Small Cap Feast

Small Cap Feast – 29 August 2018

Dish of the Day:

No Joiners Today

Off the Menu:

No Leavers Today

What’s Cooking in the IPO Kitchen?

Main Market (Premium)

Aston Martin— Reg document submitted by the iconic producer of hand-crafted luxury sports cars. Any prospectus would be published around 20 Sep. Targeting 25% plus free float. H1 results rev+8% to £445m, EBITDA £106m.

Mobius Investment—exploring the launch of a new UK investment trust. The trust will invest in small to mid-cap companies in emerging and frontier markets with an absolute return focus. Due September.


Path Investments (PATH) -RTO of  a 50 per cent. participating interest in the producing Alfeld-Elze II gas field located 22 kilometres south of Hannover in Germany. Offer TBA. Due late Aug.

Kropz PLC-Intention to float by the  emerging plant nutrient producer with an advanced stage phosphate mining project in South Africa and exploration assets in West Africa

Breakfast Buffet

Crossword Cybersecurity (NEX:CCS)* 315p £12.6m

The technology commercialisation company focusing exclusively on the cyber security sector, has appointed advisers including a leading and experienced Nominated Adviser and is liaising with them to assist the Board in assessing Crossword’s 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. This follows the successful launch of Rizikon Assurance, a GDPR SaaS solution based on a recurring revenue model, designed to enable medium and large companies to assess and monitor the cyber security risks of their large supplier base, and continuing progress of products in development.

“Crossword is delighted to have signed an engagement letter with a leading Nomad on this project together with Hybridan our existing NEX Brokers who will act as our Corporate Broker for our proposed admission to AIM.”


Integumen (SKIN.L)* 0.6p £1.59m

HYJun18 results from the non-animal-testing, skin care and cosmetic businesses developing and commercialising technologies and products for consumer use.

EBITDA losses in the period contracted slightly to £0.73m from £0.74m

Good traction at Labskin. While revenue in H1 2018 amounted to £49k, contracted work of £160,422 is already invoiced with 50% paid upfront. This is actually 327% higher than reported revenues of H1, 2018. Revenue to mid-August is £98,370. Possible divestments of Visible Youth, TS Pro and other Skincare lines.

Camillus Glover to take on CFO mantle and remains COO. Negotiations that may lead to the first US distribution agreement are ongoing with a large US animal feed commodity supplier for sales of Omega 3. Exciting new product development at Woundphase leveraging managements expertise in the adhesive dressings space.


Dalata Hotel Group (DAL.L) 643p £1,160m

Dalata Hotel Group has exchanged contracts to acquire the long leasehold interest of a hotel under development, located at Aldgate, London for a total consideration of £91m.

The Transaction is conditional on the completion of the hotel to an agreed specification. The construction of the hotel, which will be branded Clayton Hotel Aldgate London, is expected to be completed and operational towards the end of this year.

The hotel will have 212 rooms, with a restaurant, bar and access to a fitness centre. It will be located adjacent to Aldgate East Underground Station and in close proximity to the new Liverpool Street and Whitechapel Crossrail stations, both of which are scheduled to open in Dec 2018.

The Transaction will be funded by an additional debt facility which has been secured from the Company’s existing banking partners.

FY2018E revs of £380m and EBITDA of £115m.


Nostra Terra Oil and Gas Company (NTOG.L) 3.8p £5.52m

“The oil and gas exploration and production company with a portfolio of assets in the USA and Egypt, is pleased to report record revenue for the first half of 2018.

During the period Nostra Terra generated net revenue (after royalties) of approximately $1,150,000 (£850,000). This is a 55% increase over the first half of 2017. With continued strength in the oil price and increased production across the Company’s US assets, Nostra Terra expects to improve on this performance in the second half of the year.

The Company is currently finalizing its Interim Report and expects to release this on or before Friday 28 September 2018.”


Richoux Group (RIC.L) 6p £8.75m

The owner and operator of 18 restaurants under the Richoux, Villagio, Friendly Phil’s, Zintino and The Broadwick brands, today provides a trading update for the 26-week period ended 1 July 2018.

The Group has seen continued pressure on trading during the period, with further impact from temporary restaurant closures due to conversion or refurbishment. The Group expects revenues for the period to be in line with the prior year, with a reduction in the level of losses. The cash balances as at period end were approximately £0.9m.

