Small Cap Feast

18th October 2022

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What’s Cooking In The IPO Kitchen?

Ithaca Energy, a UK independent exploration and production company focused on the UK North Sea, intends to join the Premium Segment of the Main Market. Ithaca Energy is one of the largest independent oil and gas companies in the UKCS, ranking 2nd by resources and 3rd by production. During the six months ended 30 June 2022, Ithaca Energy’s average daily production (oil and gas) on a net working interest basis was c. 66.7 kboe/d, the Group’s revenue was c.$1,338m, Adjusted EBITDAX was c. $907m, profit after tax was c. $1,558m.

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.

OTAQ plc, (OTAQ.L) the technology company with three divisions: Aquaculture, Geotracking Devices and Offshore intends to delist from the Main Market and join the AQSE Growth 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 9 November 2022. Raising a total of £3.6m, £2m raised.

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 2 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.

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

Angle 49.3p £128.3m (AGL.L)

The liquid biopsy company, announces that it has decided to close its facilities in Toronto, Canada, in light of the increasing cost of operating in Canada due to currency movements and recent proposed changes to the UK R&D tax credit rules. All research and development will now be centralised in Guildford UK and equipment and assets relocated. The closure of the Canadian operations will result in one-off cash impacts of c.£0.5m. There will be net cash savings of c.£2.6m in 2023 rising to c.£4m per annum thereafter. Meanwhile, the company retains its high specification clinical laboratory facility in Plymouth Meeting, Pennsylvania, US, as its hub for North American activities.

Aptamer Group 86p £59.4m (APTA.L)

The developer of novel Optimer® binders as tools to enable innovation in the life sciences industry, announces its results for the year ended 30 June 2022. Revenue increased by 152% to £4m. Adjusted EBITDA loss was £1.7m (15-month period to 30 June 2021: £2.4m in loss). Cash balance was £6.7m (2021: £0.4m). The Company raised gross proceeds of £10.8m when listing on AIM in December 2021. With commercial traction continuing in Europe, the U.S. and APAC regions, Aptamer believes it is on track to meet market expectation for the current financial year.

Avacta Group 99p £252.7m (AVCT.L)

The clinical stage oncology drug developer of powerful diagnostics based on its Affimer® and pre|CISION™ platforms, announces that it has conditionally agreed to acquire Launch Diagnostics Holdings Limited for an upfront cash consideration of £24m (on a debt-free/cash-free basis and subject to working capital adjustments) with an earn-out capped at £13m. The acquisition is based on 1.35x of FY21 revenue, including an 80% discount on COVID related revenues. This deal marks Avacta’s first step in a M&A-led growth strategy for its diagnostics division, with the vision of building an integrated and differentiated IVD business with global reach. In conjunction with this conditional acquisition, Avacta also proposed a placing to raise £5m, an offer to raise £2m and issuance of convertible bonds to raise £55m.

Capital 82.7p £159.5m (CAPD.L)

The mining services company provides a trading update for the quarter ended 30 September 2022 (Q3 2022). Q3 2022 revenue was $73.1m, up 18.7% year-on-year and up 2.7% from the prior quarter. Capital begun repositioning its drilling contract portfolio, not only reducing exposure to small exploration contracts but also increasing exposure to tier-1 assets, with expanded relationship with B2Gold at Fekola. The demand remained robust across blue-chip customers during the quarter. Revenue guidance remains $280-290m and capex guidance remains $60-65m in 2022.

Cora Gold 4.7p £13.6m (CORA.L)

The West African focused gold company announces that it has been awarded an Environmental Permit for the Sanankoro Gold Project in Southern Mali. The award of the Environment Permit follows the completion and submission of the Environmental and Social Impact Assessment in July 2022 to Direction Nationale de l’Assainissement et du Contrôle des Pollutions et des Nuisances, the governing administration for environmental matters in Mali.

Essensys 52.5p £33.8m (ESYS.L)

The global provider of flexible workspace technology, announces its unaudited results for the year ended 31 July 2022 (FY22). Revenue increased 6% to £23.3m. Adjusted EBITDA was £7m in loss, in line with market expectation. The U.S. market, the Group’s largest market, grew 17%. The UK revenue declined 8%, reflecting churn of low value customers and previously reported one-off customer insolvency. Net cash was £24.1m (FY21: £36.9m). Management is confident of further progress in FY23 and beyond, given the contracted new business and a healthy long-term pipeline.

Logistics Development Group 12.3p £69.1m (LDG.L)

The company focused on investment in the logistics sector, announce that, further to its announcement on 26 August 2022, it has acquired a further 5.132m ordinary shares in Finsbury Food Group (LON:FIF) at an average price of £0.81 per share, for a total cash consideration of £4,165,820. Following these purchases, LDG is interested in 8.832m ordinary shares in Finsbury, representing approx. 6.77% of Finsbury’s issued share capital. Finsbury operates a specialty foods business

Mind Gym 97.5p £97.7m (MIND.L)

The global provider of human capital and business improvement solutions, provides a trading update for the six months ended 30 September 2022. Mind Gym expects to report revenues of £26.8m, +11% year-on-year (+2% in constant currency). The US represented 62% of H1 revenues (actual FX) reflecting both underlying growth in the region and the recent strengthening of the USD. With operating discipline and price increases to help to counter inflation, the Group’s performance to date is in line with the Board’s expectations and guidance for FY23 remains unchanged.

Saietta Group 102.5p £105.4m (SED.L)

The designer and manufacturer of electric drive (eDrive) systems for electric scooters to buses, provides an operational and trading update, with multiple products scheduled for commencement of volume production in 2023 in the UK and overseas. As a reaction to the unexpectedly positive response from substantial customers with more significant longer term contract potential, revenue expectation for the financial year to March 2023 is being adjusted to be at least 250% of the previous year, with the substantial majority falling in the second half. As at 30 September 2022 the Company had cash of approximately £23m.

Sosandar 15.8p £34.9m (SOS.L)

The fashion brand in the UK for women, provides a trading update on the six-month period ended 30 September 2022 (H1 FY23). Revenue was £20.9m, a 72% increase year-on-year (H1 FY22: £12.2m). Profit before tax was £0.1m, compared to £1.08m in loss in H1 FY22. Net cash was £4.2m as at 30 September 2022, down 40% from the end of FY22, reflecting planned earlier delivery of Autumn stock to third parties. In addition, Sosandar is starting to import more via lower cost sea freight, which accelerates use of cash. The Company is confident that it can protect margins and profitability by navigating the challenging market conditions.

18 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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