Small Cap Feast

11th November 2022

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What’s Cooking In The IPO Kitchen?

Long Term Assets Limited (LTA), a Guernsey investment company, intends to join the Specialist Fund Segment of the Main Market of the London Stock Exchange. The initial portfolio is made up of a diversified range of assets, recently valued in the region of £160m, comprising a complete selection of the Disruptive Capital’s family office private asset portfolio. LTA aspires to be a “best-in-class” private assets vehicle, targeting 0.55% per annum management fee and typically a 7 to 8% p.a. hurdle rate of return. Date and amount to be raised TBD.

One Health Group plc, intends to join the AQSE Growth Market. The group provides medical services, in the form of elective surgical care, to support the NHS in the management of patients, through a growing network of communitybased outreach clinics and independent hospitals. One Health is a cash generative and profitable company, with an adjusted EBITDA for the year ended 31 March 2022 of £1.2m, on revenue of £17.5m. Due 24 November 2022.

Life Sciences REIT plc (LABS.L), the AIM listed real estate investment trust focused on UK life science properties, announces that, in accordance with the intention expressed at the time of the Company’s initial public offering on AIM, the board has determined to apply for the Company’s existing ordinary shares to be admitted to listing on Premium Segment of the Main Market. The Company’s admission to trading on AIM will be cancelled with effect from Admission. Anticipated early December 2022.

Looking Glass Labs, a company engaged in digital agency specialising in immersive XR metaverse design, non fungible token architecture and virtual asset royalty streams, intends to join the AQSE Growth Market. Looking Glass Labs is currently listed on the NEO Exchange (Canada). 14 November 2022.

BWP REIT, a newly formed single asset company, announces its intention to raise £35m at the issue price of £1 per share, to acquire Bridgewater Place, an office-led mixed use property situated in central Leeds and valued at £63m. BWP REIT will apply for listing on the Wholesale Segment of the International Property Securities Exchange (IPSX). Due 16 November 2022. World Chess plc, a leading chess organisation, intends to join the Main Market.

World Chess Plc is the holding company of a group which aims to promote the mass market appeal of chess globally through the commercial offering of chess related activities. Euro 8m to be raised. Expected November 2022.

TECC Capital plc, to be renamed EDX Medical Group, intends to join the AQSE Growth Market. EDX operates a molecular biology and diagnostics laboratory in Cambridge, UK, from which it performs research & development, provides Polymerase Chain Reaction (PCR) testing and genomic sequencing services, undertakes quality assurance and has established expertise in the design, development, validation and sourcing of Lateral Flow Tests on a commercial scale. 14 November 2022.


Breakfast Buffet

Beximco Pharmaceuticals 63p £578m (BXP.L)

The manufacturer of generic pharmaceutical products and active pharmaceutical ingredients announces its unaudited results for the quarter ended 30 September 2022. Revenue was 9.8bn BDT (Bangladesh Taka), up 16% year-on-year. Profit from operation was flat at 2.1bn BDT. The Company is seeing the impact of macroeconomic headwinds, particularly the challenging exchange rates. Management expects this situation to remain throughout this financial year and look to find operational efficiencies in the business.

Driver Group 28p £14.6m (DRV.L)

The global professional services consultancy to the construction and engineering industries announces a trading update for the financial year to 30 September 2022. The underlying loss before tax is expected to be £0.3m, before one-off Middle East reorganisation costs of £0.6m as announced on 23 May 2022. The Group had a net cash position on 30 September 2022 of £4.8m, which reflected significantly improved collections in the year, particularly from the long-term debts in the Middle East. The cost base has been scaled back in the Middle East and APAC. Management expects to see the business return to profit in Q1 of the new financial year.

Horizonte Minerals 91p £173.3m (HZM.L)

The nickel company developing two Tier 1 assets in Brazil announces its unaudited financial results for the three months to 30 September 2022. Loss before tax for the quarter was US$4.1m, 14% higher year-on-year, primarily due to a 48% increase in administrative expenses. Cash and cash equivalents was US$131m, down 38% from 31 December 2021. In October 2022, the Company raised US$80m for the construction of the Araguaia nickel project in Brazil. Contracts totalling in excess of US$400m have been awarded to-date at Araguaia, with all key equipment supply and technical support services for the balance of the Araguaia process flow sheet secured. Araguaia construction is progressing as scheduled.

ImmuPharma 3.46p £11.5m (IMM.L)

The specialist drug discovery and development company provides an update on a recent meeting in Atlanta, USA with its US partner, Avion Pharmaceuticals (Avion). ImmuPharma’s Lupuzor™ for Lupus clinical program will be redesigned on key protocols following a written response from the FDA, in order to enhance the probability of success. This is considering either a Phase 2 dose ranging study to identify the optimum dose level followed by a Phase 3 study or alternatively a Phase 2/3 adaptive study which would encompass the same dose ranging. Discussions are also underway regarding the possibility for ImmuPharma to introduce certain Avion drugs into the European market.

