Small Cap Feast

Small Cap Feast – 10 July 2020

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What’s Cooking in the IPO Kitchen?

AEX Gold (TSXV:AEV) is intending to admit its shares to AIM alongside a £45m placing. The Company, led by CEO Eldur Ólafsson, has established the largest land package of gold assets in Greenland with a current portfolio of licences covering 3,356 square kilometres, in the two known gold belts in Southern Greenland, the Nanortalik and Tartoq gold belts. Nalunaq is a high-grade gold asset with an updated Inferred Mineral Resource covering 422,770 tonnes at 18.5 grams per tonne of gold, or 250,970 ounces of gold, which covers the area in and around the historical mine.  Due July.  Current mkt cap C$66.7m.

 

Breakfast Buffet

Sativa Group 3p £17m (AQSE:SATI)

The CBD wellness and medicinal cannabis company, has recorded a record month of revenues for the Group in June.

Record sales have been achieved in the month of June through a combination of both CBD and Hand Sanitiser sales from the Goodbody brand, comprising Goodbody Botanicals and Goodbody Wellness.

A range of sectors such as restaurants, airlines and hotels groups have taken on the Goodbody sanitiser programme to safeguard and protect their customers and staff.

 

Focusrite 685p £398m (TUNE.L)

Update on current trading. Overall, revenue and profits for the Group are currently ahead of where the Board would expect them to be at this stage of the financial year and it is therefore likely that market expectations for the financial year ending 31 August 2020 will be exceeded.

As announced in the interim results on 12 May 2020, demand for Focusrite Audio Engineering and ADAM Audio products has been strong during the widespread lock-downs that have occurred as a result of COVID-19, thanks to widespread availability globally through e-commerce platforms.  Consumer registrations of products primarily focused on home recording equipment have risen, indicating increased consumer demand.  This has, in turn, led to increased reseller demand from the Group.  Moving forward, it is expected that demand for these products will revert to a more normal level as the lock-downs ease.  Conversely, as announced in May 2020, demand for Martin Audio products has been significantly lower than pre-COVID levels of expectation due to the suspension of live music tours and festivals, although demand is now starting to show modest signs of recovery driven by the installed sound segment. 

 

Dalata Hotel 261p £485m (DAL.L)

Dalata has successfully agreed an amendment to the Group’s debt Facilities Agreement with its banking partners providing additional financial strength and flexibility as the Company reopens all of its 44 hotels.

Amended Debt Facility: The revised Agreement provides additional flexibility to support the Company as the business recovers   from the impact of the Covid-19 pandemic. The previous covenants comprising Net Debt to EBITDA and interest cover will not be tested again until June 2022. These two covenants have been replaced, until that date, by a Net Debt to Value covenant and a minimum liquidity test, whereby the Company must have a minimum of €50 million available to it in cash and/or an unutilised amount of the revolving credit facility (RCF).  Additionally, the RCF has been increased by €39 million to €364 million until September 2022 as part of the Agreement.

Dalata continues to have significant financial headroom. At the end of June 2020, the Company had cash resources of €103 million and further undrawn committed debt facilities of €72 million. . The Company has now reopened 42 of its hotels in the Republic of Ireland, Northern Ireland and England to the public. Two final hotels, the Clayton Hotel Cardiff and the Maldron Hotel Belfast International Airport are expected to reopen on 11 July and 1 August respectively. Although it is too early to comment on the outlook for the remainder of the year, the pace of bookings over the last week has been encouraging.

 

Infrastrata 0.37p £14m (INFA.L)

Conditional £9m placing at 0.35p,  a discount of 10.3 per cent. to the closing middle market price of 0.39 pence per Existing Ordinary Share on 9 July 2020.

John Wood, Chief Executive Officer, commented:  “We are delighted with the strong support we have received from institutional investors. This is testament to the significant growth opportunities available to our Company on the back of our acquisition of the iconic Harland & Wolff shipyard, which is home to the UK’s largest drydock. With numerous facilities currently closed globally due to the global pandemic, we have experienced unprecedented demand to use our drydock and are therefore gearing up for a period of significant activity.

