Small Cap Feast

Small Cap Feast – 15 October 2020

Dish of the Day:

Kaspi.kz, which operates the Kaspi.kz Super App, Kazakhstan’s most popular mobile app and the gateway to its market leading Payments, Marketplace and Fintech platforms  has conducted a US$870m secondary GDR offer on the LSE.  Priced at US$33.75. Mkt cap $6.5bn.

 

Off the Menu:

No Leavers Today

 

What’s Cooking in the IPO Kitchen?

SourceBio International to list on AIM. Offer TBCDue 29 Oct. Press reports suggest raise of up to £35m.  Services include Healthcare Diagnostics, Genomics, Stability Storage and infectious Disease Testing – since May 2020, the Group has provided COVID-19 Antigen RT-PCR testing services.

Round Hill Music Royalty fund to IPO on the Specialist Fund Segment of the Main Market of the London Stock Exchange, by way of a placing and offer for subscription targeting the issue of 375 million 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.  Due mid-November.

Meritwell II intends to list on the Specialist Funds Segment of the LSE raising up to £250m. The Placing will provide UK institutions with the opportunity to “swap” illiquid holdings which have become time and resource consuming holdings, at their bid price, in return for ordinary shares in the Company. Due 26 Oct.

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 ).   IPSX is a new Regulated Investment Exchange regulated by the FCA and is the world’s first such exchange dedicated to the initial public offering and secondary market trading of companies owning single institutional grade real estate assets and multiple assets with commonality. Due 21 October.

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

Buffettology Smaller Companies Investment Trust— Buffettology is seeking to raise a minimum of £100m via an initial placing, an offer for subscription and an intermediaries offer on the Main Market. will be the Investment Manager to the Company, led by Keith Ashworth-Lord (CIO of Sanford Deland Asset Management Limited). Sanford DeLand manages approximately £1.4bn across two open ended funds, the CFP SDL UK Buffettology Fund and the Free Spirit® Fund.  Due 29 October.

Wheaton precious Metals (TSE:WPM) – Proposed secondary listing on bringing one of the world’s largest precious metal streaming companies to the London Stock Exchange. Due Q4 2020.

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. Targeted for Q4 2020. 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

Breakfast Buffet

Agronomics 5.475p £17.7m (ANIC.L)

The Board at Agronomics confirmed that LIVEKINDLY Collective (“LIVEKINDLY”), a major holding, has completed a capital raise US$ 135 million financing through convertible securities. LIVEKINDLY is building its portfolio of brands that offer plant-based chicken alternatives, including The Fry Family Food Co, Oumph! and LikeMeat. The Company’s equity interest in LIVEKINDLY is currently 1.5%. Agronomics is a leading listed investor in cellular agriculture with a focus on cultivated meat and alternative proteins.

 

Atalaya Mining 185p £254m (ATYM.L)

Q3 operations update. Copper production reached a new record of 14,695 tonnes following the successful ramp up of the 15Mtpa expansion project. 

This production rate is 7.8% higher than in Q2 2020 and is the third consecutive quarter where copper production has exceeded 13,000 tonnes.

In terms of ore milled, 4.0 million tonnes were processed in the Period with consistent daily throughput, except for periods of planned mill maintenance. The increase in copper production during Q3 2020 is mainly attributable to higher than budgeted levels of ore milled which compensated for a short period of lower recoveries while treating some transitional ores. Recoveries for the remainder of 2020 are expected to be within guidance.

 The Company is on track to meet its previously announced 2020 production guidance of 55,000 – 58,000 tonnes of copper demonstrating that the Company has successfully managed the challenges of operating with Covid-19 restrictions. · Copper prices increased during the Period compared with Q2 2020.  The average realised price per pound of copper payable for the Period, including the QPs closed in the period, was $2.72/lb compared with $2.51/lb in Q2 2020. The average copper spot price during the quarter was $2.96/lb. The realised price during the quarter excluding QPs was approximately $2.96/lb.

 

LPA Group 79p £10m (LPA.L)

The high reliability LED lighting and electro-mechanical system manufacturer, announced a significant project award, subject to contract, for the UK rail market.

The award from Siemens Austria is for the design and supply of interior lighting and door status lights for London Underground’s Deep Tube upgrade program.  The initial award is for the supply of lighting systems for 94 newly designed train sets for the Piccadilly Line, with scheduled product deliveries from 2023.  The Deep Tube upgrade program has options for a further 216 train sets across other London Underground deep tube lines.  The train sets are to be manufactured by Siemens Mobility Austria in Vienna and in a new facility in Goole, West Yorkshire, with LPA supply reinforcing UK content within the program. The award is in line with the Company’s management expectations.

 

Ariana Resources 6.15p £65.35m (AAU.L)

The exploration and development company operating in Europe, announced a maiden JORC 2012 Mineral Resource Estimate for the Magellan Project, which is 100% owned and operated by Venus Minerals Ltd.  Venus is focused on the exploration and development of copper and gold assets in Cyprus.  Ariana is earning in to 50% of Venus (currently c. 12%).

JORC Mineral Resource Estimate (stated gross) of 8.5Mt @ 0.63% Cu# (Inferred), with additional potential for gold, silver and zinc-rich zones (up to 0.6 % Zn) across the Klirou and Kokkinoyia Sectors.

