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Small Cap Feast – 27 January 2020

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What’s Cooking in the IPO Kitchen?

AIM

Intention to float by Gemfields Group. No Capital Raise. Currently listed on JSE. (GML:JNB) at circa £122m.  The Group’s key producing assets, the Kagem emerald mine in Zambia  (believed to be the world’s single largest producing emerald mine) and the Montepuez ruby mine in Mozambique (one of the most significant recently discovered ruby deposits in the world), are both expected to have long mine-lives with potential for expansion. Also owns the  Faberge brand. Due Valentines Day 2020.

Main Market (Standard List)

The Proof Of Trust has announced its intention to list on the Standard Market.  The Blockchain based business, owns patents to a protocol which facilitates dispute resolution based upon smart contract disputes.  Transaction details TBC.

Main Market (Premium)

Calisen Group. Potential Intention to Float. Owner and manager of essential energy infrastructure assets through its subsidiaries Calvin Capital and Lowri Beck . Consolidated FY Dec 18 revenue £162.1m and operating profit £25.4m. Raising up to £300m in primary plus partial vendor sale.  Expected Admission February 2020

The Global Sustainable Farmland Income Trust will invest in a diversified portfolio of operational farmland assets located in major agricultural markets including the United States, Europe, New Zealand, Australia and certain countries within Latin and South America. Raising up to $300m.   Due 28 February.

Main Market (Specialist Funds)

Investment firm Nippon Active Value fund is seeking to raise up to £200m at an issue price of 100p per share via an IPO.   The company aims to invest in a portfolio of quoted Japanese stocks with market capitalisations of up to $1bn.   First day of dealings expected early February.

 

Breakfast Buffet

Kodal Minerals (KOD.L) 0.0525p £4.9m

 A mining licence application has been submitted to the Mali Government for the Bougoni  Lithium Project.

  • Proposed 2Mtpa processing plant utilising a conventional flotation circuit to maximise spodumene recovery:

o Estimated C1 cash costs of USD$431 per tonne concentrate (USD$466 including royalties and sustaining capital).

  • Capital requirement for development estimated to be USD$117M plus contingency:

o Forecast payback period of 1.7 years;

o IRR of 58% (51% post tax).

  • Pre-tax Project NPV7% of approximately USD$300M (NPV7% USD$200M post-tax).

 

Nektan (NKTN.L) 3.5p £8.5m

The fast growing, award-winning international gaming technology platform and services provider, announces a trading update for the six months ended 31 December 2019.

In the core B2B division, the Group generated revenues of £787k in H1 FY20 – growth of 153.1% over H1 FY19.  It should be noted that Q2 FY20 saw an intense period of activity with a significant number of sites either entering beta or going live.  Whilst NKTN would expect a ramp up period of 3-4 months following launch, revenue in December 2019 grew by 102.7% over November 2019, underpinning management’s confidence of significant growth over the coming months as sites which have recently gone live ramp up.

Also restored on AIM today (rule 40) and FYJun19 finals. Revenue growth of 13.5% to £22.6m. Adjusted EBITDA loss increased to £2.0m.

 

SIMEC Atlantis Energy (SAE.L) 10.5p £45.1m

Operational update for MeyGen, the world’s largest operational tidal stream array. MeyGen’s 2019 performance represents the longest period of uninterrupted generation from a multi-megawatt tidal turbine array ever achieved.

  • MeyGen has now exported 24.7GWh of predictable renewable electricity to the national grid

In 2019 alone, MeyGen exported over 13.8GWh of predictable renewable electricity, equivalent to the average annual electricity consumption of around 3800 typical UK homes generating a revenue of £3.9m.

  The AR1500 turbine is due to undergo maintenance and will be transported to land for servicing and upgrade work at the end of this month – redeployment at MeyGen is targeted for the Spring. The upgrade will increase the turbines revenue by 4% with no increase in the turbines operating cost.  During 2019, Atlantis announced its intention to develop the next phase of its MeyGen array which will see an additional 80MW of tidal capacity added to the existing project site between the island of Stroma and the mainland.

 

Rotala (ROL.L) 54p £27m

Update:  Trading during FY 19 was in-line with market expectations. During the financial year, the Group achieved significant additional growth through the acquisition of the Bolton depot of First Manchester Limited in August 2019. This acquisition was made in accordance with the Group’s stated strategy and has considerably enlarged the Group’s operations in the North West, making the Company the second largest bus operator in the Greater Manchester market. The Company is expected to realise further benefits from the Bolton acquisition during the course of the current financial year, as further synergies materialise.

Trading for the current year has begun in line with budget. Furthermore the Board remains focused on identifying suitable acquisitions with a view to continuing to expand the operations of the Group, thereby making full use of the ample financial facilities which it possesses.

