Small Cap Feast

Small Cap Feast – 31st January 2022

Dish of the Day:

SuperSeed Capital Limited, has joined the AQSE Growth Market. The Company will invest in technology-led innovation primarily through unquoted funds managed by SuperSeed Ventures, the Company’s Investment Manager, with the objective of maximising the investors’ long term total returns – principally through capital appreciation. Raised £2m.

Off the Menu:

No Leavers Today.

What’s Cooking in the IPO Kitchen?

Rumours in the press suggest that Nvidia’s proposed $40bn acquisition of Arm may not proceed due to regulatory pressure. Arm’s current owner, Japan-based SoftBank Group, is reportedly considering the possibility of taking Arm public as an alternative with some suggesting London as a potential venue.
Strip Tinning Holdings, an established supplier of specialist connectors to the automotive sector, intends to join AIM. Strip Tinning manufactures specialist flexible electrical connectors related primarily to heating and antennae systems embedded within automotive glazing and to the connection of the cells within electric vehicle (EV) battery packs, increasingly using flexible and lightweight printed circuit technology that also has growing application elsewhere within vehicles. Mkt Cap and Capital to be raised TBC. Due mid Feb.
Artemis Resources ltd, an ASX listed mining exploration and development company intends to join AIM. The Company owns projects based in the Pilbara region of Western Australia, the Greater Carlow Gold-Copper-Cobalt Project in the West Pilbara and the Paterson Central exploration project in the East Pilbara. The Company also owns the Radio Hill processing plant that is currently on care and maintenance. This plant is strategically located only 35km from the Greater Carlow Project. Mkt Cap approximately £52m, Capital to be raised £5m. Due 7th Feb.
Hercules Site Services a technology enabled labour supply company for the UK infrastructure sector, intends to float on AIM. Hercules is seeking to raise approximately £5.5m to rapidly deliver on the significant demand it is experiencing for its diverse range of services across the UK infrastructure sector, including to scale up its operations to supply labour to the northern section of the HS2 rail project from London to Birmingham. In addition, up to £4.5m will be raised for the existing shareholder from the sale of part of its interest in the Company. Hercules has a sustained track record of revenue growth from £9.7m in FY 2015 to £30.7m in FY 2019 and has experienced a strong rebound following Covid-19 growing to £14.0m in H1 FY 2021. Expected early Q1 2022.
Spinnaker Acquisitions plc, intends to join the Main Market (Standard). The Company have conditionally agreed to acquire the entire issued share capital of HomeServe Labs Ltd, a wholly owned subsidiary of FTSE250 quoted public company HomeServe Plc, by way of a reverse takeover conditional, inter alia on relisting and successful completion of fundraising activities to be undertaken by way of a placing and direct subscriptions by new and existing investor. If the Proposed Transaction proceeds to completion, it is proposed to change the name of the Company to Ondo InsurTech Plc and the name of Labs, which will become a subsidiary of the Company, to LeakBot Ltd. Should the Proposed Transaction not proceed, then the Company would need to apply for the suspension of its listing of ordinary shares to be lifted and for trading to be restored. £5m capital to be raised. Due early 2022.
Unbound Group PLC, (currently called Electra Private Equity PLC) to join AIM. Unbound Group, will be the parent company for a range of brands focused on the 55 plus demographic. Initially focused on Hotter Shoes, Unbound’s curated, multi-brand retail platform will offer additional products and services that will enhance the enjoyment and wellbeing of its targeted customer community. This online platform will be based on the foundations of Hotter Shoes as a trusted brand, cloud-based digital infrastructure, and strong customer personalisation through data insight. No capital being raised on Admission. Anticipated Mkt Cap c.£30m. Due 1st Feb.
Clean Power Hydrogen, the UK-based green hydrogen technology and manufacturing company that has developed the IP-protected Membrane-Free Electrolyser is seeking to join AIM. The Group designs and manufactures hydrogen production units and is focused on the commercial production of green hydrogen in a simple, safe, and sustainable manner. The Group intends to raise approximately £50m. Due Early Feb.
Carbon Air, a nano-technology company which leverages the adsorption properties of activated carbon and other advanced materials to improve suspension systems, enhance acoustics or reduce noise, to join AIM. The Company’s proprietary technology has allowed it to develop a unique portfolio of solutions for a variety of sizeable end markets, including vehicle suspension systems, acoustic insulation for domestic appliances and micro-speakers for smartphones. Mkt Cap and Capital to be raised TBC. Due Late Feb.
i(x) Net Zero, the investing company which focusses on Energy Transition and Sustainability in the Built Environment, announces its intention to join AIM and raise money to provide development and expansion capital to certain of its investee companies, for future investments in companies that fall primarily within its areas of interest in Energy Transition and Sustainability in the Built Environment and to provide working capital for the Group. Capital to be raised £20m. Expected admission Feb.
Spiritus Mundi due to join the Main Market (Standard), a special purpose acquisition vehicle which will seek acquisition targets in Europe and Asia in the clinical diagnostics sector. The Company has already raised approximately £1.2m in a pre-IPO fundraising round. Due in Feb, delayed again.
Recycling Tech Group to join AIM, a UK-based engineering, research and manufacturing company that has developed a modular and mass producible machine, the RT7000, which processes hard to recycle plastic waste into a synthetic oil that can be sold back to the petrochemicals industry as a chemical feedstock to make new plastics. Targeting a £40m raise. Due early Q1 2022.
Nu-Oil and Gas to acquire Guardian Maritime Ltd and Guardian Barriers IP Ltd and become Guardian Global Security plc 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. Due early Feb.
Superdielectrics to join AIM, a Company which is focused on developing technology to build supercapacitors with high energy density, low cost, and environmentally benign electrical energy storage devices that will help create a clean and sustainable global energy and transportation system. Admission is expected to take place in Due in Feb, delayed again. Mkt Cap and Capital to be raised TBC

