Small Cap Feast

12th May 2022

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What’s Cooking In The IPO Kitchen?

Trade journal, the drinks business, reports that two drinks companies of vastly different sizes are planning to offer shares on the London Stock Exchange in the near future through initial public offerings (IPO), having turned down private equity buy-out offers. BrewDog, the idiosyncratic craft brewer based at Ellon, north of Aberdeen, is expected to be valued at more than £2bln while the Kent-based iPro sports drink company will be worth a mere fraction of that. Brew Dog, which has been rocked by allegations of a “toxic” work culture, is rewarding salaried employees through a staff share issue and a profit share in its bars. The vastly smaller iPro is said to be looking to raise £100m from a share issue after turning down bids by three private equity companies to sell a majority stake.

EnSilica, intends to join AIM. EnSilica is a designer and supplier of mixed signal Application Specific Integrated Circuits (ASICs). The Company has expertise in designing complex mixed signal ASICs, which combine digital and analogue functions onto a single chip. Mkt Cap TBC. Due late May 2022.

GS Chain, a company established with the purpose of undertaking acquisitions of an interest in an operating company or business in the technology sector, intends to list on the Main Market (Standard). Timing TBC.

Altona Rare Earths, the AQSE listed mining exploration Company focused on the evaluation, acquisition and development of Rare Earth Elements mining projects in Africa, intends to join the Main Market. Admission to trading of the Company’s Ordinary Shares on the AQSE Growth Market will be cancelled simultaneously with Admission. It is also proposed that on Admission, the Company will change its EPIC from AQSE:ANR to REE. The Company also seeks to raise funds to finance its current and future rare earths mining projects in Southern and Eastern Africa. Due May 2022.

Breakfast Buffet

Destiny Pharma 47.5p £34.8m (DEST.L)

Destiny Pharma, a clinical stage innovative biotechnology company focused on the development of novel medicines that can prevent life-threatening infections, today announces that data generated from a recent C. difficile infection (CDI) model study, on the ability of non-toxigenic C. difficile strain M3 (NTCD-M3) to successfully colonise the gut following administration of antibiotics, has been accepted for presentation at the prestigious Anaerobe 2022 Conference in Seattle, 30th July 2022. As previously reported, a Phase 2 clinical trial in patients suffering CDI demonstrated that administration of NTCD-M3 shortly after the use of antibiotics to treat the initial infection successfully reduced recurrence from 30% in placebo to 5% in treated patients. Patients received either vancomycin or metronidazole to treat the initial toxic C. difficile infection before receiving NTCD-M3 treatment. Since the end of this trial, a new antibiotic, fidaxomicin, has been added to US clinical guidelines for treating CDI. It is known that fidaxomicin3 resides for a longer period within the gut potentially inhibiting the colonisation by bacteria such as NTCD-M3. In summary, this study conducted in the lab of the authors at the Edward Hines, Jr. VA Hospital, clearly demonstrated that NTCD-M3 was able to effectively colonise the gut following fidaxomicin administration indicating that NTCD-M3 would be effective in patients receiving this antibiotic as well as older antibiotics such as vancomycin and metronidazole.

Mercia Asset Management 31.5p £138.6m (MERC.L)

The proactive, regionally focused specialist asset manager with c.£948m of assets under management notes that its first Knowledge-Intensive and annual Enterprise Investment Scheme (EIS) funds have raised a combined total of c.£20m in new capital during the last year. The specialist fund will invest in high-growth businesses that generate a positive impact, as outlined by the United Nations’ sustainable development goals. As one of the UK’s leading providers of both EIS and Venture Capital Trust investment capital, these successful fund raises, together with the £40m recently raised by the Northern VCTs, means that Mercia has raised over £60m in new funds from individual investors during the last year.

Michelmersh Brick 116.5p £111.6m (MBH.L)

The specialist brick manufacturer, announces at its Annual General Meeting: “The strong and well-balanced order book and positive order intake momentum reported in our FY21 results in March has continued to date, with stable demand from our loyal customer and distributor relationships in all of our end markets, whilst production volumes have continued in line with expectations. We continue to operate in a more challenging environment due to such factors as the ongoing elevated inflation rate. To protect our margins, we remain focused on mitigating risks to our input costs as well as maintaining appropriate portfolio pricing. As such, as announced in our FY21 results in March, in collaboration with our customers we will introduce our standard timetabled price increase in July 2022. At the same time, to mitigate the ongoing energy price risk, we have secured over 90% of the Group’s energy requirement for 2022 with further contracts into both 2023 and 2024. Despite the current macroeconomic uncertainty, the Board is confident that the ongoing quality fundamentals in our business and the wider sector provide resilience to our outlook. The Group has made an encouraging start to 2022, and combined with our strong forward order book, we remain on track to meet full year expectations.” Pending approval by shareholders at the AGM, the dividend in respect of the year ended 31 December 2021 of 2.50 pence per ordinary share will be paid on 13 July 2022 to members on the register on 6 June 2022.

Plant Health Care 12.1p £36.8m (PHC.L)

The provider of novel patent-protected biological products to global agriculture markets, announced the appointment of a new Chief Executive Officer and consequent changes to the Board. Jeff Tweedy, currently the Company’s Chief Operating Officer, will be appointed Chief Executive Officer (CEO) with effect from the Annual General Meeting on June 22nd, 2022 At the same time, Chris Richards, currently CEO, will be appointed Non-Executive Chairman of the Board and Richard Webb, currently Non-Executive Chairman, will step down from the Board. Chris Richards stepped in as CEO in November 2017, having previously been Chairman since August 2012. By appointing Chris to the role of Non-Executive Chairman, the Company continues to benefit from his deep experience. At the same time, Richard Webb, currently Non-Executive Chairman, will step down from the Board to pursue other interests.

