Small Cap Feast

Small Cap Feast – 4th April 2022

Dish of the Day:

Asimilar Group plc (ASLR.L), currently listed on AIM, has joined the Aquis Stock Exchange Growth Market (Access Segment). The Group invests in the technology and software sectors and aims to focus primarily on opportunities in the Big Data, Machine Learning, Telematics and Internet of Things areas. Whilst the Directors are principally focused on making investments in private businesses, they do not rule out investments in listed businesses if this presents, in their judgment, the best opportunity for Shareholders.

Off the Menu:

Air Partner has left AIM following a takeover.

What’s Cooking in the IPO Kitchen?

First Tin plc, a tin development company with advanced, low capex projects in Germany and Australia, intends to list on the Main Market. First Tin is led by an experienced team of tin specialists, committed to the environmentally sensitive and low carbon development of advanced hard rock tin projects in conflict free, low political risk jurisdictions. The Company has raised £20m to execute its plan to bring its two 100% owned tin mines into production before the end of 2025 so that it can provide provenance of supply to support the current global clean energy and technological revolutions. Expected 8 April 2022.
Anglesey Mining, a UK mining company currently listed on the Main Market (Premium) intends to move to AIM. Anglesey’s principal asset is a 100% interest in the Parys Mountain copper-zinc-lead-gold-silver project on the island of Anglesey in North Wales. Anglesey is currently exploring and developing the property, which has a high potential for the discovery of additional mineral resources through the development of a new, modern mine in an environmentally sustainable manner. Anticipated Mkt Cap TBC, current capitalisation c£8m. Expected 8 April 2022.
Cordiant Global Agricultural Income plc intends to float on the Main Market (Premium). The Company’s investment objective will be to seek to provide an attractive yield, with potential capital growth, by providing secured medium-term finance to the global agricultural sector. The Company will seek to promote more sustainable crop production and help address a capital solutions gap which exists in the agricultural sector in select regions. The Company will provide finance for crop inputs and for capital investment in new technologies and infrastructure which help increase crop yields and have a sustainable benefit. Targeting gross proceeds of US$300m. Expected 12 April 2022.
Shellraise plc, to join AQSE Growth Market. The Company will focus on identifying investment opportunities in companies operating in the viticulture sector which require funding to increase output. Mkt Cap and Capital to be raised TBC.
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. Mkt Cap approximately £80m. Raising up to £30m, Due 5 April 2022.

Breakfast Buffet

Arrow Exploration 13.75p £29.3m (AXL.L)

The contracted Top Drilling Company rig has spud the Rio Cravo Este-2 (RCE-2) well on the Tapir Block in the Llanos Basin of Colombia. Marshall Abbott, CEO of Arrow commented: “We are delighted to have spud the second well at Rio Cravo Este, RCE-2, on the Tapir Block. Following the completion of drilling and testing of the RCE-2 well, the rig will move to the location of our next well, the RCS-1 well (formerly the RCE-3 well), which is expected to spud in early-May. In addition, we are pleased to also provide a wider update across our portfolio, which is demonstrative of the significant work we have done to date; but also of the potential which remains. Our production remains strong at over 1,100 boe/d and continues to grow, producing positive cashflow for the Company during a high commodity price environment. This is an exciting time for Arrow and we look forward to providing further updates in due course.”

Eckoh 40p £101.9m (ECK.L)

Eckoh, the global provider of customer engagement security solutions announced that the integration of Syntec, the payments solutions provider acquired for £31m in December 2021, is progressing well. Syntec’s contribution to revenue and profits in the three months are expected to be consistent with management’s projections at the time of the transaction, and the initial steps towards realisation of market, product portfolio and cost synergies are proceeding on plan. The Group expects results for the year ended 31 March 2022 to be in line with consensus market expectations and will provide more detail in its pre-close trading update in early May 2022. Eckoh believes that consensus market expectations for the year ending 31 March 2022 are currently revenue of £32.1m and Adjusted Operating profit of £4.9m. Eckoh has started the new financial year by announcing significant enhancements to its customer engagement security portfolio to assist organisations in protecting their customers’ payment and personal data in more efficient and diverse ways. Launch of a new Azure Cloud platform with a Fortune 100 client. Updated Eckoh Live Chat and ChatGuard. The market leading CallGuard product has 2 new extensions for distinct needs. Digital payment product Pay by Link is now available globally. Speech recognition language models for payments extended significantly with new contract.

