Small Cap Feast

Small Cap Feast – 18th January 2017

Dish of the Day:

No AIM Joiners Today

Off the Menu:

No AIM Leavers Today

What’s Cooking in the IPO Kitchen?

Global Energy Development (GED.L) — To be renamed Nautilus Marine Services. Schedule 1 from developer and seller of hydrocarbons and related products. Reverse takeover. Raising $10.5m via a convertible. Expected 9 Feb.

Eco (Atlantic) Oil & Gas—TSX-V listed oil and gas  exploration has announced its intention to float on AIM. Assets in Guyana and Namibia. Proposed £2m-£3m fundraise.

Diversified Gas & Oil—According to LSE website first day of trading on AIM now expected for 30 January.

Breakfast Buffet

Fitbug Holdings* (FITB.L) 0.17p £2.03m

The digital wellness technology provider for corporate organisations, announced a customer win with a global financial services group in Asia. The customer will use Fitbug’s digital wellness services to help maximise employee performance, with the end goals of improving employee engagement, and reducing absenteeism and risk of chronic illness.

Fitbug has secured an initial 1-year corporate wellness programme, which includes ongoing service revenue, together with an order for 14,000 devices. The devices were shipped in December and the programme is rolling out early this year. The client wishes to remain anonymous at this time.

Christie Group (CTG.L) 89p £23.47m

The provider of Professional Business Services and Stock & Inventory Systems & Services to the leisure, retail and care markets, announced that Christie & Co, its specialist provider of agency and advisory services, has successfully brokered the sale of Magic Nurseries to Les Petits Chaperons Rouges, France’s leading private nursery chain.  “When the time came for us to consider the sale of our business, Courteney Donaldson at Christie & Co was our first and only port of call.”  No financial details were provided.

Tribal Group (TRB.L) 64.75p £126.5m

FY Dec 16 trading update from the provider of products, services and software to the international higher education, further education, training and vocational learning markets.  Following a good second half, the Board anticipates that Group revenues will be in line with its expectations for the year to 31 December 2016 and the performance of the Group will be materially ahead. Annualised cost savings of £8.5m have been delivered by the year end and further efficiency savings are expected in 2017.   The Group’s balance sheet remains strong following the fund raising and sale of the Synergy business early in the year. The Group ended the year with £8.8m of cash, up from the £5.7 at the end of the half year.  FY16E revenue £88.7m and £2.28m PBT.

Plant Health Care (PHC.L) 15.5p £22.9m

FYDec16 trading and research update from the provider of novel patent-protected biological products to the global agriculture markets. Revenue of approximately $6.3 million; sales in the United States decreased by approximately $1.1 million, due to the decision to reduce in-market inventories. Growth outside the United States was 15% in constant currency. Cash and equivalents $10.1m.  New distribution agreements signed in H2 show potential for growth in Commercial sales during 2017. Innatus™ 3G  trials continued to show good results.
Two new PREtec peptide platforms: T-Rex 3G and Y-Max 3G have been presented to industry players with initial agreements signed.

Deltex Medical (DEMG.L) 4p £11.4m

FYDec16 trading update from the specialist in oesophageal Doppler monitoring. Group revenues for 2016 expected to be £6.3m (2015: £6.2m: £6.4m including research barter sales). US+40%.  Run-rate going into 2017 c 50% higher than at same stage in 2016 with continuing growth anticipated in 2017, both from existing and new accounts (two platform accounts announced separately today). International up 20%. UK down 26% but  positive market reception to new probes and new clinical evidence leading to improving trend in probe consumption in H2. Cash of £0.6m. £30k monthly cost savings in 2017 from in-house production. Substantially reduced cash burn in H2 2016 reflecting full effect of approximately £1m of annualised cost savings and growth in high margin US probe sales.

Mercia Technologies (MERC.L) 50.2p £106.8m

The investment group focused on the creation, funding and scaling of innovative technology businesses with high growth potential from the UK regions, announced a new direct investment of up to £1.9 million in Faradion Limited, a company focused on the development and commercialisation of advanced, low-cost battery materials. Mercia’s investment is part of a syndicated investment round of up to £3.2 million .The current investment round will be used to commercialise Faradion’s lead product, a novel, low-cost sodium-ion battery technology from which Mercia believes significant value will be derived over time.


Draper Esprit (GROW.L) 347p £141.4m

The venture capital firm involved in the creation, funding and development of high-growth digital technology businesses,  has doubled its equity stake in TrustPilot, investing a further $6.9 million (£5.5 million). Draper Esprit first invested in Trustpilot in 2013, with a follow on investment in 2015 and including this current investment, has now invested £11 million. Founded in 2007, Trustpilot is a global, multi-language review community. Trustpilot has customers in 65 countries.

Midwich (MIDW.L) 224.75p £178.56m

FYDec16 trading update from the specialist audio visual and document solutions distributor to the trade market. The Group’s trading momentum continued in  H2 and it also benefited from the continued weakness in Sterling.  Growth was seen across all of the Group’s divisions, in particular its overseas businesses, and it has seen a better than expected contribution from its most recent UK acquisition, Holdan. Now expects to report revenue of approximately £370m, +c.18%.  FX accounts for c.3% of this growth.  Gross margin improvement in line with the Board’s expectations.  The Board now anticipates reporting adjusted profit before tax for 2016 comfortably ahead of its previous expectations. FY16E PE 14.1 x.

NAHL Group (NAHL.L) 135.5p £61.45m

In-line FYDec16 trading update from marketing and services business focused on the UK consumer legal market. Ministry of Justice response to consultation regarding Personal Injury claims now due to be published in April. “Fitzalan and Bush, the Group’s Conveyancing and Critical Care divisions, are unaffected by this consultation and we expect both to continue to make good progress in 2017.” The Group intends to propose a final dividend, payable in May 2017. FY16E £50.3m and EPS of 29.6p. Div 19.15p. 14.2% yield!

Hydrogen Group (HYDG.L) 36.5p £8.74m

FYDec16 trading update from global specialist recruitment business. The Board expects to report net fee income for the year of c.£17.8m and a return to profitability generating a PBT of c.£0.75m as a result of the Group’s strategy and a renewed focus on building market leading niches within the Group. The Group’s balance sheet remains strong with net cash expected to be £2.0m (2015: £2.6m) with the reduction in cash primarily due to an increase in trade debtors. The business has a strong contractor base, a diversified client base internationally and is well positioned to take advantage of opportunities in 2017.

Head Chef:

Emily Liu, CFA, CAIA
0203 764 2344

Sous Chef:

Sacha Morris
0203 764 2345

*A corporate client of Hybridan LLP


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