Small Cap Feast

Small Cap Feast – 07/10/21

Dish of the Day:

No joiners today.

Off the Menu:

Conduity Capital has left AIM.

What’s Cooking in the IPO Kitchen?

Softline the global solutions and services provider in digital transformation and cybersecurity, with its headquarters in London, is considering proceeding with a potential initial public offering of global depositary receipts representing its ordinary shares. The Company is considering applying for admission of the GDRs to the standard listing segment of the Official List of the FCA and to trading on the London Stock Exchange’s Main Market for listed securities and on Moscow Exchange. The Group had a turnover of US$1.8 bln for the year ended 31 March 2021, employs c.6,000 people globally, and operates in more than 50 countries across emerging markets. Primary proceeds from the Offer are expected to be around US$400m. Due Late Oct.
Marks Electrical, a fast growing online electrical retailer, announced its intention to proceed with an initial public offering and to seek admission to trading on AIM. Marks Electrical sells, delivers, installs and recycles a wide range of household electrical products. In the year to 31 March 2021 revenue grew to £56m, up 78% against the previous financial year, while EBITDA increased to £7.45m, at a 13.3% EBITDA margin. The Group has made a strong start to its current financial year to 31 March 2022, with revenue growth of 78% in H1 FY2022, versus 47% growth in H1 FY2021. Offer TBA Admission is expected to take place in late October 2021.
Future Metals NL (ASX:FME) (formerly named Red Emperor Resources NL) to join AIM. No funds being raised. Future Metals is a platinum group metals exploration and development company that holds a 100% interest in the Panton PGM Project in Western Australia (the “Panton Project”). The Panton Project comprises 3 granted mining leases (M80/103, M80/104 and M80/105), which cover an area of approximately 23km2 and are located 60km north of Halls Creek and 1km from the Great Northern Highway, in the East Kimberly region of Western Australia. The Panton Project has a JORC (2012) Mineral Resource Estimate of 14.3Mt at 2.19g/t platinum, 2.39g/t palladium, 0.31g/t gold, 0.27 per cent. nickel and 0.08 per cent. copper. Due mid October. Mkt cap c£35.8m.
Bens Creek Group to join Aim. Bens Creek, together with its subsidiaries, will, on Admission, own and operate a metallurgical coal mine located on 10,000 acres in the southern part of the state of West Virginia and eastern edge of the Commonwealth of Kentucky, in the central Appalachian Basin of the eastern United States of America. The Mine’s operations are located primarily in Mingo County, West Virginia. The Mine includes a wash plant and rail loading facility located on the freehold land. Capital to be raised on Admission: £7m. Anticipated Mkt Cap on admission: £35m. Due 19 Oct.
M7 Regional E-Warehouse REIT intends to apply for admission onto The Property Stock Exchange (Wholesale Segment). On admission, the company plans to acquire a portfolio of UK retail warehouses worth £120m from M7 Real Estate Investment Partners VIII. The portfolio currently comprises 18 retail warehouse properties across the UK totalling 978,317 sq ft and fully let to 53 occupiers. Rent collections for Q2 2021 stand at 93% and are expected to revert to 100% in the coming quarters.
Castlenau Group to join the Specialist Fund Segment of the LSE’s Main Market. Castelnau was incorporated with limited liability in Guernsey under the Companies Law on 13 March 2020 as a closed-ended company limited by shares. The Company’s investment objective is to compound shareholders’ capital at a higher rate of return than the FTSE All Share Total Return Index over the long term. The Company is targeting an issue in excess of £170m. Sir Peter Wood, British entrepreneur and innovator, has committed to make a cornerstone investment of £25m in the Initial Placing. Due 18 Oct.
Tortilla Mexican Grill, the largest and most successful fast-casual Mexican restaurant group in the UK to join AIM. Offer TBA. Due 8 Oct
