Small Cap Feast

Small Cap Feast – 17 February 2021

Dish of the Day:

4basebio UK Societas  (4BB.L) is a specialist life sciences group focused on therapeutic DNA for gene therapies and DNA vaccines and providing solutions for effective and safe delivery of these DNA based products to patients.  The Company has been divested from 4basebio AG , a German company listed on the Prime Standard segment of the Frankfurt Stock Exchange . No capital to be raised on Admission. Anticipated market capitalisation on AIM Admission today: £14.53m.

 

Off the Menu:

No Leavers Today

 

What’s Cooking in the IPO Kitchen?

AMTE Power,  a developer and manufacturer of lithium-ion battery cells for specialist markets, announced its intention to seek admission to trading on AIM. Admission is expected to take place during March 2021. The Company intends to raise approximately £7 million by way of a placing of new ordinary shares in the capital of the Company. Timing TBC.

Samarkand Group Limited, the cross-border eCommerce technology and retail group opening up the world’s largest market for brands and retailers, intends to IPO on  the Apex Segment Aquis Stock Exchange Growth Market. Admission is targeted for March 2021.

Cellular Goods a UK-based provider of premium consumer products based on biosynthetic cannabinoids announced its intention to join the main market (standard) this Spring.   Target valuation £20m raising c. £8m “to finalise the development and launch of a range of the Company’s premium-quality consumer products based on biosynthetic cannabinoids, which is fully compliant under UK law.”

NextEnergy Renewables  to launch an IPO on the Main Market. NREN is a differentiated renewables investment company that aims to capture the most attractive private renewables and energy transition infrastructure investment opportunities globally.  Targeting a £300m raise.   NREN is targeting total returns of 9-11 per cent. per annum (net of all fees and expenses but including the Target Dividend and capital appreciation) . The Company’s target dividend yield for the first full financial year to 31 December 2022 is 5.5 pence. Due Early March 2021.

Auction Technology Group is considering an IPO on the Main Market.  The Group operates six world-leading online Marketplaces and proprietary global auction platform technology for curated online auctions .  In FY20 the Group delivered pro forma revenue of £52.3 million, supported by notable underlying year-on-year growth from both Standalone ATG Group and Standalone Proxibid Group (12.4 per cent. and 40.4 per cent., respectively). For the same period, the Group delivered a strong profitability performance of £22.3 million pro forma Adjusted EBITDA representing a pro forma Adjusted EBITDA margin of 42.6 per cent. Expected March 2021.

Digital 9 Infrastructure launch an initial public offering  on the Specialist Fund Segment of the Main Market of the London Stock Exchange, by way of an initial placing and offer for subscription for a target issue £400m. Digital 9 Infrastructure plc is a newly established, externally managed investment trust. The Company will invest in a range of digital infrastructure assets which deliver a reliable, functioning internet. The IPO Prospectus is expected to be  published in March 2021.

 

Breakfast Buffet

Total Produce 161.5p £627m (TOT.L)

Total Produce To Combine With Dole Food Company And Become Publicly Listed In The U.S.  Under the terms of the Agreement, Total Produce shareholders will receive 82.5% of Dole plc shares and the C&C shareholders will receive 17.5% of Dole plc shares, in each case based on the fully diluted outstanding shares immediately prior to the completion of the Transaction.

  • Dole plc will be the global #1 in fresh produce with estimated combined 2020 revenue of approximately US$9.7 billion, Adjusted EBITDA of approximately US$379 million and total assets of approximately US$4.5 billion.

Supported by the delivery of synergies and improved trading characteristics in the U.S. public market, successful completion of the Transaction is expected to create significant value equivalent to at least €2.15 per Total Produce share (a +46%   increase on yesterday’s closing share price) based on achieving the minimum agreed valuation of US$215 million (as a condition set forth in the Agreement) for the 17.5% stake in Dole plc owned by the C&C shareholders on a fully diluted basis immediately prior to completion of the Transaction .

 

Ceres Power 1431p £2464m (CWR.L)

The specialist  in fuel cell technology, provided a post period end trading update ahead of the announcement of its audited results for the 18 months ended 31 December 2020, which will be released on Thursday 18 March 2021.