Focussing on cost cutting and brand refinement. Potential sale of a central London location for c.£1.35m.

The Group intends to raise approximately £1.1m by way of a subscription  at a price of 6p per ordinary share.

We could see no forecasts.


Galantas Gold Corporation (GAL.L) 5.25p £9.38m

The gold producer and explorer with a 100% interest in Northern Ireland’s Omagh gold mine, announces channel sample and grab sample results taken during recent underground development of the Kearney vein.

The samples were taken on an underground development on the Kearney vein, approximately 15 metres below the former open pit and exposed a mineralised section of 1.7 metres, with assays of 12.8 g/t gold and 33.1 g/t silver. A grab sample, also taken on the Kearney vein, assayed at 9.8g/t gold and 30.1 g/t silver.


Xtract Resources (XTR.L) 1.08p £3.24m

Update on the hard rock collaboration agreement with Omnia Mining Ltd as announced on 19 Feb 2018, for the exploitation of the hard rock gold deposits at Xtract’s Manica mining concession in Mozambique other than the Fair Bride project, which remains under the sole control and management of Xtract.

Twelve potential mining sites identified within 15 km radius of Omnia plant.   Eight of the potential mining sites identified are already within the existing license areas of the Joint Venture parties

Construction by Omnia of its 40kt per month free gold processing plant completed, with commissioning planned in Nov 2018

Newly discovered quartz vein/alteration system, named André Zone, has been channel sampled in trenches and gold grades vary from 1.1m at 0.89g/t to 0.5m at 20.8g/t

The André Zone will be further explored by opening an underground adit

Working with outside engineering consultant to optimise plant upgrade to treat transitional and sulphide ores.


IQE (IQE.L) 102p £791.23m

HYJun18 results from the global supplier of advanced wafer products and wafer services to the semiconductor industry.

Sales growth at constant currency in all three primary markets with Wireless up 11%, Photonics up 30%, and InfraRed up 11% compared with H1 2017.  Currency headwind, accelerated customer qualification programs and Newport Foundry pre-production costs results in drag on H1 2018 profits of approximately £3.5m.  Excluding these factors, Profit Before Tax would have increased by 14.4% to £11.1m (H1 2017: £9.7m).

Multiple H1 2018 investments in VCSEL qualification programs extending the global footprint for 3D sensing in consumer and other high growth applications

Since period end, qualification of a further two major supply chain partners has been completed, with initial production for Android OEMs now commenced.

Guidance re-confirms consensus forecasts range as H2 2018 ramp in VCSELS re-commences.

FY2018E revs of £179m and EBITDA of £47.3m.


The Gym Group (GYM.L) 318p £448.36m

Revenue of £58.3m, an increase of 36.1% (H1 2017:  £42.8m)

Group Adjusted EBITDA of £17.5m, an increase of 28% (H1 2017: £13.7m); EBITDA margin in line with expectations at 30.1% (H1 2017: 32%), reflecting immature estate profile and Lifestyle conversions.

Net debt decreased to £21.6m (Dec 2017: £37.5m) due to cash of £24m received from equity placing for the easyGym acquisition

Proforma members (including easyGym sites) of 720,000 (June 2017: 508,000)

“After a strong first half we are on track to meet market expectations for the full year and look forward to further progress in the second half of the year.”

FY2018E revs of £123m and EBITDA of £38.1m


Premier Veterinary Group (PVG.L) 69p £10m

Neil Wood MBE has accepted the appointment of independent NED of PVG . 

Neil, a Fellow of the Institute of Chartered Accountants, has over 30 years’ experience advising boards across a variety of industries. Neil began his career with Arthur Andersen, became a partner in 2000 and spent 17 years as an audit partner and then management consulting partner in Deloitte LLP serving clients across the globe.  Neil was part of London’s bid for the 2012 Olympics as its Chief Financial Officer and received the award of an MBE in recognition of his contribution in securing the Olympics for London.  He went on to be appointed as Chief Financial Officer and Executive Board Member of the London Organising Committee of the Olympic and Paralympic Games (“LOCOG”).

Following the dissolution of LOCOG, Neil was CFO of the British Business Bank, preparing the bank for its launch later that year.


Head Chef:

Derren Nathan
0203 764 2344

*A corporate client of Hybridan LLP


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