 

Bluejay Mining (JAY.L) 8.9p £86.3m

New mineral exploration licence surrounding the Company’s existing Kangerluarsuk zinc-lead-silver Project in central west Greenland.  The Company intends to commence a maiden drill programme at the Project later this year, representing the first drill testing ever conducted at Kangerluarsuk, alongside additional exploration activity as part of its 2020 field season.

 Licence increase incorporates some of the most prospective ground for undiscovered zinc-lead-silver-copper deposits

  • First phase reconnaissance and sampling programme of new Licence area to commence in summer 2020
  • Maiden drill programme to be undertaken in summer 2020 at existing and historically undrilled Kangerluarsuk Licence area;

 Historic sampling by Rio Tinto Zinc underpins the resource potential – including up to 1 metre at 41.1% Zn, 0.4 meters at 45.4% Zn and grab samples up to 9.3% Pb, 1.2% Cu and 596 g/t Ag.

 

H&T Group (HAT.L) 390p £155m

The UK’s leading pawnbroker, today announces a trading update for the financial year ended 31 December 2019. H&T expects to report its results for the year ended 31 December 2019 on 10 March 2020.  Following strong second half-year trading and a positive performance of the recently acquired Money Shop and Speedloan business assets, H&T expects the full-year profit before tax to be at the top end of current market expectations. “

  • growth in the year-ending pledge book by £20m (+39%) on the prior year, with core stores up £13m (+25%)

o  the Group’s core estate performance was driven by increased lending to newly-acquired customers and organic growth in transactions

o  solid trading from acquisitions

  • the jewellery retail business delivered +7% sales growth on prior year, including +5% from core stores
  • strong income growth from foreign exchange, with Group FX income +45% with core store FX income growth +20%
  • strong returns from precious metal scrappage reflecting the high gold price.

 

Block Energy (BLOE.L) 5.05p £19.9m

Update on operations at its West Rustavi field.

Multi-rate production testing is underway at well WR-38Z (“WR-38Z”) following a clean-up period to stabilise the well and recover fluids lost during drilling. Peak production rates have exceeded 300 bopd and 1.5 MMCF/d of gas (equivalent to a total of more than 550 boepd).

  • With the WR-38Z test confirming West Rustavi’s rich gas potential, Block is accelerating the monetisation of its gas reserves by installing a central gas processing facility for the Field and by applying for permits required to get the gas onstream during Q2 2020.
  • Drilling operations have begun at well WR-51Z (“WR-51Z”), the third of West Rustavi’s wells to be horizontally sidetracked.
  • Operations at the West Rustavi appraisal well WR-16aZ (“WR-16aZ”), which was shut-in during December for the installation of improved surface test facilities, are scheduled to re-start in early February with a well intervention programme designed to add a further 100-200 boepd to the Field’s production.
  • The Company is encouraged by the quality of data indicated by a preliminary review of the recently acquired 3D seismic survey of West Rustavi.

 

Shield Therapeutics (STX.L) 163p £191m

Business and unaudited trading update for the year ended 31 December 2019.

FDA approves  Accrufer® with a broad label of treating iron deficiency in adults in the USA

AEGIS-H2H study positive and results presented at UEG Week, showing non-inferiority to IV iron therapy

European Feraccru® 2019 sales volumes grew 67% over 2018 

Trading broadly in line with market expectations

Revenues for the year expected to be £2.9m (2018: £11.9m)

Cash position at 31 December was £4.1m (2018: £9.8m)

Post-period Highlights

  • Feraccru®/Accrufer® licence agreement signed for China with Beijing Aosaikang Pharmaceutical Co. Ltd (“ASK Pharm”)
  • US$11.4m upfront received from ASK Pharm in January 2020, extending cash runway into 2021.

 

TP Group (TPG.L) 8.2p £63.9m

The providers of mission-critical solutions for a more secure world, announces that it has been awarded a contract worth approximately £1.7m by its German partner, Roda Computer GmbH, for the provision of a suite of bespoke military ruggedised computer servers and display units.  The systems will be used for deployed military applications by a European defence force. The equipment will be produced by the TP Group facility in Melksham, Wiltshire with work commencing immediately and continuing 24 months.

Gresham House (GHE.L) 652.5p £182m

 FYDec19 update.

Strong organic growth in Assets Under Management (“AUM”) up over 20% to at least £2.75 billion

  • Financial performance in line with market expectations
  • FIM and Livingbridge integration complete and delivering in line with expectations
  • Strong cash generation to support significant business development and dividend growth
  • Increasing focus on the sustainable investment and ESG aspects of the product portfolio.

 

Head Chef:

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

*A corporate client of Hybridan LLP

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