking and fund management and has been an investor in life sciences and biotechnology companies for nearly 20 years. He is also an expert in Emerging Markets and Russia, where he was previously a partner and director of UBS Brunswick. He holds a Master’s Degree in Philosophy, Politics and Economics from University of Oxford.

Yellow Cake (YCA.L) 208p £178.2m

Yellow Cake, a specialist company operating in the uranium sector, announced its maiden financial report for the period ended 31 March 2019.

Value of underlying U3O8 has increased by 22% to $217.4m as at the end of March 2019 relative to acquisition cost of $178.2m

Purchase of 8,441,385 lb U3O8 from National Atomic Company Kazatomprom JSC during the period at an average cost of $21.1/lb against a spot price as at the end of March 2019 of $25.75/lb

Steady improvement in the market for U3O8, with the spot price increasing 13% from $22.85/lb at IPO to $25.75/lb at the end of March 2019

Successful $200m (£151m) capital raise in an oversubscribed IPO on the AIM market of the London Stock Exchange in July 2018

Profit after tax of $29.7m for the period ended 31 March 2019

NAV of $2.93 (£2.25) per share as at 31 March 2019

Since the end of March 2019, the Company has raised an additional £25.9m (approximately $33.9m) through a placing of shares and acquired an additional 1.175 million lb uranium

NAV as at 31 May 2019 of $2.7 (£2.14) per share, or $238.2m, consisting of 9,616,385 lbs of U3O8 valued at a spot price of $24.10/lb, a derivative liability of $2.8m and other net assets of $9.2m

Chaarat Gold (CGH.L) 29.7p £240m

Chaarat, the gold mining company with assets in the Kyrgyz Republic and Armenia, announced the first tranche of results from its 2019 exploration and drilling programme at its Tulkubash oxide gold deposit in the Kyrgyz Republic.

Over 3,800 metres of drilling completed; minimum of 20,000 metres scheduled to be completed in 2019.

Assays received from 16 drill holes. Significant intercepts are tabulated below.

2019 drilling to date has identified new shallow mineralisation within and adjacent to current pit outlines.

Roadcut and outcrop mapping and sampling confirm extensions of gold mineralisation northeast along strike confirming that Tulkubash hosts a significant gold system.

Based on the increasing evidence that Tulkubash is an emerging gold district, district-scale exploration is being accelerated.

2019 Objectives

Exceed 2 million ounces of gold in Measured and Indicated JORC Resource categories (currently 1.6 million ounces), thereby increasing reserve and extending mine life

Improve project economics within currently defined pits by adding ore within existing pit shells, reducing the strip ratio, and optimizing metallurgical recovery model

Increase understanding of district prospectivity

Head Chef:

Derren Nathan
0203 764 2344

*A corporate client of Hybridan LLP


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