Small Cap Feast

Small Cap Feast – 15 May 2020

Dish of the Day:

No Joiners Today

 

Off the Menu:

No Leavers Today

 

What’s Cooking in the IPO Kitchen?

The pantry is empty, again!

 

Breakfast Buffet

EKF Diagnostics 47.2p £214.5m (EKF.L)

The Company announced on 27 April 2020 that it expected further orders worth over $3m for May and that it was in the process of doubling capacity at its Boerne, Texas site for the reagent used in the manufacture of the Primestore MTM device, in order to fulfil those orders and anticipated additional future orders. EKF now confirms that it has received further orders from Longhorn totalling $9.4m for the two months ending July. The majority of these further orders will be for the same core reagent manufactured by EKF.

The additional contribution now indicated for June under the Longhorn manufacturing contract means that the Company expects to further exceed the overall management budgets for H1 2020 more confidently than was noted on 27 April. EKF now expects to deliver Group revenues of at least £25m for the six months ended 30 June 2020 (H1 2019: £21.44m) and adjusted EBITDA of at least £7.5m, a 34% increase on the same period last year (H1 2019: £5.58m).

 

Venture Life 68p £57m (VLG.L)

The specialist in developing, manufacturing and commercialising products for the international self-care market, notes the research published yesterday in the journal Function, which supports the idea that using mouthwash should be considered as a way to reduce transmission of enveloped viruses such as COVID-19. The findings made reference to mouthwashes containing, among other things, cetylpyridinium chloride (CPC), which is the main ingredient in Venture Life’s key mouthwash brand – Dentyl Dual Action.

 

Keywords Studios 1493p £980m (KWS.L)

Completion of placing raising gross proceeds of approximately £100 million. Placing Shares have been issued at a price of 1,450 pence. Despite the background of the gaming industry’s general resilience to COVID-19 and structural growth drivers, the Group is expecting to see some stress in predominantly smaller service providers, which are typically single location and service with fewer clients and less able to weather the disruption.   This is likely to result in an increased number of acquisition opportunities for Keywords Studios, with some targets now more inclined to re-engage previously stale exploratory conversations.

 

AVACTA Group 126p  £262m (AVCT.L)

Several of the Affimer reagents recently generated for development of a point-of-care COVID-19 antigen saliva test have now also been shown to block the interaction between the virus’ spike protein and ACE2, a receptor on human cells that is key to the virus infection pathway.

Avacta has already successfully generated a large number of Affimer reagents that bind to the SARS-COV-2 virus’ spike protein as part of its partnership with Cytiva (formerly GE Healthcare Life Sciences and now part of Danaher Corp). As previously announced, Avacta and Cytiva are working together to develop a rapid point-of-care COVID-19 antigen saliva test to be mass produced for large-scale population screening and for self-testing by consumers. Large pharmaceutical companies, such as AstraZeneca and GSK, are now starting programmes to develop neutralising antibodies in an attempt to block the SARS-COV-2 spike protein’s interaction with ACE2. Avacta has now demonstrated that several Affimer reagents also perform this blocking function and the Company is now seeking a partner that has the resources available to develop a neutralising Affimer therapy as quickly as possible.

 

Sumo Group 188p £285m (SUMO.L)

Acquisition of Lab42, a cross-platform work for hire studio, providing co-development and full game development services, for a total cash consideration of $0.6 million. The Lab42 studio has worked on 17 projects for console, PC and mobile, since it was established in January 2015. Past and present clients include Sega Europe Publishing, Klei Entertainment, Aspyr, Ripstone, Dovetail Games and Payload Studios. Lab42 holds an exclusive licence to use the World Snooker Tour brand and was sole developer on the photo-realistic, sports simulation game Snooker 19 for all major consoles and PC, published by Ripstone. In the year ended 31 December 2019, Lab42 reported unaudited revenue of £1.4m.

 

D4t4 Solutions 177.5p £71.5m (D4T4.L)

Launch of Celebrus Version 9.2 with newly embedded machine learning (ML) and natural language processing (NLP) capabilities. Celebrus, D4t4’s enterprise software solution, captures and instantly activates data across all digital channels to enable customer analytics and hyper-personalisation through one-to-one marketing in real-time. “Celebrus 9.2 will provide our global enterprise customers with a notable advantage when it comes to the capture and instant activation of vast amounts of customer intent data in real-time.”

 

Sunrise Resources 0.125p £4.1m (SRES.L)

Further to its announcement of 26 March 2020, that the Environmental Assessment (EA) and Supplemental Environmental Reports (SERs) for its CS Pozzolan-Perlite Project in Nevada, USA has been released for public comment. “We will move to initiate first production of perlite and natural pozzolan for larger scale customer trials as soon as possible after we receive a positive permitting decision with the expectation that this will transition to commercial production in due course on the commitment of potential customers to sales contracts.”

 

TruFin 16p £12.9m (TRU.L)

FY Dec19 results from the group of companies that are niche lenders and early payment providers. ·      Gross revenues from continuing operations were £7.3m for the year ended 31 December 2019, representing year-on-year growth of 68%

  • Loss before tax from continuing operations excluding share-based payment charge was £9.3m
  • During 2019 the Group demerged Distribution Capital Finance Ltd , sold its stake in Zopa Group Limited and acquired majority stakes in Playstack Limited and Vertus Capital Limited.

Group revenues for Q1 2020 were £2.1m (unaudited), representing growth of 36% over the same period in 2019

  • Despite the headwind from the Covid-19 pandemic, April 2020 saw the Group experience revenue growth of not less than 45% over April 2019 (unaudited).

 

boohoo Group 355p £4.2bn (BOO.L)

Further to the announcement made on 14 May 2020 entitled “Proposed Accelerated Bookbuild to raise gross proceeds of up to approximately £200 million”, the Bookbuild has closed and the Group has raised gross proceeds of £197.7 million at 34op. The Group intends to use the net proceeds of the Placing to take advantage of numerous opportunities that are likely to emerge in the global fashion industry over the coming months. The Group continues to review a number of possible M&A opportunities and will update shareholders as required.

 

Arc Minerals 1.78 £13.1m (ARCM.L)

£2.37m raise at 1.7p. The company will utilise the proceeds from the Placing to fund the drilling programme across the Zamsort and Zaco licences targeting exploration works over the anomalies that have been identified and for further technical studies on the Cheyeza East prospect, as well as for general working capital purposes. $1.5m of convertible notes also converting at 1.7p.

 

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”.