Small Cap Feast

Small Cap Feast – 19th December 2016

Dish of the Day:

Big Sofa Technologies Group (video analytics) IPO raising £6.1m  at 17p

Off the Menu:

No AIM Leavers Today

What’s Cooking in the IPO Kitchen?

Ultimate Products—The Telegraph reports Jim McCarthy, former chief of Poundland has been appointed Chairman of Ultimate Products ahead of a £100m listing in H1 2017. Ultimate Products owns the Beldray cleaning brand and the licence to sell Russell Hobbs and Salter electrical products in the UK.

Breakfast Buffet

NWF Group (NWF.L) 177.5p £86.3m

The specialist agricultural and distribution business delivering feed, food and fuel across the UK, announced a trading update for the half year ended 30 November 2016. Trading was weaker than the comparative half but has improved in Q2. The Board maintains its full year expectations in terms of performance and net debt levels. The acquisitions of New Breed, Staffordshire Fuels and Jim Peet made in the prior year have performed as expected and the mill expansion plans are being successfully delivered.  FY May 17E revs of £487.3m and £8.3m PBT.

Horizonte Minerals (HZM.L) 2.825p £33.1m

The nickel development company focused in Brazil, announced the issuance of a Request for Proposals to engage consulting firms to prepare a definitive Feasibility Study for the Company’s 100% owned Araguaia nickel project which is being developed as the next major nickel project in Brazil.  The RFP follows from positive economic results of the new Pre-Feasibility Study  released in October 2016 and the successful fundraise of £9 million approved by shareholders on 30 November 2016.

Collagen Solutions (COS.L) 6.13p £11m

HY Sep16 results from developer and manufacturer of medical grade collagen components for use in regenerative medicine, medical devices and in-vitro diagnostics.  Revenue and other income increased by 30% to £1.9m. Pre-tax loss of £983k vs 356k.  Cash and  equivalents of £1.67m (31 March 2016: £2.5m). Outlook looking to the long term. ‘While we are still early in the transformation and acceleration of the Company, I believe we have made prudent investments in our core business and the management team is focused on the right priorities for sustainable growth towards our goals for this fiscal year. In the longer term, I feel confident that our target of 5x revenue within 5 years is achievable, based upon the strategy that the management team is executing against.’


Bagir Group (BAGR.L) 4p £10.17m

The designer, creator and provider of innovative tailoring has announced a proposed placing of £1.97m at 3.5p by accelerated bookbuild. The proceeds are due to be invested in further development of the Ethiopian operations, including: –  new set up costs for a currently unused production hall to enable it to produce up to 3,000 trousers per day;-upgrading the current local market production hall through the purchase of new sewing equipment and general infrastructure; and for general working capital to support Bagir’s growth.  FYDec16E revs of £50.4m and £2.4m pre-tax loss.


Digital Barriers (DGB.L) 36.25p £59.86m

The specialist provider of visually intelligent solutions to the global surveillance, security and safety markets, has secured a $2.1 million contract for its unique ThruVis standoff threat detection camera. ThruVis delivers a level of performance and real world usability unlike any other solution on the market. It can be deployed in various settings, including transport terminals, stadia and event venues, to identify potential threats in real time without disrupting crowd throughput. In recent independent government testing, it proved 100 per cent successful in identifying suicide vests and weapons concealed under clothing. FYMar17E rev of £38.8m and £4m  pre-tax loss.


Tri-Star Resources (TSTR.L) 0.11p £9.32m

Update on the Oman Antimony Roaster (OAR).  The OAR is being constructed by the Company’s Omani joint venture company, Strategic & Precious Metals Processing LLC (SPMP).  Tri-Star has a 40% equity interest in SPMP. SPMP has been pleased with responses from potential suppliers of feedstock and has been conducting bulk commercial trials with concentrates containing both antimony and gold.  Additional resources have been added by SPMP to the project team and Tri-Star is confident that the OAR remains on course for commissioning by the end of 2017, as previously advised.


San Leon Energy (SLE.L) 45p £239.2m

The Board of San Leon notes the takeover speculation regarding San Leon in the weekend press.  The Board of San Leon confirms that it has received an approach from a possible offeror, which may or may not lead to an offer being made for San Leon.


Atalaya Mining (ATYM.L) 127.5p £149m

Nameplate capacity of 9.5Mtpa was achieved during December 2016 at its 100% owned Riotinto Copper Project (Proyecto Riotinto), located in Andalucía, Spain.  The plant reached nameplate capacity during a single run of ten consecutive days during the early part of December, treating an average of 28,685 dry metric tonnes per day and achieving design recoveries and concentrate grades. After normal, scheduled maintenance and plant availability parameters are considered, the current treatment rates are enough to give comfort that the planned 9.5 Mtpa will be achieved during 2017.  Production guidance for 2017 is forecast to be in the range of 34,000 – 40,000 tonnes of copper, sufficient to generate positive cashflow at current prices.


Malvern International (MLVN.L) 3.5p £3.23m

The provider of educational services in the UK, Europe and Asia, announced its strategic plan for 2017. The focus will be on strengthening the current operation while planning for the future. Work is underway to improve and expand both the delivery and range of products and services offered by the Group. At the same time measures are being taken to improve the Company’s administrative procedures and processes to ensure that it has a robust system that goes beyond the various regulatory compliance requirements and that can support the future growth of the business efficiently and productively.


ProPhotonix (PPIX.L) 5.12p £4.29m

The high technology designer and manufacturer of LED illumination systems and laser diode modules, with operations in Ireland and the United Kingdom, announced that its results for the year ending 31 December 2016 are expected to be ahead of market expectations with revenue forecast to be approximately $16.0 million and operating income of approximately $1.3 million.


