Small Cap Feast

Small Cap Feast – 17th May 2022

Dish of the Day:

BSF Enterprise. Following the successful reverse takeover of 3D Bio-Tissues Limited, a tissue engineering business based in Newcastle, UK, the Company announces admission of the enlarged group to the standard segment of the Official List and initiation of trading on the Main Market under the ticker ‘ BSFA ‘. The Admission follows a placing which raised £1.75m at a placing price of 7.37 pence per share.

Off the Menu:

No Leavers Today.

What’s Cooking in the IPO Kitchen?

Psych Capital PLC, intends to list on the AQSE Growth Market. Psych operates the Psych Platform (a business-to-business networking platform), that is developing the Blossom Database pursuant to a third party licensing arrangement. The Company also has an investment of 426,000 common shares in Awakn, a Canadian NEO Exchange listed psychedelics research and clinical group, with operations in the UK and Europe. Psych is developing the Blossom Database pursuant to a third-party licensing arrangement, and Psych will work to develop an artificial intelligence platform that will provide biotech companies advanced clinical data that will be able to fast-track drug development and loop back the real-world data, in a centralised database, to provide feedback on molecules and associated therapy programmes. Due 30th May 2022.
Lekoil, the oil and gas exploration and production Company with a focus on Nigeria and West Africa intends to join the AQSE Growth Market. The Company was previously listed on AIM (LEK.L), however, Ordinary Shares have been suspended from trading on AIM since October 2021. Due 18th May 2022.
EnSilica, intends to join AIM. EnSilica is a designer and supplier of mixed signal Application Specific Integrated Circuits (ASICs). The Company has expertise in designing complex mixed signal ASICs, which combine digital and analogue functions onto a single chip. Mkt Cap TBC. Due late May 2022.
Altona Rare Earths, the AQSE listed mining exploration Company focused on the evaluation, acquisition and development of Rare Earth Elements mining projects in Africa, intends to join the Main Market. Admission to trading of the Company’s Ordinary Shares on the AQSE Growth Market will be cancelled simultaneously with Admission. It is also proposed that on Admission, the Company will change its EPIC from AQSE:ANR to REE. The Company also seeks to raise funds to finance its current and future rare earths mining projects in Southern and Eastern Africa. Due May 2022.

Breakfast Buffet

accesso Technologies 740p £305.4m (ACSO.L)

The premier technology solutions provider to leisure, entertainment and cultural markets, will hold its Annual General Meeting at 10.00 am today. The meeting will be held at Unit 5, The Pavilions, Ruscombe Park, Twyford, Berkshire, RG10 9NN. In the meeting, accesso CEO Steve Brown will provide the following commentary on the Group’s recent trading: “I’m very pleased with how accesso has started 2022. We’ve continued our momentum from 2021 and we are executing in line with our plan for the year. Technology like ours is now a must-have for attraction operators across our industry who are working harder than ever to put guest experience at the forefront of their thinking. Our solutions enable them to drive revenue, reduce costs and create memorable customer propositions all at once. This year we’re continuing to invest to ensure we capture as much of our opportunity as possible, and with our team working with more motivation than ever, we’re excited about the future for our business”.

Crossword Cybersecurity* 28.5p £21.4m (CCS.L)

The cyber security solutions company focused on cyber strategy and risk, announces that further to its recent announcements, the Company will be hosting an update on the Investor Meet Company platform on today at 2.00pm. In the meeting, the CEO will announce that the Company has had a strong start to 2022, building on the momentum made in 2021. The roll out of Rizikon, Crossword’s leading product, to membership organisations continues, with the Company aiming to have 1,000 users of Rizikon by the end 2022. In 2022, Crossword commenced its first engagement with a FTSE 100 company, delivering high end cyber consulting services. Additionally, contracts have been entered into with clients in two new overseas jurisdictions in 2022; one a government institution. The acquisition of Threat Status Limited completed in March 2022, was the Company’s third acquisition in 12 months. Threat Status Limited is a cyber intelligence company, and its two product Trillion and Arc, bring the Company’s SaaS product portfolio to five products. The Company will continue to focus on revenue growth in 2022, and expects to deliver the Company and market expectations of 75% revenue growth. Cross selling products and services, new client acquisition and bringing Identiproof to market, will drive organic growth. Having undertaken three successful acquisitions in the last twelve months, the Company expects to be in position to drive future growth with other acquisitions.

