Small Cap Feast

Small Cap Feast – 20th April 2022

Dish of the Day:

No joiners today.

Off the Menu:

No leavers today.

What’s Cooking in the IPO Kitchen?

Lift Global Ventures plc to join AQSE Growth Market. The Company’s investment strategy is to operate as an enterprise company seeking acquisition or investment opportunities within the financial media and technology industries. Within these broad industries, areas of focus may include: Financial news websites and other forms of “new media”, Investment research providers, Financial PR, IR, design and marketing agencies, Production studios and visual content providers and Technology platforms which facilitate capital raising and/or lending. Mkt Cap and Capital to be raised TBC, expected 29 April.
Shellraise plc, to join AQSE Growth Market. The Company will focus on identifying investment opportunities in companies operating in the viticulture sector which require funding to increase output. Mkt Cap and Capital to be raised TBC, expected later in April

Breakfast Buffet

Biome Tech 220p £8.26m (BIOM.L)

The bioplastics and radio frequency technology business, today provides an unaudited Trading Update for the quarter ended 31 March 2022. Group revenues for the quarter ended 31 March 2022 were in line with management expectations at £1.1m (Q1 2021: £1.4m). Bioplastics Division—The division’s revenues for Q1 were £1.0m (Q1 2021: £1.2m). Further substantial revenue growth from this division is anticipated during 2022 as some of the previously reported logistics issues clear and a number of important customer positions accelerate or move into a commercial phase. Stanelco RF Technologies Division – Revenues in the RF Technologies division in Q1 were £0.1m (Q1 2021: £0.2m). The division has a strong orderbook, announced previously, that are currently in production and are expected to deliver revenue both in Q2 and into the second half of the year. A solid pipeline of opportunities from the target markets are under discussion and continued good order intake is encouraging. The Board’s view of the Group’s performance remains in line with current market expectations.

Challenger Energy 0.11p £9.9m (CEG.L)

The Caribbean and Atlantic -margin focused oil and gas company, with oil production, appraisal, development and exploration assets across the region, provided a technical update: In late March 2022, the Company detailed a near-term programme of recompletions of underperforming and non-producing wells from its extensive well stock in Trinidad, focussed on production enhancement. Four recompletions have to date been completed, ahead of schedule and below budget. The aggregate incremental production from these four recompletions has been in the range of 40 to 60 bopd – in line with pre-work expectations as previously advised. In aggregate, this represents a production increase of approximately 10%-15%, with gross production across the Company’s fields now consistently averaging approximately 400 bopd. Further near-term production enhancement activities are being prepared, with a target to increase production by a further 10% over the coming months. In addition to this well activity, repairs to access roads, upgrades to utilities, and facilities integrity work continues as planned, with this work due to be completed before the end of Q2. Improved access will bring additional well stock into the ongoing review process for potential future recompletions, and the facilities/ infrastructure-based activity is designed to maintain baseline production on a consistent basis.

Eckoh 47.5p £138.25m (ECK.L)

The global provider of customer engagement security solutions, announced the renewal of its contract with Capita for a large public sector organisation. The core purpose of the service provided by Capita to its client is to maximise the successful collection of payments from the general public. The new contract is for 5 years and has a minimum value of £2.1m over the term, which is both longer and higher value than the original agreement. Since 2018, Eckoh has been supporting Capita and its client by handling all inbound calls to the contact centre, securing telephone and automated payments, and delivering advanced self-service automation to improve the customer experience and increase the proportion of successfully collected revenue. The renewal and extension of this contract is testament to Capita’s ongoing confidence in Eckoh’s expertise and product solutions and its drive to continually deliver a better customer experience.

Gateley 216.5p £258.2m (GTLY.L)

The legal and professional services group, announced the acquisition of SP 2018 Limited and its subsidiaries for a total maximum consideration of £20m, with an initial consideration of £12.15m payable on completion c. 56% in shares and c. 44% in cash. Smithers Purslow is a rapidly growing multi-disciplinary chartered surveying practice, comprising building and quantity surveyors and civil and structural engineers. Specialising in services to the property insurance claims market, it resolves high value claims for insurers, policy holders and their advisers. Expected to be earnings enhancing in the first year post acquisition, the year ending 30 April 2023. Incentivised senior management team will continue to lead the business, renamed Gateley Smithers Purslow. Compound organic growth of at least 20% per annum in revenue and EBITDA over the last 5 years. Revenue of £11.7m and adjusted profit before tax of £2.5m in the year ended 30 September 2021.With a total maximum consideration of £20m, this is Gateley’s largest acquisition to date.

Kefi Gold and Copper 0.85p £24.9m (KEFI.L)

The gold exploration and development company with projects in the Federal Democratic Republic of Ethiopia and the Kingdom of Saudi Arabia, announced an oversubscribed fundraising to raise gross cash proceeds of £8m through a Firm Placing price of 0.8 pence to raise £4.4m and a Conditional Placing at the Placing Price to raise £3.6m (Firm Placing. The Placing Price represents a discount of 25% against the ten-day VWAP to 19 April 2022, being the date prior to the release of this announcement. The gross Placing proceeds of £8m will mainly be used to fund the following: Selected development activities at the Company’s Tulu Kapi Gold Project which will continue as authorised by the Ethiopian Government, particularly with a view to confirming security conditions are conducive for full project launch and financial close at the end of Q2 2022; commencement of additional exploration works at satellite deposits in the Tulu Kapi District, Ethiopian Government permitting, in order to implement longstanding plans designed to expand or extend production and uplift the community benefits and the economics of the Tulu Kapi development still further; to contribute the Company’s share of exploration at the Hawiah Gold and Copper Project, with a view to increasing the existing resources of 24.9m tonnes at 0.90% copper, 0.85% zinc, 0.62 g/t gold and 9.81 g/t silver. In addition, funds will enable further work at the adjacent Al Godeyer licence areas following the highly encouraging results as announced in Q1 2022, which suggested the potential for another discovery similar to Hawiah; and for general working capital purposes.

