Small Cap Feast

Small Cap Feast – 26 June 2020

Dish of the Day:

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What’s Cooking in the IPO Kitchen?

The pantry is bare!

 

Breakfast Buffet

Redcentric 127p £189m (RCN.L)

The UK IT managed services provider has issued a trading update. The Board has been encouraged by the Company’s trading performance in the year to date, with recurring revenue orders received in Q1 FY21 expected to be marginally ahead of Q1 FY20 and significantly ahead of the Board’s expectations at the time of the last trading update and COVID-19 update released on 3rd April 2020. In addition, customer installations in the quarter are expected to be significantly higher than the equivalent period last year and ahead of expectations at the time of the last trading update.

 

Sativa Group 3.125p £17.8m (AQSE:SATI)

The  CBD wellness and medicinal cannabis Group, is working on its Novel Food application in partnership with Stillcanna Inc, and is committed to meeting the requirements of the Food Standards Agency (“FSA”) concerning the safe use of CBD products and the timetable for Novel Food authorisation. The FSA is giving the CBD industry a deadline of the 31(st) March 2021 to submit valid novel food authorisation applications. After 31st March next year, only products which have submitted a valid application will be allowed to remain on the market. The authorisation process ensures novel foods meet legal standards, including on safety and content.

With the novel food’s authorisation, it will mean that there is a two-step process in applications. Step one, the manufacturers of the CBD ingredient, (extract or isolate) of which genotoxicity and toxicology testing are part of that process, and step two, the manufacturer of the end consumer product who will need to conduct stability testing and apply for novel foods authorisation. Henry Lees-Buckley, Chief Executive Office of Sativa, said: “We welcome and embrace the clarity of the regulatory framework as an important step to leading the development of a safe and legal market in the UK. We are taking seriously the guidance from the FSA to reassure our customers and distribution partners that Sativa and StillCanna are at the forefront of building a sustainable CBD wellness industry. We have invested in our infrastructure to ensure that we are fully compliant with industry regulation for each step of the manufacturing process of our CBD products. By owing each step of that process we can ensure that compliance is maintained throughout”

 

Windar Photonics 20p £8m (WPHO.L)

The technology group that has developed a cost efficient and innovative LiDAR wind sensor for use on electricity generating wind turbines, announces an unaudited trading update for the year ended 31 December 2019  and also for 2020 year to date.

2019 trading update—· Revenue EUR1.2 million (2018: EUR3.5 million) – · Operating costs (ex. depreciation, amortisation and warrant costs) of EUR2.5 million (2018: EUR2.2 million)

  • EBITDA loss of EUR1.9 million (2018: loss EUR0.4 million) -· Net cash of EUR1.4 million including restricted cash holdings* of EUR0.4 million (2018: EUR2.2 million and EUR0.5 million, respectively) -· Trade receivables at 31 December 2019 of EUR0.5 million (2018: EUR0.6 million)  – · Order backlog at the end of 2019 for deliveries in 2020 totalled EUR0.1 million (2018: EUR1.0 million)

Given the Company’s concentration of contracts for projects in China and with Chinese clients generally, there has been a slowdown in delivery of LiDAR and other equipment compared with internal budgets, principally due to the global slowdown resulting from the COVID-19 pandemic.  Despite this, the Company has obtained orders in 2020 to date for more than EUR1.7 million for delivery in 2020. The current order backlog and sales pipeline for the rest of 2020 and 2021 are stronger that as at 31 December 2019.  In addition, 2020 is seeing, for the first time in the Company’s history, sustained progress from the OEM market. However, given the inherent uncertainties surrounding COVID-19, the Board continues to believe it is inappropriate to provide forward looking guidance to investors and analysts at the current time.

 

Warpaint London 69p £53m (W7L.L)

AGM Statement.

“Whilst trading conditions remain challenging as a result of the COVID-19 pandemic, sales in the first half of 2020 have been at a higher level than anticipated, albeit significantly below the first half of 2019.  There has been an improvement in margin, no erosion of cash and a positive EBITDA for the first 6 months of the current year.

“The Group has a sound financial footing and we are actively implementing our strategy for growth.  We look forward to the remainder of the year with cautious optimism.”

