Small Cap Feast

20th November 2023

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Dish Of The Day:

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No joiners today.

Leavers: 
Blancco Technology Group, Nanosynth Group, and Finsbury Food left AIM on Friday 17 November.





What’s Cooking In The IPO Kitchen?

9 November: Chapel Down Group ITF:  England's leading and largest wine producer with an award-winning range of sparkling and still wines, under the Chapel Down brand. The Company owns, leases and sources from 1,023 acres of vineyards in South East England announces its Admission to AIM after its transfer from the Aquis Apex market. The Company will not be raising new capital or providing a secondary offering as part of its Admission. Anticipated market capitalisation on Admission will be c.£75m. Expected Admission date is 7 December 2023.

2 October: Tekcapital announced intention to spin off and IPO: MicroSalt, the developer of salt-producing technology designed to deliver full flavor with less sodium, announces the launch of an exempt public offer of shares to retail investors for up to £2.5m via PrimaryBid as part of its spin out from AIM listed Tekcapital plc (TEK.L). Microsalt announced revenues of US$0.638m in 2022, its first year of retail sales of SaltMe Crisp brand and Microsalt salt shakers in US based supermarkets and through Amazon US. AIM Admission delayed, expected mid-November.


Breakfast Buffet

Bradda Head Lithium C$5 cents C$15.4m (BHLI.L)
The North America-focused lithium development group announces positive metallurgical heavy liquid separation results from test work undertaken by the SGS Metallurgical Process Facility in Lakefield, Canada (SGS Canada) on quartered drill core samples taken from its Jumbo Exploration Target at San Domingo District, Arizona, USA. The measured head grade of the samples were 3.05% Li2O, 1.03% Li2O and 0.34% Li2O, reflecting the high, medium and low-grade range seen in our drilling results to date. SGS Canada also undertook Tescan Integrated Mineral Analyzer analysis of the medium grade sample, finding a dominance of spodumene as the primary lithium mineral with possible but very minor petalite and eucryptite, along with muscovite, minor beryl, tourmaline, calcite, and apatite.

Bushveld Minerals 2.35p £36.6m (BMN.L)
The South Africa-based vertically integrated primary vanadium producer announces it has entered into a definitive agreement for the acquisition by Southern Point Resources - Fund 1 SA L.P., represented by its general partner SPR GP1 Proprietary Limited (SPRF), of 50% of the issued shares of Bushveld Vanchem (Pty) Ltd, which owns the Vanchem vanadium processing plant, for an acquisition price of up to US$21.3m. The purchase by SPR of Bushveld's 64% equity interest in a subsidiary that owns the Mokopane Vanadium project for US$3.7m (the Mokopane Acquisition), which was announced on the same date, remains on track.

EQTEC plc 0.0425p £4.9m (EQT.L)
The waste to energy Company announces a proposed financial restructuring, in collaboration with its existing funders and certain shareholders. Supported by existing lenders, the Company will redeem existing debt facilities with Altair Group Investment Limited, refinance outstanding debt with YA II PN Ltd and Riverfort Global Opportunities PCC Limited (the YA-RF Lenders) and settle an amount due to Pitcole Limited, a shareholder in EQTEC Italia MDC Srl. The restructuring is supported with an operating cost reduction by over £1.5m per year since the beginning of 2023. Meanwhile, the Company is pursuing outstanding monies payable to the Company, amounting to approximately £5m, including £3.95m being claimed from Logik Developments as announced on 20 September 2023.

Kitwave Group 249p £174.3m (KITW.L)
The delivered wholesale business announces that it has acquired the entire issued share capital of WLG (Holdings) Limited, which trades as Wilds of Oldham, a composite drinks wholesaler. The total gross consideration for the Acquisition, payable in cash, has been funded from the Group's current banking facilities. In the financial year ended 30 September 2022, Wilds of Oldham had a turnover of £10.2m. The acquired company will be incorporated into Kitwave's Foodservice on-trade business H.B. Clark & Co.

