Small Cap Feast

Small Cap Feast – 15th March 2017

Dish of the Day:

No AIM Joiners Today

Off the Menu:

No AIM Leavers Today

What’s Cooking in the IPO Kitchen?

City A.M reports that at least six companies worth up to an aggregate of £30bn are considering London floats this year. Includes Logicor, 02, Misys, TI Fluid Systems, Kuwait Energy and owner BGL Group. Some of these had been originally anticipated in 2016.

BiopPharmma Credit—Targeting $300m + raise on LSE. “This investment trust will give investors access to debt investments tied to the fast growing life sciences industry, offering predictable cash flows over a sustained period of time.” Admission due 27 Mar.

Tufton Oceanic Assets- The Company intends to invest in a diversified portfolio of second hand commercial sea-going vessels where the Investment Manager believes that an attractive opportunity exists in shipping. $150m raise. Admission 3 April.


Breakfast Buffet

Magnolia Petroleum (MAGP.L) 0.14p £2.45m

US onshore focused oil and gas exploration and production company, announced the results of an independent Reserves Report.  The Report, which is part of the six-month bank debt redetermination process, shows an increase in the Company’s net proved developed producing reserves (‘PDP’) across its leases in US onshore formations. 112% increase in total net PDP oil and condensate reserves to 282.686 mbbl. 303% increase in total net PDP gas reserves to 2,343.116 MMCF. “At US$4million the value assigned to our PDP reserves alone is almost double our current market capitalisation. We are confident the true underlying value of the Company is greater still, as this latest Report on our  leases in Oklahoma and North Dakota did not cover other classes of reserves, most notably in both the proved and  probable categories.”


Scotgold Resources (SGZ.L) 0.52p £8.36m

An update to the Bankable Feasibility Study (“BFS”) for the Cononish Gold and Silver Project dated August 2015 has been completed.  As a result the “Phased Project” development option has been selected as the most favourable overall. Improved economic returns due to both the change in TSF design and higher assumed gold price of £920/oz ($1,150/oz) (previously $1,100/oz). The peak funding requirement reduced from £18.5m to £7.4 million; Life of Mine EBITDA increased from £67m to £100m; Pre tax NPV (10%) of £23m increased to NPV (10%) £43m; The development schedule is now designed in two phases.  The first phase at 3,000 tonnes per month (tpm), the second phase at 6,000 tpm; The Tailings Storage Facility (TSF) is now designed using a “Dry Stack” system; New planning application required. Process expected to complete in 2017.


Petards Group* (PEG.L) 29p £10.31m

FYDec16 results yesterday from developer of advanced security and surveillance systems. Revenues up 17% to £15.3 million. Gross margin up to 36.3% from 35.2% in 2015. EBITDA increased 28% to £1,621,000. Operating profit increased 17% to £1,095,000. Profit after tax £910,000. Cash of £2.3m. Diluted EPS increased 15% to 1.86p. Order book grew by £8 million in the second half of 2016 with orders received from Siemens Mobility, Bombardier Transportation, Greater Western Rail, Hitachi Rail Europe and the MOD.  Closing order book £20 million (2015: £16 million). Current order book includes £12 million scheduled for delivery in 2017. Fwd diluted PE of 14x.


Manx Telecom (MANX.L) 195.5p £220.57m

FYDec16results from the  leading communication solutions provider on the Isle of Man. Revenues up 1.5% to £80.8m. As anticipated, Data Centre revenues fell due to a decline in low margin kit sales and the impact of customer consolidation that occurred in H1. Underlying EBITDA maintained at £27.7m. Underlying free cash flow up 5.1% at £16.4m. Net debt at the period end of £52.4m (2015: £52.2m), maintaining net debt/EBITDA ratio of 1.9x. Final dividend of 7.2p (2015: 6.9p) making 10.9p for the full year (2015: 10.4p). “We remain confident in the outlook for the group, reflected in our commitment to maintain our progressive dividend policy. We continue to generate strong cash flow from our core business, which enables us to support our ongoing investment programme and to create further value for shareholders.”


Turbo Power Systems (TPS.L) 0.2p £6.67m

FYDec 2016 results from the UK based designer and manufacturer of innovative power solutions. Order intake increased 29% in 2016 to £13.89 million. Revenue increased 4% to £13.92 million. Research and development increased 23% to £1.82 million. Adjusted Operating Profit  up 138% at £0.38 million (2015: £0.16 million). Remains dependent on funding from 89.4% shareholder Vale S.A. Brazil’s largest mining company. Strategic review ongoing. Expressions of interest received to date have been indicatively priced at a significant discount to the current share price.


Modern Water (MWG.L) 6.37p £5.07m

FYDec16 from the owner of technologies for water and wastewater treatment and the monitoring of water quality.  Revenue increased 12% to £3.6m. EBITDA loss reduced to £2.5m (2015: £3.7m). Cash outflow reduced to £2.0m (2015: £3.6m); and Cash as at 31 December 2016 was £1.1m (2015: £3.2m). First sale of AMBC technology in India after a successful pilot. First Aquapak order secured, currently being delivered in Oman. “With an un-geared balance sheet, a cash generative Monitoring division, the Membrane division expected to break even in 2018 and a trade finance facility secured, we believe the Group now has the resources in place to become a genuinely sustainable, profitable business.”


Clinigen Group (CLIN.L) 848p £976m

HY Dec16 results from the global pharmaceuticals and services company. Adjusted gross profit up 34% to £59.1m driven by organic growth across all divisions, a full six months contribution from Link Healthcare and currency benefits. Adjusted EPS up 31% to 19.0p. Interim dividend increased 23% to 1.6p. The second half of the year has started positively and the Group is trading in line with the Board’s expectations. The priority is to capitalise on Clinigen’s international market leading positions and geographical footprint in order to drive organic growth across the Group. FYJun17EPS 40.76p.


Mineral & Financial (MAFL.L) 18.63p £5.85m

£500k placing at 15p. The funds raised from the investment company whose purpose is to create value for its shareholders by investing in, financing of, and advising junior mining companies. The proceeds will be used in relation to potential investment opportunities in line with the Company’s investing policy and for general working capital purposes.  Last raised £300k at 10p in February.


Mobile Streams (MOS.L) 3.5p £3.21m

HY trading update. India: Mobile Streams India Private Limited has exceeded the important milestone of reaching 175,000 active subscribers to its games subscription service. This shows strong growth of 34% in a little over 6 weeks since the Company’s last trading update in January 2017. Argentina continues to be difficult with one operator discontinuing its mobile subscription services.  Despite another partner increasing MOS revenue share the net result of these changes is that the Company expects revenue and EBITDA for the current financial year to be materially lower than market expectations.


Frontier Smart (FST.L) 82.5p £33.3m

The pioneer in technologies for Digital Radio and Smart Audio devices, announced that its Minuet technology platform has been chosen by three US brands – Brookstone, Jensen and SŌLIS – to power nine new smart audio devices with Chromecast built-in. The Group is one of a very small number of solution providers working with Google on its Chromecast platform, a pioneering audio technology which enables smart speakers to stream via Wi-Fi over 150 online music services, such as Spotify, Pandora and iHeartRadio. In addition, Frontier recently updated its software, so that all products work with the Google Assistant, which means they can be controlled using voice via a Google Home device.


Head Chef:

Derren Nathan
0203 764 2344

*A corporate client of Hybridan LLP


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