Small Cap Feast

Small Cap Feast – 13 January 2021

Dish of the Day:

Nightcap (NGHT) IPO’d onto AIM this morning raising £4m at 10p giving a market cap of approx. £13.5m. Upon Admission, Nightcap will acquire the London Cocktail Club for an initial consideration of £5.7 million.  The London Cocktail Club is an independent operator of ten individually themed cocktail bars in nine London locations and one location in Bristol, targeting customers aged between 26 to 40 years old.  June 2020 FY revenues were £5.2m with a loss of £632k.


Off the Menu:

No leavers today


What’s Cooking in the IPO Kitchen?

Cornish Metals (TSX-V: CUSN) intends to list on AIM. The Company is proposing to raise £5 million by way of private placement of new Common Shares (the “Fundraising”) to advance the United Downs copper-tin project. The Company expects that Admission will become effective in February 2021.  The Company’s Common Shares will continue to be listed and trade on the TSX-V in Canada.

Further media reports that Dr Martens, the British Boot brand is planning an IPO on the LSE.  It is currently owned by PE group, Permira who  is expected to sell down its stake at the IPO.  March 2020 YE the group had revenues of £672m and EBITDA of £184m.  Deal size TBC.

HSS Hire Group, HSS.L transfer from Main to Aim. Mkt Cap c. £70m. Recently raised £52.6m. Leading supplier of tool and equipment for hire in the United Kingdom and Ireland and has provided equipment hire services in the United Kingdom for more than 60 years, primarily focusing on the B2B market.  Due 14 Jan.

VH Global Sustainable Energy Opportunities plc, a closed-ended investment Company focused on making sustainable energy infrastructure investments, today announces intends to launch an initial public offering  of shares on the Official List (Premium) of the Main Market of the London Stock Exchange.  Due by Early Feb.

Moonpig, the digital greeting card company, is planning an IPO with a potential valuation of £1bln, according to multiple media  reports.  Further details expected to be announced over the next two weeks.


Breakfast Buffet

TP Group 6.35p £49.5m (TPG.L)

The provider of mission-critical solutions for a more secure world, notes that it has received expressions of interest for the Group’s Maritime Engineering business (TPG Maritime Limited) based in Portsmouth, which includes manufacturing facilities and technologies to support mission-critical equipment for submarines and other applications. In light of such interest, the board has appointed advisers to review these opportunities and consider the strategic options for the Group’s engineering business.


Real Good Food 4p £4m (RGD.L)

The diversified food business, announces a trading update for its current financial year ending 31 March 2021 to date, ahead of its General Meeting and Shareholders’ Q&A being held later today. As reported on 16 December, at the time of the publication of the notice of General Meeting and Trading Update, the Group’s two businesses are getting stronger and more resilient after a tough first half. The near-term outlook continues to hold challenges due to covid-19 but improved Q3 trading demonstrated encouraging progress and provides confidence for the future.

“Our plan for the current financial year was to leverage the capacity investment made during FY20 in Brighter Foods, to accelerate operational changes made within Renshaw and to generate revenue growth from new products and better customer service delivery. It is frustrating therefore that the covid-19 pandemic and Brexit uncertainties have constrained these objectives, albeit the Board believes the Group did well in the first half of the year to hold revenues to within 26% of last year under these circumstances (H1 2019: £32.4m). However, given the operational gearing of the business, particularly within Renshaw, the reduction in revenues meant that there was a greater drop in profitability, such that the Group operated at around break-even at the adjusted EBITDA level for the first half (H1 2019: EBITDA of £2.8m).

Following the easing of some covid-19 restrictions, encouragingly Q3 (September – December 2020) revenues and EBITDA were in-line with last year’s third quarter at £19.4 million and £1.7 million, respectively as well as being in line with Board expectations.”


Touchstar 67.5p £5.7m (TST.L)

The suppliers of mobile data computing solutions and managed services to a variety of industrial sectors, published a trading update for the year ended 31 December 2020.

  • Profitable outcome for the year
  • Strongly cash generative throughout the year
  • Year-end cash of £1.9m (31 December 2019: £850,000)


Wey Education 39.5p £54.8m (WEY.L)

Wey Education, the online education Company, announces that trading in the first four months of its financial year has been significantly ahead of budget and market expectations. The Company expects to exceed market forecasts in both turnover and profitability for the year ending 31 August 2021.

Following a group structure and tax review, the Company also reports that InterHigh will henceforth charge VAT to its UK clients. This change will also allow the Company to recover VAT on UK expenditure and ensure that future InterHigh profits are distributable.  Part of the benefits from current trading will be used to smooth the transition in these charges for existing clients and notwithstanding this and a further targeted increase in marketing expenditure the Company expects profit before tax for 2021 to be ahead of market expectations.

Barrie Whipp, Chairman, commented “We are very pleased with the Company’s performance in the early part of the financial year which we envisage continuing during the rest of the year. The Board intends to continue investing in growth; this is not the time to consolidate, but to continue to push forward.”


AB Dynamics 2125.5p £480m (ABDP.L)

The designer, manufacturer and supplier of advanced testing systems and measurement products to the global automotive market, issues a trading update, to coincide with the Company’s Annual General Meeting taking place later today.

