Small Cap Feast
Small Cap Feast – 25 October 2018
Dish of the Day:
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Off the Menu:
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What’s Cooking in the IPO Kitchen?
Main Market (Premium)
Nova Ljuublianska banka—financial and banking institution based in Slovenia with a network of 349 branches, dual listing process in Ljubliana with GDRs in London. For HYJun18 and for FY17 the Group recorded a net profit equal to EUR 104.8 million and EUR 225.1 million, respectively. 50% plus sell down. Prospectus due for release 26 Oct.
Merian Chrysalis Investment Co –Seeking a £200m raise. Due 6 Nov. Objective is to generate long-term capital growth through investing in a portfolio consisting primarily of equity or equity related investments in unquoted companies .
Sirius Aircraft Leasing Fund targeting a raise of US$250m – objective is to provide investors with an attractive level of regular income and capital returns through investing primarily in used, single-aisle aircraft. Due early Nov
Main Market (Standard)
ECI Telecom— provider of comprehensive networking and data transport products and solutions. Raising c.$230m and potential sell down. Due late Oct
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 end Nov.
Gresham House Energy Storage Fund – will invest in utility-scale Energy Storage Systems in the UK. Raising up to £200m. Due 5 Nov.
Blue Ocean Maritime Income – aims to generate long-term, sustainable shareholder returns, predominantly in the form of income distributions, from direct lending and similar financing opportunities to vessel owners and operators, and other maritime businesses. Raising up to $250m. Due 23 Oct.
Renalytix AI—developer of artificial intelligence (“AI”) decision support and clinical management tools for improving early diagnosis, continual monitoring and drug development for kidney disease. incorporated in March 2018 as a subsidiary of EKF Diagnostics Holdings (AIM-EKF). Total fundraising in the range £21 – 25 m. Mkt cap – c. £67.5- £71.0m. Due 2 Nov.
Finncap—proposed acquisition of M&A adviser Cavendish Corporate Finance and AIM admission. Offer TBA
Kropz PLC—an emerging plant nutrient producer with an advanced stage phosphate mining project in South Africa, a phosphate project in the Republic of Congo and exploration assets in Ghana. Looking to join AIM, offer TBC, market cap TBC. Due Late October.
Azalea Energy—oil and gas production and development company based in Louisiana, United States. Net production of 13 MMcfe/D (2,200 boepd) and total 1P proved reserves of 91 Bcfe (15.1 mmboe), 2P reserves of 111 Bcfe (18.5 mmboe) raising up to $38m, expected mkt cap over $100m. Due 29 Oct
Path Investments— First acquisition of a 50 per cent. participating interest in the producing Alfeld-Elze II gas field located 22 kilometres south of Hannover in Germany. Seeking £10m raise. Due late Oct
Crossword Cybersecurity PLC* (NEX:CCS)—the technology commercialisation company focusing exclusively on the cyber security sector is exploring its options in relation to a potential move to the AIM market of the London Stock Exchange which, if it were to proceed, would likely take place over the next few months.
Auxico Resources—Proposed dual listing of the Canadian listed precious and base metals company engaged in the acquisition, exploration and development of mineral properties in Colombia and Mexico. Due 26 Oct. Mkt cap C$7.8m
Alumasc (ALU.L) 128.5p £45.8m
AGM Update from the premium building products, systems and solutions group. “Whilst external forecasts continue to point to a more challenging UK construction market in 2018, our first quarter performance was resilient, with revenues up 3% on the equivalent period last year. This reflects a solid like-for-like performance in our UK businesses, as well as the contribution from Wade (acquired in Jan 2018), which was offset in part by a quieter period for export sales. First quarter trading patterns have followed the broad trends experienced in our 2017/18 financial year, with Timloc, Wade, Alumasc Water Management Solutions, Rainclear and Alumasc Roofing continuing to perform strongly.” “In view of the above, management’s expectations for the full year performance remain unchanged.”
Has confirmed intention to relist on AIM.
FYJun19 PE c.7x and yield c.5.9%.
Centaur Media (CAU.L) 36.5p £50.6m
FYDec18 update and accelerated simplification plan from the international provider of market intelligence and specialist consultancy. Expects to deliver adjusted operating profit of between £5-£5.5m which represents year-on-year growth of 18% at the mid-point, although this is below current market expectations. The increase in profits reflects stronger performances from a number of the group’s innovative, leading brands, notably The Lawyer and Marketing Week’s Festival of Marketing and Mini MBA programme. In recent months, Centaur has received approaches for a number of its assets from potential trade and private equity buyers who recognise the intrinsic value in these businesses, which operate in fast-changing market segments and where leading brands can fetch attractive valuations. The Board believes this value is not reflected in Centaur’s current share price. “We will now explore whether selective divestments could maximise shareholder value within the medium-term.”
Green & Smart (GSH.L) 7p £24.18m
AGM Statement from the renewable energy company generating power from biogas captured through the treatment of palm oil mill effluent (“POME”) in Malaysia. “We are delighted with the performance of our Malpom biogas power plant, which we believe is converting POME at industry-leading efficiency levels. We remain confident of soon receiving the certificate of commercial operation for Malpom, which will enable us to sell power to the national utility at the full tariff rate.
“Work is underway on our third fully-owned biogas power plant, Minyak. We have completed the groundwork and expect to finish plant construction in Q3 2019 so that we will be in a position for grid connection by year-end 2019 pursuant to receiving approval rom the relevant authorities. With a capacity of 2.7MW, this will be our largest plant to date. This plant will be another lagoon-based system and so we will be able to leverage our experience with Malpom.”
