Small Cap Feast

Small Cap Feast – 31 July 2019

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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 $1.3bn to $1.5bn.

Breakfast Buffet

Mobile Tornado Group (MBT.L) 5.00p £16.76m

The company Mobile Tornado that provides instant communication services for workforce management today announced a subscription for 15,000,000 new ordinary shares at a price of 5 pence . This will raise c. £750,000 before expenses.

The CEO Jeremy Fenn commented that raising the additional share capital provides Mobile Tornado with “a little more flexibility when negotiating contracts with new customers, and to facilitate an increase in handset stock levels following an exclusive agreement” that they recently signed. The fundraiser was completed at a small premium to Mobile Tornado’s current share price.

The company also announced the capitalisation of £775,234 of indebtedness owed by the Company to InTechnology plc into 15,504,687 new Ordinary Shares.

Devro (DVO.L) 209.00p £350.59m

Devro, one of the world’s leading manufacturers of collagen products for the food industry, announced its half year results for the six months ended 30 June 2019.

Revenue was slightly down at £119.2m from H1 2018 (H1 2018: £120.2m), however operating profit was slightly up at £17.4m from the same time period (H1 2018: £16.2m). Profit before tax was up £2.7m from the corresponding period the previous year at £13.6m. Underlying basic earnings per share increased to 7.0p (H1 2018: 6.6p). Free cash flow generation also improved to £4.3m (H1 2018: £-0.2m). Overall, H1 results were in line with the Board’s expectations.

Volumes of edible collagen casings decreased by 1% impacted by a slow start to the year, however gaining momentum with growth (+1%) for the remainder of the first half (February to June) . Strong volume growth in China (+19%) and North America (+10%) was offset by expected weaker performances in Japan (-3%), Russia & East (-9%) and Latin America (-30%).

Good progress was made on strategic priorities including US plant speed improvement. The pilot project for phased capacity increases in North America is on track, the Fine Ultra platform rollout is progressing well and the company’s full year outlook remains unchanged.

StatPro Group (SOG.L) 143.50p £93.54m

StatPro Group plc, a leading provider of portfolio analysis and asset pricing services for the global asset management industry, has published its interim results for the six months ended 30 June 2019.

Group revenue was up 3.8% to £28.25 million, with recurring revenue growing to 98% (2018: 96%) of total Group revenue, and revolution platform ARR growing by 22.9% (2018: 19.0%) to £17.64 million (2018: £14.35 million). Adjusted EBITDA increased by 9.7% to £5.68 million (2018: £5.18 million). This led to free cash flow before acquisition and restructuring costs increasing to £3.53 million from £3.16 million.

Operating highlights include a strategic partnership signed with J.P. Morgan to develop Risk and Performance Attribution capabilities for portfolio managers and distribute through J.P. Morgan’s data and analytics platform. Moreso, the Environmental, social and governance (“ESG”) research and index business unit of ECPI was acquired in July 2019 . Finally, the Fixed Income module released on StatPro Revolution – enabling final phase of conversions of clients from StatPro Seven to Revolution.

The Chief Executive Justin Wheatley commented that the company has “continued to execute” on their strategy to grow organically whilst switching their clients from legacy software onto the expanding Revolution platform cloud service – which saw another period of strong ARR growth.

Bushveld Minerals (BMN.L) 25.75p £286.48m

Bushveld Minerals Limited, the integrated primary vanadium producer, with ownership of high grade vanadium assets, provided an operational update for the three months ending 30 June 2019 (“Q2 2019”), in respect of Bushveld Vanadium, Bushveld Energy and Lemur Holdings, as well as other corporate activities.

Key highlights included the Vametco Transformation programme successfully delivering higher production rates with Q2 2019 production recording the highest quarterly production rate in over two years. Production for Q2 2019 was 742 mtV in the form of NitrovanTM from magnetite concentrate, a 14 per cent increase relative to Q1 2019 (Q1 2019: 649 mtV), and an 18 per cent improvement relative to Q2 2018 (Q2 2018: 629mtV).

With regards to Bushveld Energy, The Environmental Impact Assessment (“EIA”) for the proposed plant in South Africa has passed the public participation stage and is on track to be completed this year. The first batch of electrolyte was successfully produced using Vametco’s feedstock, with the samples being sent to vanadium battery companies for testing.

Completion of the Vanchem acquisition announced on 01 May 2019, will now occur on 31 October 2019, due to certain conditions precedent having not yet been fulfilled. Fulfilment of those conditions are on track so that transaction closure can take place by 31 October 2019.

DJ Inqo Investments (NEX:INQO) 62.5p £9m

Inqo Investments Limited, a South African based social impact company that acquires and invests in businesses that tackle poverty and the social needs of low income earners in Sub-Saharan Africa, announced its audited group results for the year ended 28 February 2019.

