Small Cap Feast

1st November 2022

Dish of the day
No Joiners today
Off the menu
No leavers today
Dish Of The Day:
Burning Rock Biotech Limited ADS has joined the Main Market (Standard).
Off The Menu:
China Petroleum & Chemical Corporation ADS has left the Main Market (Standard).

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. The offer will initially comprise new ordinary shares and the proceeds will be used to repay existing shareholder debt, including a capital note in favour of DKL Energy Limited, the Company’s immediate shareholder. Immediately following Admission, the Company will target a free float of at least 10% of its issued share capital and expects to be eligible for inclusion in the FTSE UK indices.

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). 10 November 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.

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. 14 November 2022.


Breakfast Buffet

Arrow Exploration 20p £41.2m (AXL.L)

The oil and gas company announces that following the successful testing of the East Pepper well in Canada in September, production began on October 25th. The workover program on RCS-1 and RCE-1 in Colombia is progressing as expected and the Company anticipates reporting on production rates in the next few weeks. Corporate production as of October 27 2022, is approx. 2,530 boe/d net. Total net production from the Rio Cravo field is 760 bopd prior to any contribution from the current workover program. The Pepper Field has been producing approx. 1,270 boe/d, comprising approx. 270 boe/d from West Pepper and approx. 1,000 boe/d from East Pepper. Production at West Pepper is currently curtailed due to third party facility constraints. The production is expected to return to c. 400 boe/d in early Q4 2022.

AssetCo 63p £88.6m (ASTO.L)

The agile asset and wealth management company announced that it had acquired the entire issued share capital of SVM Asset Management Holdings Limited. The consideration was, after balance sheet adjustments, £11.2m satisfied by the issue of £9m nominal of 1% fixed rate unsecured convertible loan notes 2023 in AssetCo and, as a result of higher net assets of SVM on completion of £4.5m, approx. £2.2m in cash. On completion SVM had cash balances of £5m. SVM is a key component of AssetCo’s plans to have a strong asset management hub in Edinburgh. Completion of this acquisition brings assets managed by the AssetCo group in the Scottish capital to nearly £700m.

Cloudbreak Discovery 1.375p £8.4m (CDL.L)

The royalty company and natural resources project generator, provides a corporate and operational update, including a restructuring plan to shorten execution timelines. Cloudbreak now intends to focus on energy royalty acquisitions in the United States and acquisitions of minority interests in international energy projects. The mineral exploration business will be transferred to, and developed and operated through, a wholly owned Canadian subsidiary of Cloudbreak, to be named Cloudbreak Exploration Inc. Rory Kutluoglu and Cam Bartsch intend to resign from their positions at Cloudbreak to focus full time on Cloudbreak Exploration.

Eckoh 43.5p £126.6m (ECK.L)

The provider of Customer Engagement Security Solutions, announces a trading update for the six months ended 30 September 2022. Revenue increased 33% to £19.6m and operating profits grew by more than 50%, partially due to favourable currency movement. Net cash was £4.4m, up 57% from £2.8m at year end. Despite the macro-economic uncertainty, the Board expect revenue and profit for FY23 to be significantly higher than FY22, supported by long-term structural growth drivers, increasing Cloud adoption and Eckoh’s strengthening product offering.

Hydrogen Future Industries 5.25p £1.8m (AQSE: HFI)

The developer of proprietary wind and water-based green hydrogen production systems, announces the commencement of prototype testing of the wind element of its hydrogen production system 1 metre diameter prototype in Montana, USA. A key element of the prototype is the proprietary wind turbine, which allows the turbine to be more efficient than current open rotor turbines due to modified aerodynamics, with cowling directing air flow across the rotor blades to create a multiple factor increase in wind speed. The cowling also directs the wind flow out and away from the rear of the turbine, reducing the potential for still air to block the flow through the turbines.

N4 Pharma 2.85p £5.2m (N4P.L)

The specialist pharmaceutical company developing Nuvec®, a novel delivery system for cancer treatments and vaccines, provides an update on its patent application for Nuvec®, filed in March 2020. N4 Pharma originally filed a Patent Cooperation Treaty (PCT) patent application for Nuvec® to be used to manufacture viral vectors in applications such as ex-vivo gene therapy treatments. It is now making enhancements to the claims of the applications in the territories in which it wishes to gain patent protection. Should the patent be granted in these territories it would mirror the regions granted for the main patent which N4 Pharma has licensed from the University of Queensland.

Rosslyn Data Technologies 1.15p £3.9m (RDT.L)

The provider of a cloud-based enterprise data analytics platform, announces that it has sold to EnChoice the trade and software assets related to its Integritie business for a maximum consideration of £3.0m, comprising an initial cash consideration of £1.6m and a £1.4m conditional payment based on milestones. The divestment will enable Rosslyn to focus resources on the core Rosslyn product. During the year to 30 April 2022, the Company embarked on a major restructuring by refocussing on a single core product (the Rosslyn spend analytics platform) and a SaaS business model.

Tertiary Minerals 0.19p £2.8m (TYM.L)

The mineral exploration and development company whose strategic focus is on energy transition metals, provides an update on its summer exploration at the Brunton Pass Copper-Gold Project in Nevada, USA, to further evaluate previously reported copper, mercury and arsenic anomalies. Executive Chairman Patrick Cheetham commented: “The occurrence of substantial widths of clay altered rock with up to 1,000x background values for mercury and antimony at two locations 900m apart and with gold values up to 2.65g/t gold suggests these trenches may be in the upper levels of a high sulphidation epithermal gold deposit. Similar deposits occur in the area including the Paradise Peak deposit, 25km to the southeast, which produced over 1.6m ounces of gold and over 44m ounces of silver before closing in 1993.”

Trident Royalties 50p £145.6m (TRR.L)

The diversified mining royalty company provides an update on the quarter ended 30 September 2022. Q3 2022 receipts totalled US$2.4m from exposure to gold, copper, and iron ore, an increase of 20% from the prior quarter (when adjusted for one-off events) and by sixfold over Q3 2021. Cash was US$21.5m as of 28 October 2022. Lithium Americas Corp., the operator of the Thacker Pass Lithium Project, announced that the oral hearing for finalisation of the Record of Decision has been scheduled for 5 January 2023. With a date now set, Trident expects a resolution in early-2023, with construction expected to commence thereafter.

Vertu Motors 47.58p £166m (VTU.L)

The automotive retailer with a network of 164 sales and aftersales outlets across the UK, announces that on 31 October 2022 it has acquired the business and assets of two BMW Motorrad outlets in Yorkshire (the Business). For the year ended 29 September 2021, the Business achieved revenue of £20.5m and an operating profit of £463k. Total consideration is estimated at £4.2m and paid from the Group’s existing cash resources. Due to the seasonality of motorcycle sales, the Business is expected to contribute a small loss for the remaining four months of the financial year and to be earnings enhancing in its first full year of ownership.

1 November 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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MIFID II status of Hybridan LLP research
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