Small Cap Feast

Small Cap Feast – 23rd January 2017

Dish of the Day:

No AIM Joiners Today

Off the Menu:

No AIM Leavers Today

What’s Cooking in the IPO Kitchen?

Jackpotjoy — Prospectus now approved by the FCA. Admission to Official List expected 25 January.

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

Early Equity (EEQP.NEX) 1.1p £7m

FY Aug 16 results from the UK investment Company that provides equity and debt capital, along with strategic and operational counsel, to businesses that have the potential for both superior investment returns and meaningful community impact. Loss of £110k. Year end portfolio of £540k. The period included a 32.14% investment in Yicom which has a Sole  Distributorship Agreement with Early Infinity Holdings Sdn. Bhd. a direct sales Company holding licences to operate a multi-level marketing business in Malaysia. Yicom started trading in February 2015 and the rate of turnover has  increased each month as new distributors have been recruited.


Alliance Pharma (APH.L) 47.5p £224.47m

Pre-close trading update from the speciality pharmaceutical Company. Group revenue for 2016 is expected to be more than double the prior year at £97.5m (2015: £48.3m). This has been driven by the transformational acquisition of the ex-Sinclair products in December 2015 and the continued strong performance of the original Alliance portfolio. Trading profit before tax is expected to be in line with the Board’s expectations. The UK registration for Diclectin, a product undergoing approval for the treatment for nausea and vomiting of pregnancy, is progressing to plan. “We expect UK registration mid-year, which will enable us to begin sales in the second half of 2017 with European territories following from late 2018.” 11.8x FY16E PE and 2.6% yield.


Gamma Communications(GAMA.L) 490p £439.5m

FYDec16 Trading Statement  from the technology based provider of communications services to the UK business market. Adjusted EBITDA anticipated to be slightly ahead of market expectations.  This reflects a strong demand in the business market for Gamma’s portfolio of products.  Some of the highlights from the year include: continued strong growth and increasing market share in Gamma’s SIP Trunking, Cloud PBX and data services, with margins holding; continued growth in the number of channel partners; good progress with  direct sales business including significant wins including a large financial institution, Reed and Nando’s; contract lengths continue to increase in the direct business; Gamma successfully launched its Mobile Service. FY16E £213.4m and PBT of £23.27m.


Oxford BioDynamics (OBD.L) 144p £126.56m

The revenue-generating biotechnology Company focused on the discovery and development of novel epigenetic biomarkers for use within the pharmaceutical and biotechnology industry, announced that it has entered into a pilot development agreement with EpiFit, a new Singapore based Company, to identify epigenetic biomarkers to evaluate predispositions, variations and responses in healthy volunteers undergoing fitness programmes conducted by EpiFit. Upon completion of the initial project, OBD has agreed to grant EpiFit the option of a multi-year global licence to use certain EpiSwitch™ biomarker panels in the supply of screening services to certain third parties. There are no market forecasts.


Flowtech Fluidpower (FLO.L) 134.25 p £57.83m

From the Specialist technical fluid power products supplier. FYDec16 trading: Against difficult trading conditions the Group has delivered a solid performance.  Group revenue was c.19.9% up on 2015 at approximately c.£53.7m Acquisition further strengthening of its Power Motion Control division through the acquisition of HTL. Consideration comprises £0.75m and additional payments expected to be c.£1.0m subject to earn-out over  two-years. In addition, the Group will assume a further £0.9m net debt. Acquisition pipeline remains strong. FY16E rev of £54.6m and EPS of 14.15p. Div of 5.5p.


Lightwave RF (LWRF.L) 14.5p £5.62m

FYSep16 results from the proprietary IOT and connected devices specialist enabling the remote control and monitoring of light, heat, power and security through just one App.  Revenue for the year of £1.44m (2015: £2.10m); Gross profit £0.47m (2015: £0.67m); Loss before and after taxation at £0.84m. Post year end £2.2m fund raising.  Order book as at 20 January 2017 exceeds £1.2m at current exchange rates;  Significant enhancement made to cloud capabilities and cloud-based IoT platform; successfully integrated with Amazon Alexa, Google Nest and IFTTT.


Belvoir Lettings (BLV.L) 109p £36.69m

FYDec16 trading update from the UK’s largest property franchise. Strong end to the year. Consequently, the Board expects that the results for the year will be broadly in line with market expectations. Successful acquisition in June 2016 of Northwood, the largest independent franchised network of 86 offices. UK coverage expanded substantially by 90 offices to 302. Group revenue up 44% to £10.0m (2015: £6.8m). Renewed drive to double the level of franchisee portfolio acquisitions in 2017. “Following the ban on tenant fees in Scotland, our franchisees adapted quickly and effectively such that there was no discernible impact on revenue to either the franchisees or the Group.“ Strong fundamentals underpinning  lettings market. FY16E PE 15.1x 6.3% yield.


Augean (AUG.L) 50.75p £52.14m

FYDec16 trading update from one of the UK’s leading specialist waste management businesses. Underlying profit before tax is expected to be in line with consensus market expectations (FY16E PBT £7.13m). Year end 2016 net debt was £10.8m which is £2.3 m better than expected. “We have had an encouraging start to the year and have good momentum across our businesses.  Despite some challenging market conditions in 2016, we have secured further waste management contracts with top tier customers that will progressively diversify our revenue streams. In view of the opportunities ahead, the Board remains confident in the Group’s delivery of further sustainable growth, in line with our strategy.”


Safestyle UK (SFE.L) 310.75p £257.32m

FYDec16 trading update from the UK-focused retailer and manufacturer of PVC  windows and doors for the homeowner market. The Company has continued to trade well, with revenue for the year increasing 9.8% to approximately £163.5m (2015: £148.9m). In addition, profit before tax has shown good progress and is in line with Board expectations (FY16E PBT £20m).  As expected, H2 showed slower growth than H1 due to more challenging comparatives. Sterling to impact 2017 input costs. Plans to offset by price increases. “Despite the uncertain macroeconomic outlook, we remain cautiously optimistic and believe we are well positioned to continue growing the business.”


Aeorema Communications (AEO.L) 26p £2.35m

HY Dec16 results from the live events agency.  Pre-tax profits of £77,180 on a turnover of £1,575,470. Awards wins in film and events. Robust cash position of £1,151,766. Aeorema traded in line with management expectations for the first half of the year and maintained its strong cash position, but the second half remains challenging as previously reported.  “In the longer term we remain confident that our strategy and strong market reputation in the delivery of creative and diverse live events will see Aeorema prosper”. There are no market forecasts.


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Emily Liu, CFA, CAIA
0203 764 2344

Sous Chef:

Sacha Morris
0203 764 2345

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