Small Cap Feast

Small Cap Feast – 11 November 2020

Dish of the Day:

Off the Menu:

What’s Cooking in the IPO Kitchen?

Bytes Technology Group one of the UK’s leading software, security and cloud services specialists, announces that the Company intends to publish a Registration Document and is considering proceeding with an initial public offering (Main Mkt Prem). FY20 gross profit of £79.2m (+24.5% against FY19) and adjusted operating profit of £31.7m (+53.9% against FY19). Highly cash generative with FY20 cash conversion of 125.9% (FY19 cash conversion 139.7%). Bytes due on or around 17 December 2020.

Round Hill Music Royalty fund to IPO on the Specialist Fund Segment of the Main Market of the London Stock Exchange, by way of a placing and offer for subscription targeting the issue of 375m ordinary shares at an issue price of US$1.00 per Ordinary Share. The Company’s Investment Objective is to provide investors with an attractive level of regular and growing income and capital returns from investment primarily in high quality, music intellectual property. Due mid-November.

Mailbox REIT PLC , a newly formed single asset company which owns the Mailbox , a large prime office-led mixed use property in Birmingham which has been independently valued at £179m, announced its intention to raise up to £62.5m. MailBox REIT will apply for the Ordinary Shares be admitted to trading on the IPSX Prime segment of International Property Securities Exchange (IPSX ). Due November.

Tirupati Graphite, the fully-integrated, cash generative, specialist graphite and graphene producer with operations in Madagascar and India, announced its potential intention to undertake an initial public offering on the LSE (standard listing). Timing tbc

Umuthi Healthcare Solutions Plc, the technology led healthcare business focused on the distribution of pharmaceuticals and the provision of medical facilities in remote areas, seeking admission to the Standard Listing segment of the Official List. Timing tbc

Kibo Energy PLC, the multi-asset Africa focused energy Company, is seeking admission for its 100% owned UK subsidiary Sloane Developments Ltd , which will be renamed Mast Energy Developments PLC (MED), to the Standard List of the London Stock Exchange plc. The MED business strategy is to acquire and develop a portfolio of flexible small-scale power generation assets, exploiting a growth niche market in the UK for Reserve Power generation to balance out the national grid at critical times. Targeted for Q4 2020.

Press reports emerged late last week that cybersecurity firm Darktrace is targeting a float next year with a US$5bn valuation. The company uses artificial intelligence technology to spot cyber threats for businesses. Some of its clients include BT Group, William Hill and online shopping giant Ocado. Its investors also include KKR & Co, Vitruvian Partners and Summit Partners. Targeted for 2021.

Breakfast Buffet

Jadestone Energy 55p £254m (JSE.L)

The independent oil and gas production company focused on the Asia Pacific region, announces settlement of a dispute with Teikoku Oil (Con Son) Co. Ltd. (Teikoku), a wholly owned subsidiary of INPEX Corporation, in respect of Block 05-1 PSC, offshore Vietnam.
On August 8, 2016, the Company, through a wholly owned affiliate, signed a definitive sale and purchase agreement (SPA) with Teikoku, as seller, for the acquisition of a 30% working interest in Block 05-1 PSC. On February 22, 2018, Teikoku delivered to the Company a notice of termination of the SPA. As noted in the Company’s press release of February 26, 2018, Jadestone did not accept the termination. Following prolonged negotiations, the Company filed a notice of arbitration in relation to the matter with the Singapore International Arbitration Centre on July 3, 2020. The Company and Teikoku have agreed a full and final settlement in respect of the dispute. When considering the amount payable under the settlement, together with fees payable by the Company, Jadestone will not experience a significant increase in its cash position.

Thor Mining 1.225p £18.5m (THR.L)

The Company has increased its equity interest in private Australian company EnviroCopper Limited (ECL) to 30%.
Thor has paid the final tranche A$185,000 in completion of the A$400,000 additional earn-in agreement, and has provided notice to ECL to exercise its right to the increase its holding. Thor is to be issued additional shares in ECL to take the equity holding to 30%, with these additional shares expected to be issued by 16 November 2020. EnviroCopper Limited has earned its initial farm-in interest in 50% of the Kapunda project, and has provided notice that it will now proceed to a 75% interest
Mick Billing, Executive Chairman of Thor Mining, commented: “This additional investment in EnviroCopper represents outstanding value for Thor and Thor investors.”
“Through EnviroCopper we hold interests in resources totalling 233,000 tonnes of copper insitu with substantial upside for copper and the potential to also extract gold.”
“Global copper prices have improved strongly in recent weeks and, with the optimism that a COVID 19 vaccine may be available in 2021, this rebound shows signs of the acceleration which comes with economic recovery.”
“EnviroCopper have scheduled a host of field activities at both Kapunda and Alford West during the next few months, expected to add considerable value to each project. While the additional investment by Thor will be utilised on some of this work, the bulk of the expenditure requirement through to mid-2021 is funded, particularly at Kapunda, by the previously reported Australian government grant.”

