Small Cap Feast

Small Cap Feast – 29 August 2018

Set Menu AIM:

Total number of AIM Companies (Incl Susp): 939

Total number of AIM Companies trading: 873*
* As at 17 August 2018

Set Menu NEX Growth:

Total number of NEX Growth Market Companies (Incl Susp): 90*

Total number of NEX Growth Market Companies trading: 87*
* As at 17 August 2018

Set Menu Standard List:

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

Total number of Standard List Companies trading: *
* As at 17 August 2018

Dish of the Day:

No Joiners Today

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?

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.

AIM

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
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”.