Small Cap Feast

Small Cap Feast – 23 June 2020

Dish of the Day:

No Joiners Today

 

Off the Menu:

No Leavers Today

 

What’s Cooking in the IPO Kitchen?

The pantry is bare!

 

Breakfast Buffet

1pm 21.75p £19.66m (OPM.L)

Update. Trading — FY May 2020—During the year, the Group experienced three quarters of ‘normal’ trading activity and one quarter, 1 March to 31 May 2020, impacted by the effects of the COVID-19 pandemic.

The Group reports a satisfactory trading performance for the financial year as a whole in spite of the significant interruption to normal trading activities in the fourth quarter caused by the COVID-19 crisis and its financial implications. New business origination for the financial year was approximately £147.0 million of which approximately £54.5 million (37 per cent.) was written on ‘own-book’ and £92.5 million (63 per cent.) was placed for broker commission income.

New term loan funding of £3.1 million for operations; and

Further new and reallocated funding of £6.3 million for CBILS lending

 

Trackwise Designs 87.5p £19.35m (TWD.L)

The provider of specialist products using printed circuit technology, announces its audited results for the year ended 31 December 2019.

  • Revenues of £2.91m (2018: £3.47m)
  • Revenues from Improved Harness Technology (“IHT”), the key growth area for Trackwise, up 55% to £0.94m (2018: £0.61m)
  • Adjusted EBITDA of £0.57m (2018: £0.62m)
  • Adjusted operating profit of £0.26m (2018: £0.32m)
  • Net debt (excludes IFRS16 lease liabilities) of £0.30m (31 December 2018: net cash £2.79m)

Philip Johnston, CEO of Trackwise, commented: “Despite the economic headwinds faced in 2019, we made encouraging progress against our strategy, with our globally unique IHT technology gaining traction and significant capability and capacity improvements being made that position us well for the future. That momentum continued into 2020, with our first IHT production order secured in February, a successful fundraise in March and the completion of the acquisition of Stevenage Circuits Limited in April.

 

TP Group 8.35p £65.06m (TPG.L)

The provider of mission-critical solutions for a more secure world has signed an initial contract worth £0.3m with Gulf Data International Co LLC, an IT solutions provider and systems integrator based in Abu Dhabi. The contract will see TP Group work in partnership with gDi to develop Artificial Intelligence (“AI”) tools for use in the oil and gas industry in the United Arab Emirates (“UAE”), and to deliver an optimised production modelling and management solution to a major oil and gas company, also in the UAE.

The proof of concept project will develop a digital model of a selection of specific oil production assets and will be structured around the Optimiser system, which is part of TP Group’s existing software suite of AI, machine learning and decision support tools.

 

Frontier IP 66.5p £33.8m (FIPP.L)

The specialist in commercialising intellectual property, notes today’s announcement below from portfolio company The Vaccine Group relating to the significant progress made in developing animal vaccines based on its novel technology to tackle COVID-19.

Two of the Company’s vaccine candidates have enjoyed success in in vitro, pre-animal trial laboratory testing. Following this important milestone, TVG is now preparing to test the two vaccine candidates in animals. Two further vaccine candidates are also under development.  The Company is also investigating the longer-term potential for human vaccines.

 

BlueStar Capital 0.195p £7.3m (BLU.L)

Update regarding its investee company Leaf Mobile Inc (“Leaf”).

Leaf (TSX.V: LEAF), a company in which Blue Star holds an investment, has reported a significant rise in turnover from its mobile gaming portfolio for the first quarter of 2020 to CAD$5.6m, an increase of more than 420 per cent. on the prior year. Revenue growth was attributed to the success of its new mobile games and stable revenue from its portfolio of legacy games. The first quarter of 2020 represents the best first quarter in Leaf’s trading history. 

Blue Star made its investment in Leaf in April 2020 at a price of CAD0.16 per share. The share price for Leaf is currently trading at approximately CAD0.37 per share.

 

Rockfire Resources 1.075p £6.8m (ROCK.L)

The gold and base metal exploration company announced that drilling is progressing well and that long intervals of sulphides up to 235m have been recorded in drilling. A water bore, which was drilled in preparation for planned diamond drilling, has also encountered significant sulphides at the Company’s 100%-owned Plateau Gold Deposit (“Plateau”), part of the Lighthouse tenement in North Queensland, Australia.

 

Smart Metering Services 569.5p £642.66m (SMS.L)

AGM Update—Trading and FY20 outlook—At 31 May 2020, the Group’s total Index Linked Annualised Recurring Revenue (“ILARR”) was £75.9 million. Despite the temporary cessation of meter installations caused by Covid-19, the Group currently expects underlying profitability for the year to 31 December 2020 to be in line with the Board’s earlier expectations, reflecting the resilience of the SMS business model. -As previously announced on 1 June 2020, SMS has commenced a phased and progressive resumption of all field work following a temporary suspension of non-essential activities, including smart meter installations, on 24 March 2020.

 0      As a result of lower installations since March 2020, the Group’s capex on smart meters has been lower than expected. Liquidity remains strong, with a net cash position of £48m and £300m of banking facilities at 31 May 2020.

SMS is fully funded to install its 2 million smart meter order book as well as additional meter opportunities.

 

Fox Marble 1.85p £5.7m (FOX.L)

The company focused on marble quarrying and processing in Kosovo and the Balkans region, has signed a contract to supply 15,000 square metres of cut and polished tiles and 19,000 metres of bespoke cut to size products to CC Apartments LLC. 

CC Apartments LLC is engaged in developing several prestigious projects including apartments in Kosovo, as well as Albania and surrounding countries.

Fox Marble will be processing blocks of a range of marble from its own quarries for this project and supplying this material from its factory in Kosovo.

 

OnTheMarket 81.5p £58m (OTMP.L)

The majority agent-owned company which operates the OnTheMarket.com property portal, announces today an extension to the payment support initiative for its agent customers to help ease the continuing impact of the COVID-19 situation.

On 19 March 2020, OnTheMarket announced a 3 month discount to listing fees to assist agent customers who were facing the uncertainty of the evolving COVID-19 situation. The initial discount period was due to expire on 25 July 2020. To further help to reduce the cash flow pressure which agents are continuing to face, OnTheMarket is now extending listing fee discounts for a further 2 months to 25 September 2020. The discount will remain at 33% for the first month and will be 20% for the second month

 

AFC Energy 21.85p £104.44m (AFC.L)

Update on AlkaMemTM developments since the beginning of 2020. 

Highlights

  • Successfully scaled up and validated AlkaMemTM membrane within a commercial sized HydroX-Cell(S)TM fuel cell.
  • Excellent power density maintained utilising scaled up AlkaMemTM membrane, reflecting performance seen amongst alternative high-density fuel cell technologies.
  • Developing methods for enhanced mechanical stability of the AlkaMemTM membrane to meet wider industry applications.
  • Initial small scale AlkaMemTM samples sold for comparative validation to commercial and research institutions in Europe with an emphasis on alkaline water electrolysis applications.
  • Preparing for further small-scale membrane samples dispatched to European institutions next month.
  • Initial review of third-party membrane base film suppliers highlights likely cost advantages to alternative membrane base film technologies in the market today.

 

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”.