Small Cap Feast

Small Cap Feast – 12th October 2016

Dish of the Day:

No AIM Primary Today

Off the Menu:

Secure Trust Bank (STB.L) moving from AIM to the Main Market.

Last week saw the delisting of  New Europe Property Investments (NEPI.L).

What’s Cooking in the IPO Kitchen?

Pure Gym—The kitchen got a little too hot for Pure Gym which has  recently pulled its expected listing

Krispy Kreme UK—is understood to have abandoned its planned £200m London flotation in favour of a sale to its US parent

Biffa— Intention to float announcement states that up to £270m  is to be raised to pay down debt and historic landfill tax liability

Misys— Intention to float issued last week. Expected early November. Targeting £500m primary for deleverage and partial shareholder sale


Breakfast Buffet

Petards Group* (PEG.L) 19p £6.75m

The developer of advanced security and surveillance systems this week announced a c. £6m contract win to supply Great Western Railway with Petards eyeTrain systems for the design, development, supply and installation of eyeTrain systems to be fitted to Class 165 and 166 Diesel Multiple Units (“DMU”) trains. The developed systems add substantial new software driven functionality to eyeTrain solutions. With development underway there will be a 2016 revenue contribution and the 2017/18 order book is strengthened. FY2016E revenues £15m, £0.9mPBT.


Milestone Group*(MSG.L) 1.4p £10.98m

The provider of digital media and technology solutions announced last week that its Nexstar joint venture with Black Cactus has just distributed its first independent film, Brash Young Turks, to the Amazon Prime global streaming service. Nexstar will earn  between 15% and 20% of all revenue earned on streaming, rental or purchase of every title it distributes through its global distribution network, which now includes the 60 million plus members of Amazon Prime. Nexstar has an agreement in place to distribute award winning Naeem Mahmood’s next 2 films.


InnovaDerma* (IDP.L) 178p £18.37m

The developer of ‘at-home’ and clinically proven treatments for hair loss, hair care, self-tanning and skin rejuvenation, has this week provided a  FYJun16 trading update. It expects revenue and profits will be significantly higher than the previous year, driven by underlying organic growth across its product range and the contribution of the Skinny Tan business, which was acquired in May 2015.  The Group expects revenues of c. AUD $8.3m (£4.2m) representing a significant increase of more than 800%  and a maiden net profit.


Impax Asset Management Group (IPX.L) 49p £54.66m

The investment manager focused on environmental markets and related resource efficiency sectors  this week provided a Q4 and FYSep16 AUM update.  AUM reached a new peak of c. £4.5 billion, representing increases of 12% over the quarter and 59% since the start of Impax’s financial year on 1 October 2015.


Quadrise Fuels International (QFI.L) 11.63p £94.1m

The emerging supplier of MSAR® emulsion technology and fuel, enabling a low-cost alternative to heavy fuel oil (one of the world’s largest fuel markets, comprising over 450m tonnes per annum) in the global shipping, refining, power generation markets has announced a proposed £4m placing at 10p with an open offer of up to £1m. A 14% premium to yesterday’s close. The proceeds are to fund development of  key projects to enable the migration to commercial operations and generation of net positive cash flow.


Tlou Energy (TLOU.L) 8.75p £20.75m

The company focused on delivering power in Botswana and southern Africa through the development of coal bed methane (CBM) has announced an initial Independent Reserve Certification for the Lesedi CBM Project. On a 3p basis Lesedi has 52.9 billion cubic feet of Gas Reserves (Lower Morupule seam only). On a contingent 3c basis all seams have 3,243 BCF of  Gas Resources.


Walker Greenbank (WGB.L) 203.5p £123.33m

Acquisition  by the luxury interior furnishings group for £25m cash acquisition with up to £10m share based earn-out of Globaltex 2015,  a UK-based designer and worldwide distributor of quality interior fabrics and wallcoverings (trading as “Clarke & Clarke”). Part funded by a £17m placing at 190p, a 6.6% discount to yesterday’s close. Expected to materially enhance earnings  in FYJan18. Clarke & Clarke sales of £22.4m in FYDec15. Adjusted EBITDA of £3.8m. WGB HYJul16 interims today. Group sales down 8.7% to £41.8m. EPS +62.1% to 6.55p.


Diamondcorp (DCP.L) 4.13p £19.75m

A project & financial update on the lace diamond mine in South Africa.   The revised production ramp up announced in August has been further revised in light of tonnage constraints encountered during September which are now likely to continue until at least the end of the current year.  The tonnage for the months of September to December will be restricted to an average of 14-15,000 tonnes per month and commencement of full commercial mine production of 30,000 tonnes per month is now expected to  be delayed until c. February 2017.


Telford Homes (TEF.L) 295.25p £221.74m

The residential property developer focused on non-prime London, has announced a HYSep16 trading update. Long term imbalance between the supply of homes and the demand for somewhere to live in non-prime areas of London underpins future prospects for Telford Homes.  Strong forward sold position now exceeding £650 million of revenue to be recognised from the year to 31 March 2017 onwards. No adjustment to growth targets post EU vote. FYMar17 expectations  and beyond unchanged. FYMar17E sales of £288m. EPS 35.68p.


Steppe Cement (STCM.L) 18.5p £40.5m

Q3 update from the construction materials producer in Kazakhstan. Third quarter 2016 revenue of KZT 7,316 million was 6% lower than revenue of KZT 7,770 million achieved in the corresponding quarter in 2015. For the 9 months ended 30 September 2016, Steppe Cement Ltd (“Steppe Cement”) recorded revenue of KZT 15,506 million compared to KZT 16,047 million in the corresponding 9 month period in 2015, representing a 3% decrease.


Head Chef:

Derren Nathan
0203 764 2344

*A corporate client of Hybridan LLP


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