Small Cap Feast

Small Cap Feast – 14th June 2022

Dish of the Day:

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What’s Cooking in the IPO Kitchen?

LifeSafe Holdings, a fire safety technology business with innovative fire safety products, intends to join AIM. LifeSafe has developed what the Directors believe to be market disrupting, eco-friendly fire safety protection products to both protect (via fire extinguishers) and detect (via carbon monoxide, smoke and heat alarms) fires. At the centre of the Group’s product range is the FER1000 extinguishing fluid, which has been developed by LifeSafe to extinguish five different types of fire: electrical, paper, textiles, cooking oil, and petrol and diesel. The Group’s best-selling product using this patent pending extinguishing fluid is the StaySafe 5-in-1 fire extinguisher. It was launched on Amazon Prime in the UK in August 2021 and subsequently became Amazon Prime’s top selling fire extinguisher in the UK in the same month. In n the year ended 31 December 2021, the Group generated revenues of £670k and a loss post taxation of £1.5m. £3m to be raised. Due early July 2022.
Disko Exploration. Bluejay Mining (JAY.L) is undertaking a review into a demerger and potential separate stock market listing, on a London based stock exchange of its wholly owned subsidiary Disko Exploration Limited. Disko currently holds the following interests: 1. Disko-Nuussuaq nickel-copper-cobalt-PGE project in Greenland which entered into a definitive joint venture agreement with KoBold Metals Company to execute an extensive exploration program in 2022 for battery metals (49% owned by Disko). 2. Kangerluarsuk, a 100% owned lead-zinc-silver project in Greenland. 3. Thunderstone, a 100% owned gold-base metals & REE project in Greenland. Timing TBC.
AssetCo plc, intends to join re-join AIM. The Company’s strategy is to develop an agile asset and wealth management company that meets the needs of investors in the 21st century by acquiring, managing and operating asset and wealth management activities and interests, together with other related services. The Company is in the process of acquiring the entire issued share capital of River and Mercantile Group plc (RMG), via a reverse takeover and therefore a Readmission Document is required for the enlarged group. Due 15 June 2022.
Altona Rare Earths, the AQSE listed mining exploration Company focused on the evaluation, acquisition and development of Rare Earth Elements mining projects in Africa, intends to join the Main Market. Admission to trading of the Company’s Ordinary Shares on the AQSE Growth Market will be cancelled simultaneously with Admission. It is also proposed that on Admission, the Company will change its EPIC from AQSE:ANR to REE. The Company also seeks to raise funds to finance its current and future rare earths mining projects in Southern and Eastern Africa. Due June 2022.
Silverwood Brands (AQSE:SLWD), has signed a conditional share purchase agreement for the acquisition by the Company of Balmonds Skincare Ltd, a UK based skincare company that manufactures cosmetic skincare products primarily for consumers who suffer from skin conditions such as eczema, psoriasis and dermatitis. Balmonds’ product line is made from natural ingredients that work to protect and hydrate sore and inflamed skin. The proposed acquisition of Balmonds constitutes a reverse takeover under the AQSE Growth Market Rules. AGM to be held on 15 June 2022.

Breakfast Buffet

Aferian 130p £110.7m (AFRN.L)

The B2B video streaming solution company, announces a trading update for the six months ended 31 May 2022. The Group has continued to make strong progress in improving the quality of earnings and enhancing revenue visibility. It expects to report exit run rate Annual Recurring Revenue of approximately $15.8m (H1 2021: $13.8m), which represents 16% growth versus the prior year, or 26% on a constant currency basis. Higher margin software and services revenue is expected to be approximately $12m (H1 2021: $9.9m), an increase of 21%, or 28% on a constant currency basis. Device revenues in the first half are expected to be approximately $33m, a decrease of c.8% year-on-year. These have been impacted by shipping and production delays as a result of the challenges faced due to COVID-19 related lockdowns in China, and the associated difficulties in delivering devices to customers. To mitigate against further potential delays, second half production has been weighted into Q3. The Board expects the order book to drive device revenues higher in the second half of the year. Consequently, Group revenue for the period is expected to be approximately $45m (H1 2021: $45.3m). The Group’s balance sheet remains strong and as at 31 May 2022 the Group had net cash of $7.6m, and undrawn credit facilities of $50m.

