Small Cap Feast

19th 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.

BWP REIT, a newly formed single asset company, announces its intention to raise £35m through the issue of 35m ordinary shares 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 (PSX). Expected 27 October 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.

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

ADM Energy* 0.55p £1.4m (ADME.L)

The natural resources investing company announces that on 18 October 2022, Osa Okhomina, Chief Executive Officer, sold 4,339,492 ordinary shares at an average price of 0.57937 pence per share. Following the sale, Mr Okhomina has a total beneficial holding of 1,666,667 shares in ADM, representing approximately 0.65% of the company’s issued share capital. On 17 October 2022, ADM announced that Mr Okhomina will step down from the Board of Directors and his position as Chief Executive Officer upon receipt of the total proceeds of £725k from Tennessee Black Gold LLC, expected to be by 28 October 2022.

ASOS 535.3p £534.9m (ASC.L)

The global online fashion company reports its final results for the year ended 31 August, 2022. Group revenue was flat at £3.9m. Operating loss was £9.8m (FY21: £191m in profit). To navigate the continued macroeconomic volatility, ASOS has agreed renegotiated for core banking covenants, with cash and committed facilities of over £650m at year end. Under the renewed commercial model of shorter buying cycles and near sourcing, ASOS expects a non-cash stock write-off of £100m-£130m in FY23 in order to increase logistics flexibility and reduce costs.

Brickability Group 74.5p £223.3m (BRCK.L)

The leading construction materials distributor, announces a trading update for the six-month period to 30 September 2022. Revenue for H1 2022 is expected to be approximately £353m (including the impact of acquisitions), an increase of c.58% year-on-year. As a result, the Board currently anticipates adjusted EBITDA for H1 2022 to be at least £25m, up 39% from £18m in the prior corresponding period. The Group looks to the near future with cautious optimism as it continues to actively manage the headwinds.

Cambridge Cognition Holdings 118p £36.8m (COG.L)

The company that develops and markets digital solutions to assess brain health, announces that it has won a £1.1m contract with a major pharmaceutical company (an existing customer) to provide electronic clinical outcome assessments (eCOA) and hardware for a rare blood disease study running over the next 2 years. The new contract is for eCOA licenses, services and hardware to support an upcoming clinical trial. The eCOA market is valued at over US$1bn per annum and growing at more than 15% according to GrandView Research 2018 eCOA Report.

Chaarat Gold Holdings 11.2p £77.2m (CGH.L)

The gold mining company with an operating mine in Armenia and assets at various stages of development in the Kyrgyz Republic, announces the completion of the Bio-oxidation first phase metallurgical test programme performed by SGS Lakefield on its Kyzyltash gold project. The project has an unconstrained JORC-compliant Measured, Indicated and Inferred sulphide resource of 5.4m ounces of gold at 3.8 g/t. Management estimates that the project has the potential to produce approximately 300koz per annum of gold subject to the project meeting its feasibility, permitting and development milestones.

Europa Oil & Gas 1.15p £11.0m (EOG.L)

The UK, Ireland and Morocco focused oil and gas exploration, development, and production company, announces that it has repaid in full the £1m loan facility provided by Union Jack Oil plc announced on 9 September 2022. In accordance with the terms of the loan, the principal and accrued interest has been repaid without penalty. The loan was secured against a 10% interest in the Wressle field (PEDL180 and PEDL182), including the associated infrastructure. This security will now be released at which point the Company will be completely unencumbered and debt-free.

IOG 8.85p £46.4m (IOG.L)

The Net Zero UK gas and infrastructure operator focused on high return projects, provides a Phase 1 operational update. Average H2 2022 production to date was 28.6 mmscf/d, constrained by aqueous liquids production at Blythe, at an average realised price of 258 p/therm. Drilling fluid losses at Southwark A1 well have continued in the Bunter Shale Formation. A1 has been suspended to enable A2 well stimulation operations to proceed for First Gas in Q4. Saturn Banks to be shut-in for a total of four weeks, including depressurising the line ahead of the Bacton terminal shutdown, to enable the final subsea connection to Southwark. Hence, H2 2022 production guidance is now revised from 30-50 mmscf/d to 22-28 mmscf/d.

The Artisanal Spirits Company 72.5p £50.6m (ART.L)

The curators single-cask and limited-edition whisky, and owner of The Scotch Malt Whisky Society (SMWS), announces that SMWS has signed a new franchise agreement with F.J. Korea (FJK) in South Korea. FJK is the fourth largest liquor distributor in South Korea with over 2,000 on-trade venues. South Korea is the tenth largest market within the global Ultra-Premium Scotch Malt Whisky sector and was estimated to be worth c. US$161m in 2021, an increase of 65% from 2020 (source: IWSR). This represents an entirely new market for SMWS.

Time Finance 16.25p £15.0m (TIME.L)

The specialist finance provider announces that as at 30 September 2022 the value of its unaudited lending portfolio had reached a record high of £145.1m. This compares with the previous Group high of £144.1m recorded in February 2020, immediately prior to the onset of the pandemic. The current lending portfolio value is 6% higher than the 31 May 2022 year-end level of £136.8m and is a further 2% up on the 31 August 2022 level of £142.8m. As announced in June 2021, Time Finance is targeting a doubling of the lending portfolio by 31 May 2025.

Surface Transforms 41p £80.1m (SCE.L)

The manufacturers of carbon fibre reinforced ceramic automotive brake discs, announces that it has raised gross proceeds of £2m, pursuant to the Open Offer set out in the Circular dated 29 September 2022. Applications were received for 4,963,739 Open Offer Shares, representing a take-up of 66.2% of the 7,500,000 available Open Offer Shares. This Open Offer brings the total funds raised (including the Placing) to £18m. The proceeds will be used to complete factory one and commit to the second factory.

19 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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