Small Cap Feast

18th July 2022

Dish of the day
No Joiners today
Off the menu
No leavers today
Dish Of The Day:
Haleon Plc (HLN.L) joined the Main Market following the demerger of the Consumer Healthcare business from the GSK Group to form the Haleon Group. Haleon is a global leader in consumer health, with brands trusted by millions of consumers globally. The group employs over 22,000 people across 170 markets.
Off The Menu:
No leavers today.

What’s Cooking In The IPO Kitchen?

Unigel Group, intends to join the Aquis Growth Market. Unigel Group is a pioneer in the field of thixotropic gels for the fibre optic cable industry. The Company is also a supplier of laminated steel tapes to the fibre optic cable industry in the US. Thixotropic gels and laminated steel tapes are essential components to the rapidly growing global fibre optic cable market. The Group exports to over 40 countries and is a key supplier to almost every leading fibre optic cable manufacturer worldwide and is the industry’s only organisation with multiple manufacturing facilities spread across 3 continents. The Company acts as the holding company for its wholly-owned operating subsidiary, Unitape Limited and its 60% owned operating subsidiary, Unigel (UK) Limited. Expected 1 August.

Equipmake Holdings intends to join the Aquis Growth Market. Equipmake is a UK-based technology company, which has developed a range of electrification products for the provision of electric vehicle drivetrains to meet the needs of the automotive, aerospace and other sectors in support of the transition from fossil-fuelled to zero emission powertrains. The Company now has a significant pipeline of opportunities of in excess of £400m at various stages of negotiation, as demand for electric vehicles increases as part of the global decarbonisation movement. Expected 29 July.

Georgina Energy, an early-stage resource company with a strategy of actively pursuing the exploration, commercial development and monetisation of helium, hydrogen and hydrocarbon interests located in the Amadeus and Officer Basins in Northern and Western Australia intends to join AIM. Georgina Energy has two principal onshore interests. The first, the Mount Winter Prospect is located in the Amadeus Basin in Northern Australia, which the Company has a right to earn an initial 75% interest. The second interest, the Hussar Prospect is 100% owned by the Company and is located in the Officer Basin in Western Australia. Expected late July.

Macaulay Capital is due to join the Aquis Growth Market on 29 July. The Group was formed to originate and manage corporate transactions, raise funds from third parties, invest the Group’s own funds alongside those of external investors and to manage the Group’s investment portfolio with the aim of maximising its value.


Breakfast Buffet

Active Energy Group 4.4p £7.1m (AEG.L)

The international biomass based renewable energy business announced the award of Malaysia Patent No. MY-191174-A in respect of the process for beneficiating and cleaning biomass. This patent will be valid until May 2038 and allows Active Energy to exclude others from making and/or selling its biomass product, CoalSwitch® in Malaysia according to the patented processes and systems. The Malaysia patent combines with patents awarded in the United States in 2020 for the manufacturing and production of CoalSwitch ® and in Canada in 2021.

Barkby Group 11.2p £16.1m (BARK.L)

The diversified business group provided a trading update for the financial year ended 2 July 2022 (FY2022). Revenues are expected to increase by c.29% to £19.4m, with EBITDA returning to a positive contribution of £1.6m for the year. The continuing core business will report revenue of £10.4m and EBITDA of £2.5m for FY2022. Meanwhile, the Board has resolved to dispose of certain non-core divisions and investments, and these will be deemed as discontinued operations. The disposals will also ensure a focus on roadside property development, more likely to attract new investors.

CyanConnode Holdings 13p £28.6m (CYAN.L)

The UK-based designer and developer of narrowband radio frequency (RF) smart mesh networks for machine-to-machine (M2M) communications, provided a trading update for the financial year ended 31 March 2022. Unaudited turnover for the period exceeds market expectation of £9.3m (FY2021: £6.4m). Cash received from customers during the period is approx. £8.2m (FY2021: £5.3m). It has been a record year for CyanConnode in terms of revenue. Momentum has continued into the new financial year, especially in the Indian market.