Nightcap 19.25p £37m (NGHT.L)

The owner of The Cocktail Club, the Adventure Bar Group and the Barrio Familia group of bars, announced a further opening in Bristol for the Adventure Bar Group – under its Blame Gloria brand. The latest Blame Gloria opening will be located at 22 Small Street, Bristol, BS1 1DW and covers an area of approximately 8,000 square feet. The site has a 2:00 am license and an unrestricted capacity of 350. The venue will open later this year. This will be the first new opening for the Blame Gloria brand outside of London, where it operates successfully in both Covent Garden and Clapham, and is the second new site opening for Adventure Bar Group in the last week following the announcement of the opening of a Tonight Josephine in Hanover Street, Liverpool. Nightcap now has 3 sites across two of its brands in Bristol and it takes the total number of sites within its estate to 33, with an additional 23 premises under offer or in legal negotiations across the UK for all of Nightcap’s brands.

Phoenix Copper 55.5p £67.6m (PXC.L)

The USA-focused base and precious metals emerging producer and exploration company, is pleased to see the President of the United States prioritising and encouraging the domestic production of critical minerals, including copper and cobalt, for electric vehicles, defence systems and other technologies. Phoenix Copper Limited is the 80% owner of the historically producing Empire copper mine, as well as 100% owner of two exploration properties on the Idaho Cobalt Belt. The Company is eager to continue working toward development at these projects which will help contribute to the United States’ energy independence goals. President Biden recently invoked the Defense Production Act, stating that the directive will help secure American supply chains for the critical materials that support national defence, electric vehicles and storage of renewable energy. According to The White House, the directive will support U.S. production and processing of minerals and materials used for large capacity batteries, in particular those used in electric vehicles and in the infrastructure required to power and charge those vehicles. These metals include lithium, nickel, cobalt, and copper.

Semper Fortis Esports* 1.05p £4.36m (AQSE: SEMP)

The esports company focused on establishing esports teams and forming brand and technology partnerships, yesterday announced that it has reached an agreement with the Rocket League Championship Series (RLCS) team ‘Team Endpoint’ for a Loan Agreement of SMPR player ‘Archie,’ which will see the player competing under Team Endpoint until the end of the current RLCS season. Endpoint will hereby be granted the license and rights to allow that player to compete under their organisation for the remainder of the Rocket League Championship Series 2021-2022 season. Under this Agreement, Endpoint are liable to any and all costs associated with the player competing in Rocket League, these may include any contractual salary, compensation or service fees; and any costs incurred for travel. Also under the Agreement, 20% of any prize monies awarded to the player, as part of his service to Endpoint, will be recoverable by SMPR. SMPR has also secured the services of Brice Bigeard ‘Exotiik’ in a new contract that runs until the end of the RLCS season. Jassem Osseiran, COO of Semper Fortis Esports, commented: “We have made the necessary changes we believe will allow our team to perform at their best for the remainder of the RLCS season. ‘Archie’ remains a big part of our plans moving forward and we hope that this loan deal will be of great benefit to both parties upon his return next season.”

Symphony Environmental Technologies* 19.5p £34.95m (SYM.L)

Symphony announced that its Indian joint venture with Indorama, Symphony India, has been honoured with a prestigious award for its contribution to sustainability with d2w biodegradable masterbatch technology for manufacturing non-bio plastics into biodegradable, environmentally safe compounds. Symphony has a solid operational footprint in India with their d2w masterbatch technology being produced in India with local materials. The infrastructure is now in place for manufacturing at commercial levels and based upon current enquiries, the Board anticipates increasing sales volumes during H2-2022 and beyond. The award received by Symphony India will significantly strengthen its visibility in the country as new waste management laws banning or restricting ordinary plastics become effective later this year.

Synectics 116.5p £20.7m (SNX.L)

AGM Statement from the specialist in the design, integration and support of advanced security and surveillance systems. Synectics’ trading in the first quarter of the new financial year was in line with the Board’s expectations. The Systems division has begun the financial year slightly ahead of the Board’s expectations, mainly as a result of an improved contribution from public space and infrastructure security systems in the UK, including the National Grid contract which was announced recently, and also encouraging progress in global Oil & Gas markets. While the Security division has had a slower start to the financial year, with several projects experiencing client-driven delays, these are expected to be recovered later this financial year. The Company’s consolidated order book as at 31 March 2022 was approximately £29m (30 November 2021: £28.4m) and the Group’s balance sheet remains strong with net cash of approximately £3.9m at 31 March 2022 (30 November 2021: £4.6m). Activity in Synectics’ main regional markets has continued the pattern shown in the second half of the last financial year with continued modest recovery in the UK and Europe, the pipeline of expected orders in North America progressing steadily, and Asian markets remaining subdued, but with some evidence that these look likely to turn by early next year. These trends underpin the Board’s continued expectations for a solid improvement in trading results across this year, particularly in the second half. A further update on current trading and prospects will be given in June 2022 following the end of the Company’s first half year.

Head Chef:

Derren Nathan
0203 764 2344
derren.nathan@hybridan.com

*A corporate client of Hybridan LLP

Disclaimer

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 enquiries@hybridan.com with “unsubscribe me”.