Breakfast Buffet

Active Energy 0.16p £9.1m (AEG.L)

The renewable energy business focused on the production of next generation energy pellets, announced the results of the first phase independent combustion testing program conducted on CoalSwitch™ fuel in Utah, USA. CoalSwitch™ combustion testing results demonstrate the superior quality of the fuel over existing biomass fuels. The tests delivered the following key findings: ¾ CoalSwitch™ fuel delivered to Utah had an increased heating value of 9,313 British Thermal Units per pound (BTU/lb), which represents a 12.9% premium to traditional white pellets currently being produced for the biomass market; ¾ the CoalSwitch™ test results show a material reduction of Ash compared to burning 100% coal; ¾ the CoalSwitch™ test results show a significant reduction in Nitrogen Oxide and Sulphur Dioxide emissions compared to burning 100% coal; ¾ CoalSwitch™ can be used on its own as well as co-fired with coal in different ratios; and ¾ CoalSwitch™, both when blended and in its pure form, can be milled in an unmodified bowl mill and burnt in existing coal-fired burners without additional capital expenditure requirements. Prospective customers have been requesting this data in order to understand the full environmental and commercial benefits that use of CoalSwitch™ represents.

Cora Gold 8.4p £24.3m (CORA.L)

The West African focused gold company, provided an update on its Definitive Feasibility Study (DFS) for the Sanankoro Gold Project in Southern Mali. All hydrogeological and geotechnical drilling, associated pump testing and geotechnical test pits have been completed on schedule. All field-based sampling work is now complete and final samples are being dispatched to the relevant laboratories. Metallurgical test work is ongoing. All major procurement packages have been sent to suppliers for costing. Site lay-out has been finalised, including locations of the plant, tailings storage facility and camp accommodation. The Environmental and Social Impact Assessment remains on target for completion in H1 2022. DFS remains on track to be completed by end of H1 2022.

Knights Group 388p £325.5m (KGH.L)

One of the UK’s fastest growing legal and professional services businesses has agreed to acquire Langleys Solicitors LLP, a leading independent law firm in York and Lincoln. Langleys, established in 1890, brings a further 72 fee earners to Knights, significantly strengthening the Group’s presence in York. The acquisition will also allow the Group to further expand its operations in the East of England by providing entry into Lincoln, an attractive growth market for legal and professional services. In its unaudited accounts for the year ended 31 March 2021, Langleys reported revenue of c£14m with a corporatised PBT margin of c5%. Approximately two thirds of revenue is in respect of the core Langleys business (excluding the HPL and CL businesses). Following full integration and realisation of all synergies, the Board expects the core business to contribute a PBT margin of c20% which, combined with a typical level of revenue churn post-acquisition, means the acquisition is expected to be immediately earnings enhancing. Under the terms of the acquisition, Knights will acquire Langleys from its four existing equity partners on a debt free, cash free basis for a total consideration of £11.5m subject to working capital adjustments at the time of completion.

KRM22 45p £16m (KRM.L)

The technology and software investment company that focuses on risk management for capital markets, today announces a trading update for the 12 month period to 31 December 2021. Gross cash as at 31 December 2021 of £5.4m (FY2020: £2.0m). ARR at 31 December 2021 of £3.8m (FY2020: £4.1m). New contracted ARR in the year of £0.7m (FY2020: £0.8m). Total revenue recognised of approximately £4.1m (FY2020: £4.6m). Adjusted EBITDA loss of £0.8m (FY2020: loss of £0.3m). FY2021 has seen KRM22 successfully sign multi-year contracts with new customers as well as transitioning customers, inherited from legacy acquisitions, on to new multi-year contracts. However, this progress was more than offset by churn from a subset of those legacy customers. In addition, a new contract with a global “tier one” bank, expected to be signed in the fourth quarter of FY2021, has been delayed to 2022. The Company’s cost base increased in FY2021 compared to the prior year due to the reinstatement of salaries in order to ensure retention of key staff, expand the Global Risk Platform and the extension of the Company’s risk management products. This all resulted in lower revenue recognised and an increase in adjusted EBITDA loss compared to FY2020 and overall results slightly lower than current market expectations.

