Small Cap Feast

21st November 2022

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What’s Cooking In The IPO Kitchen?

AT85 Global Mid-Market Infrastructure Income plc, a UK investment trust targeting an innovative, adjacent-space strategy in some of the most sought-after sectors in infrastructure, is proposing to undertake an IPO on the Premium Segment of the Main Market. The Company has access to an initial portfolio of assets of £98.5m and a total pipeline (including the Initial Assets) of £539.8m. Targeting to raise c.£300m.

Long Term Assets Limited (LTA), a Guernsey investment company, intends to join the Specialist Fund Segment of the Main Market of the London Stock Exchange. The initial portfolio is made up of a diversified range of assets, recently valued in the region of £160m, comprising a complete selection of the Disruptive Capital’s family office private asset portfolio. LTA aspires to be a “best-in-class” private assets vehicle, targeting 0.55% per annum management fee and typically a 7 to 8% p.a. hurdle rate of return. Date and amount to be raised TBD.

One Health Group plc, intends to join the AQSE Growth Market. The group provides medical services, in the form of elective surgical care, to support the NHS in the management of patients, through a growing network of community-based outreach clinics and independent hospitals. One Health is a cash generative and profitable company, with an adjusted EBITDA for the year ended 31 March 2022 of £1.2m, on revenue of £17.5m. Due 24 November 2022.

Life Sciences REIT plc (LABS.L), the AIM listed real estate investment trust focused on UK life science properties, announces that, in accordance with the intention expressed at the time of the Company’s initial public offering on AIM, the board has determined to apply for the Company’s existing ordinary shares to be admitted to listing on Premium Segment of the Main Market. The Company’s admission to trading on AIM will be cancelled with effect from Admission. Anticipated early December 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.


Breakfast Buffet

Accrol Group 27.1p £86.4m (ACRL.L)

The UK independent tissue converter, announces a trading update ahead of its interim results for the 6 months ended 31 October 2022 (H1 FY23) to be released in late January 2023. Revenue has increased 64% to £121.1m (H1 FY22: £73.7m), volumes grew by 14% in the period. Net debt at 31 October 2022 was lower than anticipated at c.£30.5m, despite a significant increase in tissue stocks and the effect of strikes at UK ports. The Group expects this working capital position to furth improve in H2 FY23 ahead of current market expectations for FY23. Volume growth is expected to continue as consumers move away from high-cost, low-value branded products in search of best-value.

Catalyst Media Group 116p £24.4m (CMX.L)

The 20.54% stake owner of Sports Information Services (Holdings) Limited (SIS) provides an update following the publication of SIS’s audited financial year statement ended 31 March 2022. On 30 June 2022, the Company announced that SIS was expected to return to profitability with an anticipated profit before tax of between £6m – £8m. The final result for its FY was a profit before tax of £7m. On 18 November 2022, SIS declared an interim dividend of £4.4m with CMG expecting to receive its share of such dividend shortly. SIS has started its new financial year well and has advised CMG that it expects to close its financial year to March 2023 with increased turnover year-on-year.

FIH Group 240p £30m (FIH.L)

The international specialist services group with businesses in the Falkland Islands and the UK, announces its unaudited results for the 6 months ended 30 September 2022. Revenue increased by £5.5m (32%) to £22.8m (2021: £17.3m) with improvement in all 3 businesses. Pre-tax profit was £0.6m (2021: £0.4m). Cash position was £7.6m as at 30 September 2022. Looking into the second half of the financial year, return of tourists to the Falkland Islands should boost retail sales and the strong construction order book is expected to be delivered.

MTI Wireless 51.5p £45.5m (MWE.L)

The technology group focused on comprehensive communication and radio frequency solutions announces its financial results for the 9-month period ended 30 September 2022. MTI reported a strong trading quarter across all business divisions, as each division grew and was profitable. Revenue increased 8% to $34.8m (2021: $32.1m). Increased EBITDA, up 14% to $4.58m (2021: $4.03m). Net cash was $5.2m as at 30 September 2022. Moni Borovitz, Chief Executive Officer of MTI Wireless Edge, commented: “Going into the final quarter of this year, the Company is well placed to deliver a good result for the year.”

Ncondezi Energy 0.825p £3.4m (NCCL.L)

The power development company provides an update on its solar photovoltaic (PV) and Battery Energy Storage System (BESS) project in Tete, Mozambique (the Solar Project). The Solar Project valuation forecasts have been updated for 100MW phases up to 300MW following inputs from 300MW solar PV plus BESS feasibility study. Forecasts for the Solar Project pre money NPV at 10% discount rate: 100MW: US$ 23m; 200MW: US$ 51m; 300MW: US$ 75m. Forecasts have been updated to include transmission, permitting and concession costs.

