Small Cap Feast

11th October 2022

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What’s Cooking In The IPO Kitchen?

OTAQ plc, (OTAQ.L) the technology company with three divisions: Aquaculture, Geotracking Devices and Offshore intends to join the AQSE Growth Market. OTAQ is currently listed on the Main Market. OTAQ is developing adjacent technologies to take advantage of a number of growth initiatives that will broaden the Group’s current product portfolio in the global marine aquaculture sector and facilitate entry and growth into the geotracking devices sector. Expected 8 November 2022.

Cooks Coffee Company ltd, an international coffee focused café chain which currently owns the Esquires Coffee and Triple Two Coffee Brands, intends to join the AQSE Growth Market. The Company is the 4th largest coffee focused café chain in the UK. Cooks Coffee is currently listed on the New Zealand Stock Exchange. Raising £1.5m through a rights issue in New Zealand and a private placement. Expected late November 2022.

Guanajuato Silver Company ltd, a fast growing silver producer in Mexico currently listed on the TSX Venture Exchange, intends to join the AQSE Growth Market. The Company currently owns five precious metals mines and three production facilities. GSilver is primarily focused on reactivating past producing silver and gold mines in the state of Guanajuato. Expected 25 October 2022.

Sondrel Holdings plc, a UK founded and headquartered fabless semiconductor business providing turnkey services in the design and delivery of complex, high end ‘application specific integrated circuits’ (ASICs) and ‘system on chips’ (SoCs) for leading global technology brand, intends to join AIM. Anticipated Mkt Cap £48.1m. £20m to be raised. Expected 31 October 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. Due 31 October 2022.

Streaks Gaming plc, a UK-based provider of conversational gaming products intends to join the Standard Segment of the Main Market this autumn. The flotation is expected to value Streaks at approximately £10.2m (pre-money) and will make it the first LSE-listed “pure-play” conversational gaming company. Raising between £5-10m. Delayed but due in October.

The Sustainable Farmland Trust PLC, intends to float on the Premium Segment of the Main Market. The Company invests in a diversified portfolio of farmland and related agriculture-focused assets predominantly located in the US. Raising £200m. Expected 12 October 2022.

Welkin China Private Equity, newly established closed-ended investment company dedicated to investing in unquoted Chinese companies, intends to join the Premium Segment of the Main Market. The Company is targeting a raise of up to US$300m. Due 3 November 2022.

Georgina Energy, focusing on the exploration, development and monetisation of helium, hydrogen and hydrocarbon interests located in Australia intends to join AIM. Georgina Energy has two principal onshore interests: (1) Mount Winter Prospect in the Amadeus Basin in Northern Australia, which the Company has a right to earn an initial 75% interest; (2) Hussar Prospect, 100% owned by the Company, located in the Officer Basin in Western Australia. Expected late October.


Breakfast Buffet

Arecor Therapeutics 255p £77.7m (AREC.L)

The biopharmaceutical company announces headline results from the second Phase I clinical trial of its ultra-rapid acting insulin, AT247, which support its potential to facilitate a fully closed loop artificial pancreas. According to Dr Victoria Mirza, Principal Investigator for the ARE-AT247-103 clinical trial, AT247 has the potential to significantly improve blood glucose control when delivered via insulin pump and be an important next step in enabling the development of a fully closed loop/artificial pancreas system for people living with diabetes.

Eneraqua Technologies 262p £87.0m (ETP.L)

The specialist provider of energy and water efficiency solutions, announces that, following the success of net water neutrality pilot programmes with two English local authorities, the Board has confirmed the decision to invest in a direct B2C offering. From both a saving and customer satisfaction perspective, the company will shortly commence the launch of the product direct to consumers, with pre-launch costs of approx. £0.5m in H2 FYJan23. The Board strongly believes the B2C offering has the potential to create a new revenue stream in FY24.

