Small Cap Feast

Small Cap Feast – 23 January 2020

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What’s Cooking in the IPO Kitchen?


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)

Calisen Group. Potential Intention to Float. Owner and manager of essential energy infrastructure assets through its subsidiaries Calvin Capital and Lowri Beck . Consolidated FY Dec 18 revenue £162.1m and operating profit £25.4m. Raising up to £300m in primary plus partial vendor sale.  Expected Admission February 2020

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.

Main Market (Specialist Funds)

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.


Breakfast Buffet

Gear4music (G4M.L) 272.5p £57.1m

The largest UK based online retailer of musical instruments and music equipment, today announced a trading update for the two months to 31 December 2019.

Total sales +7%,

  • Gross margin improved by 260bps to 26.5% (FY19: 23.9%)


  • Gross profit increased by £1.2m (18%) from £6.8m to £8.0m


  • Logistics and IT infrastructure performed well during peak trading


  • FY20 profits expected to be at least in line with Board expectations

The upgraded infrastructure demonstrated its resilience and capacity over the Black Friday to Cyber Monday weekend, and G4M comfortably dispatched over 26,000 consignments, which was 34% more than last year’s Black Friday weekend.


Avacta Group (AVCT.L) 18.25p £32.1m

 The developer of Affimer® biotherapeutics and reagents  updated for the 17 month to Dec 2019. Revenues for the period, which include the initial milestone payment from LG Chem, have grown 100% to £5.5m from £2.76m (12 months ended 31 July 2018) and are ahead of market expectations. Importantly revenues from the Affimer® diagnostics business have grown by 130% as more customer evaluations of the Affimer® platform are underway. The Group’s order intake and sales pipeline into 2020 are the strongest to date.

The Group’s revenues this year will benefit from the expanded LG Chem partnership, the new collaboration established with ADC Therapeutics and the recently announced joint venture with Daewoong Pharmaceuticals; each of which will fully fund Avacta’s related R&D activities.

The cash position at 31 December 2019 was £8.7m (31 July 2018: £5.2m), also ahead of market forecasts, following completion of the placing in November 2019.

NCC Group (NCC.L) 213.5p £593m

The independent global cyber security and risk mitigation expert, reports its HY Nov 19 results.

Group revenue increasing by 5.3% to £132.7m. :        Assurance increased by 6.7%

  • Encouraging growth in North America and UK Assurance at 10.6% and 6.9% (H1 2019: 20.4% and 1.1%) respectively
  • Following slower first quarter, Q2 Assurance momentum and robust order book provides confidence of continued double-digit Assurance growth and margin improvement in H2 2020, after recently investing in sales and delivery capacity.      Escrow declined by 2.6%
  • Decline due to lower contract revenues and phasing of verification testing.  Adjusted operating profit on a like-for-like basis 3 increased 11.5% to £16.5m with margin improving by 0.7% pts to 12.4%. Full year trading to be in line with expectations .   28.6% increase in sales orders to £149.2m compared to H1 2019.


ITM Power (ITM.L) 94.8p £448m

The energy storage and clean fuel company announced the incorporation of ITM Linde Electrolysis GmbH (“ITM Linde”), a joint venture company between ITM Power and Linde as announced in October.


ITM Linde will focus on providing global green gas solutions using ITM Power’s modular PEM electrolysis technology and Linde’s world class EPC expertise to deliver turnkey solutions to customers.

ITM Power is also pleased to announce that Andreas Rupieper, Head of Group R&D and Portfolio Management at Linde will be appointed as Managing Director of ITM Linde. Before Joining Linde as Vice President – Head of Business Unit Petrochemistry, Andreas worked as a senior consultant for Management Engineers, now part of PWC Strategy and before that for 13 years at Thyssenkrupp, most recently as Project Director, EPC.


EMIS Group (EMIS.L) 1185p £750m

FY Dec 19 update from the specialist in  in connected healthcare software and systems. Trading for the year was in line with the Board’s expectations, with growth in both revenue and adjusted operating profit maintained at similar levels to the half year. 

In EMIS Health, the Group’s leading NHS market shares were maintained, and the GP IT Futures English GP Framework renewal process was successfully concluded, as previously announced on 21 October 2019.