DeepVerge 11.7p £24.2m (DVRG.L)

DeepVerge announced that its environmental division, Modern Water, has been chosen to supply 27 fully integrated Microtox® solutions to monitor water toxicity and pollution in the Qatar region ahead of the 2022 FIFA World Cup. This £1.4m order from Avanceon is the result of a strategic move away from equipment only sales to supplying fully integrated regional monitoring solutions. This order is additional to the £3m of orders in Q2 2022, for China and South Asia and is expected to be shipped later this year.

Dianomi 194p £58.3m (DNM.L)

The provider of native digital advertising services provided a trading update for the first six months to 30 June 2022 (H1 2022). H1 revenues are expected to be up 4% year-over-year. Management expects revenues for the full year to be broadly in line with market expectations. However, the investments in Dianomi’s contextually-led programmatic platform, marketing and people and the additional costs as a public company, have contributed to a decrease in Adjusted EBITDA margin from 10% for H1 2021 to approximately 5% for H1 2022. Adjusted EBITDA margin is expected to improve in the second half of the year.

Great Western Mining 0.15p £5.2m (GWMO.L)

The exploration company provided an update on its 2022 drilling programme at the OMCO Mine area of the Olympic Gold Project in Mineral County, Nevada where initial results exceed management expectations. Chairman indicated that the most significant development is the apparent identification of unmined portions of the OMCO vein itself. Should laboratory analysis establish grades of gold comparable to those achieved from material mined in the past at the main OMCO vein, a shallow gold resource could potentially be defined and expanded in short order, with minimal additional work.

Kore Potash 1.1p £38.4m (KP2.L)

The potash development company with 97%-ownership of the Kola Potash Project and Dougou Extension (DX) Potash Project in the Sintoukola Basin located in the Republic of Congo, provided the quarterly update for the period ended 30 June 2022. Engineering, Procurement and Construction contract proposal for the construction of Kola will be based on the outcomes of the study expected in August 2022. This will be followed with the financing proposal. As of 30 June 2022, the Company held US$7.6m in cash.

Northern Bear 54.5p £10.2m (NTBR.L)

The specialist building and support services provider in Northern England announced its unaudited preliminary results for the year ended 31 March 2022 (FY22). Revenue is £61.1m (2021: £49.2m). Adjusted EBITDA is at £3.6m (2021: £2.3m) prior to the impact of impairments of £2.6m, amortisation, and other one-off costs. Reported loss for the year is £1.3m (2021: £1.8m loss). The net cash position was £2.2m at 31 March 2022 (£2.1m at 31 March 2021). The company is in the process of a strategic review for future growth either by geographic expansion or additional product/service offerings.

Tortilla Mexican Grill 125p £48.3m (MEX.L)

The largest fast-casual Mexican restaurant group in the UK provided a trading update for the half year ended 3 July 2022 (H1 2022): revenue up by 60% to £26.9m (up by 55% excluding the impact of the Chilango acquisition). During the period, 6 new sites were opened, taking the total number to 84, including the 8 acquired Chilango sites (H1 2021: 58) and with 41% of company-run sites located outside of the M25. Net cash position as at 3 July 2022 was £3.1m. To mitigate the macroeconomic risks, management is updating pricing, driving operational efficiencies, and adopting a multi-platform delivery proposition by partnering with Uber Eats, Just Eat and Deliveroo.

Tristel 360p £170.0m (TSTL.L)

The manufacturer of infection prevention products provided a trading update for the year ended 30 June 2022 and declares a special dividend. Revenue and adjusted profit before tax for the year from the continuing operations will be in line with consensus forecasts of £28.4m and £4.5m respectively. The consensus expects a 8% decline in revenue and adjusted profit before tax at the same level as the previous financial year. Net cash balances on 30 June 2022 were £9m (30 June 2021: £8.1m). The Company announced a special dividend of 3p per share payable on 10 August 2022. Management indicates a positive outlook this year as the Company is emerging from the disruption caused by Brexit and the pandemic.

18 July 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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