Small Cap Feast

Small Cap Feast – 22/10/21

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What’s Cooking in the IPO Kitchen?

Arrow Exploration Corp (AIM: AXL ; TSXV: AXL) , the oil and gas exploration and production company, has conditionally raised approximately £8.8m and is due to complete its dual listing on AIM on 25 Oct. Market cap c£13.1m.
Devolver Digital to join AIM, an award-winning digital video games publisher and developer in the indie games space. Recently awarded indie ‘Publisher of the Year 2021’ by GamesIndustry.biz. Offer TBA. Due early Nov.
Life Science REIT to join AIM raising up to £100m. This will be the first London listed real estate investment trust (REIT) focused on UK life science properties providing investors with exposure to an attractive and growing real estate sector. Due mid Nov.
Alinda Capital Infrastructure Investments to join the Specialist Fund Segment of the Main Market of the London Stock Exchange raising up to £350m. Due Late November.
Nu-Oil and Gas to acquire Guardian Maritime Ltd and Guardian Barriers IP Ltd and join the Main Market (Standard). Guardian is a technology group that supplies products to prevent unauthorised entry into areas that are deemed to have value, with maritime security being the main focus initially. Subject to shareholder approval, admission will take place during Q4 2021. The Company will change its name to Guardian Global Security plc.
ProCook, the UK’s leading direct-to-consumer specialist kitchenware brand, is considering applying for admission of the Shares to the Main Market (Premium). ProCook’s revenue grew by 37% to £53.4m in FY21 (ending 4 April 2021), with Adjusted EBITDA growing by 246% to £13.3m in the same period. Timing TBA
Silverwood Brands, an investing company established to identify investment opportunities including, but not limited to, in the foods, organic food, wellness, lifestyle and leisure sectors, targeting admission on the to join the AQSE Growth (Access). Due November 2021. Offer TBA.
Kasei Holdings, a technology specialist investor that focuses on cryptocurrencies and blockchain technologies, due to join the AQSE Growth Market 27 Oct. No funds being raised.
Following the previously announced intention to demerge trading on the London Stock Exchange plc’s Main Market on 2 November. Hostmore plc from Electra Private Equity PLC, Hostmore announces that, subject to approval by Electra shareholders, it is expected that the Demerger will be completed and the Hostmore shares will be admitted to the Premium Segment of the Financial Conduct Authority and to generated from operations over the 3 complete months following the resumption of indoor dining in England on 17 May 2021 (i.e. June to August 2021) was £12.5m. Hostmore is a growing hospitality business with its current operations focused on the American-themed casual dining brand, Fridays, and the cocktail-led bar and restaurant brand, 63rd+1st.
Rubix Group Holdings, the market leading pan-European distributor of industrial maintenance, repair and overhaul products and services is considering an initial public offering Main Market (Premium). In the six months ended 30 June 2021, Rubix generated Revenue from Ongoing Operations of EUR1,312m and Adjusted EBITDA of EUR123m (9.4% Adjusted EBITDA Margin from Ongoing Operations), an increase of 10.6% and 19.3% compared to the six months ended 30 June 2020, respectively. Raising proceeds equivalent to approximately EUR850m, and additionally may also include the sale of existing ordinary shares by current shareholders. Timing TBA
Firering Strategic Minerals to join AIM, a holding company for a group of exploration and development companies set up to focus on developing assets towards the ethical production of critical metals. The Company’s portfolio of assets is located in Côte d’Ivoire and contains projects that the Directors believe to be prospective for lithium and columbite-tantalite. Due Early Nov. Offer TBA
Harmony Energy Income Trust to join the Specialist Fund Segment of the Main Market raising up to £230m. The Company’s investment objective is to provide investors with an attractive and sustainable level of income returns, with the potential for capital growth, by investing in commercial scale energy storage and renewable energy generation projects, with an initial focus on a diversified portfolio of battery energy storage systems located in Great Britain. The Company has contracted with Tesla Motors Limited in respect of its initial portfolio of battery storage projects, to be acquired on IPO, which will benefit from Tesla’s 2-hour duration Megapack systems and Autobidder AI revenue optimisation platform. Due Early Nov.
Stelrad Radiator Group, the specialist manufacturer and distributor of steel panel radiators in the UK, Europe and Turkey, is considering an IPO on the Main Market (Premium). Potential secondary and primary (c.£25m) offer. Early Nov.
Pantheon Infrastructure to join the Main Market (Premium). PINT will target attractive risk-adjusted total returns comprising capital growth and a progressive dividend through making equity and equity-related investments in private infrastructure assets alongside other leading private asset investment managers. Due Mid Nov.
Quantum Exponential to join AQSE. The Company intends to identify investment opportunities in the quantum technology sector primarily in the NATO allied countries. The Company has identified over 175 start-ups which potentially meet their investment strategy with a focus on seed funding for start-ups with second stage funding plans in preparation. Offer and timing TBA.
Pod Point, one of the United Kingdom’s leading providers of Electric Vehicle charging solutions is considering a Main Market (Premium) listing. As at 30 June 2021, Pod Point had installed more than 89,000 home charge points and over 13,000 commercial units, including those located at workplaces and destination locations (such as shops and leisure attractions). Timing and offer TBA.
Softline the global solutions and services provider in digital transformation and cybersecurity, with its headquarters in London, is considering proceeding with a potential initial public offering of global depositary receipts representing its ordinary shares. The Company is considering applying for admission of the GDRs to the standard listing segment of the Official List of the FCA and to trading on the Main Market for listed securities and on Moscow Exchange. The Group had a turnover of US$1.8 bln for the year ended 31 March 2021, employs c.6,000 people globally, and operates in more than 50 countries across emerging markets. Primary proceeds from the Offer are expected to be around US$400m. Due Late Oct.
Marks Electrical, a fast growing online electrical retailer, announced its intention to proceed with an initial public offering and to seek admission to trading on AIM. Marks Electrical sells, delivers, installs and recycles a wide range of household electrical products. In the year to 31 March 2021 revenue grew to £56m, up 78% against the previous financial year, while EBITDA increased to £7.45m, at a 13.3% EBITDA margin. The Group has made a strong start to its current financial year to 31 March 2022, with revenue growth of 78% in H1 FY2022, versus 47% growth in H1 FY2021. Offer TBA Admission is expected to take place in early Nov 2021.
M7 Regional E-Warehouse REIT intends to apply for admission onto The Property Stock Exchange (Wholesale Segment). On Admission, the company plans to acquire a portfolio of UK retail warehouses worth £120m from M7 Real Estate Investment Partners VIII. The portfolio currently comprises 18 retail warehouse properties across the UK totalling 978,317 sq ft and fully let to 53 occupiers. Rent collections for Q2 2021 stand at 93% and are expected to revert to 100% in the coming quarters.
Central Copper Resources, a company focused on delivering a high grade copper project into production and exploration of assets in the Democratic Republic of the Congo (DRC) and in the Republic of Zambia to join AIM. By 2022, CCR intends to be ready to commence the project financing of its Mbamba Kilenda copper project. It pushed back its AIM float on 30th September from end September to late October. The amount to be raised is still yet to be confirmed.