Revenue and other operating income for the 18-month period to 31 December 2020 will be around £32-33 million, above market expectations.  The order book and pipeline were £54 million and £44 million respectively at 31 December 2020, compared to £22 million and £50 million at 31 December 2019. Cash and short-term investments were approximately £110 million at 31 December 2020, higher than expected as a result of positive working capital movements

Doosan signed a manufacturing licence with a target capacity of 50MW in 2024 and also extended its systems partnership with Ceres to target higher power utility scale applications. · Bosch has also strengthened its partnership with Ceres having passed a key development milestone in December 2020. It is now preparing to scale up to mass manufacture and targeting production capacity of 200MW in 2024. Weichai continues its bus trials employing Ceres’ SteelCell® due to complete in H1 2021 as a key step towards establishing a Joint Venture between Weichai and Ceres in China in mid-2021

 Focus remains on supporting manufacturing partners in scaling up their production capabilities towards mass market launches in 2024 which will trigger royalty payments to Ceres.  Ceres and Weichai intend to establish a joint venture in mid-2021, following the successful conclusion of the bus trial.  Ceres plans to continue the development of solid oxide electrolysis for green hydrogen production targeting industrial applications, following successful initial R&D stage.

 

PetroNeft Resources 1.45p £12.17m (PTR.L)

The oil & gas exploration and production company, operating in the Tomsk Oblast, Russian Federation, and 50% owner and operator of Licences 61 and 67, provided a financing update.  New $2.9m convertible loan facility providing greater headroom to develop value with a group of thirteen lenders that matures in March 2023. 

The loan facility will be used for general corporate and ongoing operational purposes and carries an interest rate of 8% above the base rate of the Bank of England. Lenders can elect at any time to convert up to 75% of the outstanding loan to shares at a conversion price of £0.02 in year 1 and £0.025 in year 2.

The funding secured by the Company will support key operational priorities which are expected to deliver considerable news flow in the near to medium term, these priorities include:

  • Licence 67; bringing the Cheremshanskoye field on stream for year round production and completing the infield infrastructure work including the all season road. Mobilising to the Ledovoye field to carry out a work over program aimed at proving up well productivity to enable field production.  Continuing to improve our knowledge and understanding of the two fields to optimise the capital allocation model for future development plans.
  • Licence 61; continuing to improve production performance through selected low capital but high reward projects such as the current fracking program and optimisation of water flood programs at the fields. The Company is also focused on analysing ways to unlock the significant potential within the northern hub complex being the West Lineynoye and Sibkrayevskoye fields, and the large Emtorskaya prospect.

 

Silence Therapeutics 598p £534.6m (SLN.L)

The specialist in the discovery,   development and delivery of novel short interfering ribonucleic acid (siRNA) therapeutics for the treatment of diseases with significant unmet medical need, today announced that it has started dosing subjects in the APOLLO Phase I clinical study of its wholly owned lead product candidate, SLN360, for the treatment of elevated Lipoprotein (a) – or Lp(a) – levels.

 This first-in-human study is investigating the safety, tolerability, pharmacokinetic and pharmacodynamic response of SLN360 in people with elevated Lp(a) levels approximately ≥60 mg/dL. The APOLLO trial is a global, randomized, double-blind, placebo controlled, single-ascending and multiple-ascending dose study enrolling approximately 88 subjects total in up to nine cohorts.

 

Evgen Pharma 9.5p £13.05m (EVG.L)

The clinical stage drug development company, announces that as of 16 February, a total of 102 patients had been recruited and randomised to the STAR trial (“SFX-01 Treatment for Acute Respiratory infections”).

This Phase II/III trial is a randomised, placebo-controlled trial, sponsored by the University of Dundee and funded by the UK charity LifeArc. It is investigating whether the Company’s lead asset, SFX-01, can reduce the severity, or prevent the onset of, acute respiratory distress syndrome (“ARDS”) in patients with suspected COVID-19. Patients may be included in the study if they are infected with SARS-CoV-2 or another respiratory infections causing community-acquired pneumonia.