Eurowag confirms its intention to undertake an initial public offering on the Main Market (Premium). The Offer would be expected to comprise both (i) new Ordinary Shares to be issued by the Company, raising gross proceeds of approximately EUR200m to support Eurowag’s growth strategy and (ii) existing Ordinary Shares to be sold by existing Eurowag shareholders. Eurowag is a leading pan-European integrated payments & mobility platform focused on the commercial road transportation industry. It makes life simpler for commercial drivers and operators across Europe through its unique combination of payments solutions, seamless technology, a data-driven digital eco-system and high-quality customer service. Due October.
Light Science Tech Holdings, the holding company of the Group’s contract electronics manufacturing division, UK Circuits and Electronics Solutions Limited, and its controlled environment agriculture division, Light Science Technologies Ltd to join AIM. Due early Oct. Offer TBA.
Responsible Housing REIT to join the Main Market (Premium) raising up to £250m. The Company’s investment objective is to generate a consistent and sustainable income-based return from the provision of Supported Housing accommodation assets and aligned sectors. The Company will acquire and create quality, fit-for-purpose accommodation assets to cater for supported residents across a number of care sectors including adults and young people with learning disabilities, mental health issues, physical disabilities, addiction, those with support needs, those in need of temporary accommodation, the elderly and otherwise vulnerable individuals.
Arrow Exploration, currently on the TSX Venture exchange to dual list on AIM. Arrow has a portfolio of operated and non-operated interests in producing Colombian oil assets, together with a producing Western Canadian natural gas asset. The Company also has interests in development assets in Colombia. The Company has interests in six onshore blocks in Colombia, held through Arrow’s wholly-owned subsidiary in Colombia, Carrao Energy S.A., and in oil and gas leases in seven areas in Alberta, Canada, held through Arrow’s wholly-owned Canadian subsidiary Arrow Holdings Ltd. Offer TBA. The company last said Sept 13th that it expected to list end of September which has now passed.
Marley Group, a UK leader in the manufacture and supply of pitched roof systems to the construction market , today announces that it is considering an initial public offering on the Main Market (Premium). In HY Jun 2021 revenues grew from £52.1m to £76m with underlying EBITDA more than doubling to £21.8m Timing and offer TBA.
Fruugo.com which owns and operates a high growth and profitable global cross-border marketplace employing its own proprietary technology and data science, announces its intention to seek admission of its shares to trading on AIM. Due early Oct. Timing and offer TBA.
Blackfinch Renewable European Income Trust plc, a closed-end investment trust established to invest in a diversified portfolio of mixed renewable energy infrastructure assets, is considering proceeding with an initial public offering and has published a registration document. Raising up to £300m. Due on the Main Market (Premium) in October.
Central Copper Resources, a company focused on delivering a high grade copper project into production and exploration of assets in the Democratic Republic of the Congo (DRC) and in the Republic of Zambia to join AIM. By 2022, CCR intends to be ready to commence the project financing of its Mbamba Kilenda copper project. It pushed back its AIM float on 30th September from end September to late October. It last night said that the amount to be raised is still yet to be confirmed.
Euro Sun Mining Inc (TSX:ESM) seeking to join the Main Market in Q3 2021. The Company’s main asset, the Rovina Valley Project, which contains the Rovina, Colnic and Ciresata deposits, is one of the largest undeveloped copper-gold projects in Europe, holding approximately 400Mt of confirmed resources containing 7.0m ounces of gold and 1.4 bn lbs of copper.

