Small Cap Feast

Small Cap Feast – 12 November 2020

Dish of the Day:

Off the Menu:

Sumner Group Mining has left the Aquis Stock Exchange.

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

MediaZest* 0.04p £0.56m (MDZ.L)

The creative audio-visual company updated on current trading and the impact of the second UK “lockdown” as a result of
the Covid-19 Pandemic.
Post the initial UK “lockdown”, trading has continued to be encouraging. Although client work continues
at a slower pace than in the run up to March 2020, new projects are being pitched for on a regular basis,
and several mandates have been won in recent weeks. Ongoing contractual income remains robust and the
renewal rate of such recurring revenue streams has been strong.
The differing terms of the second “lockdown” mean that many projects continue to be delivered, with additional safety and
social distancing measures. In light of this the Board does not expect the impact of this second lockdown to be as negative as
the first, although it will may have an adverse effect on trading. The Group will also continue to use Government support
schemes as appropriate where work cannot continue, and cost reduction measures remain in place where possible to
mitigate the impact of such restrictions.

TMT Investments* 4.45p £130m (TMT.L)

The venture capital company investing in high-growth technology companies, is pleased to announce that its portfolio
company Pipedrive, Inc., a leading sales CRM solution ( www.pipedrive.com ), has today announced that it signed a
definitive conditional agreement regarding a majority investment from Vista Equity Partners, a leading US investment firm
that focuses exclusively on enterprise software, data and technology-enabled businesses .
As part of the Transaction, TMT has agreed to dispose of its entire holding in Pipedrive to Vista for a cash
consideration of approximately US$41 million.
The Disposal represents a substantial valuation uplift of approximately US$29.1 million (or 245%) in the value of TMT’s
investment in Pipedrive prior to the Disposal, being the sum of the previous reported amount as of 30 June 2020 plus the
value of Pipedrive shares acquired by TMT in July 2020.

Sareum Holdings* 1.375p £44.9m (SAR.L)

Amended terms to the 2016 licensing agreement between Sierra Oncology, Inc. and CRT Pioneer Fund LP
for the Chk1 inhibitor SRA737 have been agreed between the two parties. Sierra and CPF have agreed to a
decrease in the additional milestone payments of up to an aggregate of $290.0 million that may be payable
to CPF upon the achievement of certain developmental, regulatory and commercial milestones, including a
milestone payment of $2.0 million upon the dosing of the first patient of the first trial of SRA737 following
the Amendment.
In the event that the milestone payment for a milestone event, as defined in the CRT License Agreement, becomes due, but
no milestone payment for an earlier milestone event has been paid, then the milestone payment attached to the earlier
milestone event will automatically become due and payable contemporaneously with the payment for the later milestone
event. Sierra will accrue for any future milestones payments once they are considered probable of occurring.
In addition, Sierra remains required to pay CPF, on a product-by-product and country-by-country basis,
tiered high single-digit to low double-digit royalties on the net sales of any product successfully developed.
Sareum continues to be eligible for 27.5% of the economics of the CRT License Agreement, as amended .

Volex 256.5p £390.5m (VLX.L)

The global supplier of integrated manufacturing services and power products, has signed a share purchase agreement
for the proposed acquisition of the entire issued share capital of De-Ka Elektroteknik Sanayi ve
Ticaret Anonim Şirketi, for a total consideration of up to €61.8 million, on a debt-free basis .
DEKA is a leading power cord manufacturer for the European white goods market
Headquartered in Kocaeli, Turkey, with three production facilities and approximately 450 employees, it is strategically
located in a low-cost region close to Europe Like Volex, DEKA has shown a resilient performance through the period of the
Covid-19 pandemic and reported unaudited sales of €33 million for the nine months ended 30 September 2020
DEKA has best-in-class automation, full vertical integration and a strong management team who are expected to remain
with the business
DEKA offers exciting organic growth potential, providing Volex with increased market share in attractive end market
segments

Ideagen 227p £515m (IDEA.L)

The supplier of regulatory and compliance software, is pleased to provide an update on trading for the six months ended
31st October 2020 .
The Board is pleased to report that trading for the first half of the financial year has been ahead of the
same period last year and comfortably in line with the Board’s expectations . These results underpin the Board’s
confidence in the Group’s prospects for the second half of the financial year and are based upon the continuing execution
of a strategy to grow revenue both organically and through acquisitions , maintaining high EBITDA margins through
disciplined cost control , generating strong cashflow and increasing annual recurring revenue (ARR) as a percentage of total
revenue.
The Board considers ARR as the Group’s primary growth metric and the driver for long term value. ARR recognised during
the first half is expected to be £24.4m (H1 2019: £20.3m), representing 83% of total revenues, up from 74% in the
comparative prior period. The ARR book (being contracted revenue to be recognised over the coming 12 months) has
increased by 13% during the first six months to approximately £54. 8m (April 2020: £48. 7m ), arising from both strong
organic growth of approximately 7% (14% on an annualised basis) and 6% of acquired ARR from the acquisition of Qualsys
in August 2020 .

