Small Cap Feast

03/03/2022

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What’s Cooking In The IPO Kitchen?

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. Mkt Cap and Capital to be raised TBC.

More Acquisitions plc, a new type of special purpose acquisition company, intends to list on the Main Market. Raising approximately £1.2m. Due 4th March 2022.

Majestic Corporation plc, to join AQSE Growth Market. Majestic is a profitable business recycling precious and non-ferrous metals from obsolete mechanical and industrial material including catalytic convertors, printed circuit boards, legacy electrical and electronic equipment, and industrial metal residues left over from manufacturing. The metals extracted for recycling include gold, platinum, rhodium and palladium. The company uses a network of partners to source, acquire, store, and process material and once the waste precious metal is ready it is supplied to refineries, in countries such as Japan, for reconstitution and resupply in to the global supply chain. Due March 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. Expected 18 March 2022.

Invinity Energy Systems plc, intends to join AQSE Growth Market. The AIM listed Company (IES.L) manufactures flow batteries for large-scale, high-throughput energy storage requirements of business, industry and electrical networks. Due 9 March 2022.

Cleantech Lithium intends to join AIM. The Group is intending to produce lithium using a sustainable direct lithium extraction method, which returns water to its source instead of depleting vital aquifers. Each of the Projects are based in Chile, one of the world’s best regions for solar and other renewable energy. The intention is to utilise renewable energy for process power. The result being that the overall process will have a very low CO2 footprint potentially giving a critical advantage in the European Union market which has set strict CO2 emissions limits. Mkt Cap and Capital to be raised TBC. Due 14 March 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.

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 March.

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. Delayed until second half of Q1 2022.

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 March 2022.


Breakfast Buffet

ATOME Energy 71p £23.1m (ATOM.L)

The international company focused on green hydrogen and ammonia production, sales and marketing with current projects in Iceland and Paraguay, provides an update on mobility operations in Paraguay. ATOME Mobility is dedicated to providing a clean energy solution for road transport and shipping, two hard-to-abate industries where battery alternatives cannot provide effective solutions using present technology. ATOME has appointed AECOM to provide engineering consultancy services in respect of UK procurement of core equipment for ATOME Mobility. AECOM is a US based multi-national Fortune 500 infrastructure consultancy firm with nearly 50k employees worldwide. Significant progress is being made in the procurement of core equipment for ATOME Mobility, with the business on track to commence transport operations, initially in Paraguay, before the end of Q2 2023. Further announcements are anticipated in due course. At the same time, material progress is being made in discussions on the sourcing of non-equity funding for core equipment procurement and the Company has well-founded confidence that this can be put in place at the appropriate time. In parallel, discussions have taken place with a number of potential end users and the company is clear that the significant interest being shown in ATOME Mobility can be converted into concrete offtake arrangements.

Europa Oil & Gas 1.92p £10.9m (EOG.L)

Further to the announcement yesterday regarding the proposed Fundraising, Europa Oil & Gas (Holdings) plc has conditionally raised gross proceeds of £7.02m, before expenses, through the conditional placing of 390m new ordinary shares of £0.01 each at an issue price of 1.8 pence per share (a 21.7 % discount to the 30 day volume weighted average share price on 2 March 2022). The Fundraising and any requirement from future cashflows will fund the acquisition by the Company of a 25% interest in Serenity by paying 46.25% of the appraisal well cost, equating to a 1.85 to 1 carry. The acquisition is in line with the Company’s previously stated intention to acquire an appraisal asset, adding to its existing producing and high impact exploration assets and thus creating a more balanced asset portfolio for its investors. Serenity is expected to be drilled during 2022 at a gross cost of £14m.

Image Scan 2.25p £3.1m (IGE.L)

The specialist in the field of X-ray imaging for the security and industrial inspection markets, announces the award of a contract to supply an industrial scanning system to a new customer. Image Scan’s MDXi precision X-Ray systems are used to inspect automotive catalytic converters and diesel particulate filters in the manufacturing process. It has over fifty units in service around the world and generates valuable service revenue from this installed base. The new customer is a significant player in this market, with a global manufacturing footprint. There is potential, over the next few years, for further orders, should the widescale deployment seen with Image Scan’s other customers be adopted by this new one. The unit will be built alongside an identical system recently ordered by a long-established customer.

Kefi Gold And Copper 0.71p £21m (KEFI.L)

The gold and copper exploration and development company with projects in the Federal Democratic Republic of Ethiopia and the Kingdom of Saudi Arabia announced that development activities at the Tulu Kapi Gold Project, part of the KEFI-operated Ethiopia joint-venture Tulu Kapi Gold Mines Share Company have recommenced. Following the abatement of Ethiopia’s civil war at the end of 2021 and its State of Emergency being lifted, TKGM has worked intensely with the Ethiopian Ministry of Mines to monitor the situation to ensure that it is appropriate for the recommencement of activities at the Tulu Kapi site and in the wider district. The Company is pleased to report that over the past two months the security situation has remained stable at both the site and the preferred transport routes, enabling activities at the Tulu Kapi site to recommence in an appropriately managed manner.

MTI Wireless Edge 47.5p £42m (MWE.L)

The technology group focused on comprehensive communication and radio frequency solutions across multiple sectors, announced that its Antenna division has received a trial order, from a TIER 1 OEM vendor, for its new automatic beam steering (ABS) antenna solution as part of the Company’s 5G solution. The global wireless backhaul market is dominated by seven key OEM vendors. Some of the seven are considered Tier-1 and some are Tier-2, all of them supply radio equipment to the main cellular network operators to support the roll-out of 5G infrastructure. With this order, MTI now works with five out of the seven leading OEM vendors and this is the first order from a TIER 1 OEM vendor for the ABS antenna solution.