Head Chef:

Emily Liu, CFA, CAIA
0203 764 2344

Sous Chef:

Sacha Morris
0203 764 2345

*A corporate client of Hybridan LLP


This document, which does not constitute research, has been issued by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to any such action. This document has no regard for the specific investment objectives, financial situation or needs of any specific person or entity and is not a personal recommendation to any such person or entity. Recipients should reach an individual investment decision, based upon their respective financial objectives and financial resources and, if any doubt, should seek advice from an investment advisor.

The information contained in this document is based on materials and sources that are believed to be reliable; however, such information has not been independently verified and therefore it is not possible to confirm such information as being accurate. This document is not intended to be a complete statement or summary of any securities, markets, reports or developments referred to herein. No representation or warranty, either express or implied, is made or accepted by Hybridan LLP, its members, officers, employees, agents or associated undertakings in relation to the accuracy, completeness or reliability of the information contained in this document, nor should it be relied upon as such.

The content of this document includes market commentary and other information which we have prepared in relation to the company referred to in this document, which is our broking client. The provision of this document to you constitutes a minor non-monetary benefit which is capable of enhancing the quality of service provided by Hybridan LLP and which is of a scale and nature which could not be judged to impair the duty of Hybridan LLP to act in the best interest of its client falling within article 24(7)(b) of Regulation 600/2014/EU (MIFID II Regulation).

Any and all opinions expressed are current as of the date appearing on this face of this document only. Any and all opinions expressed are subject to change without notice and Hybridan LLP is under no obligation to update the information contained herein. To the fullest extent permitted by law, none of Hybridan LLP, its members, officers, employees, agents or associated undertakings shall have any liability whatsoever for any direct or indirect or consequential loss or damage (including lost profits) arising in any way from use of all or any part of the information in this document.

This document should not be relied upon as being an independent or impartial view of the subject matter and, for the avoidance of doubt, constitutes non-independent research (as such term is defined in the Financial Conduct Authority’s Conduct of Business Sourcebook to reflect the requirements of the MIFID II Regulation and Directive 2014/65/EU (known as MIFID II)). The individuals who prepared this document may be interested in shares in the company concerned and/or other companies within its sector, may be involved in providing other financial services to the company or companies referenced in this document or to other companies who might be said to be competitors of the company or companies referenced in this document. As a result both Hybridan LLP and the individual members, officers and/or employees who prepared this document may have responsibilities that conflict with the interests of the persons who receive this document. Hybridan LLP and/or connected persons may, from time to time, have positions in, make a market in and/or effect transactions in any investment or related investment mentioned herein and may provide financial services to the issuers of such investments.

In the United Kingdom, this document is directed at and is for distribution only to persons who (i) fall within article 19(5) (persons who have professional experience in matters relating to investments) or article 49(2) (a) to (d) (high net worth companies, unincorporated associations, etc.) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (SI 2005/1529) (as amended) or (ii) persons who are each a professional client or eligible counterparty (as those terms are defined in the Financial Conduct Authority’s Conduct of Business Sourcebook) of Hybridan LLP (all such persons referred to in (i) and (ii) together being referred to as relevant persons). This document must not be acted on or relied up on by persons who are not relevant persons. For the purposes of clarity, this document is not intended for and should not be relied upon by any person who would be classified as a retail client under the Financial Conduct Authority’s Conduct of Business Sourcebook.

Neither this document, nor any copy of part thereof may be distributed in any other jurisdictions where its distribution may be restricted by law and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions. Distribution of this report in any such other jurisdictions may constitute a violation of territorial and/or extra-territorial securities laws, whether in the United Kingdom, the United States or any other jurisdiction in any part of the world.

Where possible this document is made available to all relevant recipients at the same time. Dissemination of research by Hybridan LLP is monitored to ensure that it is only provided to relevant persons. Research prepared by Hybridan LLP is not intended to be received and/or used by any person who is a retail client.

Hybridan LLP and/or its associated undertakings may from time-to-time provide investment advice or other services to, or solicit such business from, any of the companies referred to in this document. Accordingly, information may be available to Hybridan LLP that is not reflected in this material and Hybridan LLP may have acted upon or used the information prior to or immediately following its publication. In addition, Hybridan LLP, the members, officers and/or employees thereof and/or any connected persons may have an interest in the securities, warrants, futures, options, derivatives or other financial instrument of any of the companies referred to in this document and may from time-to-time add or dispose of such interests.

This document may not be copied, redistributed, resent, forwarded, disclosed or duplicated in any form or by any means, whether in whole or in part other than with the prior written consent of Hybridan LLP.

MIFID II status of Hybridan LLP research
The cost of production of our corporate research is met by retainers from our corporate broking clients. In addition, from time to time we issue further communications as market commentary (such as our daily newsletter, Small Cap Breakfast), which we consider to constitute a minor non-monetary benefit which is capable of enhancing the quality of service provided by Hybridan LLP and which is of a scale and nature which could not be judged to impair the duty of Hybridan LLP to act in the best interest of its client falling within article 24(7)(b) of the MIFID II Regulation.

Hybridan LLP is a limited liability partnership registered in England and Wales, registered number OC325178, and is authorised and regulated by the Financial Conduct Authority and is a member of the London Stock Exchange. Any reference to a partner in relation to Hybridan LLP is to a member of Hybridan LLP or an employee with equivalent standing and qualifications. A list of the members of Hybridan LLP is available for inspection at the registered office, 2 Jardine House, The Harrovian Business Village, Bessborough Road, Harrow, Middlesex HA1 3EX.

If you would like to unsubscribe, please email with “unsubscribe me”.