The trial design includes an assessment of safety and futility by a Data Safety and Monitoring Board (“DSMB”) who will review unblinded data on the first 100 patients treated. In addition to the DSMB safety and futility assessment, Dundee University (“the Sponsor”) has decided to review the top-level unblinded data in a preliminary assessment of possible efficacy. This may lead to adjustments to the design of the trial for remaining patients, including in patient numbers, and possibly early termination for either safety, futility or alternatively, strong efficacy. It is expected that this initial data will be available during the second quarter of calendar 2021.

 

Creo Medical 224p £354m (CREO.L)

The medical device company focused on the emerging field of surgical endoscopy, announces that trading for the year ended 31 December 2020 was marginally ahead of management expectations, with revenue for the year ended 31 December 2020 increasing to over £9m (2019: £0.01m).   The Company had a net cash position at 31 December 2020 in excess of £45m.

During 2020, the Company demonstrated commercial progress with the transformational acquisitions of Albyn Medical S.L. and Boucart Medical SRL. The acquisitions provide the Company with a direct sales presence in Europe to facilitate the roll-out of its CE marked advanced energy devices, and strengthen Creo’s EU and UK commercial teams. The integration of these businesses have performed in line with management’s expectations.

In addition, the Company has grown its commercial team organically.  David Woods, previously a non-executive director of Creo and former President and CEO of PENTAX Americas, joined Creo full time as Chief Commercial Officer.

 

Ariana Resources 4.75p £51m (AAU.L)

The AIM-listed exploration and development company operating in Europe, announced the completion of its transformational joint venture with Ö zaltin Holding A.S. and Proccea Construction Co., following the satisfaction of all conditions precedent.

  • JV formalised on the terms summarised on 7 December 2020, ratified by shareholders on 30 December and approved by the Competition Authority in Turkey on the 19 January 2021.
  • Expanded Joint Venture with Özaltin and Proccea involves the partial disposal of the Company’s interests in Turkey in exchange for US$37.75 million in cash before costs and taxation (inclusive of the sale of the Satellite Projects).
  • Ariana and Proccea retain a 23.5% interest each in the expanded Joint Venture, with Ö zaltin owning 53%.
  • US$8 million being committed by Özaltin to a Feasibility Study, Environmental Impact Assessment and additional permitting at the Salinbas Project.
  • Process plant expansion at Kiziltepe well underway, with completion expected in H2 2021.
  • Drilling programme to test vein extensions at Kiziltepe ongoing.

 

ECSC Group 72.5p £7.3m (ECSC.L)

The provider of cyber security services, announced two significant contract wins in its Managed Detection and Response (MDR) division for one of the UK’s major charities and a national leisure group. 

ECSC will provide 24/7/365 cyber security monitoring, detection and response support from the Group’s Security Operations Centres (SOCs) located in the UK and Australia, employing its proprietary Kepler Artificial Intelligence (AI) technology to deliver an enhanced service.

The contracts, both of which are for an initial period of three years, have a combined revenue value in excess of £550,000. Revenues will be recognised throughout the duration of the contracts.

In addition, during January 2021, ECSC gained eleven new clients within its Assurance Division for a wide range of consultancy engagements across a number of diverse industries. ECSC’s Assurance Division helps organisations test their cyber security, prevent breaches and achieve industry certifications.

 

Pressure Technologies 106.5p £33.1m (PRES.L)

The specialist engineering group, announced that the outstanding principal of £3.1 million on the Promissory Note, payable under the Framework Agreement with Greenlane Renewables Inc., Creation Partners LLP and Brad Douville announced on 3 July 2020, has been repaid in full, together with an interest payment of £0.3 million.

Repayment has been made earlier than the previously announced Promissory Note final maturity date of 30 June 2021 and concludes all arrangements made under the Framework Agreement.

The total consideration received by the Group for the disposal of PT Biogas Holdings Limited in June 2019 is £10.1 million.  As previously outlined, the proceeds will be used to reduce the Group’s debt.

 

Jangada Mines 11.75p £28.45m (JAN.L)

Jangada Mines plc, a natural resources company, notes the announcement released on 16 February 2021 by TSX-V listed ValOre Metals Corp. (‘ValOre’), in which Jangada holds a 18.03 per cent interest. Valore announced the intent to increase the size of the previously announced non-brokered private placement on January 29, 2021 from C$3,600,000 to C$8,330,000.

 

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Derren Nathan
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