Gemfields 19.25p £225.8m (GEM.L)

Results of an auction of predominantly commercial quality rough emeralds held in Jaipur, India from 15 March to 1 April 2022. The emeralds were extracted by Kagem Mining Ltd in Zambia (Kagem, which is 75% owned by Gemfields and 25% by the Industrial Development Corporation of Zambia). The proceeds of this auction will be fully repatriated to Kagem in Zambia, with all royalties due to the Government of the Republic of Zambia being paid on the full sales prices achieved at the auction. Highlights, Emerald Auction; Auction revenues of USD 42.3m, an all-time record for any Kagem auction. Of the 32 lots offered, all 32 were sold (100%). Average price of USD 9.37 per carat, an all-time record for Kagem commercial quality auctions. The 40 auctions of Kagem gemstones hosted by Gemfields since July 2009 have generated USD 792m in total revenues.

Induction Healthcare 42p £38.7m (INHC.L)

The virtual care platform driving digital transformation of healthcare systems worldwide, announces that the South West London Integrated Care System will deploy Induction Zesty to support their outpatient transformation programme. Induction Zesty is a digital front door for hospitals, with an intuitive interface that empowers patients to take control of their appointments, correspondence and virtual consultations from the convenience of their smartphone. For the first time, patients can see a joined up view of their care journey, spanning multiple care providers, via a single digital platform. Comprising four of the acute NHS Trusts within South West London, the combined contracts have terms ranging between 2 and 9 years and will result in total revenue of c£3.6m with an ARR of around £650k from FY23 onwards. Around £450k of revenue expected to be recognised in FY23 in respect of these contracts as implementation work is completed and the sites go live. The contracts were in part driven by a strategic collaboration with Cerner Corporation (NASDAQ: CERN) and Induction, who created a joint product, made available as part of a value-added reseller agreement to NHS Trusts that are already Cerner clients as an extension to their existing Cerner EPR contracts. In June 2021, Induction acquired Attend Anywhere which is South West London’s preferred platform for remote video consultations. The opportunity to combine both platforms’ complementary capabilities will strengthen patient engagement and underpins the Company’s growth strategy for FY23 and beyond.

Kromek Group 10.25p £43.7m (KMK.L)

The developer of radiation and bio-detection technology solutions for the advanced imaging and CBRN (Chemical, Biological, Radiological, and Nuclear) detection segments, has been awarded a contract worth £1.7m from an existing UK government-related customer. The contract is for the provision of CBRN detection products and services. It is to be delivered over the next 4 years, with revenue split equally over that period. Dr Arnab Basu, CEO of Kromek, said: “We are pleased to have received this new contract from this long-standing customer. It is testament to the value that they place on our products and the nature of our CBRN business where we build solid relationships and continue to receive repeat orders. Governments are becoming increasingly aware of the need to enhance their wide-area monitoring in order to be able to provide early warning of the presence of CBRN material as well as a full range of CBRN threats, and our solutions are best placed to provide them with this capability.”

Libertine Holdings 26.7p £37.1m (LIB.L)

The developer of clean, highly efficient and fuel-flexible Linear Generator products has received the London Stock Exchange’s Green Economy Mark. The classification, first introduced in 2019, was created to highlight companies and investment funds listed on the are driving the global green economy. To qualify for the Green Economy Mark, companies and funds must generate 50% or more of their total annual revenues from products and services that contribute to the global green economy. The underlying methodology incorporates the Green Revenues data model developed by FTSE Russell. It provides a detailed taxonomy of environmental goods, products and services, and is designed to recognise both ‘pure-play’ green technology companies, as well as those across all industries that make significant contributions to the transition to a sustainable, low carbon economy. Sam Cockerill, Chief Executive Officer of Libertine, commented: “We are delighted that Libertine has been awarded the Green Economy Mark by the London Stock Exchange, and we are proud that our contribution to the global green economy has been recognised. The Mark underlines our commitment to support the transition to Net Zero and the essential role we believe our technology will play in the decarbonisation of ‘hard to electrify’ transport applications.”

