Small Cap Feast

Small Cap Feast – 30 May 2019

Dish of the Day:

Watches of Switzerland Group  (main mkt prem WOSG.L), UK’s biggest seller of luxury timepieces . Total offer £220m including £155m primary.  Mkt Cap £647m FY Jan  19 revenue £746m and EBITDA of £67.7m . Priced at 270p.

Off the Menu:

No Leavers Today

What’s Cooking in the IPO Kitchen?

Main Market (Premium)

Trainline—reg document submitted. No timeline or  quantum announced as yet. Proceeds to target a net debt at IPO of c.2x LTM Adjusted EBITDA) . In FY 2019, Trainline achieved net ticket sales of £3.2bn, and revenue of £210m.

Airtel Africa Limited — provider of telecommunications and mobile money services, with a presence in 14 countries in Africa, primarily in East Africa and Central and West Africa, looking to join the premium segment of the main market. Offer TBC, expected TBC

Main Market (Standard)

IMC Exploration Group (NEX: IMCP), focused on acquiring and exploring prospecting licence areas which have high potential for natural resource, is looking to admit its shares to the standard list and will withdraw for the NEX Exchange. Expected 11 June 2019


Renold plc—a leading international supplier of industrial chains and related power transmission products, announced that it will cancel the listing of the Company from the premium segment and apply for admission on AIM. Expected 06 June 2019.

Alumasc Group plc, the premium building products, systems and solutions group, has announced its intention to move from the Premium Segment of the main market to AIM. Expected market cap of £33.4m. Expected 25 June 2019

NEX Exchange

SSuINOx—has developed a hydrocarbon fuels conditioning and emulsifying process that enables more efficient fuel combustion, leading potentially to reduced fuel usage and significantly lowered emissions.  Offer TBA.

Breakfast Buffet

Vast Resources (VAST.L) 0.11p £9.93m

£900k placing at 0.116p. As announced on 29 April 2019, the Company has received a draft term sheet containing the material indicative terms from a Swiss bank for a loan finance of up to $10m. This is to be applied in connection with the Company’s Romanian projects including full repayment of the $4m plus accrued interest by the Company to Mercuria. While due diligence on the provision of the Swiss bank loan finance and/or any equivalent  progresses, the Company plans to incur some of the necessary pre-production expenditure for Baita Plai in advance of the receipt of the Loan Finance. This will significantly reduce the lead time up to commencement of production.

The pre-production expenditure will include the commencement of the installation of a seven-kilometre tailings pipe to the tailings dam and, as is required in the Company’s licence, the installation of a new and independent electricity supply at Baita Plai in addition to the supply the Company has already installed. Expenditure will also include the cost of the independent report from SRK Consulting (UK) Ltd as mentioned in the Company’s announcement of 28 May 2019. The money raised from the Placing will be applied for these purposes plus for general expenses at Baita Plai and for general corporate purposes.


Amino Tech (AMO.L) 86p £61.18m

The global provider of media and entertainment technology solutions to network operators, announced that its AminoOS software will power the delivery of IPTV services across a newly deployed fiber network in Bolivia, which covers almost 100% of the country.

Entel, the national telecommunications operator in Bolivia, has begun a major deployment of AminoVU set-top boxes running on AminoOS to deliver IPTV services across its fiber network.

Currently, Entel has a broad consumer offering including telephony, mobile, broadband and satellite TV and is broadening this range of services by deploying IPTV nationally as part of an aggressive drive to increase connectivity and digital service quality throughout the country.

The government-owned telco rollout of IPTV services is the first in Bolivia and has a broad range of entertainment, news and sports content.

Entel selected Amino’s IPTV devices running on Linux as part of a solution that includes Minerva middleware and Verimatrix conditional access.

Headquartered in La Paz, the state-run operator has 100% national coverage and has recently extended its drive to provide telecommunications services to every community in the country.


PetroTal (PTAL.L) 16p £77.97m

The development and production company focused on oil assets in Peru, announced receipt of  approval of the Environmental Impact Assessment (“EIA”) to fully develop the Bretaña oil field in Block 95.  The Company has also signed a contract with PetroPeru for access to the existing pipeline for transport of crude oil to commercial markets. 

The approval of the EIA sets the stage for PetroTal to continue with the full field development of the Bretaña oil field, and allows the Company to fully develop its reserves, as well as providing the authorization to drill future development wells and install needed production equipment and facilities. The EIA also sets forth the work needed to return the field to its original condition at the end of the license contract, including the safe and environmentally responsible removal of facilities and reforestation of the affected lands.

Additionally, the Company signed a contract with PetroPeru, the State owned oil company, who operate the Oil Northern Pipeline (“ONP”), to deliver oil to the Pacific coast via the pipeline. The Company plans to access the ONP once it reaches 5,000 barrels of oil per day by mid year.


Frenkel Topping (FEN.L) 38.5p £29.4m

AGM Statement from the specialist independent financial advisor and asset manager focused on asset protection for vulnerable clients.