Redcentric 122.5p £190.6m (RCN.L)

Redcentric today announced that the Board has decided to terminate the formal sale process with immediate
effect. Redcentric is a customer focused end to end managed service provider delivering innovative
technology to improve business productivity and efficiency.
The Company is also today announcing its half year results to 30 September 2020, which show a 7%
increase in revenue to £46.2m and a 19% increase in Adjusted EBITDA to £12.3m. Since 31 March 2020, net
debt has reduced by £17.5m to £17.0m, reflecting continuing strong adjusted operating cash flow conversion of 105%.

iEnergizer 275p £523m (IBPO.L)

iEnergizer, the technology services and media solutions leader for the digital age, reports another record set of interim
results for the six months ended September 30, 2020. Following the increase in both earnings and interim dividend the
Board looks forward to the remainder of the year with confidence.
Financial Highlights: Enhanced profitability and margin improvements despite temporary revenue impact
of the COVID-19 pandemic.
· EBITDA up by $1.6m to $30.7m (H1 2020: $29.1m) · Increased EBITDA margin at 34.1% (H1 2020:
30.2%) · Group Revenue down 6.5% to $90.2m (H1 2020: $96.5m), reflecting reduced business from clients
impacted by government lockdown measures
· Net Cash of $5.6m (31 March 2020: $1.6m). · Proposing interim dividend of 5.72p per ordinary share
($14.36m) (H1 2020: 5.2p)

Restore 345p £433m (RST.L)

The UK market leading document management, commercial relocation and IT recycling business provide a trading update
for the ten month period ended 31 October 2020.
Further to the third quarter trading update announced on 1 October 2020, the Group provides the
following update on trading activity through to the end of October: – Overall activity levels in October were
in line with the expected improvement in trajectory – Cash collection remained strong on track to deliver
reduced net debt at year end of £65-69m (pre acquisitions) – Building on growth in Q3, net box growth in
Records Management continued to be positive in October
– Restructuring of the business will result in c250 staff leaving the business (during August and to November) – Following
completion of the planned restructuring, only c7% of staff remain furloughed on the Government’s Job Retention Scheme
which underlines the strong increase in customer activity levels over the last six months
– Acquired E Recycling Ltd, a high security IT Asset Destruction (ITAD) business which will further enhance the Group’s
strong position in the large and rapidly growing IT recycling market

KR1 15p £19.6m (AQSE:KR1)

The leading digital asset investment company, has started generating revenue from staking activities on the
Kusama network, a portfolio holding received at zero cost in line with the Company’s Polkadot position.
Kusama is an incentivised ‘canary’ network for the Polkadot blockchain project. Kusama is designed to battle-test technical
upgrades for Polkadot as well as allow aspiring Polkadot parachain projects to test their systems before deploying on
Polkadot. However, it is also envisioned that Kusama may become home to a range of lower value blockchain projects, that
do not require Polkadot’s ‘stability’ and far superior safety guarantees. As such, Kusama could become an important
standalone platform with
To date, KR1 has generated a total of 3,258.70 KSM from staking activities, which thus far have not been realised into fiat
currency but instead are being ‘compounded’ by staking them.

Tern 7.75p £23.33m (TERN.L)

The investment company specialising in the Internet of Things, announces that it has raised £1,700,400, at 7.5p. The
Issue Price represents a discount of 14.3% to the closing middle market price of 8.75p per Ordinary Share on 11 November
2020. The Directors intend to use the net proceeds of the Fundraise to facilitate a new investment in due course, strengthen
the Company’s balance sheet to enable the Company to hold strong negotiating positions for any follow-on investment
opportunities in the Company’s principal portfolio companies and for working capital generally. In addition to the
Subscription, there will be an offer to retail and other investors via PrimaryBid Limited at the Issue Price.

Head Chef:

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

*A corporate client of Hybridan LLP

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