Small Cap Feast

Small Cap Feast – 23 August 2019

Set Menu AIM:

Total number of AIM Companies (Incl Susp): 884

Total number of AIM Companies trading: 800*
* As at 19 August 2019

Set Menu NEX Growth:

Total number of NEX Growth Market Companies (Incl Susp): 87*

Total number of NEX Growth Market Companies trading: 85*
* As at 19 August 2019

Set Menu Standard List:

Total number of Standard List Companies (Incl Susp): 166*

Total number of Standard List Companies trading: 144*
* As at 19 August 2019

Dish of the Day:

Oakley Capital Moving from AIM to Main (Specialist Funds) (OCI.L)

Off the Menu:

No Leavers Today

Dish of the Day:

No Joiners Today

Off the Menu:

No Leavers Today

What’s Cooking in the IPO Kitchen?

AIM

Brickability – The bricks supplier, which also has a heating and plumbing business as well as a roofing division, expects to join the junior market at the end of this month with a market cap of circa £150m

NEX

Sulnox Group— Are in the process of conducting a placing and on Admission 31/08/19, the Company will have net funds of approximately £160,319 and there will be 83,131,876 ordinary shares of £0.02 par value in Issue

Breakfast Buffet

Eddie Stobart (ESL.L) SUSPENDED

The UK end-to-end supply chain, transport and logistics group, announces that Alex Laffey will stand down as Chief Executive of the Group with immediate effect. Sebastien Desreumaux, currently CEO, iForce and Head of Contract Logistics, will take over as Chief Executive, and is expected to be appointed to the Board in due course. Sebastien, who joined Eddie Stobart in 2018, has extensive experience in the logistics sector, including 20 years spent with Norbert Dentressangle (now part of XPO Logistics).

Revenue recognition policies are under review. While revenue expectations for the first half are broadly in line with previous guidance, the full impact of these items on Adjusted EBIT is unclear, but it is likely to be significantly lower than anticipated at the time of the Half Year Trading Update on 9 July 2019.  Results delayed till September. Suspended today.

Holders Tech (HDT.L) 40p £1.7m

HY May 2019 results.  Holders Technology plc supplies specialty laminates and materials for printed circuit board (PCB) manufacturers  and operates as a lighting and control solutions (LCS) provider to the lighting market and commercial buildings sector.

Group revenue decreased by 2.5% to £6.0m (H1 2018: £6.2m), gross margins increased by 0.6% to 26.2%, and the pre-tax result was a profit of £20,000 (H1 2018: profit of £65,000).

Our PCB business continues to face challenges due to unfavourable market conditions.  However, PCB operations remain profitable, and management has recently implemented targeted cost savings to further improve profitability.  The LCS divisions have achieved good growth and a modest profit in the first half, and the pipeline of sales opportunities is encouraging, with the acceptance in the market of wireless lighting controls.

Stilo International (STL.L) 0.75p £0.85m

HY Jun 19 results from the provider of   software tools and cloud services that help organisations create and process structured content in XML format, so that it can be more easily stored, managed, re-used, translated and published to multiple print and digital channels.  Reduction in sales revenues to £638,000 (2018: £707,000) .  Loss before tax for the period of £29,000 (2018: £42,000 profit).  Cash of £1,096,000 as at 30 June 2019 (2018: £1,442,000).

We are currently expecting trading to continue slowly for the remainder of 2019 and need to take measures to reduce our operating costs wherever possible. Of primary importance is the proposal to de-list from AIM and re-register as a private limited company, subject to shareholders’ approval. “

Clear Leisure (CLP.L) 0.24p £1.4m

 “Following the business update of 19 August 2019, the Company is pleased to confirm that it has now signed an agreement with its Joint Venture partner, 64Bit Ltd, whereby the partner has agreed to sell its 50% holding in the data centre for the price of 1, including the pro rata assignment of the Bitcoins and Litecoins mined to date. Therefore, the Company now owns 100% of the data centre.

The nominal settlement price, under the termination agreement, reflects the acknowledgement by 64Bit Ltd of its mismanagement of the Joint Venture operations, including a wrongful allocation of the partnership’s resources, mainly during the start-up phase.”  The data centre remains on care and maintenance although the recent rise in the price of Bitcoin has encouraged the Company to reassess its options for recommencing production under Miner One Limited’s supervision.

