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AIM BREAKFAST – 21 September 2018

Set Menu AIM:

Total number of AIM Companies (Incl Susp): 936

Total number of AIM Companies trading: 871*
* As at 14 September 2018

Dish of the Day:

No Joiners Today

Off the Menu:

No Leavers Today

 

Set Menu ISDX Growth:

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

Total number of ISDX Growth Market Companies trading: 88*
* As at 14 September 2018

Dish of the Day:

No Joiners Today

Off the Menu:

No Leavers Today

What’s Cooking in the IPO Kitchen?

Main Market (Premium)

Smithson Investment Trust—New Fund from Fundsmith LLP  established by Terry Smith. focused on a global basis on small and medium sized companies between £500m and £15bn in market cap . Due 19 Oct.  Seeking £250m raise.

Funding Circle—SME loans platform seeking raise of up to £300m plus a secondary sell down. Reg doc published but no prospectus as yet.

Aston Martin— 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.  Due 3 October. Mkt Cap C.£4bn to £5bn

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.

Main Market (Specialist Funds)

CEIBA Investments. the largest foreign investor solely dedicated to investing in Cuba, with existing total assets in excess of £160 million.  Raising up to £100m.  Due 10 Oct

Blue Ocean Maritime Income  – aims to 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.

AIM

Green Man Gaming—pure play e-commerce and technology company in the digital video games industry. revenue CAGR growth of 26.7% in the last three years to £47.5m.  Due 28 Sep.  EBITDA Profitable. Offer TBA

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.

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

Braime (BMTO.L) 1585p £228m

HY Jun18 results from the manufacturer of metal presswork and the distribution of bulk material handling components.

Performance for the first half of the year is very positive.  Group sales revenue for the first six months of 2018 increased by 16% to £18.07M compared to £15.54M for the same period in 2017, while profit before tax increased by 96% to £1.16M from £0.59M for the same period.

Cash flow from operations of £0.99M, an improvement of £1.18M when compared to the same period in 2017.  The group has invested this back into operations, primarily in new manufacturing facilities in Morton, USA our largest subsidiary, and in new presses for Braime Pressings.  The group is committed to some substantial investment and cash flow is expected to become tighter in the second half of the year.

“The group is ahead of both last year and budget and we would expect the result for the full year to be ahead of 2017.”

Most of exports are outside  the EU.

Sativa Investments (NEX.SATI) 6p £26.2m

Sativa has established a joint venture with German-based Lexamed GmbH forming a new German medicinal cannabis company named Sativa Germany GmbH, which will secure German wholesale, import and export licences for the distribution of medicinal cannabis products.

There will also be a Sativa office set up in Stuttgart for the sale of CBD products to be supplied by the Group’s subsidiary, George Botanicals Ltd.

Sativa will initially invest EUR80,000 into the joint venture project as part of its 60 per cent majority shareholding in Sativa Germany, which may then increase to a maximum investment of EUR250,000 once the German licence has been granted to the Group.

Germany allowed the use of medicinal cannabis by prescription in March 2017, and since then the demand for the product has developed exponentially, with the German market now one of the largest in Europe. Sales for medicinal cannabis in Germany for 2018 are expected to be at least EUR64 million, and the market continues to grow.

 

Mercia Technologies (MERC.L) 36p £106m

AGM Statement from the national investment group focused on the identification, creation, funding and scaling of innovative technology businesses with high growth potential from the UK regions.

“I am pleased to say that since our  31 March year end, the Group’s direct investment portfolio has continued to make good overall progress, with significant commercial milestones being achieved by a number of our investee companies including Oxford Genetics, nDreams and Aston EyeTech.

“We are seeing an increasing number of exciting investment opportunities for Mercia’s third-party managed funds which will, in due course, lead to further balance sheet direct investment opportunities.

“Our focus remains on growing the net asset value of the Group’s direct investments by utilising Mercia’s differentiated model to create long term value for shareholders. We look forward to updating shareholders on further positive progress throughout the year.”

 

Xeros Tech Group (XSG.L) 41.5p £41.16m

“The developer and provider of water saving technologies with multiple commercial applications, has signed a 10-year contract with Le Farc SA de CV (‘LEFARC’) to convert its re-tanning operations in León, Mexico to use Xeros’ patented polymer technology.

With a weekly production of 5,000 hides, LEFARC is a globally recognised tannery producing leather for shoes, supplying brands such as Timberland and Wolverine.

Xeros anticipates leather produced by LEFARC using its technology to be incorporated in consumer products after March 2019.

The tannery is located in one of the world’s leading tanning centres, supporting the major brands in the shoe and auto industries.

The contract follows extensive trials which demonstrated material reductions in process inputs and effluent production and radically improves the sustainability of production, whilst maintaining high quality leather output.”

