Small Cap Feast

Small Cap Feast – 07th March 2017

Dish of the Day:

Impact healthcare REIT due to join the Main Market £160m raise

Off the Menu:

GN Group due to leave AIM under rule 1 due to prior resignation of NOMAD

What’s Cooking in the IPO Kitchen?

Kuwait Energy –Report in Bloomberg that the oil & gas exploration business is considering a London IPO with a valuation of up to $1bn.

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.

Guinness Oil & Gas Exploration—The proposed launch of the Company is not proceeding at the current time as the capital raise has fallen short of the minimum level.


Breakfast Buffet

Redstone Connect (REDS.L) 1.48p £24.3m

FY Jan 17 update from the provider of technology and services for smart buildings and commercial spaces. Trading materially ahead of market expectations. Adjusted EBITDA is expected to be approximately £2 million  achieved on revenues of approximately £41.5 million, demonstrating the successful implementation of the strategy to focus on higher quality, higher margin business. Development and renewal of large managed services contracts for between three and five years with large blue chip clients. Strong order book underpinning medium term growth expectations. Emergence of OneSpace™ as an innovative software solution enabling organisations to better understand, manage and control their workspace utilisation. FYJan18E PE 13.6x.


Paysafe Group (PAYS.L) 420.7p £2bn

The provider of digital payments and transaction-related solutions to businesses and consumers around the world has appointed two non-exec directors, Jennifer Allerton, the former CIO of the pharmaceutical division of Hoffmann-La Roche and Karen Guerra who held senior positions at Colgate-Palmolive. FYDec16E £808.5m rev, PBT £178.86m, EPS 33.67, Mo dividend. PE 12.6x


1Spatial (SPA.L) 1.62p £11.94m

Company Update from  the global spatial software, service and data quality company which manages the world’s largest spatial data. The Board of directors now comprises Andy Roberts as Executive Chairman, Claire Milverton Acting CEO, and Nicole Payne who has been appointed as Acting Finance Director and will join the 1Spatial plc Board at the next Board meeting. Recently  awarded a full US patent for a method (and system) allowing any changes made to a database to be validated using logical business rules stored in a rules database. This is of substantial significance for the 1Integrate technology suite. Enables IT’s US sold to its US operating management as a standalone business. This disposal does not impact in any way Enables UK which has been profitable and cash generative and remains a significant part of the group.


MayAIR Group (MAYA.L) 88.5p £37.14m

FYDec16 trading update from the specialist provider of air purification technology. On 9 December 2016, the Group announced that it had recorded unaudited revenues for the 10 months to 31 October 2016 of US$52.4 million, with an unfulfilled order book of US$20.4 million.  Whilst the Group was able to fulfil the majority of the order book prior to the year end, one contract, with a value of approximately US$7.1 million, was unable to be recognised prior to the year end. As a result, the revenue for this contract will be recognised in the first quarter of 2017. Consequently, the Group’s revenue for the year ended 31 December 2016 is now expected to be approximately US$65.6 million . With increased opex (mainly sales/marketing) now expects PBT of $5.9m.


Staffline (STAF.L) 1150p £320.3m

The Staffing and Employability organisation,  announced the acquisition of Oak Recruitment, the recruitment firm based in the Republic of Ireland that specialises in industrial recruitment on a temporary and contract basis. The acquisition supports Staffline Ireland’s aim to build and develop the most reliable and integrated workforce across the island. With a number of large blue-chip clients, Oak Recruitment will help further extend the Staffline network across Ireland. Expected to be earnings neutral in the current year and earnings enhancing thereafter and is being funded out of Staffline’s existing bank facilities. FYDec17E £949.8m and EPS of 115.32p. Yield 2.4%.


Autins Group (AUTG.L) 159.5p £35.25m

FYSep16 results. Successful completion of IPO in August 2016 raising £13.1m. Revenue increased to £20.4 million (FY 2015: £19.8 million). Profit before tax decreased to £0.2 million (FY 2015: £0.9 million). Net cash £3.3 million (FY 2015: Net debt £5.5 million).  Proposed second interim dividend of 0.4p. “In the near term the profile of our results will be significantly weighted to the second half of the year and is dependent on successful deliveries of Neptune product into the market. We expect solid growth for the full year, however, as already announced, this will fall significantly short of previously anticipated levels due to  the timing and rate of growth in our automotive business not being as strong as we had expected.”


Tandem group (TND.L) 102.5p £5m

FY Dec16 trading update from the designers, developers and distributors of sports, leisure and mobility equipment. Revenue for the year ended 31 December 2016, at £38.4 million, was approximately 12% ahead of the prior year. Group operating profit after exceptional items is expected to be ahead of the prior year. H2 margin pressure. Company increased prices in the latter part of the year. Expects improved margin in 2017. “We remain confident, despite a degree of macro-economic uncertainty, that the Group will show increased profitability in 2017.” There are no forecasts in the market.


Kromek (KMK.L) 31.13p £80.62m

The radiation detection technology company focusing on the medical, security screening and nuclear markets, has been awarded a contract, valued at $990k, by an existing US-based customer, a global leader in aerospace and defence technologies, for the upgrade of the Company’s advanced security screening detectors that the customer has deployed since 2009. Under the terms of this 12-month contract, Kromek will develop and provide the first annual supply of the upgraded detectors. Furthermore, the contract guarantees that Kromek will continue to be the exclusive supplier for these upgraded detectors for the next 10 years.


CentralNic (CNIC.L) 46.75p £44.8m

FY2016 trading update from the internet platform business which derives revenues from the global sale of domain names and associated services. Group Revenue increased by more than 110% to £22.1 million. Recurring/subscription revenues increased to circa 80% of overall revenues (2015:67%). Adjusted EBITDA increased by over 65% to £5.5 million (2015: £3.3 million). Net Cash at the end of the year was £7.3 million. Early 2017 trading in line with plan. Should benefit from global growth in Top Level Domain names. Now the number one service provider with 32% Market Share. Acquisitions feature in the strategy update seeking deals that are earnings accretive in the short term with a strong recurring revenues base.  FYDec17E 11.7x PE


Coinsilium (NEX:COIN) 1.5p £1.1m

The blockchain technology investment and development company, has successfully raised £187,985 gross of expenses at 1p with £45k contributed by Directors. Since the beginning of the year, Coinsilium has seen material increases in the valuations of some of its principal investments, notably Factom and SatoshiPay. The funds raised will be utilised for general working capital purposes and for new initiatives within the blockchain sector.


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