Likewise Group 37.25p £88.4m (LIKE.L)

The fast growing UK floor coverings distributor, advised that trading in the first 3 months is ahead of internal budgets. Whilst remaining wholly autonomous, Valley Wholesale Carpets Limited acquired on 14 January 2022 is also trading ahead of initial expectations. Whilst the first 3 months can only provide limited indication of the year as a whole, early trends are positive and the Board remains confident in meeting market expectations for 2022. The horrific events in Ukraine are tragic for the people and devastation caused. The inevitable consequences are impacting the cost of the products. These include manufacturers’ energy costs in production, increases to the costs of various raw materials and transportation. The Group’s trade brands will issue a new Price List on 1 May to reflect cost price increases. It is very difficult to predict the wider economic repercussions of the current macro environment and resulting effect on consumers’ disposable income. Notwithstanding this short-term uncertainty, the Group continues to develop its logistics infrastructure. Birmingham is now operational which doubles the carpet capacity for the Likewise branded businesses. Construction is underway for a new Distribution Centre in Glasgow and the business in Newcastle has now moved into an enlarged facility adjacent to its previous location. The search continues to relocate A&A into larger premises in the North West. The Group is also establishing a new Logistics Centre in Newbury to service the South of England.

Oilex 0.22p £15.9m (OEX.L)

Update to its operations in India and in particular, with respect to the Cambay field. Oilex has been in detailed discussion with the Gujarat Pollution Control Board (GPCB) concerning the Company’s new Environmental Clearance Certificate (EC) issued by India Ministry of Environment, Forest and Climate Change (MoEF) on March 17th 2022. A copy of the EC is viewable on the Oilex website. GPCB are questioning whether the new EC authorises the use of the Early Gas Production Facility (EGPF) on the Cambay C-73 wellsite since the EGPF is not specifically referenced. The Company asserts that the EGPF is indeed specifically referenced and authorised under Clause 17 of the EC. The Company has enlisted the assistance of both the MoEF and the Directorate General of Hydrocarbons, both of which are being very supportive in resolving this issue with GPCB. In relation to recent enquiries, the Company confirms that Oilex has a ten year extension to the Production Sharing Contract in Cambay, expiring September 2029, documentation of which is available on the Company’s website.

Thor Mining 0.93p £18.7m (THR.L)

Significant update on the Company’s 100% owned Wedding Bell Project, located in the historic uranium-vanadium mining district within the Uravan mineral belt, southwest Colorado, USA. Project highlights: San Miguel County, Colorado has approved the proposed drilling at Rim Rock and Section 23 prospects. Project prospective for shallow ‘Saltwash’ type sandstone-hosted mineralisation within the high-grade uranium-vanadium Uravan mineral belt. Field sampling by Thor returned assay results of high-grade uranium, up to 1.25% (12,500ppm) U3O8 and vanadium, up to 3.47% V2O5 (THOR ASX, AIM: 21 July 2020). With final sign off with the Federal Bureau of Land Management (BLM) and Colorado Division of Reclamation Mining and safety (DRMS) sought in the coming weeks, reparations are already underway to engage drilling contractors, with a view to start drilling early in the US summer. Spot uranium prices are trading near an 11-year high as a result of improved market sentiment and supply concerns. Potential US sanctions on Russian uranium imports has resulted in an increased focus on US domestic uranium supply.

Nexus Infrastructure 210p £95m (NEXS.L)

Nexus Infrastructure, a leader in enabling the energy transition by delivering sustainable infrastructure, announces the successful completion of a sale and leaseback transaction of Nexus Park, the Group head office building. Nexus Park was completed in 2021 and has been successfully occupied by all subsidiaries of the Group during the summer of 2021. The Group has completed the sale and leaseback transaction of the freehold of Nexus Park with Dorsel U.K. 4 Limited. The disposal included the 4.7 acre site and the three story, 35,000 sq ft head office building that all constitutes Nexus Park. The assets are being sold at net book value, and so a breakeven result is being recorded, prior to disposal costs of £150k. The proceeds of £13.5m will be used to clear existing bank debt totalling £10.8m, with the balancing £2.7m enhancing cash reserves. The Group has simultaneously entered into a 20 year lease for Nexus Park, which will create an IFRS 16 Right of Use asset of £11.3m and an associated Lease Liability of £11.4m.

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