Eckoh 43p £125.2m (ECK.L)

The global provider of customer engagement security solutions, announced a trading update for the year ended 31 March 2022. The Board confirms that revenue for the year was in line with consensus market expectations. Operating profit grew strongly, some 5% ahead of consensus market expectations. Despite ongoing challenges presented by the pandemic and the now planned completed exit from US and UK Support, which had contributed £2m to the previous year’s profit figure. The performance reflects ongoing progress in our US Secure Payments operation, which now accounts for nearly 90% of total US revenues. There was more than 20% organic growth in US ARR. Including Syntec, US ARR ended the period at $12.7m, nearly 60% higher than last year. The UK business returned to growth, and transactional volumes have largely returned to pre-pandemic levels with just a few exceptions. Since period end the largest contract renewal scheduled for this financial year, a contract through Capita for a large public service organisation, was successfully renewed for £2.1m over the term. The recently announced implementation of a new Microsoft Azure cloud platform with a Fortune 100 US retailer is now live, making Eckoh the only provider in the industry to offer alternative cloud providers. This supports the stated strategy to continue investing in broadening the cloud proposition geographically, and with multiple suppliers and product offerings. Syntec’s contribution to revenue and profits in the final quarter of the year was consistent with expectations at the time of the transaction, and the integration of the businesses is proceeding on plan.

Fintel 208p £214m (FNTL.L)

AGM Statement from the fintech and support services business. “The Company is pleased to be able to report strong trading in the year to date, with performance in line with expectations. We have continued to improve our earnings quality by increasing our Sass and Subscription revenues via the conversion of annual managed services agreements to multi-year Distribution as a Service agreements. Our unaudited net cash position has increased to c.£7.8m of net cash as of 30 April 22 (31 Dec 2022 £2.6m). The gross drawn position of the £45m revolving credit facility is currently £4.0m following a £3.0m repayment in March 2022. We look forward to updating shareholders again on our further progress and plans at the time of the half-year results.”

Kibo Energy* SUSPENDED (KIBO.L)

The renewable energy focused development company has signed a rolling 5-year Framework Agreement with Enerox GmbH (CellCube), to develop and deploy CellCube based Long Duration Energy Storage (LDES) solutions in selected target sectors in Southern Africa. Under the Agreement Kibo has been granted conditional exclusive rights, subject to successful Proof of Concepts, to the marketing, sales, configuration and delivery of CellCube’s vanadium redox flow batteries (VRFB) in the development of its LDES solutions in microgrid applications behind the meter. For any utility scale projects the parties will work on a non-exclusive basis. The FA will be rolled out within an operational concept and aim, consisting of an initial stage focused at planning, preparation and the delivery of at least two POC Projects and a continuous production stage, focused on the delivery of a commonly agreed project pipeline which is expected to exceed at least 1 Gigawatt over the course of the 5-year term.

Osirium 8.25p £3.8m (OSI.L)

The leading vendor of cloud-based cybersecurity and IT automation software, has signed its first customer in the United States of America via one of its channel partners. The new customer, a global investment bank headquartered in New York and listed on the New York Stock Exchange, has selected Osirium’s Privileged Access Management (PAM) security product. This contract will see Osirium’s services guard against potential threats to the clients IT infrastructure, such as ransomware attacks, through managing internal and third-party access to critical servers, applications and networking equipment. This contract was sold via reseller HIC Global in conjunction with one of the Group’s new partners, software distribution firm Prianto, which has a strong cybersecurity presence with mid-market customers in the UK, across Europe and North America. Having recently partnered with Osirium, Prianto has won multiple contracts with the Group for its PAM and Privileged Endpoint Management (PEM) services. Whilst the contract is not expected to have a material impact on the Group’s results for the current financial year, the Directors of the Company consider that it is strategically important in demonstrating the potential demand for the Group’s products in the significant market in the USA.