JORC Exploration Target of 2.7 to 8.4Mt within a grade range of 0.5 g/t Au to 0.8 g/t Au, for 42,000 oz to 216,000 oz of gold and 3.3 g/t Ag to 8.2 g/t Ag, for 297,000 oz to 2,218,000 oz of silver.

Resources at the Klirou and Kokkinoyia Sectors are open in several directions and particularly down-plunge, beyond 250-350m in depth.

New exploration drilling programme of up to 3,000m to test several target areas within the greenfield exploration portfolio, due to commence imminently.

 

Volex 209p £318m (VLX.L)

The global supplier of integrated manufacturing services and power products, is today issuing a trading update ahead of the scheduled announcement of the group’s interim results for the 26 weeks ended 4 October 2020, on 12 November 2020.  Volex’s performance has continued to improve since the group last updated the market at our Annual General Meeting on 30 July 2020.

Consequently, the board now expects revenue and profitability to be above current market expectations for both the half-year period and the full year as a whole. 

  • Unaudited revenue for the six months ended 4 October 2020 is expected to be at least $200 million, which represents an increase of 2.2 per cent over the same period a year earlier;
  • Underlying operating profit is expected to be at least $20 million, which represents an increase of 25.8 per cent over the same period a year earlier;
  • Net cash excluding lease liabilities as at 2 October 2020 was approximately $31 million.

 

Distil 1.325p £6.65m (DIS.L)

The owner of premium drinks brands including RedLeg Spiced Rum, Blackwoods Gin and Blavod Black Vodka, announced its unaudited interim results for the six months ended 30 September 2020.

  • RedLeg Banana Rum launched into the UK market · Ready-to-drink (“RTD”) RedLeg Pineapple Rum with Franklin & Sons Ginger Ale launched and listed in major UK retailers · Increase in Marketing headcount and investment · Increase in Product Development headcount, resources and investment
  • Revenue increased by 128% to £1,878k (2019: £824k) · Gross profit increased by 107% to £1,032k (2019: £499k) · Volume (litres) increased by 87% · Investment in brand marketing and promotion increased by 158% to £565k (2019: £219k) · Other administration costs increased by 10% to £307k (2019: £279k) · Operating profit of £154k (2019:  1k) · Cash reserves at period end of £570k (2019: £836k).

“Lockdowns and imposed restrictions, particularly on the hospitality sector and international travel, means we have seen a significant short term shift in product mix and source of business away from the On Trade and Travel Retail toward Grocery and online retail channels as consumers stayed home.

While the nature and speed of market recovery is uncertain we will remain responsive, flexible and efficient to ensure we exit this year in a stronger position.”

 

Cerillion 313p £92.38m (CER.L)

Cerillion, the billing, charging and customer relationship management software solutions provider, is pleased to announce an update on trading for the financial year ended 30 September 2020.

Trading Update

Trading over the remainder of the second half continued strongly and, as previously announced, the Company signed its largest ever contract in mid-September. This helped to take the back-order book at the financial year end to a record high. As a result, management now expects revenue and adjusted EBITDA for the financial year to be slightly ahead of current market expectations. Net cash at the year-end is expected to be significantly ahead of market expectations at approximately £7.7m.

 

Osirium 26p £5.1m (OSI.L)

The vendor of cloud-based cybersecurity software, announced a contract win with a leading provider of health services across the UK. The order was secured against competition from two other suppliers of Privileged Access Management (“PAM”) technologies.

The new customer has made a multi-product purchase including Osirium’s PAM solution and 5,000 endpoints of Osirium’s Privileged Endpoint Management (“PEM”) platform. This combination provides them a complete solution from protecting privileged user accounts through to protecting privileges at the end-point level. Osirium’s Professional Services team will assist with the implementation and rollout of both products as part of the contract.

 

GCM Resources 17.75p £19.98m (GCM.L)

Further to its announcements of 11 July 2019, and 13 January 20 20, in respect of the memorandum of understanding  with China Nonferrous Metal Industry’s Foreign Engineering and Construction Co., Ltd. (“NFC”) and Power Construction Corporation of   China, Ltd. (” PowerChina “), it has now signed a framework agreement with NFC, valid for 12 months, in relation to the Company’s world class 572 million tonnes (JORC 2004 compliant) high grade coal resources at the Phulbari Coal and Power Project in North-West Bangladesh .

Pursuant to the Framework Agreement, the Parties have agreed t  establish a joint venture entity, which will be responsible for progressing and implementing the Framework Agreement. GCM and NFC shall meet on a regular basis to discuss and arrange works relating the Project, including but not limited to, the definitive feasibility study and financing. It is intended that NFC will acquire an interest of 5% of the joint venture entity from GCM based upon a valuation of the Project to be agreed upon with GCM or its affiliate or investment partner holding the balance of ownership of the Project.

 

Mosman Oil & Gas 0.185p £3.3m (MSMN.L)

Update on drilling at the Falcon-1 well on the Champion Project in East Texas.

The wireline logs indicate good porosity and hydrocarbons in the primary and secondary Frio sandstone target zones interbedded with shale between circa 7100 to 7550 feet TVD. The primary zone is circa 90 feet thick. The mud logs also showed hydrocarbons in these zones with an increase in mud gas readings from a background of circa 30 units to over 3000 units in the primary zone. 

 

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Derren Nathan
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