Small Cap Feast

Small Cap Feast – 11th November 2016

Dish of the Day:

No AIM Joiners Today

Off the Menu:

No AIM Leavers Today

What’s Cooking in the IPO Kitchen?

Diversified Gas & Oil—The US based gas and oil producer is seeking a December AIM quoting to raise circa $60m

FreeAgent—Schedule one now out from the provider of accounting software to small businesses. £8m capital to be raised with an anticipated market capitalisation on admission of £34.1m

Civitas Social Housing –Intention to float on Main Market from the first REIT to be listed on the London Stock Exchange offering pure play exposure to social housing

Breakfast Buffet

Clinigen Group (CLIN.L) 724p £833m

AGM Statement from the global pharmaceutical and services company.  “We delivered a strong financial performance with good levels of organic growth combining with acquisitions to increase adjusted EPS* by 25%. Trading for the current financial year remains in line with the Board’s expectations.” As flagged previously  Peter George will step down as CEO after the AGM and Shaun Chilton will now take over. Peter will continue to work with the Group as a Non-Executive Director. 17.5x FYJun17E PE multiple.

iEnergizer (IBPO.L) 79.5p £151.15m

HYSep16 results from the digital publishing and technology company, which benefits from the dual disruptive waves of big data and the cloud. Revenues of $71.5m (H1 2016: $68.9m). Operating profit $13.8m (H1 2016: $13.7m). Cash and cash equivalents of $11.9m (31 March 2016: $10.2m). Term Debt of $81.5m (31 March 2016: $87.6m).  Expects current market trends to continue in H2 with a continuing focus on underlying operating margins. FYMar17E. Rev £119.6m. 9xPE

Range Resources (RRL.L) 0.63 p £26m

The QUN 158R (renamed QUN 160) development well in Trinidad successfully spudded on 9 November 2016. The well is located in the Morne Diablo field and is drilling ahead to a total depth of 2,600 feet, expected to take approximately 3 weeks to reach target depth. The GY218 SE well located in the Beach Marcelle field is the last well from the five-well campaign to be drilled this year. The well location has been completed and the rig is already rigged up on location. The well is expected to spud by early December 2016.

Aquatic Foods (AFG.L) 11.5p £13m

The Chinese marine foods and seafood processor and producer supplying to export and local markets, has provided a 9mth trading update to Sep 2016. 9mth Revenue for the Group decreased by 5.0%, to RMB 644.9 million (c£76.3 million). Q3 revenue improved by 5.1% compared with Q1 and 10.6% compared with Q2 2016. Volumes higher but pricing lower. Net profit margin of 10-11% vs 14%. Cash strong at c£51m. Near term conditions remain difficult. Increasing marketing and advertising spend. Seeking overseas opportunities.

Global Invacom group (GINV.L) 8p £20.77m

Q3Sep16 results from the satellite communications equipment provider. Net profit of US$0.7m (Q3 FY2015: US$2.7m loss).  Gross profit of US$7.2 million (Q3 FY2015: US$6.3 million). Secured approval to supply next-generation products; positioned for improved sales. The Group will complete R&D and deploy DCSS (digital channel stacking switch)  technology across its LNBs for all customers and territories over the next 12 months 9M FY2016 net profit was US$0.3m compared to a loss of US$5.6m.  FYDEC16E PBT of $4.16m will require a very strong Q4.

Goldstone Resources (GRL.L)1.88 p £1.92m

The West and Central Africa focused gold exploration company has provided an update on the recent drilling programme comprising 3,000 metres of auger and some 1,500 metres of Reverse Circulation drilling of the AK02 prospect, located immediately south west and along strike of the Homase/Akrokerri deposit and within the Akrokerri licence. Confirmed mineralisation at depth and returned significant intersections of 14 metres @ 1.18 g/t gold (“Au”) and 8 metres @ 1.88 g/t Au. Defined a new 1,250 metre x 350 metre zone of gold enrichment.

Stratex International (STI.L) 2.5p £9.35m

Stratex International has also referenced Goldstone’s update on the Homase/Akrokerri deposit. Stratex has a 33.45% interest in Goldstone Resources.

Bacanora Minerals (BCN.L) 74.5p £82.55m

The lithium company developing the Sonora Lithium Project in , Mexico,  has provided an update on the Company’s upcoming definitive Feasibility Study targeted for completion in late Q1, 2017. Resource upgrade and mine planning work has commenced following completion of infill drilling programme. The expanded Pilot Plant has been operating since May 2016, producing battery grade samples of lithium carbonate. Over the past year there has been a significant strengthening in the price of lithium products.

Gloo Networks (GLOO.L) 117.5p £30.08m

The digital transformation company that aims to acquire and develop trusted media brands, announced HYSep16 results. Gloo Networks generated a loss after taxation of £1.6 million, reflecting operating expenses and diligence costs incurred in the continued pursuit of its stated investment strategy. Over £25.6 million in cash at period end. “We continue to be encouraged by the potential opportunities we are seeing in the market, verifying our initial hypothesis.” The Company Floated in August 2015 and has yet to complete its first deal.

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”.