Breakfast Buffet

Conygar Investment Company 141p £74m (CIC.L)

Conygar has submitted a further planning application for its Holyhead Waterfront development in Anglesey supplementing the outline consent previously granted in 2014. The proposed development will include a 250-berth marina, 259 townhouses and apartments, marine commercial and additional A1/A3 retail units on the waterfront, together with substantial areas of improved public realm, and an amphitheatre and covered arcade for open-air events. The submission of the application follows a period of stakeholder and community engagement, carried out earlier this year, and a mandatory period of pre-application consultation, which concluded in August.

DeepMatter 1.28p £11.7m (DMTR.L)

The international digital chemistry data company, has created a new Scientific Advisory Board (“SAB”) to be led by Professor Richard Bourne, who was recently promoted to Professor at the University of Leeds and appointed Research Chair of Royal Academy of Engineering. The SAB, which is made up of sector Key Opinion Leaders, will work closely with the whole team at DeepMatter as it builds its unique, fully integrated digital chemistry platform, which ultimately will enable AI-driven chemical automation. The SAB also comprises: Dr Nessa Carson, Principal Automation Scientist at Syngenta. Dr Natalie Fey, an expert in computational approaches as Associate Professor at the Centre for Computational Chemistry, University of Bristol. Dr David Parry, Head of Research at DeepMatter. Dr Bryn Roberts, SVP and Head of Data Services at Roche Information Solutions and non-executive director at DeepMatter.

Global Invacom Group 6.5p £14.2m (GINV.L)

The global provider of satellite communications equipment and electronics announced the award of European Space Agency funding under the Advanced Research in Telecommunications Systems (ARTES) programme towards developing a low-cost Ka-band user terminal and a larger enterprise solution in partnership with Methera Global Communications Limited and its subcontractors. The project is designed to meet Methera’s and the wider industry’s needs for connectivity to non-geostationary satellite orbit constellations. The aim is to deliver terminals to market in 2024, offering service providers and operators constellations to provide affordable satellite broadband to under-connected global communities. Global Invacom will leverage its experience in designing and manufacturing low-cost antennas, Ka-band transceivers and tracking antenna solutions to design a fully-integrated user terminal, whilst also holding overall responsibility for system integration of the custom Application-Specific Integrated Circuit and modem from the project partners.

