Small Cap Feast

Small Cap Feast – 14th November 2016

Dish of the Day:

Admission to AIM of Angus Energy (ANGS.L). Has raised £3.5m  at  6p.

Off the Menu:

Cancellation of SWP Group following unconditional offer

What’s Cooking in the IPO Kitchen?

United Global—According to Arabian Business the merged UAE Exchange/Travelex is seeking a LSE float in Q3 2017 with 30% of the shares to be made public

Diversified Gas & Oil—The US based gas and oil producer is seeking a December AIM quoting to raise circa $60m

FreeAgent—Schedule one now out from the provider of accounting software to small businesses. Date and quantum of raise still to be disclosed.

Breakfast Buffet

Inspiration Healthcare Group (IHC.L) 62p £18.71m

The global medical device company, announced that the new Inspire rPAP™, a unique resuscitation and stabilisation system, and an enhanced version of the LifeStart neonatal resuscitation unit will be showcased for the first time at MEDICA, the world’s leading trade fair for the medical industry this week. The Inspire rPAP™ is the first medical device which has been entirely developed in-house by Inspiration Healthcare. FYJAN17E revenue £14.35m, PBT £0.51m, EPS 3.1p.

Augean (AUG.L) 52.5p £53.94m

The specialist waste management businesses, announced that Augean North Sea Services (ANSS), as part of its strategic development, has entered into a partnership with Forth Ports Dundee to establish a state of the art facility in Dundee for the management of waste arising from the decommissioning of offshore equipment. The business unit is opening a new 25,000 square feet material transfer facility at the Port of Dundee.  FYDec16E revenue £65.9m, PBT £7.14m, EPS 5.48p, Dividend 0.8p.

Venture Life Group (VLG.L) 55p £20.26m

FYDec16E trading update from the international consumer self-care group focused on developing, manufacturing and commercialising products for the ageing population.  Strong revenue growth seen in H1 has  continued into H2 with the strong order book and strengthening Euro converting into improving revenue. The Group expects to report revenue  of not less than £14.0m, an increase of more than 50%. UltraDEX (oral care) integration proceeding well. Current market expectation £13.65m rev and £1m pre-tax loss

Sterling Energy (SEY.L) 16.75p £36.9m

Q3Sep16 results from  the international exploration and production company, with a focus on Africa. Production, net to the Company (including royalty barrels) from the Chinguetti field, averaged 351 barrels of oil per day  (Q3 2015: 303 bopd). Adjusted Earnings before Interest, Tax, Depreciation and Amortisation and Exploration Expense (‘EBITDAX’) loss for the Group of $992k (Q3 2015: $2.1 million loss).  Net cash of $91m.  Seeking new non executive appointments following last months resignations. Actively seeking M&A.

Directa Plus (DCTA.L) 124.75p £55.16m

The producer and supplier of graphene-based products for use in consumer and industrial markets, has acquired a 60% interest in the issued share capital of Osmotek, involved in the commercialisation and distribution of textile membranes, for a total consideration of €60k to be invested in the business as working capital. Osmotek was incorporated in September 2015 and, in the period from incorporation to 31 October 2016 revenues were approximately €150k and it  reached its target of operating profit breakeven.

Metals Exploration (MTL.L) 5.87p £111.9m

The natural resources exploration and development company with assets in the Pacific Rim region has announced a proposed placing of 10.3m at a price of 5p. The Company has chosen to raise additional finance due to ongoing delays experienced in realising revenue from gold sales and to provide adequate working capital for the continued ramp-up of the Runruno processing plant which is proceeding satisfactorily. US$15m project debt repayment deferred again.

Orchard Funding Group (ORCH.L) 89p £19m

The finance company which specialises in insurance premium finance and the professions funding market, announced FY July 2016 results.  The Group remains cash generative, with revenues in the period increasing by 1.76% to £3.47 million  (31 July 2015: £3.41 million). Net profit fell, mainly due increased costs associated with the AIM listing, delays by the FCA to authorise brokers and additional investment in sales. The fall was to £1m vs £1.03m. Remains committed to implementing progressive dividend policy in 2017.

Castleton Technology (CTP.L) 65.5p £51.56m

H1Sep16 results from the software and managed services provider to the public and not-for-profit sectors.  Revenues of £9.7 million (H1 2015: £8.5 million), of which over 60% are recurring. Maiden pre-tax profit of £0.6m from £1.1m loss. Post period end appointment of Dean Dickinson as CEO with Ian Smith moving to Executive Deputy Chairman.  Expressed confidence that Castleton will maintain its organic growth, whilst increasing profitability by providing more customers with a broader range of complementary services

AFH Financial (AFHP.L) 190p £38.96m

Trading update from the financial planning led wealth management firm. Expects FYOct16   to show continued growth driven by higher average levels of revenue generated by its advisers with a year on year increase in turnover expected to be over 15%, to over £24m. At the year end Funds under Management  exceeded £2bn, driven by double digit growth in monies invested by existing and new clients.  AFH well positioned to continue to take advantage of ongoing IFA market consolidation with  a strong pipeline of potential acquisitions under negotiation .

Akers Biosciences (AKR.L) 240p £17.7m

The developer of rapid health information technologies has reported Q3Sep16 results.  Total Revenue – all from product sales – up 262% to $613k.  Sales of flagship PIFA Heparin/PF4 Rapid Assay products up 341% to $515k entirely from US-based customers. PBT in the quarter of $310k (Q3 2015: $2.3m loss) following the reversal of an allowance for bad debts of $1.3m.  $2m due under Novotek order in China expected in Q4. Expects profitability in Q4 and FY2017.

Head Chef:

Derren Nathan
0203 764 2344
derren.nathan@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”.