Breakfast Buffet

Fusion Antibodies 129p £33.4m (FAB.L)

The specialist in pre-clinical antibody discovery, engineering and supply for both therapeutic drug and diagnostic applications has signed a collaborative research and development agreement with a US based biotechnology company which has been recently incorporated to focus on a number of innovative early stage antibody discovery and development programmes. Pursuant to the Agreement, Fusion will provide its discovery and engineering services in relation to the research and development of several pre-determined projects. Based on the initial statement of work in the Agreement, Fusion will receive a minimum of US$1.83m of fees over the next two years for the provision of its initial agreed scope of services, which will utilise the Company’s affinity maturation platform, RA MPTM. Subject to the outcome of the works undertaken, there is a framework for increased fee for service work within the Agreement. The Client has made an initial cash payment of US$318k to Fusion upon the signing of the Agreement with the remaining consideration payable at pre-agreed intervals.

Marlowe 915p £706m (MRL.L)

The UK leader in business-critical services and software which assure safety and regulatory compliance, has acquired water treatment and compliance services provider Sterling Hydrotech Holdings Limited for an enterprise value of £1.75m. Founded in 1988, Sterling Hydrotech is based in Derbyshire and employs approximately 40 staff. The acquisition provides attractive synergies with Marlowe’s Testing, Inspection & Certification (TIC) division. For the year ended 31 March 2021, Sterling Hydrotech generated an operating profit of £0.5m on revenues of £4.8m. Net assets at 31 March 2021 were £1.1m. The total consideration of £1.75m comprises an upfront cash payment of £1.5m and a deferred element of £0.25m. The acquisition will be funded from Marlowe’s existing cash and debt resources.

Mast Energy Developments 12.5p £23.6m (MAST.L)

The UK-based multi-asset operator in the rapidly growing Reserve Power market has exchanged final documentation and completed the definitive Sale and Purchase Agreement for Rochdale Power Limited announced on 16 August 2021. The transactional rationale and the technical and financial merits of the project are outlined in the Company’s RNS of 16 August 2021. Louis Coetzee, non-executive chairman, said: “Rochdale is the third site (after Bordesley and Pyebridge) in MED’s growing portfolio of flexible power plants in the UK and brings its total generating capacity currently under active development/ construction to 18.4 MW. Completion of the Rochdale transaction is yet another step in MED’s clear strategy to establish a portfolio of reserve power plants in aggregate of 300 MW generating capacity in the UK”.

The Pebble Group 155p £259.6m (PEBB.L)

The Pebble Group 155p £259.6m (PEBB.L)
The Pebble Group, a leading provider of technology, services, and products to the global promotional products industry is announced the launch of its first Environmental, Social and Governance report, which can be found on the Group’s website. The report introduces the Group’s four ESG cornerstones and its bespoke ESG framework developed from a materiality assessment, which identified 13 material issues that most impact its business and are of the greatest importance to stakeholders.

Poolbeg Pharma 10.25p £51.25m (POLB.L)

The clinical stage infectious disease pharmaceutical company with a capital light clinical model, has partnered with leading global biopharma services company, Eurofins Genomics to complete RNA sequencing for Poolbeg of Respiratory Syncytial Virus (RSV) disease progression samples from human viral challenge studies. This deep sequencing work is a key step leading to Poolbeg commencing Artificial Intelligence (AI) analysis of its RSV data and will mean that it then has full immunological datasets for RSV, as well as influenza, which are ready to use with AI platforms to identify drug targets and products for influenza and RSV indications. The Company already has RNA sequencing data for influenza. This data is unique as it covers the full disease cycle and presents significant opportunities to unlock insights into these diseases which will magnify the power of the AI analysis. The project with Eurofins is expected to be completed by the end of 2021 and will involve next generation RNA sequencing of RSV transcriptomics, or disease progression data, which enables the tracking of the biology of immune responses in molecular detail during infection. Sequencing of the samples will be tailored for incorporation into AI algorithms which will be the first time that human challenge trial immune data has been analysed using AI, unlocking unique insights from the rich dataset that Poolbeg will translate into additional pipeline products which will be progressed using its capital light clinical structure.

Sareum Holdings* 6.7p £225.5m (SAR.L)

The specialist drug development company delivering targeted small molecule therapeutics to improve the treatment of cancer and autoimmune diseases, announces that, further to its announcement of 30 July 2021, the United States Patent and Trademark Office has now formally approved its patent in respect of an invention associated with Sareum’s proprietary SDC-1802 TYK2/JAK1 Kinase Inhibitor Programme. The patent (US 11,154,539) will grant on 26 October 2021 and will protect the SDC-1802 molecule and pharmaceutical preparations thereof as a therapeutic to treat cancer selected from pancreatic, colorectal and kidney cancers, melanoma, and B-cell lymphoma by inhibiting TYK2 kinase. This programme is in preclinical development. Sareum’s CSO, Dr John Reader, commented : “We are pleased to confirm the grant of this US patent for SDC-1802, adding another layer of protection around this promising candidate in key territories. Our SDC-1802 programme is in preclinical development currently and we are designing the translational studies needed to define the optimal cancer application prior to completing toxicology and manufacturing studies. We look forward to providing further updates on progress as we achieve key milestones.”