EMIS Enterprise continued to make good progress, including in the Patient business, with the controlled roll-out of new functionality within its Patient Access app completing the first phase of the connected healthcare marketplace.

As previously indicated, the Group continues to invest in the development of its next generation EMIS-X software platform.

Net cash nearly doubled to £31.1m.


Gfinity (GFIN.L) 2.15p £10.3m

Trading through the first half of the financial year has continued broadly in line with management’s expectations. Gfinity expects to report H1 revenue of circa £3.5 million, which is lower than the same period last year (H1 2019: £4.4m) primarily due to the transition away from low margin Elite Series revenues. Significant growth in higher margin revenue streams during H1 are expected to deliver a circa 300% increase in gross profit to £2.1 million (H1 2019: £0.5 million) whilst continued cost discipline is expected to further reduce adjusted operating loss  for the period to £2.4 million (H1 2019: £4.4 million).

The Board now expects revenue for the year to 30 June 2020 to be broadly in line with the 2019 financial year, but with significantly improved margins compared with current market expectation. The Group is also in active discussions with several potential strategic investors in the US and Europe that would create new opportunities and the further scale required to exploit the rich opportunities in the esports sector.


Immotion Group (IMMO.L) 7.9p £22.6m

Following a range of successful developments, including significant new Partner contracts, and ongoing demand for larger installations , the Company is carrying out an equity fundraising to strengthen its balance sheet.

The Placing is intended to raise approximately £2.85 million, before expenses, at  a price of 7.25 pence per share. It is intended that the net proceeds of the Fundraising will be used to accelerate the Company’s growth plans.

Revenue share Partnership signed with MGM Resorts International for installation of a 36-seat VR theatre and interactive exhibit (“the Exhibit”) at the Mandalay Bay Resort & Casino’s Shark Reef Aquarium, in Las Vegas. The standard entry package offered for Shark Reef includes the Aquarium and Exhibit, with the value attributed to the Exhibit being a minimum of $5. The agreement provides that Immotion will receive 50 per cent. of all revenue attributed to the Exhibit and, not less than $2.50 per ticket sold on this basis. This package has historically received in excess of 500,000 paying visitors per annum.


Location Sciences (LSAI.L) 1.5p £5.6m

New report into the State of Privacy and Location Marketing.

An analysis of over two billion background location events found that, in the five weeks following the launch of iOS 13 at the end of September 2019, more than two thirds (68%) of iOS 13 users opted out of sharing their background (always-on) location data. This impacts several key elements of the marketing toolkit, including audience quality, attribution and footfall confidence, multi-touch attribution, and dynamic creative optimisation. Location Sciences also observed a 24% drop in foreground location data sharing, “Operating system privacy updates are fantastic for consumers, but they have a significant impact on the quality and availability of location data used within marketing,” said Jason Smith, Chief Business Officer, U.S., Location Sciences. “We’re seeing a noticeable decrease of already scarce high-quality GPS data as well as an increase in the use of poor-quality IP data. This is driving a significant shift in media delivery across planning, measurement, audience development,  and attribution.”


ECSC (ECSC.L) 120p £10.9m

The provider of cyber security services, updated FY19 with the Company’s results being in line with market expectations.

Revenue growth of 10% to circa £5.9m. Managed services recurring revenue growth in excess of 25%

Cash generative in the second half, with an adjusted EBITDA profit in H2 of circa £0.2m

Year-end cash balance of £0.35m, with an unutilised bank facility of £0.5m, and debtors of £1m

2019 new client acquisitions up 24% to 118, with 17% generated from the partner programme.


Gresham House Strategic (GHS.L) 1355p £47.7m

 Alongside the Q4 2019 factsheet  Richard Staveley, Investment Manager, commented: “The election result has given much improved clarity on the outlook for UK taxation and investment conditions. The immediate positive stock market response will likely be followed by improving company fundamentals linked to the release of pent-up corporate decision-making and investment. UK equities, particularly smaller companies, remain extremely cheap. The opportunity set has rarely been greater.”


Head Chef:

Derren Nathan
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