Small Cap Feast

21 October 2022

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Dish Of The Day:
Sondrel (SND.L) has joined AIM.
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No leavers today.

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.

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

CleanTech Lithium 47p £37.1m (CTL.L)

The company involved in the exploration and development of three lithium projects in Chile, announces the successful completion of the Placing and Retail Offer (together the Fundraising) announced on 20th October 2022. The Fundraising raised gross proceeds of approx. £12.3m and was upsized due to investor demand. A total of 26,100,258 shares will therefore be issued, representing c. 24.83% of the Company’s enlarged ordinary share capital. The issue price represents a 3.98% discount to the 10-day VWAP on 19 October 2022.

Corero Network Security 11.25p £55.8m (CNS.L)

The provider of real-time high-performance, automatic Distributed Denial of Service (DDoS) cyber defense solutions, announces significant enhancements to its SmartWall Threat Defense Director (SmartWall TDD) in partnership with Juniper Networks. The expanded agreement extends DDoS protections across Juniper’s PTX and MX series routers, enabling Corero’s SmartWall TDD technology to prevent DDoS attack traffic directly at the edge of the customers network in seconds and to include newly enhanced protections against DDoS carpet bombing, also known as ‘spread spectrum’ or ‘subnet’ attacks.

Custodian REIT 82.8p £363.0m (CREI.L)

The company investing in a diversified portfolio of smaller regional properties across the UK, announces the disposal of its only high street shopping centre for £9.3m. Custodian REIT purchased the 73,367 sq ft shopping centre in Gosforth as part of its acquisition of DRUM Income Plus REIT in November 2021 and the price reflects a 3.5% premium to the £8.975m apportioned value of the asset at that time. Since acquisition, a number of asset management activities have been completed to grow the rent roll by 8.5%. The asset is producing £0.9m of rental income over the period of ownership. Custodian REIT intends to invest the sale proceeds in its ongoing pipeline of building refurbishments.

Directa Plus 87.5p £57.8m (DCTA.L)

The producer and supplier of graphene nanoplatelets based products for use in consumer and industrial markets, announces that an innovative, sustainable, resilient and safe asphalt for the A4 Torino-Milano motorway section, managed by the ASTM Group will be made with G+® graphene and specially selected recycled hard plastics. The asphalt will re-use 70% of milled material from existing pavement, thus reducing the use of new natural aggregates to only 30%. This contract has no significant impact on the Company’s 2022 sales. The supply of several tons of material will be in 2023/2024.

Hummingbird Resources 5.6p £22.0m (HUM.L)

The multi-asset, multi-jurisdiction production, development and exploration company, provides a trading update for the third quarter to 30 September 2022 (Q3 2022). Mali Yanfolila: Q3 2022 production was 16,827 ounces of gold, down 16% from Q2 2022. This was below the Company’s expectations and primarily due to the continued underperformance of the contract miner and delays in accessing the anticipated higher-grade ore zones at the Komana East orebody. The Company has taken actions to stabilise ongoing production. As a result of the actions taken, Yanfolila is expected to deliver an AISC (all-in sustaining cost) of under US$1,400 per ounce for Q4 2022 and return to positive cashflows.

Invinity Energy Systems 28.5p £33.1m (IES.L)

The global manufacturer of utility-grade energy storage, announces the sales contract for a 10 MWh Invinity VS3 flow battery system for use in a large-scale solar microgrid project in Southern California has now been executed with Maada’oozh LLC, a wholly owned subsidiary of Indian Energy LLC. This follows Invinity’s 13 October 2022 announcement that the project had been granted funding from the California Energy Commission. This builds on Invinity’s ongoing work with Indian Energy which includes the 0.5 MWh project at a US Marine Corps base in Southern California announced 17 May 2021.

Jade Road Investments* 3.25p £3.7m (JADE.L)

The London quoted pan-Asian diversified investment vehicle focused on providing shareholders with attractive uncorrelated, risk-adjusted long-term returns provides the following update concerning its USD-denominated corporate bonds. The corporate bonds issued on 21 October 2019 and 11 May 2020 totalling US$3.6m have reached maturity and are now due for redemption. The Company has not yet realised sufficient funds from its current program of legacy asset disposals to redeem these bonds at present. The Company is in discussions with the bondholders with a view to either restructuring and/or extending the maturity date. The Company will provide an update in due course.

Orosur Mining 12p £19.1m (OMI.L)

The gold producer, developer and explorer provides an update on its exploration activities at the Company’s flagship Anzá Project in Colombia. Assay results from four additional diamond drill holes (PEP004, PEP005, PEP007 and PUP001) from the Pepas and Pupino prospects have been received. Holes PEP005 and PEP007 return substantial gold intersections, with the best at PEP007 being 80.55m @ 3.05g/t Au from surface (including 41.75m @ 5.24g/t). Two holes are currently underway from new pads to attempt to better define the geometry of this mineralised body.

Trident Royalties 46.5p £132.5m (TRR.L)

The diversified mining royalty company announces the Los Filos Gold offtake following Equinox Gold’s recent news release announcing an updated Feasibility Study for an expansion at the Los Filos Mine Complex. The Feasibility Study contemplates the construction of a carbon-in-leach processing plant beginning in H2 2023 to process higher grade ore from Los Filos’ six mines, commencing in mid-2024.2. Equinox has not yet approved the expansion. Trident holds an offtake agreement for 50% of all refined gold production up to a cap of 1,100,000 ounces from Los Filos (approx. 770,000 ounces remaining).

Wickes Group 117.35p £304.7m (WIX.L)

The home improvement retailer announces third quarter total like-for-like (LFL) sales growth of 2.6%, compared with 0.8% for the first half. Following this stable third quarter performance, Wickes Group continues to expect full year adjusted PBT to be in the range of £72-82m. Looking further ahead, the cost base will be impacted by rising energy prices once the current energy contract ends in March 2023. If energy costs were to remain at the current price cap for businesses, FY2023 energy costs would be c£7.5m higher than FY2022.

21 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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