The Board reported that conditions through the end of 2020 remained consistent with expectations as at the time of the Group’s full year results on 25 November 2020, with demand in the first four months of the current year in line with the Q4 FY20 exit rate. The Group continues to make good progress in the execution of its strategy.

Whilst the Group continues to monitor the evolving COVID-19 situation and the current disruption associated with further waves of infection in various operational and end market territories, the underlying market drivers continue to be compelling. The Board remains confident that the medium-term outlook is positive and that the Group can continue to deliver on its strategic priorities.


Frontier Development 3290p £1.3bn (FDEV.L)

The developer and publisher of videogames based in Cambridge, UK, provides an update on trading following the Holiday period and in advance of the publication of interim financial results:

  • Trading in the current financial year to date is ahead of the Board’s original expectations
  • Extended home working has created additional development challenges
  • Elite Dangerous: Odyssey is still planned for release on PC in FY21, with PlayStation and Xbox releases now coming in FY22 to ensure the best experience for players on all platforms
  • Frontier Foundry title Lemnis Gate is now planned for release in FY22
  • Notwithstanding the decision to move these releases to FY22, the Board continues to expect that revenue for FY21 will be in the range of £90 million to £95 million


Sosandar 15.5p £29.8m (SOS.L)

The online women’s fashion brand, announced a trading update covering the three-month period ended 31 December 2020. The Company has delivered a record quarter for revenue and number of orders along with a substantial improvement in EBITDA versus the same period in the prior year.

  • Revenue of £3.98m, up 6% year on year (Q3 2019: £3.80m) delivered with a £1.61m (66%) reduction in marketing spend
  • EBITDA loss reduced by c.60% compared to the same period in the prior year
  • Continued agility in responding to changing Covid restrictions, pivoting from successful customer acquisition strategy between September and November to pulling back on marketing and trading the expanded customer database in December as restrictions became more severe


Enwell Energy 26.5p £85m (ENW.L)

The AIM-quoted oil and gas exploration and production group, provides an update on its operational activities in Ukraine, where it operates the Mekhediviska-Golotvshinska (MEX-GOL), Svyrydivske (SV) and Vasyschevskoye (VAS) gas and condensate fields, as well as the Svystunivsko-Chervonolutskyi (SC) exploration licence . Overall production volumes in Q4 2020 decreased by approximately 7% compared with Q4 2019, mainly due to natural field production decline, albeit offset by new volumes from May 2020 onwards when the SV-54 well in the SV field commenced production testing (see announcement dated 22 May 2020). More particularly , a decline in production rates from the VAS-10 well in the latter part of 2019 impacted overall production at the VAS field in 2020. As a consequence, in early 2020, compression equipment was installed to stabilise production from the VAS-10 well, and a workover of the well is planned to commence in late Q1 2021 to access an alternative reservoir horizon, with the aim of boosting production from this well.

Upgrade  works are designed to improve overall plant efficiencies and boost recoveries of condensate and LPG, and are planned to commence in mid-2021.

At the VAS field, planning is continuing for a new well to explore the Vvdenska (VED) prospect within the VAS licence area, as well as the workover of the VAS-10 well.


Kromek Group 14p £48.3m (KMK.L)

Interim results from the worldwide supplier of detection technology focusing on the medical, security screening and nuclear markets, announces its interim results for the six months ended 31 October 2020.  Cash and cash equivalents at 31 October 2020 were £5.8m

Financial Summary · Revenue of £4.6m (H1 2019/20: £5.3m) · Gross margin was 54% (H1 2019/20: 58%; FY 2019/20: 47%)

  • Adjusted EBITDA was £0.9m loss (H1 2019/20: £0.6m loss)

Resumption of orders and shipments across all segments in final two months of the period with business patterns starting to return to normal and increased commercial activity post period

  • Continuing commercial traction and development of D3S family of products, which has been sold in over 25 countries.  Significant progress in fast-growing bio-security market

As customers start to resume the rollout of their next-generation products based on Kromek technology, consequently detector shipments have increased. Specifically, in medical imaging, the Group’s OEM customer that awarded the contract expected to be up to $58.1m, has commenced installing its medical imaging scanners in multiple countries, with the rollout expected to ramp-up from H2 2020/21. The Group has received multiple contracts from new and existing customers in recent months, underscoring the pronounced rebound in sales and commercial activity across the Group’s key segments of medical imaging, nuclear detection and security screening. The renewed level of activity within its customer base is underpinned by the commercial traction Kromek has demonstrated in recent years in winning several, high-value contracts. As a result, the Group expects revenue in the second half of the year to be significantly higher than in H1 2020/21.   Has commenced a £1.25m programme funded by Innovate UK to customise its biological threat-detection solution for the automated detection of all airborne viruses, including COVID-19, to support end-use cases.


Induction Healthcare 72p £30.3m (INHC.L)

The healthcare technology company that helps digitally transform hospitals, announces a contract with the Royal Free London NHS Foundation Trust (RFL). Induction Zesty, a leading provider of patient portals to NHS Hospitals, has delivered the My RFL Care patient portal as the first phase of an ambitious roadmap for RFL’s digital patient services in the next two years.

The My RFL Care portal launched in August 2020 and has had significant traction with over 50,000 patients registering and using the service in the first few months. 250,000 patients are expected to adopt the service in the first year.


Head Chef:

Derren Nathan
0203 764 2344

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