Mercia Asset Management 25.7p £114.8m (MERC.L)
The regionally focused specialist asset manager announces the profitable sale of nDreams Limited to Aonic AB for an enterprise value of £90.3m. Mercia held a 33.2% direct stake in nDreams, resulting in total consideration of £30.2m, consisting of £26.4m in cash and £3.8m re-invested into Aonic. This exit results in a 2.7x return on invested capital and an 18.4% IRR. The exit price represents a £4.4m (17.5%) increase on Mercia's carrying value for nDreams as at 31 March 2023. nDreams is a leading virtual reality (VR) studio that specialises in developing and publishing VR games.

MTI Wireless Edge 34.5p £30.4m (MWE.L)
The technology group focused on communication and radio frequency solutions announces its financial results for the nine-month period ended 30 September 2023. Revenue for the period was $33.7m (nine months to 30 September 2022: $34.8m). Profit before tax increased 6% to $3.4m, helped by positive currency movements and margin improvement. Mottech division’s pipeline for Q4 2023 looks promising to support a good end to the year and start to 2024. The MTI Summit division remains well placed to deliver a good result for the year and is likely to benefit from increased government spend in Q4 2023.

musicMagpie 25p £27m (MMAG.L)
The Board of musicMagpie notes the recent speculation and confirms it is in early-stage discussions with both BT Group plc and Aurelius Group (the Parties) as to a possible offer to acquire the entire issued and to be issued share capital of musicMagpie. In accordance with Rule 2.6(a) of the Code, by no later than 5.00 pm on 18 December 2023, the Parties must either announce a firm intention to make an offer or announce that they each do not intend to make an offer for musicMagpie. This deadline will only be extended with the consent of the Takeover Panel in accordance with Rule 2.6(c) of the Code. This announcement has been made without the consent of BT Group plc and Aurelius Group.

Netcall 80.5p £129.2m (NET.L)
The provider of intelligent automation and customer engagement software gives an update on the Board succession planning. This results in changes to roles for certain Board and management members. Following twenty years leading the business, Henrik Bang, CEO, will move to Non-Executive Chair of the Board on 1 January 2024, at which time the current Chair, Michael Jackson, will continue on the Board as a Non-Executive Director and will chair the Remuneration Committee. The Current Group FD, James Ormondroyd, will become CEO. Richard Hughes will join the Company as CFO on 27 November 2023. In addition, Nigel Halkes will join as a NED on 1 December 2023.

Oriole Resources 0.145p £5.6m (ORR.L)
The exploration Company focussed on West Africa has signed a non-binding Heads of Terms (HoT) with Ghana-based BCM International Limited (BCM), a mining and civil contractor, for an earn-in by BCM to fast-track exploration at the Company's 90%-owned Mbe gold licence (Mbe or the Licence) in central Cameroon. Following execution of the HoT, BCM will, at its own cost, complete due diligence at Mbe no later than 31 January 2024. Subject to a positive outcome of the due diligence, BCM will pay Oriole US$1m cash payment. BCM will commit to US$4m in exploration to define Resources at the Licence. Further success-based payments from BCM are subject to the number of resource ounces reported under JORC. Subject to completion of the Earn-In Agreement, maiden drilling is expected to commence in Q1-2024. Beyond these commitments, any further expenditure at Mbe will be on a contribute or dilute basis. In the event that Oriole's holding in the Licence falls below 5%, its interest will convert to a 3% net smelter returns royalty on future production from the Licence.

Velocys 0.2795p £4.6m (VLS.L)
The sustainable fuels technology Company announces that it has received a non-binding indicative all-cash offer for the entire issued and to be issued ordinary share capital by a consortium led by Lightrock LLP and Carbon Direct Capital Management LLC at 0.25 pence per share, valuing the issued share capital of the Company at approximately £4.1m, representing a 64% discount to the closing price of 0.689 pence on 17 November, 2023. The Board notes that it has been unable to secure the additional funding it has been seeking since completion of its last placing in June 2023. Accordingly, the Board is continuing engagement with the Consortium and its advisers with a view to progressing and recommending the proposal.

20 November 2023
*A corporate client of Hybridan LLP or retained by Hybridan LLP for certain services
** Arranged by most recent first
*** Alphabetically arranged

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