Lekoil (LEK.L) 5.12p £27.5m

Acquisition of 45 per cent. participating interest in the Production Sharing Contract in relation to the Oil Prospecting Licence 276, covering a territory located onshore in the eastern Niger Delta basin . Maximum consideration $5m.

Preliminary resource estimates by Newcross, based on data from these four wells, reported gross recoverable volumes of 29 million barrels of oil and 333 Bcf of gas, upside of 33 million barrels of oil and 476 Bcf of gas (recoverable). LEKOIL has verified these estimates internally, but also intends to commission an independent Competent Persons Report in due course. LEKOIL sees a clear opportunity for re-entering one or more of these discovery wells, with the potential for rapid monetization of resources due to existing export facilities nearby.

Eco Oil & Gas (ECO.L) 141.5p £255.8m

Q1 Jun 19 results from the  oil and gas exploration company with licences in highly prospective regions in Guyana*, where the Company recently announced a major oil discovery, and Namibia. Ended period with C$42.2m benefitting from a $21.6m private placement.

*The Jethro-1 exploration well was drilled by the Stena Forth drillship to a final depth of 14,331 feet (4,400 meters) in approximately 1,350 meters of water. Evaluation of logging data confirms that the Jethro-1 is the first discovery on the Guyana License and comprises high-quality oil-bearing sandstone reservoir of Lower Tertiary age. It encountered 180.5 feet (55 meters) of net high-quality oil pay in excellent Lower Tertiary sandstone reservoirs which supports recoverable oil resources. The well was cased and is awaiting further evaluation to determine the appropriate appraisal activity.

Sirius Petroleum (SRSP.L) 0.4p £14.76m

The Nigeria-focused oil and gas development and production company, announces the delisting of the Company’s ordinary shares from trading on AIM.

Trading in the Company’s shares was suspended on 25 February 2019 in contemplation of a transaction which was deemed to be a reverse takeover under AIM Rule 14. While the Company continues to work on this transaction and the proposed transaction referenced in the announcement of 21 June 2019, the Company requires additional time to complete the regulatory process which would have allowed its shares to resume trading following completion of the transaction pursuant to Aim Rule 14 requiring shareholder approval.

The Company is continuing to develop its portfolio and will seek a relisting on the London Stock Exchange as a new applicant (rather than pursuant to Aim Rule 14) as soon as possible.

Adept4 (AD4.L) 2.85p £6.4m

The AIM quoted provider of IT as a Service, today announces that, further to the announcement on 2 August 2019 and the recent movement in the Company’s share price, it has entered into non-binding heads of terms to acquire the share capital of Cloudcoco Limited.

CloudCoCo was established in September 2017 by former sales directors of Redcentric plc and offers cloud and related technology solutions. CloudCoCo’s team of cloud and connectivity experts leverage the capacity of its large supplier ecosystem to provide unique technology solutions to customers in order to optimise and transform their businesses. Though only recently established, CloudCoCo is already trading profitably and has a strong and growing pipeline.

The anticipated consideration for the Proposed Acquisition is 218,160,586 ordinary shares of Adept4, which would represent 49% of the enlarged issued share capital following completion .

Real Good Food (RGD.L) 6.625p £6.6m

£8.87m of new debt facilities from Bank Leumi. £4.5 million of shareholder debt is to be repaid from the proceeds, £3.624m of principal, £0.604m of interest and £0.272m in redemption premium; Napier Brown will receive £1.627m, Omnicane £1.626m and Downing £1.247m.  The new arrangements will see a reduction in the annual interest charge of some £0.25m.  The balance of the funding will replace the existing CID and asset-based facilities.

Naked Wines (WINE.L) 265.5p £193.3m

Nakedwines.com, the US arm of Naked Wines PLC, (formerly Majestic Wines)  the fast-growing online wine subscription service, has been awarded ‘Best Wine Club’ 2019 in the USA TODAY 10 Best Readers’ Choice travel awards. The award is testament to the wine company’s high-quality customer service, selection of unique independent winemakers, and continued growth in the US wine market.

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”.