Northcoders 315p £21.9m (CODE.L)

The independent provider of training programmes for software coding, announces that it intends to raise approximately £2.1m (before expenses) by way of a placing of approximately 694,444 new ordinary shares at a price of 300 pence per share. The placing price represents a discount of approximately 4.8% to the closing price of 315 pence per on 18 November 2022, i.e., the latest practicable business day prior to this announcement. Use of proceeds will be to further accelerate the Company’s growth strategy by introducing 4 new technology training courses across the following disciplines: Cyber Security; Platform Engineering; Agile Project & Product Management.

OKYO Pharma 2.6p £35.7m (OKYO.L)

The ophthalmology-focused bio-pharmaceutical company which is developing OK-101 to treat dry eye disease, announces that it filed an Investigational New Drug (IND) application with the U.S. Food and Drug Administration (FDA) for the development of OK-101 to treat dry eye disease (DED). “The filing of this IND with FDA is a key step for OKYO as we advance our plan to open a Phase 2 trial in DED patients in the first quarter of 2023,” said Gary S. Jacob, Ph.D., CEO of OKYO Pharma.

Sareum Holdings* 87.5p £59.6m (SAR.L)

The biotechnology company developing next generation kinase inhibitors for autoimmune disease and cancer, notes the publication of data from a Phase I/2 trial of SRA737, in the November 15 edition of Clinical Cancer Research. The objectives of the trial were to establish the safety profile, recommended Phase 2 dose, pharmacokinetics profile, and clinical activity of SRA737. Treatment of patients with SRA737 in combination with low-dose gemcitabine was found to be well tolerated and resulted in lower myelotoxicity compared to standard doses of gemcitabine alone or in combination with other Chk1 inhibitors. Tumour responses were observed in anogenital and other solid tumours. The objective response rate in anogenital cancer was 25%.

Uniphar 290.5p £881.3m (UPR.L)

The diversified healthcare service organisation announces the acquisition of BModesto Group. BModesto is a Netherlands headquartered healthcare services business focused on improving access to pharmaceutical and healthcare products across the Netherlands, Germany, the UK and Europe. The purchase price includes an upfront payment of EUR51m, which will be funded from existing banking facilities, plus a deferred consideration payment of up to EUR24m contingent upon the achievement of EBITDA and gross profit targets. BModesto generated EBITDA of EUR7.7m in 2021 and the acquisition is expected to deliver a Return on Capital Employed in line with Uniphar’s target rate of 12%-15% within 3 years.

Zinc Media Group 85.5p £18.6m (ZIN.L)

The television, brand and audio production group, announces a trading update for the financial year ending 31 December 2022 (FY22). Revenue booked and anticipated to deliver in FY22 is at £28m (FY2021: £17.5m), ahead of market expectations. EBITDA performance is in line with current guidance with the Group expecting to be profitable in H2 2022. Cash was £3.1m as at 17 November 2022. £6m of revenue is booked for FY23 and a further £16m is at an advanced stage.

21 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).

Any and all opinions expressed are current as of the date appearing on this face of this document only. Any and all opinions expressed are subject to change without notice and Hybridan LLP is under no obligation to update the information contained herein. To the fullest extent permitted by law, none of Hybridan LLP, its members, officers, employees, agents or associated undertakings shall have any liability whatsoever for any direct or indirect or consequential loss or damage (including lost profits) arising in any way from use of all or any part of the information in this document.

This document should not be relied upon as being an independent or impartial view of the subject matter and, for the avoidance of doubt, constitutes non-independent research (as such term is defined in the Financial Conduct Authority’s Conduct of Business Sourcebook to reflect the requirements of the MIFID II Regulation and Directive 2014/65/EU (known as MIFID II)). The individuals who prepared this document may be interested in shares in the company concerned and/or other companies within its sector, may be involved in providing other financial services to the company or companies referenced in this document or to other companies who might be said to be competitors of the company or companies referenced in this document. As a result both Hybridan LLP and the individual members, officers and/or employees who prepared this document may have responsibilities that conflict with the interests of the persons who receive this document. Hybridan LLP and/or connected persons may, from time to time, have positions in, make a market in and/or effect transactions in any investment or related investment mentioned herein and may provide financial services to the issuers of such investments.

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.

Neither this document, nor any copy of part thereof may be distributed in any other jurisdictions where its distribution may be restricted by law and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions. Distribution of this report in any such other jurisdictions may constitute a violation of territorial and/or extra-territorial securities laws, whether in the United Kingdom, the United States or any other jurisdiction in any part of the world.

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