Small Cap Feast

Small Cap Feast – 02nd March 2017

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What’s Cooking in the IPO Kitchen?

BiopPharmma Credit—Targeting $300m + raise on LSE. “This investment trust will give investors access to debt investments tied to the fast growing life sciences industry, offering predictable cash flows over a sustained period of time.” Admission due 27 Mar.

Tufton Oceanic Assets- The Company intends to invest in a diversified portfolio of second hand commercial sea-going vessels where the Investment Manager believes that an attractive opportunity exists in shipping. $150m raise. Admission 3 April.

Anglo African Oil & Gas— Admission expected early March. Acquiring stake in producing near offshore field in the Republic of the Congo.

Guinness Oil & Gas Exploration—Publication of prospectus. Seeking to raise £50m and invest in 15 exploration companies at launch, with plans to grow the portfolio to 30 positions during its lifetime.  Admission due 7 March


Breakfast Buffet

First Derivatives (FDP.L) 2288p £569m

The provider of products and consulting services to some of the world’s largest finance, technology and energy institutions has signed a contract with a Fortune 500 engineering solutions company for the use of its Kx technology within precision manufacturing. Kx has been selected as the high-performance, time-series data historian and analytics platform in the next version of the client’s fault detection product range, expected to be released in mid-2017. The total expected value over a five year period places this contract amongst some of the larger software contracts FD has signed. FYFeb18E PE of 38.7x and 0.9% yield.


Field Systems Designs (NEX:FSD) 26.5p £1.5m

The specialist installation and engineering Group providing mechanical and electrical installation and maintenance services in the water, power, waste, security, commercial and transport industries has reported HYNov16 results. Rev £8.5m from £8.3m. PBT of £92k from £68k. Cash of £2.3m. ‘The Board expect volumes in the water sector to continue to improve, but the timing of release of Energy from Waste work is difficult to predict. The order book however  remains strong and the balance sheet sound. The directors believe that the group remains well positioned for the future.’


Base Resources (BSE.L) 17.625p £130.8m

Preliminary exploration results. Additional mineralisation discovered that extends the footprint of the Kwale South Dune Deposit to the south by 950m and east by up to a further 500m. Discovery of a new dunal mineral deposit at Mafisini, a continuation of the Kwale South Dune Deposit mineralisation, with recorded intercepts over a contiguous 1240m of strike and up to 480m in width. Discovery of new dunal mineralisation and marine sediments in the NE Sector, adjacent to the Kwale Central Dune. Visual inspection of the Kwale South Dune Deposit extension and Mafisini Deposit mineralisation indicates a similar composition and high-value mineralogy as that reported for the Kwale Operations Mineral Resources (134.6Mt at 4.2% heavy mineral (“HM”), 26% slimes, 2% oversize and a HM assemblage of 59% ilmenite, 13% rutile and 6% zircon.)


Morses Club (MCL.L) 118p £152.8m

FY Feb 17 trading update from the UK’s second largest home collected credit lender. Trading performance for the period has continued to show strong growth and is in line with the Board’s expectations. Total credit issued increased by 18% to £144m compared with the prior year, with customer numbers increasing by 9% to 216,000 as at 25 February 2017. This increase reflects the success of new territory builds and acquisitions in our core home collect credit  market. The Company’s gross loan book is up over 4% compared with 27 February 2016. The proportion of loans attributable to highest tier customers has increased by 10% against last year, demonstrating the Company’s focus on higher quality lending. Acquired Shelby Finance in Jan 17  and is finalising plans for the launch of its new online instalment lending product.


HML Holdings (HML.L) 41.5p £18.5m

The provider of property management, insurance and ancillary services to residential property blocks, announced the acquisition of the Block Management Business of Gordon and Company Property Consultants Limited, the flats and estates property management business of Gordon & Company. Initial £1m consideration and £0.4m earn-out. The acquisition produces normalised annual revenues of £1.1 million. It is expected that G&CPCL will be earnings enhancing once it has been fully integrated into HML. FYMar17E rev of £20.3m and PBT of £1.8m


Molins (MLIN.L) 68p £13.7m

FYDec16 results from the specialist in the design, development and manufacture of secondary tobacco processing machinery.  Sales: £80.1m (2015: £87.0m). Underlying PBT: £0.9m (2015: £3.8m). Statutory pre-tax loss: £0.8m (2015: £2.0m profit from continuing ops). No final divi. Increase in order intake of 20% and significantly higher order book at start of 2017. “Molins has presence in large and attractive growth markets, an enviable  portfolio of global multinational customers, an impressive range of innovative technologies and above all a very talented and engaged workforce. With the implementation of the strategic review findings, I am confident we have significant potential to grow.”


Total Produce (TOT.L) 159p £508m

The fresh produce provider has reported FY December 2016 results. Revenue up 8.9% to 3.76 billion. Adjusted fully diluted EPS up 14.1% to 12.07 cents. Adjusted EBITDA up 14.5% to 94.8m. “We are pleased to propose a 10% increase in final dividend to 2.2297 cent per share. The Group is continuing to actively pursue additional acquisitions and is targeting 2017 adjusted earnings per share in the range of 12.0 to 13.0 cent per share.”


Diurnal Group (DNL.L) 133.5p £69.7m

The specialty pharmaceutical Company targeting patient needs in chronic endocrine (hormonal) diseases, announced a marketing and distribution agreement with Medison Pharma Ltd (Medison), Israel’s leading group for the marketing of innovative niche healthcare solutions. The agreement covers the commercialisation in Israel of Diurnal’s novel therapies for adrenal insufficiency, Infacort® and Chronocort®. Infacort®is expected to be submitted for marketing authorisation in Israel once approved by the EMA. Diurnal anticipates EMA marketing authorisation approval for Infacort® could come towards the end of 2017 with the potential of approval in Israel during 2018.  Mkt opportunity in Israel c. $7m.


Sunrise Resources (SRES.L) 0.12p £1.4m

The diversified mineral exploration and development Company provided a positive update on testwork and details of a new development in the potential commercialisation of the CS Project.  Variability testing of samples from across the deposit indicate consistent results as a high quality natural pozzolan. Pozzolan testwork accelerated. Samples now submitted to accredited laboratory for certification testing. Results expected within 45 days. Testing also identified a potentially valuable opportunity for production of Perlite, a product in high demand in the construction and other industries. Concept Study in progress to evaluate commercial options expanded to include perlite  production.


Osirium Technologies(OSI.L) 105p £10.9m

The UK based cyber-security software provider, announced that its Privileged Access Management product is now available in the Asia Pacific region (APAC). Additionally, Osirium has appointed Distology as a UK distribution partner. As part of Osirium’s commitment to the APAC, the Group has appointed Hugh Sunderland and Mike Stephens as Business Development Directors for the region. They will have responsibility for identifying and recruiting key value-added distributors and associated business partners. There are no forecasts in the market.


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Derren Nathan
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