Bezant Resources 0.14p £6.8m (BZT.L)

The copper-gold exploration and development company, reported results of the Gorob drill programme targeting previously untested near-surface copper – gold mineralisation on the Hope and Gorob Project in Namibia. Drill assay results received to date for eight diamond drillholes testing near-surface copper mineralisation at the Gorob Prospect returned significant intercepts, including 2.16% Cu, 0.35g/t Au over 2.4 metres in hole GRD006 and 2.03% Cu, 0.18g/t Au over 5.5m in GRD003. These holes are part of a 23-hole programme recently completed over 5 prospects (Gorob, Anomaly, Vendome, Du Preez and Hope) within the Hope and Gorob Licence. The assays to date confirm that strong copper-gold mineralisation extends to surface from the deeper historic drill intercepts. This recent work by the Company indicates scope for additional open pit potential at several sites across the wider licence area, in addition to the already established underground resources. Further strike extensions remain to be tested over a minimum strike length of 3km.

Clontarf Energy 0.09p £2.0m (CLON.L)

Completion of the Sasanof-1 exploration well, located 207 km northwest of Onslow, Western Australia: The Sasanof-1 exploration well was drilled by the Valaris MS-1 semi-submersible without incident. The rig has de-mobilised from the well location, and departed exploration permit WA-519-P on 12 June 2022. The well has been plugged and permanently abandoned, with wellhead infrastructure removed. The well was drilled to a total depth of 2,390 metres on 5 June 2022 and intersected the Lower Barrow Group target sands at a depth of 2252.9 metres true vertical depth sub-sea (TVDSS), just 3.9 metres below the pre-drill prediction. A preliminary evaluation indicates 40 metres of net sand was encountered. However, logs confirmed that the sands contained water, and no commercial hydrocarbons were detected. Initial technical analysis indicates that the expected western seal of the targeted stratigraphic trap was breached allowing migration of gas out of the Prospect. As planned, the well cost under US$25m with a duration of 25 days.

Frontier Development 1,306p £514.9m (FDEV.L)

The developer and publisher of videogames based in Cambridge, UK , provides an update on trading for financial year FY22, the 12 months ended 31 May 2022. Record revenue (unaudited) of £114m in FY22, an increase of 26% on the previous year. Jurassic World Evolution 2 base game unit sales exceeded 1.3m units. Warhammer 40,000: Chaos Gate – Daemonhunters performing ahead of expectations. FY22 cash profit (adjusted EBITDA) in line with expectations (subject to audit). Accounting profit (IFRS operating profit) reduced by a one-off amortisation charge. FY23 releases to include Jurassic World Evolution 2: Dominion Biosyn Expansion and F1® Manager 2022 in June and August 2022 respectively, plus three new Foundry titles.

Ixico 37.5p £18.1m (IXI.L)

The neuroimaging Contract Research Organisation (CRO) delivering advanced AI analytical insights in neuroscience, announced that an existing client has asked IXICO to extend its breadth of services to them on their phase I/II trial into HD, which was originally announced in April 2019. This results in a contract extension worth circa £0.8m which IXICO expects to deliver across a period of 4 years. HD is a rare, inherited disease that causes the progressive breakdown of nerve cells in the brain affecting movement, mood and thinking abilities.

MJ Hudson 40.25p £68.6m (MJH.L)

MJ Hudson, the end-to-end solutions provider to the asset management industry, today announces a new strategic partnership with leading restructuring practice, Cork Gully, providing MJ Hudson and its clients with access to the growing market for private markets fund restructurings and further extending the full-service solutions provided by the Group. Pursuant to this partnership, Cork Gully will provide restructuring, insolvency, and supplemental and replacement manager services. The Company expects that its existing clients will have a need for these services and may prefer to access them through its trusted adviser, MJ Hudson, rather than an additional third party. MJ Hudson will also provide its existing services to Cork Gully’s clients, such as regulatory advice, fund and manager domiciliation, legal services, and fund administration services. Fund restructurings may be desirable as a result of strategic changes to an investment programme, or where a successful investment vehicle needs to restructure in order to capture additional value creation opportunities in the portfolio. Restructurings may also be necessary where the structure or a connected party is under stress due to economic, public health, or political events.