Aura Energy (AURA.L) 1.05p £11.26m
The Häggån Vanadium Project Scoping Study is progressing well with substantial technical work completed over the past 8 weeks. Metallurgical test work combined with project capital and operating cost estimates have strongly increased Aura’s confidence in the project.
“The vanadium price has risen approximately 900% over the past 3 years and was most recently quoted at $30.70 per lb1, benefitting from significant structural shifts in the Chinese steel industry where, in some cases, legislation has driven a three-fold increase in vanadium use. Currently low inventory levels with no near-term replacement capacity is driving this price continued rise.”
Aura continues to review the potential for an IPO of the Häggån Vanadium Project and this activity remains current. Aura Energy has a preference to complete the Häggån Vanadium IPO post the completion of the Häggån Vanadium Scoping Study in order to maximise value.
Smart Metering Systems (SMS.L) 542p £610m
“The integrated metering services company that connects, owns, operates and maintains current generation and new advanced metering assets and databases, is pleased to announce that it has signed an agreement with Bristol Energy to provide services as an integrated domestic smart meter installer and Meter Asset Provider.
Under the terms of the agreement, SMS will have initial access to a minimum 100,000 meter points to exchange, fund and install domestic smart meters on behalf of Bristol Energy.”
FYDec18E rev £93.14m and PBT £25.15m. Div 5.75p.
Begbies Traynor (BEG.L) 73.6p £81.24m
Q3 red flag alert report from the business recovery, financial advisory and property services consultancy.
“The number of UK companies rated as being in ‘significant financial distress’ during Q3 2018 has increased by 5% compared to the same quarter last year, according to the latest Red Flag Alert research data from Begbies Traynor, the UK’s leading independent insolvency firm.
The research data, which monitors the financial health of UK companies – shows that during Q3 2018, 469,006 companies across the UK were in significant financial distress – an increase of almost 21,000 on Q3 2017. However, significant distress has fallen 1% since Q2 2018 indicating that UK business health may be showing some signs of stability.”
FY Apr 19E rev £57m and £6.4m PBT.
Reabold Resources (RBD.L) 0.7p £26.8m
“The oil and gas investing company, is pleased to announce the completion of a Sales and Purchase Agreement (“SPA”) by Danube Petroleum [Reabold 29%] to purchase a 100% interest in the Iecea Marea Production Licence from the Romanian production company Amromco Energy SRL.
The operator of the Licence has contracted a rig and long lead items have been ordered for drilling the first well in Q1 2019.”
The acquisition of the Licence enables the Parta Appraisal well to be drilled from an optimal location within the Licence area and enhances Danube’s ability to organically develop other high-value gas production opportunities in the area. With the acquisition of the Iecea Marea Production Licence, Danube, on successful appraisal, has the ability for rapid tie in of gas production particularly given the proximal location of the active Calacea gas plant.
Feedback (FDBK.L) 1.55p £4.37m
The specialist medical imaging technology company, announces that it has conditionally raised a total of £1.375m at 1.5p, a discount of approximately 11.8% to the closing mid-market price of 1.7p per Ordinary Share on 24 Oct 2018 .
Use of proceeds:
Expansion of the Company’s sales and marketing services
Development of technical product support for the new Cadran product offerings and to expand the Cadran customer base
To fund regulatory consultant commission costs in relation to the Company’s plans to secure regulatory approval of TexRAD® with the US FDA, including 510k as a medical device and CFR Chapter 21 part 11 compliance for use in clinical trials of drug candidates for FDA marketing approval
To develop the Company’s partnership with Imaging Endpoints, its US imaging company partner, in order to maximise its sales in the US
To facilitate new staff appointments
Oriole Resources (ORR.L) 0.47p £3.33m
The “exploration company operating in Africa and Europe, is pleased to announce results of systematic Air Core (‘AC’) drilling at its 85%-owned Dalafin project in the Kédougou-Kéniéba inlier of eastern Senegal, where IAMGOLD Corporation (‘IAMGOLD’) has the option to spend US$8M to earn a 70% interest (announcement dated 1 March 2018). In Q2 2018, IAMGOLD commenced a fully carried multi-phase drilling programme on the southernmost Madina Bafé prospect (announcement dated 31 May 2018) which lies c.12km to the west-northwest of IAMGOLD’s 2.49Moz (Indicated) Boto gold project (‘Boto’), where the geological setting is similar, including the presence of quartz-tourmaline veins.”
Best results include 2.48 g/t Au and 0.66 g/t Au;
Broadly WNW-trending anomaly (>20ppb Au) identified over 1.5 km in south-east of Madina Bafé
Mattioli Woods (MTW.L) 687.5p £180.75m
AGM Statement from the specialist wealth management and employee benefits business. “We have secured further revenue growth and operational efficiencies in the first four months of this financial year, and I believe the benefits of operating our integrated model will allow us to further reduce clients’ total expense ratios (“TERs”), whilst realising new operational efficiencies and synergies. As reported by many participants in the UK wealth management sector, we have seen a lower level of client activity over the summer months, attributed primarily to poor investor sentiment and prolonged uncertainty over Brexit. This “has been more than offset by resource and other administrative cost savings, resulting in EBITDA margin for the year to date tracking substantially ahead of target.” Pe c.18x. Yield 2 to 3%.
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