Semper Fortis Esports* 2.075p £8.6m (AQSE:SEMP)

Semper Fortis (SEMP) has added another top tier game to their roster with Fortnite as well as a further recruitment drive with top class talent joining the team. Fortnite is a free-to-play battle royale shooter game developed by Epic Games and considered one of the most popular titles ever made. The company’s esports team, SMPR, has also made the official signings of Max Anthony Cope (‘Tweaks’) and Jack Renata (‘Esky’) as its pro Fortnite team for the upcoming season. Both players have signed six-month contracts with an option to renew for an additional 6-months thereafter. They will receive an annual salary and performance-based incentives. The signings will enhance the company’s digital footprint by 575,000+ and allow for Company partners and sponsors once signed to participate in one of the fastest growing games over the last decade.

Serinus Energy 2.05p £23.4m (SENX.L)

Serinus Energy has incorporated a new gas trading subsidiary, Serinus Energy Romania Trading S.r.l. The subsidiary will initially trade the Company’s Romanian gas production not committed under its marketing agreement with Vitol into the Romanian market. Serinus Energy Romania Trading S.r.l has been created to allow our licenced gas traders to directly access the Romanian gas market and to capture the full value of gas prices in Romania. Serinus Energy Romania Trading S.r.l will be fully licenced by the Autoritatea Nationala de Regemenatre in domeniul Energiei (ANRE), the Romanian energy regulator, and is able to trade Serinus’ gas production as well as third-party gas.

Sunrise Resources 0.23p £8.5m (SRES.L)

Through its 100% owned Nevada subsidiary, SR Minerals Inc., Sunrise has signed an agreement with Kinross Gold U.S.A Inc. granting Kinross a Lease and Option to purchase the Company’s 25 Jackson’s Wash mining claims in Nevada, USA. Sunrise retains the right to mine perlite on the Claims during the lease/option period. Under the terms of the Agreement Kinross has been granted: a 9-year mining lease over the Claims ;and an option to purchase the Claims at any time during the term of the Lease for US$500k and the grant to Sunrise of a 2.5% Net Smelter Royalty. Kinross will make the following payments to Sunrise until the Lease expires or is terminated or the Option is exercised:US$5k annually in advance in years 1-3; US$10k annually in advance in years 4-6; and US$15k annually in advance in years 7-9.

Thruvision 20.6p £30m (THRU.L)

The leading provider of “safe distance” people-screening technology to the international security market has updated on trading for the six months ended 30 September 2021. Revenues for the period are expected to be £2.0m (H1FY21 £4.7m, H2FY21 £2.0m). The reduction reflects the fact that last year’s comparative included a material order (of £3.0m) from US Customs and Border Protection (CBP) as described in the results announcement at the time. The period under review did not benefit from a similar order, although Thruvision is in ongoing discussions with CBP about potential orders for the second half. Looking forward, Thruvision expects to maintain the strong growth rate in Profit Protection across the UK, US and Europe, and to make material progress in expanding its remit with CBP and, in the medium term, win business with further Customs agencies globally. Subject to continued positive progress with TSA, The Company sees clear longer-term opportunities for our technology in the Aviation sector.

Head Chef:

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

*A corporate client of Hybridan LLP

Disclaimer

This document, which does not constitute research, has been issued by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to any such action. This document has no regard for the specific investment objectives, financial situation or needs of any specific person or entity and is not a personal recommendation to any such person or entity. Recipients should reach an individual investment decision, based upon their respective financial objectives and financial resources and, if any doubt, should seek advice from an investment advisor.

The information contained in this document is based on materials and sources that are believed to be reliable; however, such information has not been independently verified and therefore it is not possible to confirm such information as being accurate. This document is not intended to be a complete statement or summary of any securities, markets, reports or developments referred to herein. No representation or warranty, either express or implied, is made or accepted by Hybridan LLP, its members, officers, employees, agents or associated undertakings in relation to the accuracy, completeness or reliability of the information contained in this document, nor should it be relied upon as such.

The content of this document includes market commentary and other information which we have prepared in relation to the company referred to in this document, which is our broking client. The provision of this document to you constitutes a minor non-monetary benefit which is capable of enhancing the quality of service provided by Hybridan LLP and which is of a scale and nature which could not be judged to impair the duty of Hybridan LLP to act in the best interest of its client falling within article 24(7)(b) of Regulation 600/2014/EU (MIFID II Regulation).