Guild Esports 3.95p £20.5m (GILD.L)

The global teams organisation and lifestyle brand, announces that it has terminated the three-year sponsorship deal with a European fintech company, announced on 19 October 2020, following delays in the sponsor’s launch and the payment of sums due under the contract. Under the terms of the agreement, the sponsor was due to commence payments from the date of their global brand launch and unveiling. To date, Guild has not been given any clear timeline for their launch and none of the amounts scheduled under the contract have been paid. Given the uncertainty about the contract and the strong appetite from other brands to partner with Guild, the Company has elected to terminate the contract with immediate effect to focus on new sponsorship deals that are at an advanced stage of negotiations.

LMS Capital 33p £26.6m (LMS.L)

The listed Investment Company provides the following update covering the period from 30 June 2021 to date. Unaudited Net Asset Value at 30 September 2021 was £46.9m (58.0p per share). This compares to £47.6m (59.0p per share) at 30 June 2021; Interim dividend of £0.2m paid in September; and Cash at 31 September 2021 was £20.5m compared to £21.4m at 30 June 2021.

musicMagpie 165p £177.8m (MMAG.L)

musicMagpie 165p £177.8m (MMAG.L)
musicMagpie, a leading re-commerce business in the UK and US specialising in refurbished consumer technology, updated on its process to appoint a Chief Financial Officer (CFO). Following Ian Storey’s promotion to Group Chief Operating Officer at IPO, the Board confirms that it has held discussions with a number of potential candidates for the CFO position. The recruitment process remains ongoing, with a shortlist of high quality candidates well progressed and as soon as an appointment is made, the Group will make a subsequent announcement.

Physiomics* 6.25p £6.1m (PYC.L)

The consultancy using mathematical models to support the development of drug treatment regimens and personalised medicine solutions has been awarded two further contracts by existing client Merck KGaA that it expects to be completed by the end of this calendar year. These projects involve simulations of clinical efficacy of drug products in Merck’s DNA damage/ repair portfolio. Physiomics CEO, Dr Jim Millen, commented: “Merck remains a key, valued client and we are pleased to be continuing to work with them on a number of important development programs.”

Smartspace Software 75.5p £21.9m (SMRT.L)

Update on current trading. Annual recurring revenue (ARR) up 53% year on year to £3.78m at 31 July 2021 (FY21 H1: £2.46m). This momentum has continued in to H2 with ARR of £4.11m as at 30 September. Gross margin on continuing operations continued to improve to 71% (FY21 H1: 51%), reflecting an increased mix of higher margin SaaS revenues, in-line with stated strategy. Revenue for the year ended 31 January 2022 now expected to be not less than £5.2m (FY2021: £4.6m) with an adjusted EBITDA loss of not more than £2.7m (FY21 adjusted EBITDA loss: £2.1m). The Group had net cash of £3.25m as at 20 October 2021 (31 July 2021: £3.37m) “Our primary objective is to build a high growth SaaS business with strong recurring revenues. The results outlined above for Space Connect and SwipedOn show we are achieving this. Whilst we share Evoko’s confidence in the medium and long term potential of Naso, the uncertainties around the global return to office, together with the Naso sales trend for September and October, have led us to conclude that it is prudent to adjust down expectations for the full year. Our market continues to be a very attractive sector, even more so when you consider the recent acquisitions of our major competitors at high ARR multiples. Our priorities remain in continuing to deliver growth in ARR and to maximise value for shareholders over the coming years.”

SourceBio 137.5p £102m (SBI.L)

The international provider of integrated state-of-the-art laboratory services and products, notes an online article published by Which? titled ‘The best cheap day two Covid tests for travel’ that recommends SourceBio as the best provider of day two travel COVID-19 PCR testing among a cohort of 50 companies supplying home testing kits, found on www.Gov.uk.. The mystery shop concluded that SourceBio’s travel COVID-19 PCR test was the most reliable of all providers, with test kits and results arriving on time on 12 out of 13 occasions. The endorsement from Which? is a significant achievement given the complete impartiality of the selection process and underlines the excellent customer service and affordability of the day two PCR testing service offering by the Group.

Zytronic 185p £29.7m (ZYT.L)

The specialist manufacturer of touch sensors, provided a pre-close update. “Although the business continues to see COVID-19 related effects, both nationally and internationally, and particularly related to electronic component supply issues across our full range of touch controllers, we are pleased to announce a considerable turnaround and a return to profitability since the half year ended 31 March 2021. Over the second half there has been an improvement in sales and gross margins, and strong cash generation. The improvement in trading in the second half of the financial year compared to the first half was significant, with sales increasing by 44% to £6.9m from £4.8m and gross margins increasing by six percentage points to 33.2%. EBITDA for the second half is expected to be around £1.3m and operating profit around £0.8m, enabling the elimination of the reported first half operating loss of £0.3m. For the year to 30 September 2021, we expect to report EBITDA of around £1.5m with an operating profit around £0.5m.”

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

*A corporate client of Hybridan LLP

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