Poolbeg Pharma 5.45p £27.25m (POLB.L)

The clinical stage infectious disease pharmaceutical company with a unique capital light clinical model, announces an update on its lead asset, POLB 001, a small molecule immunomodulator which aims to address a significant unmet need in severe influenza. The Company has signed a contract for GMP manufacturing, ensuring ample supply of GMP grade POLB 001 for use in its upcoming LPS human challenge clinical trial, due to commence in June 2022, and for use in investigating POLB 001 as a treatment for other disease indications. POLB 001 has potential therapeutic applications beyond severe influenza, due to its mode of action of reducing hyperinflammation which is linked with many diseases. Following receipt of the results from the upcoming bacterial lipopolysaccharide (LPS) human challenge trial, the Company aims to rapidly monetise POLB 001 by partnering or out licensing the product to pharma / biotech for further development and commercialisation. The GMP manufacturing of the product began in late 2021 to ensure that sufficient grade and quantities of the product is available for use in the forthcoming human challenge trial which is due to commence in June 2022, with first results expected before the end of the year.

Proteome Sciences 4.2p £12.3m (PRM.L)

The Company has secured a contract from a major US academic group to evaluate changes on the proteome and phospho-proteome of tissue and blood samples taken from persons with and without a neurodegenerative disease. The contract value is in excess of £0.5m and PRM expects the study to be completed this year. Commenting on the contract, Richard Dennis, Chief Commercial Officer of Proteome Sciences said: “We are pleased that the SysQuant workflows that we offer has been selected by our client to quantitate the proteomic/phosphoproteomic changes in these research samples. By using the TTMpro ™ reagents we are able to analyse 17 samples and one reference in one mass spectrometry experiment, so are able to deliver data from this large sample set in a timely manner and still be able to better quantitate smaller proteomic differences.”

Serabi Gold 37.5p £28.4m (SRB.L)

The Brazilian-focused gold mining and development company updated on its production at the Palito Complex, development on its wholly owned Coringa project and initial drilling at the Matilda prospect in the Tapajos region of Para State, Northern Brazil. Production from the Palito Complex showed a continued improvement with 2,919 ounces of gold produced for April, the highest monthly level so far in 2022.

Silver Bullet 155p £20.8m (SBDS.L)

The provider of digital transformation services and products has entered into a Joint Venture Agreement with Making Science Group, S.A. which will see the two companies combining their respective products, services, and talent to deliver solutions for the privacy-first, post-cookie era. Making Science is an international digital acceleration company with presence in 13 global markets: Spain, Portugal, Mexico, Colombia, France, Italy, Germany, the UK, Ireland, Sweden, Denmark, Georgia, and the US. In 2021, the Company achieved revenue of over EUR100m in its core digital business with a growth of 76% over 2020. Making Science has 777 global clients and supports its clients in digital advertising, data analytics, e-commerce, and cloud-based solutions, whilst also acting as a Google Marketing Platform Reselling Partner. The Agreement will expand the services and products of both companies, from first party data strategy design and deployment, technical implementations and integration across AdTech and MarTech platforms, data and analytics, and post-cookie solutions. It will lead to an attractive Google offering, including expert knowledge and the opportunity of being a Google Marketing Platform Reselling Partner. In addition, it will offer advanced 4D contextual video solutions across YouTube, as well as leverage established partnerships with Salesforce Marketing Cloud and leading CDPs such as Treasure Data, a Softbank-owned platform.

Verici DX 30p £51.1m (VRCI.L)

The developer of advanced clinical diagnostics for organ transplant announces the successful outcomes from its blinded, international, multi-centre validation study for Tuteva™, the Company’s post-transplant blood test focused on acute rejection, including sub-clinical rejection. The results of the validation study show that the test, a next-generation RNA sequencing assay, is demonstrating strong performance in the detection of acute rejection, following a kidney transplant. The finalised data, to be presented at the American Transplant Congress in June 2022, demonstrates a significantly higher Positive Predictive Value (PPV) for Tuteva™ than currently available kidney transplant blood tests, without enhancement from clinical features, in a broad validation population. This successfully addresses the unmet need for actionable, novel (immune-pathway) biomarker data in this field which should assist clinicians in improving patient outcomes.

Water Intelligence 705p £137m (WATR.L)

The multinational provider of precision, minimally-invasive leak detection and remediation solutions for both potable and non-potable has advanced its 2022 growth plan with the reacquisition of its franchise in central Texas within the Group’s American Leak Detection (ALD) subsidiary. The Acquisition builds upon the acquisition of its large Fort Worth, Texas franchise in January and the greenfield launch of a new corporate location in Wichita Falls in March. The purchase price of $0.75m in cash includes all assets required to conduct operations, including trucks and equipment. The purchase price is based on the franchise’s 2021 Statement of Income of $0.65m in revenue and $0.21m in profit before tax. The transaction is accretive to Water Intelligence shareholders.

12 May 2022
*A corporate client of Hybridan LLP or retained by Hybridan LLP for certain services
** Arranged by most recent first
*** Alphabetically arranged
**** Potential means Intention to Float (ITF) has been announced, or it is a rumour


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