Small Cap Feast

Small Cap Feast – 12th September 2022

Dish of the Day:

Critical Metals (CRTM.L) has re-joined the Main Market following a RTO. The Company completed the acquisition of a 57% interest in Madini Occidental Limited, which holds an indirect 70% interest in the Molulu copper/cobalt project. The Company raised £1.8m through placing 9m new ordinary shares at 20p per share. Approximate Mkt Cap £10.5m.

Off the Menu:

No leavers.

What’s Cooking in the IPO Kitchen?

Independent Living REIT plc, intends to float on the Premium Segment of the Main Market. The Company’s investment objective is to address the shortage of high-quality supported housing, delivering capital growth and inflation-linked income returns for its investors whilst providing a fair deal for society through savings for the UK taxpayer, and improved outcomes for residents. To be raised £150m. Expected 4 October 2022.
The Sustainable Farmland Trust PLC, intends to float on the Premium Segment of the Main Market. The Company invest in a diversified portfolio of farmland and related agriculture-focused assets predominantly located in the US. £200m to be raised. Due TBC.
Aurrigo Group plc, a international provider of transport technology solutions, intends to join AIM. The Group designs, engineers, manufactures and supplies OEM products and autonomous vehicles to the automotive, aviation and transport industries. Capital to be raised and Mkt Cap TBC. Expected Mid-September.
Welkin China Private Equity, newly established closed-ended investment company dedicated to investing in unquoted Chinese companies, intends to join the Premium Segment of the Main Market. The Company is targeting a raise of up to US$300m.
Georgina Energy, focusing on the exploration, development and monetisation of helium, hydrogen and hydrocarbon interests located in Australia intends to join AIM. Georgina Energy has two principal onshore interests: (1) Mount Winter Prospect in the Amadeus Basin in Northern Australia, which the Company has a right to earn an initial 75% interest; (2) Hussar Prospect, 100% owned by the Company, located in the Officer Basin in Western Australia. Expected late September.
Altona Rare Earths, the AQSE-listed mining exploration company focused on rare earth elements projects in Africa, intends to join the Main Market. The trading of its ordinary shares on the AQSE Growth Market will be cancelled simultaneously and its EPIC will be changed from AQSE:ANR to REE. Conditionally raised £1.1m. Expected late September.

Breakfast Buffet

Beeks Financial Cloud Group 156p £102m (BKS.L)

The cloud computing and connectivity provider for financial markets, provides a trading update the year ended 30 June 2022. Beeks has delivered a record performance and exited the year with annualised committed monthly recurring revenue of over £19.3m, up 40% from the prior year. Beeks confirms that the first customer for its newly launched Exchange Cloud offering is ICE Global Network (IGN) part of ICE Data Services, a division of Intercontinental Exchange (NYSE: ICE), the world’s largest exchange group and owner of the New York Stock Exchange.

Epwin Group 73p £105.8m (EPWN.L)

The manufacturer of energy efficient and low maintenance building products announces that it has completed the acquisition of Poly-Pure Ltd for an initial cash consideration of £15m on a debt-free and cash-free basis, representing a multiple of 6x estimated 2022 adjusted EBITDA. Poly-Pure’s financial year ended 31 July 2022 and it expects to report revenues of c.£10m (£4.7m: 2021) and adjusted EBITDA of c.£2.5m (£0.4m in the year to 31 July 2021). The acquisition is expected to be immediately earnings enhancing.

Ironveld 0.29p £8.2m (IRON.L)

The exploration and development company that it has been working with Enernet Global Inc. for an optimised hybrid power plant to deliver clean and low cost power to the smelter facility in Rustenburg. The first stage of the service is underway with a 1MW pre-operations power facility and this will enable Ironveld to test and re-commission the smelter. Enernet will fully finance the power plant and sell energy through a power purchase agreement to Ironveld. Enernet will complete installation of the pre-operations power in September 2022.