 

DP Poland 7.25p £18.4m (DPP.L)

AGM Update from DP Poland who  through its wholly owned subsidiary DP Polska S.A., has the exclusive right to develop, operate and sub-franchise Domino’s Pizza stores in Poland.  “Trading in 2020 has started broadly in line with management’s expectations. COVID-19 has had relatively little impact on our business in comparison to other businesses in our industry as we have been able to keep open all our stores and our 2 commissaries operating without interruption. As previously reported, from Saturday, 14 March 2020, the Polish government imposed ‘lock down’ restrictions across the country. As a result, like-for-like (“LFL”) System Sales and System Sales were down 14% and 10% respectively for the month of March. However, performance recovered in the following months, with LFL System Sales up by 3% and System Sales up by 6% in each of  the months of April and May.

A positive impact of COVID-19 has been a reduction in our food and labour costs and in some of our rent costs. In addition, the recruitment market has improved for us, in terms of both availability of staff and labour costs. However we have also incurred some additional costs, principally in connection with safety and cleaning, across our operations to meet the requirements necessitated by COVID-19 regulations.

 

Inspiration Healthcare 69p £27.4m (IHC.L)

Appointment of Jonathan (Jon) Ballard as the Group’s Chief Financial Officer and Company Secretary with effect from 1 July 2020.

Jon joined Inspiration Healthcare in 2017 as Group Finance Controller and has worked alongside Mike Briant the retiring Chief Financial Officer for over 3 years. As has been previously announced, Mike Briant will retire from the Board at the end of June 2020 and will continue to work full time with the Group until the end of August and will then continue during a handover period part time until November 2020.

 

IQE 53p £423m (IQE.L)

The manufacturer of advanced semiconductor wafer products for the global semiconductor industry, today welcomes the UK Government’s approval of a major £43.74m project with South Wales’ compound semiconductor cluster. This comes as part of the first wave of funding through UK Research and Innovation’s flagship Strength in Places Fund (SIPF).  

The project’s twelve partners include key Welsh Anchor Companies (IQE plc, Newport Wafer Fab (NWF) and SPTS), two universities (lead partner Cardiff University and Swansea University), CSC and several government organisations, including the Compound Semiconductor Applications Catapult.

The initiative is one of seven chosen to be supported by the UK Government as part of a broader £400m investment programme being announced today.

 

Kazera Global 0.63p £4.2m (KZG.L)

Kazera has increased its interest in African Tantalum (Pty) Limited (Aftan), who own the Tantalite Valley Mine (TVM) and the Tameka Shelf Company, to 100%, having acquired a further 25% interest.

Furthermore, the Company has announced the appointment of Mr Odilon Ilunga as an Executive Technical Director to the Board of the Company.

  • Acquisition cost of £26,008 funded via low-cost issuance of 4,523,114 ordinary shares in the capital of the Company .o

 The acquisition of the further 25% interest has been completed for the same number of shares relative to the 75% interest previously acquired by the Company, despite significant resource upgrades and progress being made to the Mine during this period and the share price being considerably lower than at the time of the original acquisition.

  • Completes the Company’s long-term planned strategy of acquiring total control over TVM ahead of a significant period for the Mine where the Orange River Pipeline building project matures
  • As a reminder to shareholders, cumulatively, Aftan de-risked JORC Compliant Mineral Resource Estimates of 622.2 kt of lithium and tantalite resources in it’s first exploration phase at the Mine since Kazera first invested, with the second phase ongoing

 

Marlowe 484.5p £223m (MRL.L)

Acquisition of Elogbooks, a leading provider of contractor management software and services, for an enterprise value of up to £14.05 million. The acquisition represents the next step in Marlowe’s strategy to deliver integrated technology and services to enhance the compliance, safety & upkeep of our clients’ premises

  • Placing, by way of an accelerated bookbuild, expected to raise a minimum of £35 million at 478p to fund the acquisition and provide resources to accelerate the Group’s acquisition-led strategy amidst a favourable M&A climate
  • Unaudited results for year ended 31 March 2020 (FY20):

o  Adjusted EBITDA2 up 51% to £16.6 million

o  Adjusted profit before tax2 up 52% to £13.6 million

 

Instem 440p £73.36m (INS.L)

Proposed £15.75m placing at 435p. The net proceeds of the Placing receivable by the Company will be used to accelerate the Group’s acquisition strategy with a number of potential compelling opportunities for bolt on acquisitions and more substantial targets having been identified. 

 

Head Chef:

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

*A corporate client of Hybridan LLP

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