Small Cap Feast

Small Cap Feast – 23rd March 2017

Dish of the Day:

Duke Royalty—Schedule 1 update.  Seeking re-admission to AIM today as a Rule 8 investing company.  Raising £15m

Off the Menu:

No AIM Leavers Today

What’s Cooking in the IPO Kitchen?

K3 Capital Group—Schedule 1 from the Group of business and company sales specialists across business transfer, business brokerage and corporate finance. Admission date and fundraise details TBC.

Integumen— Schedule 1 from the personal health company developing and commercialising technology and products for the human integumentary system. Raising £2.16m at 5p. Expected market cap £8.16m. Admission expected 5 April.

Sentinel—Investment company expecting NEX admission/introduction on 24 March. £636k raised pre-IPO.

BioPharma Credit—Expected Gross Initial Acquisition Proceeds now c.$338m. Gross Cash Proceeds capped at $423m with placing and open offer. Results expected 23 March with admission  now due 30 march.


Breakfast Buffet

Produce Investments (PIL.L) 202.5p £52.86m

H1Dec16 results from the operator in the fresh potato and daffodil sector.  Board significantly strengthened with appointment of new Chairman, Group Finance Director and Non-Executive directors. Revenue £79.3m, up 1.0%. Operating profit £0.2m (2015: £3.4m) as result mainly of lag in raw material price recovery, and costs associated with the new ERP system. Interim dividend increased by 2% to 2.44p. Net debt £29.1m (2015: £22.8m). New “Acquire, Develop, Manage the Portfolio” strategy for future growth formulated and ready for implementation. “Current trading is well ahead of last year as we begin to recover higher raw material costs through our pricing arrangements with key customers.” FYJun16 Underlying trading profit broadly in line with the Board’s original expectations, however full year PBT will be lower than these expectations as a result of the non-cash write-offs. FYJun16E rev £185.1m and £8.1m PBT.


Gfinity (GFIN.L) 15.38p £24.2m

The eSports business, announces OMEN by HP as its first official partner of the inaugural eSports tournament, Gfinity Elite Series (“Elite Series”). As the Official Hardware Partner, OMEN will be integrated throughout the 10-week professional season which commences in June 2017, together with the supporting Gfinity Challenger competition. This announcement follows on from the agreement signed in August 2016, with HP Inc Limited, for an OMEN sponsored tournament, which took place at EGX, the UK’s largest gaming exhibition in September 2016.  There are no market forecasts.


Solid State (SOLI.L) 512.5p £43.3m

The supplier of specialist industrial/ruggedised computers, electronic components, advanced antenna products, communications systems and battery power solutions to the electronics market, announces a trading update for the year ending 31 March 2017. Underlying PBT is expected to be broadly in line with expectations, being in excess of £3.1m with revenue in excess of £39m. The final quarter has seen a number of projects within the higher margin antenna division being delayed, consequently contribution from these projects is expected in future periods. The other areas of the manufacturing business unit have performed broadly in line with management’s expectations and the distribution business has performed slightly ahead of management’s expectations. The Group’s order book stood at £18.13m as at 28 February 2017 (29 February 2016: £16.45m).  FYMar17E rev of £43.6m and £3.25m PBT.


Curtis Banks Group (CBP.L) 265p £142m

FYDec16 results from one of the UK’s leading SIPP providers with a portfolio of over 72,000 SIPPs. Operating revenue £29.7m from £17m. Underlying PBT £7.1m from £6m. 86% growth in SIPP numbers, 16% gross from organic growth. £27m raised in equity placing . Acquisition of Suffolk Life from Legal & General for £45m – completed 25 May 2016. “The outlook for 2017 is strong. We continue to be approached by SIPP operators looking for an exit for a variety of reasons and we evaluate opportunities as they come to us. We will only consider acquisitions of high quality books of SIPPs where we have confidence that they can provide at least the required level of operating margins. Admission to AIM has provided us with the resources and ability to consider and fund all levels of acquisition.” FYDec17E £38.89m and 14.73pEPS.


Craneware (CRW.L) 1192p £321.5m

The specialist Value Cycle solutions for the US healthcare market, announced a significant new contract with a large hospital operator in the US.  This win, with an existing customer, adds further Value Cycle solutions and related services to a seven year contract originally announced in April 2014.  The contract is expected to deliver a further $3.7m of revenue over this new seven year term as the hospital network rolls out these additional solutions across its facilities and $1.5m of additional revenue as the contract for the currently implemented solutions is extended to run co-terminus to this amendment.  FYJun17E rev £47/07m and £14.07m PBT.


Ideagen (IDEA.L) 70.5p £128.7m

The supplier of Information Management Software to highly regulated industries, has acquired PleaseTech for an initial net consideration of £10m (on a cash-free, debt-free basis) and a potential further consideration of up to £2m dependent on the attainment of specified performance targets in the six months after completion. £10m placing at 75p. PleaseTech is a fast growing, profitable and cash generative software company. PleaseTech achieved revenue of £3.9m and EBITDA of £1.3m for FYDec16, an increase in revenue of 45% and EBITDA of 72%.  Expected to enhance FYApr18 earnings. (FY18E EPS 3.9p).


Science In Sport (SIS.L) 82p £35.57m

FYDec16 results from the  sports nutrition company that develops, manufactures and markets sports nutrition products for professional athletes and sports enthusiasts. Revenues increased by 30% to £12.24 million. Underlying operating loss of £0.8 million (2015: £0.25 million) in line with expectations and growth strategy, reflecting continued investment in brand awareness, e-commerce and International expansion. “Strong start to 2017 sales, core UK and EU market forecast to be EBITDA positive this year.” FYDec17E £15m rev and £1.19 PBT loss.


Progility (PGY.L) 1.13p £2.25m

HYDec16 results from  Professional Services, Healthcare and Communications firm. Revenues up to £36.5 million (2015: £30.0 million). Operating profit £1.6 million (2015: £0.1 million). Comms and healthcare performing well with trading tougher in professional services. Benefitted from Sterling weakness. “Overall, we continue to pursue our strategic objectives, and we remain optimistic for the full year to June 2017. Management will continue to seek means to reduce costs and increase revenue, and to improve performance across all areas of the business.”  There are no forecasts in the market.


Vela Technologies (VELA.L) 0.2p £1.44m

The investing company focused on early-stage and pre-IPO disruptive technology investments, notes the announcement released on 22 March 2017 by BTL Group Ltd  regarding a proposed fundraising by the company. Vela currently holds 689,800 common shares in BTL equivalent to c. 4% of BTL’s issued share capital.  Vela intends to subscribe for 50,000 BTL Units in the BTL Fundraise for a total consideration of C$135,000. BTL intends to use the proceeds from the Private Placement in connection with acceleration of the development of Interbit, BTL’s proprietary blockchain platform and towards general and administrative expenses.


Venture Life Group (VLG.L) 68p £25.05m

FY Dec16 results from the international consumer self-care group focused on developing, manufacturing and commercialising products for the ageing population. Revenues up 57% to £14.3 million. Adjusted EBITDA profit of £0.8 million (2015: loss of £0.6 million). Adjusted loss per share of 1.3p (2015: loss 3.1p). £2m cash. ‘We moved into January 2017 with a significantly higher order book for that month than January 2016, and with many discussions ongoing for new business across all of the Group’. FYDec17E £16,5m rev and £0.5m PBT.


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