Kape Technologies 285p £1,001.6m (KAPE.L)

The digital security and privacy software business, announces its unaudited results for the six months ended 30 June 2022. Revenues increased by 216.6% to $302.4m (H1 2021: $95.5m), with recurring revenues of $268m, an increase of 353.5% (H1 2021: $59.1m). Operating profit went up 333.8% to $59m (H1 2021: $13.6m). Kape is experiencing growing demand across its entire product suite and expects to generate revenues of between $610-624m for the year ended 31 December 2022.

Nightcap 12.6p £25m (NGHT.L)

The owner of The Cocktail Club, the Adventure Bar Group and the Barrio Familia Group of bars, announces another new opening for Barrio in Watford, northwest of London. This is the second new opening for Barrio Familia Group following the Covent Garden opening and will be the second new opening since it was acquired by Nightcap, taking Barrio sites within the Group to 6. Nightcap now has 37 sites within its estate and a further 19 premises under offer or in legal negotiations for all its brands. The venue will open later this year.

Omega Diagnostics 2.5p £6.1m (ODX.L)

The specialist medical diagnostics company focused on Health and Nutrition products, announces its audited results for the year ended 31 March 2022. Revenue increased by 25% to £8.5m (2021: £6.8m). However, losses have increased. Operating loss of continuing operations was £0.9m (2021: £0.5m) and loss from discontinued Global Health operations was £9.9m (2021: £2.5m). With a new executive team, the company has realigned its strategy to focus on its Health and Nutrition products. The Health and Nutrition division is profitable and cash generative, with opportunities for expansion both geographically and in terms of product range.

PipeHawk 14.5p £5.3m (PIP.L)

The provider of ground probing radar equipment and services, announces that its subsidiary QM Systems Limited (QM) has been awarded a contract by RCR Flooring Products, the manufacturing division of RCR Industrial Flooring S.L.U. to deliver a manufacturing solution for a floor jointing system. This contract will generate approximately £1m of revenue, with one third of which to be paid immediately and the remainder paid over the duration of the contract. The company expects that work will commence immediately with delivery within 12 months.

Sareum Holdings* 162.5p £110.6m (SAR.L)

The clinical stage biotech company developing next generation kinase inhibitors for autoimmune disease and cancer, notes the announcement from Bristol Myers Squibb that the US Food and Drug Administration (FDA) has approved Sotyktu™(deucravacitinib), a first-in-class, oral, selective, allosteric tyrosine kinase 2 (TYK2) inhibitor. This is the first approval by the FDA of a medicine based on TYK2, a member of the JAK cell signalling family, and therefore supports Sareum’s confidence in its broader portfolio of TYK2/JAK1 inhibitors focused on autoimmune disease. Sareum has submitted a Clinical Trial Authorisation (CTA) to the UK’s Medicines and Healthcare Products Regulatory Agency to initiate a clinical trial of SDC-1801, with an initial focus on psoriasis, and hopes to begin dosing patients for Phase 1b in 2023.

Spectra Systems 161.5p £72.4m (SPSY.L)

The machine-readable high speed banknote authentication, brand protection technologies, and gaming security software company, announces its interim results for the six months ended 30 June 2022. Revenue increased by 15% to $9,265k (2021: $8,023k), while adjusted EBITDA was up 8% at $3,818k (2021: $3,522k). The Board believes that the company is on track to achieve record earnings and meet market expectations for the full year. The appointment of Dr. Barbara Paldus as an Independent Non-Executive Director is also announced today.

UK Oil & Gas 0.087p £15.5m (UKOG.L)

The energy exploration and production company announces that it has raised £3m through a placing of new ordinary shares at a price of 0.0875p per share, representing a discount of approximately 20.3% to the closing price on 9 September. The net proceeds will be used to help with the completion of Phase 2 Turkey seismic programme and the subsequent drilling of a new appraisal well in the Basur oil discovery. The company also announces the appointment of Guzyal Mukhametzhanova as Chief Financial Officer.

Head Chef:

Emily Liu, CFA, CAIA
0203 764 2344
emily.liu@hybridan.com

Sous Chef:

Sacha Morris
0203 764 2345
sacha.morris@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”.