“We made significant investments in 2018 to grow and protect the business in a challenging market environment. Pleasingly, these investments, which were mainly in IT systems, the Frenkel Topping Group Training Academy and marketing, have translated into a healthy 43% rise in new investment mandates and a 33% increase in Expert Witness instructions, the latter being a key pipeline for future AUM growth.

“We have a well-defined five-year strategy which is centred on creating excellence in everything we do to maintain our high client retention rate and our position as the UK’s market leading asset manager for personal injury and clinical negligence awards.  The Company is exploring a number of opportunities to widen its market reach and further develop the Obiter brand, in addition to creating new socially responsible investment portfolios within Ascencia.

“We have started the year with good momentum, building on a solid performance in 2018 and the business is performing well and in line with the Board’s expectations.”  


Burford Capital (BUR.L) 1,671p £3,596m

The “global finance and investment management firm focused on law, announced that the World Bank arbitration panel considering the Republic of Argentina’s annulment application in the Teinver matter unanimously dismissed the application and upheld the original tribunal’s decision in full.

As previously reported, Burford sold its entire interest in the Teinver matter for $107m in 2018. The transaction included the ability of the purchasers to put the investment back to Burford should annulment be granted whereupon Burford would have had to return $100m of the purchase price (and Burford would have regained the investment to relitigate the matter).  With the decision on annulment, the put has now expired.”

In aggregate, the Teinver investment produced $107m of proceeds on a $13m investment for a total profit of $94m, a 722% return on invested capital and a 39% IRR.


Brady (BRY.L) 58p £48.1m

AGM statement from the global provider of trading, risk management and settlement solutions to the energy and commodities sectors.

“The Company has made substantial progress in the first four months of the year. As a result, we are delighted to report that trading to the end of April 2019 is in line with management’s expectations. Under the leadership of our new Chief Executive, Carmen Carey, our new sales pipeline is building, and I look forward to providing a further update in the Interim Results which we expect to be released in September.

In March 2019 we strengthened our Board with the Non-Executive appointments of Dan Look (former head of the commodity and energy trading consulting group at Baringa) and Iain Greig (former CTO of LME Clear). Their market and technical expertise, together with their enthusiasm is already starting to have a positive effect within the Company.”


Panthera Resources (PAT.L) 10p £6.42m

“The gold exploration and development company with assets in India and West Africa, announced it has decided to move to a full Option to Purchase agreement following its successful due diligence investigation of the Labola Project in Burkina Faso, West Africa. 

Panthera has informed the vendor of its decision to proceed and made the initial option fee payment of $50,000. The agreement allows Panthera up to five years to explore and develop the project and it may obtain a 100% interest in the project by payment of $1m0 to the vendor at any time within this five-year period. An additional payment of $1m will become due if a JORC compliant resource exceeding 1,000,000 ounces of contained gold is defined and a 1% net smelter royalty capped at $2M will be payable from production.”

Previous explorers have announced combined JORC and 43-101 compliant resources of over 600,000oz averaging (approximately) 1.2g/t Au.


Immotion Group (IMMO.L) 9.20p £20.5m

The “the UK-based immersive virtual reality ‘Out of Home’ entertainment business, announced following the initial success of its “Blue Ocean’ VR cinematic pod installations, the signing of a number of additional Concession agreements, including its first zoo.

The new locations are Mote Marine Laboratory (“Mote”) in Sarasota, Florida, and Santa Barbara Zoo. Mote, established in 1955, is one of the oldest aquariums in the USA, with a staff of over 200 people on a 10.5-acre estate, serving some 344,000 annual visitors. Santa Barbara Zoo is the Company’s first deployment in a zoo, a 30-acre site housing over 500 animals with circa 500,000 visitors per annum.

These new additions join several other aquariums including: OdySea in Scottsdale, Arizona, which recently featured on FoxNews –, Norwalk in Connecticut, and Merlin Entertainment’s SeaLife centres in Sydney, and Melbourne, both of which opened their VR offering to the public last week, and SeaLife in Oberhausen, Germany, which opened a few weeks ago.”


Mereo BioPharma (MPH.L) 80.5p £69.62m

Positive early 6 month data from the open label arm of the phase 2b clinical study in adult patients with Type I, III or IV Osteogenesis Imperfecta treated with the anti-sclerostin antibody, BPS-804 (setrusumab).

Clear and encouraging percentage changes over baseline in trabecular volumetric bone mineral density measured at the radius at an early readout

Expect topline 12 month data from the blinded arms of study to be available in fourth quarter 2019.


Veltyco Group (VLTY.L) 3.75p £2.28m

The online marketing and operating company for the gaming industry, to announced that it has raised 300,000  through a subscription with an existing investor.

The Issue Price represents a 128% premium to the Company’s closing middle market share price of 2.9 pence on 29 May 2019, being the last practicable business day prior to this announcement.

The Directors  believe that the Group is able to continue to meet its liabilities as they fall due, if trading is not in line with their expectations going forward, the Group’s ability to meet such liabilities as they fall due may be impacted.  Accordingly, the Directors continue to explore further appropriate sources of capital.


Head Chef:

Derren Nathan
0203 764 2344

*A corporate client of Hybridan LLP


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