Two Shields Investments 0.1125p £7.29m (TSI.L)

Two Shields Investments plc (TSI), the AIM quoted investment company with a strategy to build a high-quality portfolio of investments in fast growing and scalable digital and technology enabled businesses, has announced today that it has conditionally agreed to acquire the shares in BrandShield Limited not currently held by TSI for an aggregate consideration of approximately £13.15 million. It also announces that the Company has at the same time raised approximately £3.2 million by way of a Placing from institutional and private investors including Dame Ann Gloag, and Subscriptions at 20p per share (following a proposed 200:1 share consolidation) to finance growth of the Enlarged Group

Tiziana Life Sciences 101.5p £197.5m (TILS.L)

Tiziana is collaborating with Parexel Biotech, a division of a leading global clinical research organisation, Parexel International (IRL) Limited, to conduct a global Phase 1b/2 trial with enteric-coated capsules of formulated Foralumab, the only fully human anti-CD3 monoclonal antibody (“mAb”) – as a therapy for patients with moderate to severe Crohn’s Disease (CD). This clinical study will evaluate the safety, tolerability, and clinical activity of escalating doses of orally administered capsules of Foralumab. The trial is a dose-ranging, open-label study that will enroll 60 patients in the U.S. and Europe.
First Ever Study with take-home capsules of Foralumab, a Fully Human Anti-CD3 Monoclonal Antibody
– Potential to be a safer and effective alternative to the intravenous immunotherapies currently used for Crohn’s Disease
-Crohn’s Disease Therapeutics Market Size $4.7 Billion by 2025

Rosslyn Data 5.7p £19.37m (RDT.L)

The big data technology company, has won a three-year contract for the implementation and license of a Langdon Excise system.
The client is a major multinational grocery and general merchandise retailer based in the UK and with a significant presence in the Republic of Ireland. The system will provide a comprehensive end to end solution complying with existing legislation and public notices to allow the client to receive, manage and discharge duty suspended shipments from authorised suppliers under the Excise movement and control system (EMCS), as well as to make their own shipments of duty suspended goods to authorised destinations.

Team17 Group 705p £927m (TM17.L)

The global games label, creative partner and developer of independent premium video games, announced that Overcooked! All You Can Eat has launched on Xbox Series X|S and will be launching tomorrow on PlayStation 5®.
Overcooked! All You Can Eat, which will be the first Team17 title launched on Microsoft and Sony’s next-generation consoles, includes fully remastered versions of Overcooked! and Overcooked! 2, including all downloadable content previously released for both titles, and an exclusive new adventure, which includes seven new levels and three new chefs.
Overcooked! All You Can Eat is the most accessible Overcooked! title yet and will include an option to enable dyslexia friendly text, a scalable user interface, and colour-blind friendly chef indicators, alongside an assist mode that adds features to increase level times.
The game will also be available in a physical edition for both next-generation consoles later this year.

7digital Group 1.15p £31.3m (7DIG.L)

The specialist in B2B end-to-end digital music solutions, announced that its joint venture eMusic Live has partnered with HarrisonParrott, a world-leading international classical music artist and project management company, to launch Virtual Circle, an exclusive online concert and music hub for classical music listeners. This is the first such partnership since the formation of the joint venture with eMusic and presents clear evidence of the growing demand for artist monetisation tools, a key growth market and new revenue stream for 7digital.

Eagle Eye Solutions 387p £99.6m (EYE.L)

The SaaS technology company that creates digital connections enabling personalised, real-time marketing through coupons, loyalty, apps, subscriptions and gift services, announced that Woolworths Group Limited has signed a five-year agreement to use Eagle Eye’s AIR platform to support its personalised real-time digital marketing program.
Woolworths is Australia’s largest retailer; the group operates 3,000 stores in Australia and New Zealand and serves more than 29 million customers across its brands every week.

Evgen Pharma8.15p £11.19m (EVG.L)

The clinical stage drug development company, notes the recent news that Pfizer have announced the first interim analysis of a Phase III COVID-19 vaccine. Evgen believe that multiple approaches will be needed to curtail this virus and the progress announced earlier this week is a hugely positive development.
As previously announced, Evgen have entered into a Phase II/III trial with the University of Dundee to investigate whether the Company’s lead asset, SFX-01, can reduce the severity, or prevent the onset of, acute respiratory distress syndrome (ARDS) including, but not exclusively in patients with suspected COVID-19. The Company confirms that this study is poised to commence recruitment, as announced on 23 October 2020 and will be providing a further update shortly.
The Phase II/III STAR trial (SFX-01 Treatment for Acute Respiratory Infections) has received all the necessary regulatory approvals needed to proceed and patient recruitment will begin shortly. Supplies of SFX-01 have already been delivered to the centre.

VR Education Holdings 14.75p £35.7m (VRE.L)

The virtual reality VR technology company in the education, communication and virtual events space, announces that the Group’s flagship ENGAGE platform will be officially supported and made available on the Facebook Oculus store during the course of 12 November 2020 (Eastern Standard Time). Up until this point users who wished to use the platform had to download the installation file from the Group’s own website and side load the application to the Quest device, which was a significant barrier to usage.
Facebook, which just recently released the Oculus Quest 2, has now approved the ENGAGE platform for full release on its own devices and via its sales channels on the Quest store, thereby opening up a wider VR user base to ENGAGE.

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”.