FW Thorpe 364.5p £427.2m (TFW.L)

The group of companies that design, manufacture and supply professional lighting systems, announces its results for the year ended 30 June 2022. Revenue (including Zemper acquisition) was up 21.9% to £143.7m. Profit before tax was £24.1m, an increase of 19.7%. Net cash inflows from operating activities totalled £19.7m (2021: £21.9m). The Board recommends an increased final dividend of 4.61p per share (2021: 4.31p). The group had a solid start to 2022/23, with operating performance ahead of the beginning of last year.

GreenRoc Mining 4.4p £4.9m (GROC.L)

The company focused on the development of critical minerals projects in Greenland, provides the results from a field exploration campaign conducted in July 2022, alongside the Phase 2 drill programme at its flagship Amitsoq Graphite Project in the Nanortalik Region of South Greenland. Grab samples were collected across the Project area, which was recently expanded following the granting of exclusive Mineral Exploration Licence 2022-03 in July 2022. These results have significantly expanded the potential for multiple significant graphite discoveries outside the primary target zones of the Amitsoq Island and Kalaaq Deposits.

Ince Group 5.15p £12.6m (INCE.L)

The provider of legal, financial services, consulting, and pension advice services, announces that it has implemented the annual cost savings of £4.0m, identified in its announcement of 28 July 2022, as well as an additional approximate £1.0m. These savings are incremental to the previously announced annual cost savings of £2.2m already achieved prior to the recent fundraise. As a result, Ince Group has reduced its annual cost base in total by at least £7.2m.

K3 Capital Group 257.5p £189.3m (K3C.L)

The multi-disciplinary and complementary group providing specialist advisory services to SMEs, announces the acquisition of insolvency practitioner, Chamberlain & Co. for an initial cash consideration of £3.3m with an additional deferred consideration of up to £1.1m. Chamberlain & Co. is an award-winning turnaround, restructuring and insolvency practice headquartered in Leeds with offices in Sheffield, York and London. The business had turnover of c.£1.6m and normalised EBITDA of c.£0.8m in the 12 months to 30 April 2022. The acquisition is expected to be immediately earnings enhancing.

Marks Electrical Group 58.5p £61.4m (MRK.L)

The online electrical retailer provides a trading update for the six months ended 30 September 2022 (HY23). Revenue increased 15% to £43.1m. H1 margin was under pressure due to heightened levels of competition. The closing net cash position was £7.7m (FY22 £3.9m). As momentum continues to build going into the peak trading period, the company expects its robust platform to generate continued profitable market share growth and achieve our full year targets.

Sureserve Group 77.5p £128.6m (SUR.L)

The Social Housing Energy Services Group provides an update in relation to its financial year ended 30 September 2022. The Group has continued to experience growth in revenue, earnings and cash flow and the Board therefore expects results for the financial year ended 30 September 2022 to be in line with management’s expectations. The order book stands at £585m, up more than 16% (2021: £503m). At 30 September 2022, the net cash balance (excluding lease liabilities) was in excess of £23m (30 September 2021: £16.5m), with the £15m revolving credit facility remaining undrawn.

Smartspace Software 37.5p £10.9m (SMRT.L)

The provider of Integrated Space Management Software for smart buildings and commercial spaces such as meeting rooms, announces its unaudited results for the six months ended 31 July 2022. Total revenue was up 45% to £3.67m (31 July 2021: £2.52m). Adjusted EBITDA was negative £0.5m, improved from the loss of £1.29m in H1 21. Trading is in line with expectations for FY23. The company is continuing to deliver growth in ARR (annual recurring revenue) to transition business to cashflow breakeven towards the end of FY23.

Roquefort Therapeutics* 8p £10.3m (ROQ.L)

The biotech company focused on developing first in class medicines in the high value and high growth oncology market, announces that the results of its anti-cancer RNA pre-clinical study will be presented today at the 29th European Society of Gene & Cell Therapy (ESGCT) in Edinburgh. The results demonstrate for the first time that a splice switching RNA medicine can impair Midkine action by inducing a change in the Midkine mRNA, that not only reduces full length Midkine but also generates a non-functional shortened Midkine. Production of truncated Midkine has been shown to reduce the size of cancers in vivo and underpins the potential for anti-Midkine RNA medicines to treat cancer in patients.

11 October 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.

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