MyHealthChecked 1.6p £12.5m (MHC.L)

The consumer home-testing healthcare company, announces that it has launched 5 new at-home cheek swab DNA wellness tests, enabling individuals to make more informed choices about their health and well-being by providing a better understanding of their genetic disposition. The tests are designed to give individuals the power to be more proactive in unlocking their health potential through the management of diet and lifestyle. Each of the tests will be priced at £54 and the tests currently available to purchase are: Intolerances & Sensitivities; to identify genetic variants associated with intolerances, such as gluten and lactose, as well as sensitivities, including caffeine, salt and alcohol. Weight Management; intended for use by those wishing to identify their genetic susceptibility to becoming overweight and their responsiveness to weight loss interventions at a molecular and metabolic level, including genetic interactions. Heart Profile; identifying how individuals respond differently to diet. This will facilitate optimisation of heart health parameters by using personalised dietary advice. Vitamins & Minerals; this test indicates the predisposition towards a nutrient deficiency or toxicity, to highlight nutrients or supplements an individual should increase or deprioritise. Glucose Management; for individuals who aim to follow a tailored diet to adjust their intake of specific nutrients or foods to improve their glucose response.

Open Orphan 12.8p £85.5m (ORPH.L)

The rapidly growing specialist contract research organisation (CRO) and world leader in testing infectious and respiratory disease products using human challenge clinical trials, announces that hVIVO, a subsidiary of Open Orphan, has signed a £7.2m contract with an existing top 5 global pharmaceutical company to test its orally administered antiviral product, using hVIVO’s respiratory syncytial virus (RSV) Human Challenge Study Model. The Phase 2a double-blinded placebo-controlled human challenge study will take place at the Company’s specialist quarantine facilities in Whitechapel and will evaluate the safety and efficacy profile of the antiviral against RSV. The study will commence in June 2022, with the revenue being recognised in 2022 and 2023. As part of the study, hVIVO will recruit healthy volunteers via the Company’s dedicated volunteer recruitment arm, FluCamp. The client’s antiviral is presently in Phase III clinical trials for another infectious disease indication and the client will use human challenge to assess the efficacy of their antiviral drug candidate against RSV quickly and efficiently, highlighting the value that human challenge studies can bring within the drug development process. The repeat business from this top 5 global pharmaceutical company underlines the Company’s world leading expertise and its ability to attract additional contracts from its existing Big Pharma clients.

Synectics 106p £18.9m (SNX.L)

The specialist in the design, integration and support of advanced security and surveillance systems, provides a trading update for the six months ended 31 May 2022. Activity levels in the major end-user markets that Synectics serves generally continue to gather momentum, particularly in Oil & Gas and in US gaming. That recovery is as yet less evident in casinos and gaming resorts in Asia-Pacific where leisure travel has remained subdued. Although there are signs of increased customer activity in this region, firm business remains patchy and difficult to predict. Trading in H1 2022 was in line with the Board’s expectations and produced a considerable positive turnaround from the same period last year, with operating profits expected to be at a broadly similar level to the seasonally stronger second half of last year. Operating profit for H1 2022 is estimated to be approximately £0.4m (H1 2021: operating loss £0.8m) on revenues of approximately £23.0m (H1 2021: £22.0m). Net cash as at 31 May 2022 was approximately £3.9m (31 May 2021: £3.5m).

Windward 107.5p £89.2m (WNWD.L)

The Maritime AI company, announced today a new AI capability integrated into its recently launched Ocean Freight Visibility (OFV) solution. Using deep learning technology, the solution fuses data from a multitude of independent sources to deliver accurate and reliable ETA predictions and real-time visibility into container and vessel journeys, providing Windward customers with the ability to plan according to ongoing changes and disruptions to the supply chain. Ami Daniel, Co-Founder and CEO of Windward said: “Our revolutionary new AI model is fundamental for any stakeholder involved in the supply chain, and is a culmination of 18 months of development and over 12 years of aggregated data, marine intelligence, advanced algorithms, and domain expertise.” “The result is a new standard for predicting and measuring arrivals across all carriers and continents. The solution provides our customers and partners with the most accurate prediction of containers’ expected arrival time at their Port of Discharge (POD) throughout the entire voyage, a critical advantage in a new world that is constantly grappling with global supply chain disruptions.”

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