N4 Pharma 3.4p £6.15m (N4P.L)

The specialist pharmaceutical company developing Nuvec®, a novel delivery system for cancer treatments and vaccines, announces that the University of Queensland has informed the Company that it has been notified by the US patent attorney of the granting of its patent application in relation to Nuvec® in the United States and by the Chinese authorities of the granting of a patent in China. N4 Pharma has the exclusive worldwide rights to Nuvec® for therapeutic uses in humans and animals. The granted patent in the USA will specifically cover the matter of composition of the nanoparticle made using a broad description of the manufacturing process used by the Company. The University of Queensland has also informed the Company it will file a continuation patent application in the USA for a matter of composition patent independent of the manufacturing process to match the patents granted in Europe, Japan, Australia and China.

Next Fifteen 1,125p £1,126.4m (NFC.L)

Trading update from the tech and data-driven growth consultancy with operations in Europe, North America and across Asia Pacific. Strong revenue growth in Q4: 34% year-on-year, with 24% organic growth. 34% year-on-year revenue growth for full year with 24% organic growth. Very encouraging performances across all segments and geographies continue. Continued strong performance in Q4 sets us up well for a positive start to the new financial year. Results for the year to 31 January 2022 expected to be ahead of management expectations.

Poolbeg Pharma 8.1p £40.5m (POLB.L)

The clinical stage infectious disease pharmaceutical company with a capital light clinical model, confirms that it has signed the licence to AnaBio Technologies (AnaBio) microencapsulation and nanoencapsulation technologies to develop an oral vaccine delivery platform. This follows the binding term sheet announced on 16 December 2021. This licence provides Poolbeg with exclusive access to AnaBio’s microencapsulation and nanoencapsulation technologies for use in the development and commercialisation of vaccines. Combined with the Company’s expertise in infectious diseases and vaccine development, Poolbeg will use this technology as a platform to complement its existing and growing pipeline of assets by developing oral vaccines for multiple disease indications.

Powerhouse 3.90p £154.3m (PHE.L)

The UK technology company commercialising hydrogen production from plastic, has appointed Paul Drennan-Durose as its Chief Executive Officer. Paul has many years of Board level experience in complex new technology, distribution, engineering services, and manufacturing companies. He has led businesses on an international scale and has extensive experience in a range of sectors, including cleantech energy, oil & gas, waste to energy, process manufacturing, marine, and the auto industry. Paul brings significant and diverse commercial, strategic, tactical and transformation experience to Powerhouse. Paul will join Powerhouse on 14 February 2022, having spent over three years as the investor appointed Chief Executive Officer of Heliex Power Limited, a private equity backed cleantech energy business. Whilst there, he led the transformation of the start-up new technology company, leading the roll-out of its technical and commercial market recovery.

Wandisco 297p £177m (WAND.L)

The LiveData company, today announces a deepening of its strategic partnership with Oracle to provide WANdisco LiveData Migrator ™ to both Oracle and its customers. With this agreement, Oracle will provide customers and partners fully funded access to WANdisco LiveData Migrator to accelerate their data lake migrations to Oracle Cloud Infrastructure without incurring any additional cost. Oracle has strategically prioritised the movement of data into its cloud in order that customers can quickly benefit from the scalability and flexibility of the cloud without the burden of the associated transition costs. Oracle will purchase licenses from WANdisco to be used in migration projects and there is already a large and defined pipeline, which Oracle intends to pursue over the coming year using WANdisco LiveData Migrator.

Xpediator 54.50p £77.2m (XPD.L)

The provider of freight management services across the UK and Central and Eastern Europe, confirms that trading, for the 12 months to 31 December 2021, has continued strongly across all three divisions and expects to deliver revenues in excess of £300m(2020: £221m) and adjusted profit before tax well in excess of £8.5m(2020: £7.2m), in line with the upgraded guidance given in June 2021. Revenue growth continued into the second half of 2021, with strong increases in Freight Forwarding revenues, the largest division of the Group, driven primarily by CEE markets, increased sea freight volumes and an uplift from UK customs clearance. Lithuania and Bulgaria are again expected to be significant contributors to the uplift in performance. Pallex Romania has contributed to another positive trading period for the Logistics and Warehousing division. In addition, the recent partnership with e-Commerce fulfilment expert, Synergy Retail Support, has introduced new customers into the Braintree site (Essex) and other Xpediator warehouses. The consolidation of Southampton warehousing activity was completed in 2021. Substantial benefits of the integration and additional 200,000 sqft are expected to be realised in 2022. Transport Support Services, trading principally under the Affinity brand, provides bundled fuel and toll cards alongside financial and support services for hauliers in Southern Europe. The recovery seen in the first half of 2021 has continued into the second half of the year, in part due to increased freight movement and expansion into the Balkans, despite the reduction in road transportation due to the pandemic. Advanced payments to secure key supplier performance and additional cost associated with a new freight forwarding operating system in the UK means the Company expects to report a net debt position £4.9m, as at 31 December 2021. Alongside the new operating system and implementing new processes, receivables have increased which will unwind in 2022 as these processes are embedded.

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