Next Fifteen Comms 1,130p £1,049m (NFC.L)

The tech and data-driven growth consultancy announced the successful completion of the equity placing announced yesterday afternoon raising gross proceeds of approximately £50m (before expenses) at 1,110p. The proceeds from the Placing will be used to part-fund the acquisition and associated costs of Engine Acquisition Limited. Engine UK is a broad-based digital transformation, communications and creative business with approximately 600 staff and 300 UK and international clients. Acquisition of Engine UK for an enterprise value of £77.5m, with £61.7m paid on completion in cash, subject to adjustment by a daily rate amount between 1 March 2022 and completion. The upfront consideration will be funded from the Placing alongside existing debt facilities. In the year ended 31 December 2021, Engine UK increased its net revenue by 18% to £88.6m and generated adjusted EBITDA of £11.8m, representing an acquisition multiple of approximately 6.7x 2021 adjusted EBITDA.

Palace Capital 242p £112m (PCA.L)

The Main Market property investment company that has a diversified portfolio of UK commercial real estate in carefully selected locations outside of London with a focus on the office & industrial sectors, announces that it has completed the sale of Pelham House, Pelham Square, Brighton for £1.6m. In April 2021, the Company announced a strategic disposal programme which identified 15 non-core properties for sale, with an aggregate value of at least £30m. Pelham House is the fourteenth of the 15 properties to be sold and brings the total gross proceeds from the disposal programme to £31.5m, which is 20% above the aggregate book value of the 14 properties and 12% ahead of the original purchase prices paid plus any capital expenditure. Of the proceeds secured to date, £15.7m has been allocated towards debt reduction, leaving £15.8m for redeployment into properties that satisfy the Company’s acquisition criteria.

Savannah Resources 4.15p £70.1m (SAV.L)

The European lithium development company signed an Agreement with ECOPROGRESSO – Quadrante Group – a Portuguese Consultant in Environment, Sustainability, Climate Change and Resources Management, to lead on the creation of a decarbonisation strategy for the Barroso Lithium Project. The appointment of ECOPROGRESSO, an international leader in multiple aspects of environmental management including carbon management and mitigation and adaptation strategies on climate change, follows on from Savannah’s commitment last November to move towards net zero Scope 1 and 2 emissions for the Project whilst also targeting the reduction of its Scope 3 emissions.

Sovereign Metals 25p £108m (SVML.L)

Sovereign Metals has entered into a non-binding Memorandum of Understanding (MoU) with Hascor International Group™ (Hascor) for potential supply of 25,000 tonnes of natural rutile per annum from the Company’s Kasiya Rutile Project (Kasiya) in Malawi to Hascor’s processing plants and clients across five continents. The MoU contemplates a supply agreement to cover an initial five-year period from commencement of nameplate production for potential 25,000 tonnes per annum of natural rutile to Hascor and their existing clients. Volumes may be varied up or down by mutual agreement. Pricing at commencement will reference market prices to the welding sector subject to agreed price variations through the supply term. Hascor is a multinational ferroalloy and metal powder supplier. The group is a key processor and global distributor of natural rutile products for the welding industry with production and distribution centres across five continents. This maiden MoU is part of Sovereign’s product marketing strategy as the demand and pricing for natural rutile are both very strong as the global structural deficit in supply continues to widen. The premium chemical parameters of Kasiya’s natural rutile produced indicates the product is suitable for all major end-use markets including welding, TiO2 pigment feedstock and titanium metal.

Zytronic 152.5p £17.4m (ZYT.L)

Zytronic, a leading specialist manufacturer of touch sensors, provides the following trading update ahead of the AGM being held at 9.30 a.m. today. “The first five months of this financial year have seen a continuing and significant improvement compared to the same period last year, principally driven by the Gaming sector. Revenues for the first five months are approximately 25% ahead year-on-year and we are maintaining operating margins at the improved levels of last year. The order book is 45% ahead of the same period last year, partly benefitting from some advance orders which improves visibility for the coming months and allows us to plan for any of the well-publicised electronic component supply issues.”

3 March 2022
*A corporate client of Hybridan LLP

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The content of this document includes market commentary and other information which we have prepared in relation to the company referred to in this document, which is our broking client. The provision of this document to you constitutes a minor non-monetary benefit which is capable of enhancing the quality of service provided by Hybridan LLP and which is of a scale and nature which could not be judged to impair the duty of Hybridan LLP to act in the best interest of its client falling within article 24(7)(b) of Regulation 600/2014/EU (MIFID II Regulation).

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In the United Kingdom, this document is directed at and is for distribution only to persons who (i) fall within article 19(5) (persons who have professional experience in matters relating to investments) or article 49(2) (a) to (d) (high net worth companies, unincorporated associations, etc.) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (SI 2005/1529) (as amended) or (ii) persons who are each a professional client or eligible counterparty (as those terms are defined in the Financial Conduct Authority’s Conduct of Business Sourcebook) of Hybridan LLP (all such persons referred to in (i) and (ii) together being referred to as relevant persons). This document must not be acted on or relied up on by persons who are not relevant persons. For the purposes of clarity, this document is not intended for and should not be relied upon by any person who would be classified as a retail client under the Financial Conduct Authority’s Conduct of Business Sourcebook.

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