 

Westminster Group (WSG.L) 11.5p £14.4m

HYJun18 results from the  supplier of managed services and technology based security solutions. Group revenues of £2.6m (H1 2017: £2.9m). These revenues exclude £0.7m (H1 2017 £0.1m) of unrecognised revenue from the Middle Eastern screening and other projects held in Work in Progress (WIP) that will be largely recognised along with the full ME screening project value in H2 2018.  Reduction of adjusted EBITDA loss to £0.4m . Cash balance of £0.3m at 30 June 2018 and £0.8m at 14 September 2018. Loan notes extended.

Major long-term contract signed in May 2018 relating to one of 60 airports in Iran. Significant progress has been made in overcoming challenges posed by the US withdrawal from the Joint Comprehensive Plan of Action (JCPOA) Agreement and the Board is committed to the exchange of letters and commencement of the project as soon as possible.

$4.5m Middle Eastern advanced vehicle screening solutions contract awarded to the Technology Division is currently underway and expected to be largely, completed by year end.

 

Science Group (SAG.L) 241p £96.4m

Formal strategic review underway of  the cash generative consultancy business with two substantial freehold property .

This review will cover a range of subjects including:

The allocation of cash resources and asset utilisation;

The shareholder structure and share liquidity;

The potential diversification of the Group;

The merits of the Group remaining as an independent organisation.

The Board anticipates completing the Corporate Strategic Review by the time of the release of the Preliminary Results for 2018. 

Share Buy-Back Programme suspended during the process.

 

Gfinity (GFIN.L) 11p £31.5m

“Gfinity plc and Ove Arup & Partners Ltd today announce a partnership to design a world-leading integrated esports facility. The two companies will combine their skills and resources to develop a blueprint for a scalable, specialist playing, watching, training, learning and broadcast facility which will enable gamers of all levels to come together, share experiences and compete. Both companies are confident that their thought leadership and technical expertise in creating the blueprint will lead to an organisation choosing to bring the concept to life, delivering the world’s most advanced integrated esports facility.

The increased interest amongst game publishers, rights holders and sports franchises for dedicated esports facilities reflects the continued growth in gaming and the explosion of participation in both competitive gaming from the amateur level, usually through online play, through to professional esports which culminate in live event finals. The global gaming and esports communities number 1.93 bn and 368m respectively. The number of people competing and watching esports is growing 17% year on year.”

 

Carr’s Group (CARR.L) 149p £137.1m

The Agriculture and Engineering Group, announces the acquisition of the entire issued share capital of Animax Limited, a producer of market-leading animal health products, for a total cash consideration of up to £8.5m.  As part of the acquisition, Carr’s has also acquired the entire issued share capital of Animax’s related party, Clinimax Limited (“Clinimax”).  Clinimax is a manufacturer of specialist disinfectant products for use in the medical industry and which also carry the benefit of patent-protection.

Animax is at the forefront of innovation in the field of livestock trace element supplementation. Its patent-protected leaching boluses, currently sold in the UK and overseas under the Tracesure® and Allsure® brands, are specifically designed to deliver health benefits to livestock consistently over prolonged periods.  For the year ended 30 November 2017, Animax and Clinimax in aggregate recorded EBITDA of £0.6m and profit before tax of £0.3m.  Expected to be earnings enhancing in the first full year of ownership.

FYAug18E PE x.11x and yield c.3x.

 

Moss Bros (MOSB.L) 45.1p £45.5m

HY Jul18 numbers from the men’s tailoring retailer. Total Group revenue, excluding VAT, of £64.5m, -3.3% lower than the previous year.

Like-for-likeretail sales, including e-commerce were -6.9% lower. E-commerce like-for-like* sales for the first half grew +9.5% on the prior year and now represent 12.7% of total sales (HY1 2017 11.2%).  Adjusted profit before tax1 of £0.2m, was down -£3.7m versus the same period in the prior year.

Retail like-for-like sales, including VAT, in the first seven weeks to 15 September 2018 are down -3.7%, showing an improved trend from the extreme reduction in footfall of the high summer months. E-Commerce +23.2%. The Group is still on track to deliver a FY operating profit before adjusting items, but materially lower than current market expectation of £2.3m.

 

Tungsten Corp (TUNG.L) 51.8p £65.3m

AGM statement from the global supply chain enabler.

Revenue of £8.6 million in Q1-FY19, 4% year-on-year constant currency growth; five new accounts payable customer sales and a strong pipeline of new opportunities

Sustained lower run-rate of adjusted operating expenses, with £8.5 million incurred in Q1-FY19, down 13% from £9.8 million in the same quarter of FY18

EBITDA loss of £0.5 million, an improvement of £1.6 million compared with Q1-FY18

Adequate working capital, with net cash of £3.9 million at 31 July 2018 and £4 million revolving credit facility with HSBC

On track with FY19 trading guidance, with constant currency revenue of at least £37.5 million, stable gross margin and adjusted operating expenses, and an EBITDA profit.

 

Head Chef:

Derren Nathan
0203 764 2344
derren.nathan@hybridan.com

*A corporate client of Hybridan LLP

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