Intelligent Ultrasound Group 9.5p £25.7m (IUG.L)

The ultrasound artificial intelligence (AI) software and simulation company announces a placing and subscription to raise a total of £5.2m at a 9.25 pence per share. The issue price equates to a nil discount to the closing mid-market price of 9.25 pence on 10 November 2022. The new shares to be issued represent 17.2% of the enlarged share capital. The net proceeds of £4.8m will be used to strengthen the balance sheet and provide additional working capital.

I(X) Net Zero 19p £15.0m (IX.L)

The investing company focusing on Energy Transition and Sustainability in the Built Environment announces that its portfolio company, Carbon Engineering Ltd. has signed an agreement with its US development partner, 1PointFive, to begin planning and engineering for Direct Air Capture (DAC) facilities at a second site in the U.S., in Kleburg County, Texas. Carbon Engineering has a proprietary DAC technology that removes carbon dioxide directly from the atmosphere for sequestration and storage. The site in Kleburg County is expected to provide access for the potential construction of multiple DAC facilities that would be capable of collectively removing up to 30m tonnes of carbon dioxide from the atmosphere annually for dedicated sequestration, creating one of the largest DAC projects in the world.

Powerhouse Energy Group 1.525p £60.4m (PHE.L)

The pioneering technology company that converts non-recyclable waste into low carbon energy announces the team led by Dr Amir Keshmiri at the University of Manchester has received the EPSRC Impact Acceleration Account grant, and will be working with Powerhouse Energy in the development and validation of a novel, cost effective and potentially game-changing hydrogen separation technique. This technology extracts hydrogen from synthesis gas (syngas) produced by PHE’s DMG process. Any commercialisation of the project would directly support achieving the UK Government’s Low Carbon Hydrogen Strategy target of 5GW of installed capacity by 2030.

Prospex Energy 10.25p £28.5m (PXEN.L)

The investment company notes the announcements made by Warrego Energy Ltd (Warrego) (ASX:WGO) on 10 November 2022 regarding a potential sale of its shares in Tarba Energía S.L. (Tarba) as a result of a proposed merger of Warrego with Strike Energy Ltd. Warrego is a co-owner of Tarba and the coventurer in the assets that Prospex holds in Spain. Should any scheme of arrangement between Warrego and Strike Energy be agreed, then within a 12-month period, Strike would use best endeavours to sell Warrego’s Spanish assets and additional consideration would be distributed to the Warrego shareholders. The Spanish assets owned and operated by Tarba comprise the El Romeral gas to power plant and related gas concessions near Carmona in Andalucía, southern Spain and the Tesorillo exploration permit in the Cadiz province in Southern Spain, which is currently suspended. Prospex owns a 49.9% working interest in El Romeral and a 15% working interest in Tesorillo, with Warrego owning 50.1% and 85% respectively.

Synectics 112.5p £20m (SNX.L)

The company that designs, integrates and supports advanced security and surveillance systems, announces the conditional sale of its division SSS Management Services Limited (SSS) for cash consideration of up to £0.2m to Parfas Limited. The transaction is expected to be completed on or before 30 November 2022. The consideration comprises an initial cash payment of £0.1m on completion and the balance is conditional on the profitability of SSS post-sale, payable following the first anniversary of completion. This transaction will have a positive impact on Synectics’ gross margin and is anticipated to result in a material exceptional profit on disposal, to be included in the results for the financial year ending 30 November 2022.

Synergia Energy 0.1p £9.4m (SYN.L)

The responsible gas production provides an update on its Cambay India operations. The C-77H well continues to produce on a consistent plateau with gas rates between 255 and 275 MCFD. The c. 1450m column of gas condensate persists and requires an artificial lift solution to both remove fluids and enhance gas production. The Company has engaged Wellynx, a recognised leader in completions technology, to design an artificial lift solution for the C-77H well. Synergia Energy believes that the implementation of the artificial lift solution in the C-77H well will significantly enhance gas and condensate production. This will be an essential component of a full field development of the condensate-rich Eocene reservoir.

11 November 2022
*A corporate client of Hybridan LLP

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The information contained in this document is based on materials and sources that are believed to be reliable; however, such information has not been independently verified and therefore it is not possible to confirm such information as being accurate. This document is not intended to be a complete statement or summary of any securities, markets, reports or developments referred to herein. No representation or warranty, either express or implied, is made or accepted by Hybridan LLP, its members, officers, employees, agents or associated undertakings in relation to the accuracy, completeness or reliability of the information contained in this document, nor should it be relied upon as such.

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.

Neither this document, nor any copy of part thereof may be distributed in any other jurisdictions where its distribution may be restricted by law and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions. Distribution of this report in any such other jurisdictions may constitute a violation of territorial and/or extra-territorial securities laws, whether in the United Kingdom, the United States or any other jurisdiction in any part of the world.

Where possible this document is made available to all relevant recipients at the same time. Dissemination of research by Hybridan LLP is monitored to ensure that it is only provided to relevant persons. Research prepared by Hybridan LLP is not intended to be received and/or used by any person who is a retail client.

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MIFID II status of Hybridan LLP research
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