Solid State 1,060p £90.6m (SOLI.L)

The specialist value added component supplier and design-in manufacturer of computing, power, and communications products, announces an important design and development contract from an existing customer. The initial commitment reflects a mobilisation fee of £0.5m awarded to Steatite’s Power Business Unit for the design and manufacture of prototypes and pre-production packs of a bespoke power system for the client’s autonomous application. The Appointment is to design-in an innovative rechargeable battery for the next generation solution with production volumes expected to follow subject to customer acceptance / commissioning.

t42 IoT Tracking Solutions 13p £6.9m (TRAC.L)

The real-time tracking, security and monitoring solutions provider for the global container and freight market, announced a commercial order for its tracking solutions and services from Olimp Bulgaria Ltd, a world leader and exporter of security seals. Following the completion of an extensive pilot programme that ran for over a year and a half and included working with Bulgaria’s national customs authority, t42 has delivered the first order for c.250 Lokies Smart Tracking Lock units to be used by Bulgaria’s customs authorities. The pilot programme followed a competitive tender and included a comparison of multiple competitor units each of which was activated and integrated with Bulgarian customs systems and operating procedures.

Tertiary Minerals 0.212p £3.3m (TYM.L)

The Company has commenced its first drill programme at the Jacks Copper Project in Zambia. Jacks lies within exploration licence 27069-HQ-LEL, held by local partner Mwashia Resources Limited. Tertiary has an exclusive option to earn up to a 90% joint venture interest in the licence. Visual observations of core from the first drill hole 22JKDD01 indicate the presence of copper mineralisation which has been confirmed by portable XRF measurements at site. Chrysocolla and malachite occur as veins and in fractures and as disseminations over several metres around 90 metres downhole depth (corresponding to a depth of approximately 74 metres below surface). This is the first drill hole of a programme designed to accurately locate previously intersected mineralised zones and test their continuity to depths up to 150-180 metres below surface. This phase of drilling will comprise approximately 750 to 1,000 metres of HQ and NQ orientated drill core. The core is being analysed on site using portable XRF and mineralised intervals will be sent to the SGS laboratory in Kalalushi for analysis. Historic work has established an 16 kilometre open-ended soil geochemical anomaly at Jacks with historic drill logs reporting intersections as wide as 23.95 metres grading at 1.26% total copper (TCu), including intervals as high as 3.19% TCu over 2.15 metres.

Van Elle Holdings 51.25p £54.7m (VANL.L)

The UK’s largest ground engineering contractor, today provides a trading update for the year ended 30 April 2022. The Board reports the elevated levels of demand in Van Elle’s core markets detailed in the Interim Results in January continued through the second half of the year. Consequently, the Group now expects to report results for the Period ahead of the recently upgraded forecasts, with revenues of approximately £125m. This represents an increase of approximately 48% (a 41% increase after adjusting for the impact of the acquisition of ScrewFast Foundations Limited) compared with the prior year (FY2021: £84.4m), with operating profits slightly ahead of the top end of the range of market expectations. This continued demand is reflective across the Group’s divisions. As anticipated, there has been an increase in work delivered within the Rail division, and volumes across Housing, Specialist Piling and General Piling have remained consistent. Supply chain challenges are showing some signs of moderating, with the impact of material price inflation being managed through contract pricing mechanisms. Cash generation in the second half was strong, with cash at the Period end of £7.0m (31 October 2021: £6.3m), and net funds (excl. IFRS 16 lease liabilities) increasing to £5.9m (31 October 2021: £3.5m).

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Emily Liu, CFA, CAIA
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emily.liu@hybridan.com

Sous Chef:

Sacha Morris
0203 764 2345
sacha.morris@hybridan.com

*A corporate client of Hybridan LLP

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