Small Cap Feast

Small Cap Feast – 13 November 2020

Dish of the Day:

Round Hill Music Royalty fund has joined the Specialist Fund Segment of the Main Market of the London Stock Exchange, by way of a placing and offer for subscription of 282m 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.

 

Off the Menu:

No Leavers Today

 

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.

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

Vast Resources 0.1675p £24.2m (VAST.L)

Increase to the exploration target for its Baita Plai Polymetallic Mine in Romania. Further to the recent Baita Plai JORC Resource and Reserve report (see RNS dated 29 October 2020), which confirmed a JORC compliant mineral total gross resource of 608,000 tonnes at 2.58% copper  equivalent and an exploration target in the range of 1.8M-3M tonnes, Vast has now had the opportunity to review further historical data which has only recently been made available and is pleased to update the market that the Antonio North skarn, which is one of a number of high priority exploration targets, may be more extensive than previously interpreted.

Following an analysis of historical data records, the exploration target tonnes assigned to the Antonio North skarn has been updated to between 1.4M–2.8M tonnes giving an increased total gross exploration target of between 3.2M–5.8M tonnes.

Based on these findings, the Directors believe that the Antonio North skarn represents a major near to medium term mining opportunity. An underground exploration drilling programme is currently being compiled to better determine its potential.

 

Driver Group 52.5p £27.39m (DRV.L)

The global professional services consultancy to the construction and engineering industries, providing multi-disciplinary consultancy services including expert witness, claims and dispute resolution services, announces that it has opened an office in Madrid.

The launch of Driver Group’s office in Spain is supported by the appointment of Mr. Javier Sánchez Llopes, who is a well-known quantum expert in the Spanish and Latin American markets with 18 years’ experience. Mr. Sánchez will be working in close cooperation with Driver’s European network of offices and his appointment will strengthen the Group’s offering to Spanish speaking clients.

 

Gemfields 6.25p £73.05m (GEM.L)

Gemfields has commenced a sale process for its 23.65% equity holding in Pallinghurst Ivy Lane Capital S.à r.l, a company incorporated in Luxembourg .

Ivy Lane in turn owns 27.64% of Sedibelo Platinum Mines Limited (“SPM”) giving Gemfields an effective and indirect interest in SPM of approximately 6.54%.  As previously announced, SPM is not considered a core part of Gemfields’ strategy.

SPM is a public (unlisted) company incorporated in Guernsey and owns and operates the Pilanesburg Platinum Mines located in South Africa’s Bushveld Igneous Complex. In its financial year ending 31 December 2019, SPM dispatched and sold approximately 127,000 4E ounces (comprising platinum, palladium, rhodium and gold) and generated EBITDA of approximately USD 13 million.

 

FRP Advisory 106.5p £255m (FRP.L)

The UK professional services firm specialising in advisory services, today announces a trading update for the half year ended 31 October 2020.

The Group delivered another strong performance during the first half, continuing to grow and win larger and more complex mandates. This includes a recent high-profile appointment in the Group’s Restructuring division on the administration of Edinburgh Woollen Mill. This growth was achieved despite the significant reduction in the number of formal insolvency appointments within the marketplace compared with the prior year, as a result of the support measures made available by the UK Government in response to the COVID-19 pandemic.

 As a result, the Group expects to report revenues for the half year to 31 October 2020 of £35.9m, up 14% on the prior year (H1 2019: £31.4m), and underlying adjusted EBITDA of £9.7m, up 7% on the prior year (H1 2019: £9.1m), in line with the Board’s expectations.

 

Nakama Group 0.5p £0.6m (NAK.L)

The recruitment consultancy working across the UK and Asia providing recruitment and related services for the web, interactive, digital media, IT and business change sectors, provides a trading and corporate update. As noted in the Company’s announcement of 21 September 2020, the COVID-19 pandemic had an immediate and significant impact on the Group’s trading activities.  The Company has utilised a number of government initiatives in the UK (including the Coronavirus Jobs Retention Scheme), Hong Kong and Singapore in order to preserve cash and retain the businesses ability to continue to trade.

