Small Cap Feast

Small Cap Feast – 24 July 2019

Dish of the Day:

No Joiners Today

Off the Menu:

No Leavers Today

What’s Cooking in the IPO Kitchen?

Main Market

Interswitch, a Nigeria-based payments firm, has hired advisers to resurrect plans for a stock-market listing in London and Lagos later this year, which may value the financial technology company at $1.3 billion to $1.5 billion.

Main Market (Specialist Funds)

Voyager AIR  The Company will focus on the acquisition, leasing and management of primarily widebody aircraft, with asset management services to be provided by Amedeo Limited the IPO will comprise a Placing and Offer for Subscription of Shares to raise up to approximately US$200m.


Roxi Music UK music streaming service plans London IPO as it goes up against Spotify. They have appointed investment bank Arden Partners for an initial public offering (IPO) on the London Stock Exchange later this year.


Freyherr International Group PLC the Medicinal Cannabis holding company established in 2016,  is planning to list on the NEX exchange on the 30th July

Breakfast Buffet

Sopheon (SPE) 740p £95.49m

Sopheon, the international provider of software and services for complete Enterprise Innovation Management solutions, issued the following trading update for the six months to 30 June 2019.

The Board expects first half revenues to be approx. $13.7m compared to $15.9m in 2018. “As we have always stated, our licensing model has been predominantly perpetual and consequently the precise timing of deal closure plays a significant role in periodic revenue recognition. Our sales pipeline includes a large number of opportunities where we are strongly positioned and that we remain confident have a high probability of closing in the balance of the year.

Since January, we have increased our sales pipeline value by 48 percent, and the number of opportunities above $500,000 in deal value by 29%. We believe this is a result of executing on the strategic growth initiatives communicated in our past two annual reports, to drive higher growth and profit over time. The delay to some of these licences has been reflected in profitability for the first half. EBITDA for the first half is expected to be approximately $2m (2018:$4.1m).

Volex (VLX) 86p £129.54m

Volex announced that it has refinanced the group’s $30m revolving credit facility (“RCF”), which was due to expire in July 2019. The RCF, provided by Lloyds Bank plc and HSBC UK Bank plc, has been extended on improved terms for a three-year period, with a maturity date of July 2022.

A 40 basis point (bps) reduction in the non-utilisation fee and a 70 bps reduction in interest-rate margin;

Fewer restrictions in key operational covenants; and

A $10m uncommitted “accordion” feature to provide further capacity, up to a total RCF limit of $40m, for potential future acquisitions to support the group’s strategy.

Volex currently has a net cash balance of $16.4m.

Versarien (VRS) 132.50p £194.72m

Versarien, the advanced materials engineering group, will today showcase an innovative large-scale industrial prototype which aims to improve rail transportation infrastructure.

The prototype under evaluation uses a 3D-printed polymer structure constructed using Versarien’s high-purity, low-defect, graphene enhanced polymer technology.  The addition of Versarien’s graphene to the structure is designed to increase its tensile strength and thermal protection, enabling the viable 3D-printing of large-scale transport infrastructure components.

The preview event being held today in Bristol will be attended by investors and partners of Versarien.  In particular, attendees will include representatives from other Versarien collaboration partners, together with Chinese, Japanese and UK government representatives.

No material new information is expected to be disclosed at the event.

Arkle Resources (ARK) 1p £1.32m

Arkle Resources, the Irish gold and zinc exploration and development company, updated investors on results received from recent surface soil sampling at the Company’s 100% owned Mine River Gold Project.

Significant new gold anomaly 850m in extent identified 1km west of the original Tombreen discovery

Tombreen target extended by 300m to south west and 250m north east of existing drilling

New sampling methodology provides better resolution data and more coherent anomalism

Gold results by laser ablation include 26 samples > 20 ppb Au; and 234 samples >10 ppb Au

“The results of this initial trial of a new soil sampling approach are very encouraging.  We are also very pleased to have discovered new and compelling targets along trend from the original discovery site at the Tombreen prospect.”

Cora Gold (CORA) 5.70p £5.51m

Cora Gold, the West African focused gold exploration company, announced that it has been awarded 100% ownership of the 82km² Tagan Permit, partially overlying previously held ground, located on the Yanfolila Gold Belt in southern Mali.

Cora Gold awarded 100% ownership of the Tagan Permit, covering 82km² across the highly prospective Yanfolila Gold Belt

The Permit is awarded for a period of three years, with two subsequent extensions of two years each

Tagan Permit located approximately midway between Cora’s Sanankoro gold discovery and the Yanfolila Gold Mine, operated by significant shareholder in the Company, Hummingbird Resources Plc

Historic exploration undertaken across the permit reportedly returned drill intercepts of 44m @ 1.1 g/t Au (air core) and 14m @ 1.7 g/t Au (diamond core)

The Permit overlies an area, that was considered to be the most prospective area in the previously held permit

Cora Gold has previously compiled historical data and in Q2 2019 had the opportunity to undertake additional fieldwork across the permit

Over 20 priority targets have been identified for an exploration programme that may include regional geophysics and shallow reconnaissance drilling

IMImobile (IMO) 311.50p £207.67m

IMImobile, a global cloud communications software and solutions provider, announced that it has conditionally agreed to acquire the entire issued and to be issued share capital of 3CInteractive Corp., a private US cloud-based multichannel, customer engagement platform company with a leading position in Rich Communication Services (“RCS”), on a debt-free, cash-free, basis for a total consideration of $53.2m (£42.8m).