 

Inspired Energy 16p £115m (INSE.L)

The consultant for energy procurement, utility cost optimisation and legislative compliance to corporate energy consumers in the UK and Ireland announces a proposed placing of new Ordinary Shares to raise gross proceeds of up to approximately £30 million by way of an accelerated bookbuilding process. The Company is proposing to raise up to an additional £5.0  million (before expenses) by way of an Open Offer made to Qualifying Shareholders. Inspired has also conditionally agreed to acquire the outstanding 60 per cent. of Ignite Energy LTD  not already owned by it for an initial consideration of £11.0 million. he Placing Price represents a discount of approximately 12.5 per cent. to the closing price of 17.15 pence of the Ordinary Shares on 9 July 2020

 

SolGold 20.25p £420m (SOLG.L)

Update on the Company’s regional exploration activities from its 100% owned Rio Amarillo Project in northern Ecuador, held by wholly owned subsidiary Carnegie Ridge Resources S.A.

 Four high-priority porphyry targets at Rio Amarillo porphyry cluster are now supported by high quality magnetic data which reveals a highly magnetic NE/SW trending corridor, spatially coincident with porphyry style surface mineralisation covering a vertical extent of up to 1500m over a 12km long northeast trending porphyry belt.

Extensive porphyry litho-caps and associated copper and gold mineralisation discovered by SolGold at Rio Amarillo Project are typical of the surface expression of large fertile porphyry copper and copper-gold systems.

A cluster of preserved porphyry targets at the Rio Amarillo Project is geologically consistent with regional distribution of porphyry deposits.  The giant Alpala (~14Mt CuEq) and Llurimagua (~11Mt CuEq) deposits occur some 30km and 60km away respectively.  Drill testing expected to commence this year.

 

SRT Marine Systems 34.5p £56.7m (SRT.L)

The provider of maritime surveillance, monitoring and management systems, has updated on trading.

“We are pleased to advise that our Philippines fisheries management system project has recommenced, with a significant cash payment having been received this week. The revised project plan agreed with our customer seeks to accelerate implementation to make up for as much of the time lost due to the  5 month pause as is logistically possible.  We are also pleased to advise that in the Middle East that final contract negotiations have recommenced and therefore, subject to completion of their respective internal processes, these are expected to conclude soon with the projects commencing in the coming months. Furthermore, our transceivers business has performed better than expected in the current circumstances, achieving gross sales during the first financial quarter 2% ahead of the of the same quarter for the previous financial year.”

 

Attraqt Group 28p £50.4m (ATQT.L)

Appointment of Paul Tough as Chief Product Officer with immediate effect. 

Paul is a highly regarded expert in ecommerce technology and has been helping and advising leading brands and retailers on their ecommerce strategies for the past 20 years. Paul joins the Group from eComp Consulting, a specialist digital strategy firm offering digital transformation advisory, technology evaluation, & enablement, programme management and technology due diligence services, which he co-founded in 2014 with Mark Adams, Attraqt’s recently appointed CEO.  

 

Remote Monitored Systems 0.225p £1.5m (RMS.L)

Nigel Burton, Non Executive Chairman of the Company, has retired from the Board, effective immediately, to pursue other opportunities. Nigel has agreed to continue to provide support to the Company on a consultancy basis for as long as is necessary to ensure a smooth transition.

Paul Ryan, Non-Executive Director, becomes Non Executive Chairman. 

The Board has also appointed John Richardson, a Director of GyroMetric Systems Limited (“GyroMetric”), the Group’s 58% owned subsidiary, as Chief Operating Officer.  John will take Nigel’s place on the Audit and Remuneration committees and will also be responsible for the executive finance function of the Group.

 

Codemasters Group Holding 336.5p £509m (CDM.L)

The award-winning British video game developer and publisher specialising in high-quality racing games, confirmed the release of F1® 2020 today for PlayStation®4 computer entertainment system, the Xbox One family of devices including the Xbox One X, Windows PC (DVD and via Steam), and, for the first time, Google Stadia.

 

F1 ® 2020 is one of the highest-scoring games of 2020 according to aggregator site Metacritic, averaging 91% on Xbox, 89% on PC and 86% on PlayStation 4. The launch trailer can be viewed here – https://youtu.be/j2BpNE94qAs

 

Head Chef:

Derren Nathan
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derren.nathan@hybridan.com

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