The Group consolidated revenues saw a slight increase to R23,795,780 from R22,962,689 in 2018 with an EBITDA of -R642,183 (2018: -R3,671,677). The Group results for the year reflect a loss after tax for the year of R1,862,282 (2018: Loss of R4,274,616), an improvement of 56%.

During the 2017/8 and 2018/9 financial years a number of the current Inqo shareholders committed to a private placement of shareholder funds of GBP2.5 million. The funds have been received and will be reportedly be used to grow the Group’s investment portfolio in social impact businesses.

The continued financial improvement of the Group is largely attributable to the Kuzuko Lodge operation, Inqo’s main trading subsidiary in South Africa.

AfriTin Mining ( ATM.L) 3.35p £21.58m

AfriTin Mining Limited, a tin mining company with assets in Namibia and South Africa, provided an operational update relating to the Phase 1 Plant commissioning of its new mining and processing facility at its flagship Uis Tin Mine in Namibia.

Construction of the Phase 1 Pilot Plant was completed on 26 July 2019 and both hot and cold commissioning is nearing completion ahead of production ramp up.

The plant consists of two main parts: a 4-stage crushing circuit and a 3-stage concentrating circuit. Hot commissioning of the crushing circuit was completed in June 2019 and cold commissioning of the concentrating circuit, which includes water testing of the wet circuits, was completed on 28 July 2019. Commissioning has progressed well and the final phase will see the hot commissioning of the concentrator, followed by commercial production of tin concentrate, which is on track to commence this week.

The CEO Anthony Viljoen commented: “This marks a momentous milestone for the Company and for the AfriTin team in particular, having delivered a pilot plant of this scale on a relatively modest budget, within two years of listing on AIM. “

Global Petroleum(GBP.L) 1.27p £2.58m

Global Petroleum Limited, an oil and gas, upstream exploration company presently focused on Africa and the Mediterranean, presented its Quarterly Report for the period ending 30 June 2019.

In Namibia, the company continued to carry out interpretation of the existing data in PEL 0094, and initial contacts with counterparties took place in relation to a potential farm-out of PEL 0094 and PEL 0029.

In Italy, the latest judgement means that all first instance appeals made to the Rome Tribunal have been adjudicated in Global’s favour; Puglia – as the Italian region principally interested – has appealed to the Council of State in respect of all judgements made against Puglia by the Rome Tribunal.

The Court Case related to the Environmental Decrees for Global’s applications in the Southern Adriatic.

Smart Metering Systems (SMS.L) 515.00p £583.71m

Smart Metering Systems plc, the UK’s largest integrated installer and manager of smart meters, provided a half year trading update for the six months to 30 June 2019 and the current view of the outlook for the year to 31 December 2019.
H1 2019 revenues were in line with the Board’s expectations, and annualised recurring revenue continued to grow strongly and increased by 14.1% during the period to £85.9m at 30 June 2019, ahead of expectations. 156,000 domestic smart meters were installed in H1 2019 taking the Group’s domestic smart portfolio alone through the 1 million meter milestone. Moreso, they are well-positioned for an increase in installation run-rate in H2 2019 and beyond.
The Group has significant liquid resources: c.£50 million cash in hand, undrawn banking facilities of £183 million and future internal cash generation.
The CEO Alan Foy commented further: “We are looking at options to monetise the value of a minority of our meter asset portfolio to support our future growth. “

Provexis (PXS.L) 0.30p £6.05m

Provexis, the business that develops, licenses and sells the Fruitflow heart-health functional food ingredient, provided an update on trading following the end of its financial year on 31 March 2019.

The Company expects to report revenues for the year ended 31 March 2019 of £322k, a 37% year on year increase (2018: £236k), reflecting largely an increase in the net income received from Provexis’ Alliance Agreement with DSM, which grew by 22% to £198k in the year (2018: £163k). Underlying operating loss for the year was £385k (2018: £362k), reflecting a £48k year on year increase in R+D costs due to Fruitflow blood pressure lowering patents entering the national application phase.

Elektron Technology UK (EKT.L) 54.00p £91.19m

Elektron Technology, an electronic connector manufacturing company, today announced that it has entered into a conditional agreement with a special purpose vehicle wholly-owned by Equistone Partners Europe, one of Europe’s leading mid-market private equity investors, to sell the entire issued share capital of Elektron Technology UK Limited for a total cash consideration of £105 million, before adjusting for net debt/cash and subject to adjustments at completion.

The group will transform from a specialist electronics manufacturer to a Service as a Software company focussed on the fast growing field of real time operations management.

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