The Total Consideration will be satisfied through $43.2m (£34.7m) in cash on completion and $10m (£8m) through the issue of up to 2,567,256 new IMImobile ordinary shares of 10p each which will be deferred for up to two years with founders and key employees subject to a further 12 month orderly market agreement thereafter.

IMImobile proposes to fund the Initial Consideration through the drawdown of new debt facilities of up to $18.7m (£15m) and a proposed placing of up to 6,533,422 new ordinary shares of 10p each in the capital of the Company, representing approximately 9.7% of the existing issued share capital of the Company, at a price of 310p per share to raise gross proceeds of up to $25.2m (£20.3m).

The Acquisition is expected to be immediately earnings accretive, being marginally accretive in the current year ending 31 March 2020, with low double-digit earnings accretion in the year to 31 March 2021.

Diversified Gas &Oil (DGOC) 112p £766m

Diversified Gas & Oil, the US based owner and operator of natural gas, natural gas liquids and oil wells as well as midstream assets, announced the following trading and operating update for the half-year period ended 30 June 2019.

1H19 production averaged 76 MBoepd (net) including ~2 months of production from the HG Energy II (“HG”) assets (
transaction closed 18 Ap­ril 2019), up ~295% com­pared to 1H18 (19 MBoe­pd) and up ~22% compared to 2H18 (62 MBoepd)

June exit rate production exceeded 90.2 MBoepd (net) including 69.7 MBoepd (net) excluding production from the wells acquired in the HG transaction

The Company’s Smarter Well Management (“SWM”) Programme continued to offset natural production declines with ~430 previously non-producing wells placed back into production since 1 January 2019

Re-established wells and further SWM optimisations contributed to production (excluding from wells acquired in the HG acquisition) at month end June 2019 of 69.7 MBoepd, consistent with 2018 year-end exit rate production

The HG assets have been successfully integrated into the portfolio and are producing 20.5 MBoepd, in line with expectations

All seller-financed compression projects associated with the HG acquisition are complete and online

Horizon Discovery Group (HZD) 158p £237.39m

Horizon Discovery, a global leader in the application of gene editing and gene modulation technologies, provided a trading update for the six month period ended 30 June 2019. The Group will report its Half Year results on Monday 16 Sept 2019.

The Group continues to perform well and is trading in line with expectations for the full year. Group revenues for the six months ended 30 June 2019 are expected to be £28.6m (HY18: £25.1m) representing 13.7% growth on the same period in the prior year and 8.6% growth on a constant currency basis. Gross margin is expected to be in excess of 65% (HY18: 63%).

At the Half Year results in September, the Group will report against its new market-aligned business unit structure, comprising Research Reagents, Bioproduction, Diagnostics, Screening and In Vivo, as announced in the Full Year results published on 29 April 2019.

Revenue growth for the first six months has largely been driven by a strong performance in the Group’s Bioproduction and Screening business units. The Diagnostics business unit had a soft first half as a result of some internal organisational challenges. These issues have been identified and necessary corrective action has been taken.

The Group has a customary second-half weighting to trading due to the markets it operates in and the Board expects FY19 revenues to be in-line with current market expectations and expects to maintain a positive EBITDA performance for the full year.

Synairgen (SNG) 10.75p £11.33m

Synairgen, the respiratory drug discovery and development company, announced an update on the Company’s wholly-owned inhaled interferon beta (IFN-beta) programme, currently in a Phase II clinical trial, which is aimed at countering the adverse effects of common cold and influenza viruses in patients with chronic obstructive pulmonary disease (COPD).

The trial is progressing well in 15 centres around the UK and is scheduled to complete in the winter 2019-2020 virus season.

Empresaria Group (EMR) 68.50p £33.58m

Empresaria, the international specialist staffing group, provided a trading update ahead of announcing its interim results on 21 Aug 2019.

For the first half the Group has delivered solid net fee income growth of 7%, 6% in constant currency. As part of the Group’s Stronger Together initiative, launched in May, brands have been aligned to the Group’s core staffing sectors.   This will be a key driver in delivering improved results through increased collaboration in “like” businesses, driving operational efficiencies and maximising synergies in each of the sectors. An analysis of net fee income by sector is provided below.

Head Chef:

Derren Nathan
0203 764 2344

*A corporate client of Hybridan LLP


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 with “unsubscribe me”.