Any and all opinions expressed are current as of the date appearing on this face of this document only. Any and all opinions expressed are subject to change without notice and Hybridan LLP is under no obligation to update the information contained herein. To the fullest extent permitted by law, none of Hybridan LLP, its members, officers, employees, agents or associated undertakings shall have any liability whatsoever for any direct or indirect or consequential loss or damage (including lost profits) arising in any way from use of all or any part of the information in this document.

This document should not be relied upon as being an independent or impartial view of the subject matter and, for the avoidance of doubt, constitutes non-independent research (as such term is defined in the Financial Conduct Authority’s Conduct of Business Sourcebook to reflect the requirements of the MIFID II Regulation and Directive 2014/65/EU (known as MIFID II)). The individuals who prepared this document may be interested in shares in the company concerned and/or other companies within its sector, may be involved in providing other financial services to the company or companies referenced in this document or to other companies who might be said to be competitors of the company or companies referenced in this document. As a result both Hybridan LLP and the individual members, officers and/or employees who prepared this document may have responsibilities that conflict with the interests of the persons who receive this document. Hybridan LLP and/or connected persons may, from time to time, have positions in, make a market in and/or effect transactions in any investment or related investment mentioned herein and may provide financial services to the issuers of such investments.

In the United Kingdom, this document is directed at and is for distribution only to persons who (i) fall within article 19(5) (persons who have professional experience in matters relating to investments) or article 49(2) (a) to (d) (high net worth companies, unincorporated associations, etc.) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (SI 2005/1529) (as amended) or (ii) persons who are each a professional client or eligible counterparty (as those terms are defined in the Financial Conduct Authority’s Conduct of Business Sourcebook) of Hybridan LLP (all such persons referred to in (i) and (ii) together being referred to as relevant persons). This document must not be acted on or relied up on by persons who are not relevant persons. For the purposes of clarity, this document is not intended for and should not be relied upon by any person who would be classified as a retail client under the Financial Conduct Authority’s Conduct of Business Sourcebook.

Neither this document, nor any copy of part thereof may be distributed in any other jurisdictions where its distribution may be restricted by law and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions. Distribution of this report in any such other jurisdictions may constitute a violation of territorial and/or extra-territorial securities laws, whether in the United Kingdom, the United States or any other jurisdiction in any part of the world.

Where possible this document is made available to all relevant recipients at the same time. Dissemination of research by Hybridan LLP is monitored to ensure that it is only provided to relevant persons. Research prepared by Hybridan LLP is not intended to be received and/or used by any person who is a retail client.

Hybridan LLP and/or its associated undertakings may from time-to-time provide investment advice or other services to, or solicit such business from, any of the companies referred to in this document. Accordingly, information may be available to Hybridan LLP that is not reflected in this material and Hybridan LLP may have acted upon or used the information prior to or immediately following its publication. In addition, Hybridan LLP, the members, officers and/or employees thereof and/or any connected persons may have an interest in the securities, warrants, futures, options, derivatives or other financial instrument of any of the companies referred to in this document and may from time-to-time add or dispose of such interests.

This document may not be copied, redistributed, resent, forwarded, disclosed or duplicated in any form or by any means, whether in whole or in part other than with the prior written consent of Hybridan LLP.

MIFID II status of Hybridan LLP research
The cost of production of our corporate research is met by retainers from our corporate broking clients. In addition, from time to time we issue further communications as market commentary (such as our daily newsletter, Small Cap Breakfast), which we consider to constitute a minor non-monetary benefit which is capable of enhancing the quality of service provided by Hybridan LLP and which is of a scale and nature which could not be judged to impair the duty of Hybridan LLP to act in the best interest of its client falling within article 24(7)(b) of the MIFID II Regulation.

Hybridan LLP is a limited liability partnership registered in England and Wales, registered number OC325178, and is authorised and regulated by the Financial Conduct Authority and is a member of the London Stock Exchange. Any reference to a partner in relation to Hybridan LLP is to a member of Hybridan LLP or an employee with equivalent standing and qualifications. A list of the members of Hybridan LLP is available for inspection at the registered office, 2 Jardine House, The Harrovian Business Village, Bessborough Road, Harrow, Middlesex HA1 3EX.

If you would like to unsubscribe, please email enquiries@hybridan.com with “unsubscribe me”.