Recent trading has been in line with management’s expectations, as re-set following the onset of the COVID-19 pandemic, but market conditions remain difficult particularly in light of a second wave of the pandemic and continued uncertainty following new national lockdowns.  It remains the Board’s view that as the various government support schemes are ended, the Company will face a number of trading and cashflow challenges and without access to additional capital the Group’s working capital situation may deteriorate. The Company’s largest shareholder has made it clear to the Board that they would not support a fundraise and would vote against the necessary shareholder resolutions to issue new shares.

As such and noting that the UK government support schemes are due to end in Q1 2021, the Board is now exploring a number of options for the Company and its businesses and further announcements will be made as and when appropriate.

 

EPE Special Opportunities Fund 241p £79.4m (ESO.L)

On 12 November 2020 it completed a $2.5 million investment in a segregated account of Prelude Structured Alternatives Master Fund LP, satisfied by cash payment. 

The Prelude account is advised by Atlantic Capital Management Limited  and will invest in distressed credit opportunities, targeting a fund level gross annual return of 6-8%. The Company will invest in the Prelude junior tranche and will benefit from a leveraged position, receiving an equity-like return. The investment strategy of the Prelude account will benefit from increased opportunities generated by the default cycle expected in credit markets over the coming period.

 

Synairgen 123p £246m (SNG.L)

The respiratory drug discovery and development company, today announces the publication of data from the Company’s SG016 trial in The Lancet Respiratory Medicine journal. The SG016 trial randomised 101 hospitalised COVID-19 patients to either SNG001, Synairgen’s inhaled formulation of interferon beta-1a, or placebo. Positive top line results from the trial were originally announced on 20 July 2020, with more detailed results of primary endpoint analyses disclosed in the Company’s 2020 Interim Results on 29 September 2020.

SNG001 was shown to be well tolerated and patients who received the drug had greater odds of improvement and recovered more rapidly. Patients receiving SNG001 had greater odds of improvement across the OSCI scale (OR 2·32; 95% CI: 1·07, 5·04; p=0·033) and were more likely to recover to “no limitation of activity” during treatment (HR 2·19; 95% CI: 1·03, 4·69; p=0·043). There were three deaths in the placebo group and none in the SNG001 group.

 

Alien Metals 1.375p £43.6m (UFO.L)

Since its Earn-in Agreement with Capstone Mining Corp (TSX: CS) over its Donovan 2 Copper-Gold project in Mexico Capstone have commissioned a detailed close spaced surface Induced Polarisation (IP) geophysical survey across the majority of the tenement to both add infill detail to the northern anomaly already defined by Alien and as an extension to historic geophysical work undertaken by Alien.

 

Chaarat Gold 27.9p £151m (CGH.L)

The mining Company with an operating mine in Armenia, and assets at various stages of development in the Kyrgyz Republic, provides an update on the current situation in Armenia.

On 9 November, a peace deal brokered by Russia was agreed between Azerbaijan and Armenia in relation to the Nagorno-Karabakh region. Russia has deployed resources to keep the peace in the region with an initial period of five years and a potential extension for another five years. 

Operational impact to the Company has been limited and management has successfully focused on higher grade areas and treating additional third-party ore purchases. Additionally, transport routes and concentrate shipments have seen minimal impact from the conflict. As a result, Chaarat maintains its annual production guidance of 55,000 gold equivalent ounces  from its Kapan operation. 

 

Panthera Resources 9.5p £8.1m (PAT.L)

Plans to recommence fieldwork at its Bido Project, located in the prolific Boromo greenstone belt within the Birimina terrain of Burkina Faso.

 

  • Geochemical survey to be conducted in the south-central area of the licence
  • Programme to define and rank additional drill targets
  • Multiple gold prospects identified across the Licence area including extensive historical artisanal workings 

 

Head Chef:

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

*A corporate client of Hybridan LLP

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