Small Cap Feast

23 November 2022

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What’s Cooking In The IPO Kitchen?

Kistos Holdings plc, intends to join AIM. The Company was incorporated to act as a new holding company for the group companies 0f Kistos plc (KIST), a holding company with the objective of creating value for its investors through the acquisition and management of companies or businesses in the energy sector. Anticipated Market Cap £327m. Expected 22 Dec 2022.

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

AB Dynamics 16.125p £369.0m (ABDP.L)

The designer, manufacturer and supplier of advanced testing, simulation and measurement products to the global transport market, announces its final results for the year ended 31 August 2022. Revenue was £80.3m, up 23%. EBITDA reached £16.3m, an increase of 21%. Net cash was £29.2m, up 31%. Momentum into the early part of the new financial year has been encouraging, supported by a solid order book. The Board remains confident that the Group will make further financial and strategic progress this year and its expectations for FY 2023 are unchanged.

ECO Animal Health Group 85p £57.6m (EAH.L)

The pharmaceutical company in the global animal health market announces its results for the six months ended 30 September 2022 (1H 2022). Revenue was £34.9m, down 9% year-on-year, primarily due to the decline in China. Adjusted EBITDA was £1.7m, half of the level from 1H 2021. The company is on track for submission of the new Mycoplasma poultry vaccines at the end of 2023 and expects marketing approval to be received shortly afterwards. The Board looks forward with cautious optimism to reporting the full year numbers in line with market expectations.

Jadestone Energy 72.5p £328.1m (JSE.L)

The independent oil and gas producer focused on the Asia-Pacific region, announces the completion of the acquisition of the remaining 10% interest in the Lemang production sharing contract (Lemang PSC) onshore Indonesia. As a result, Jadestone’s interest (pre local government back-in rights) in the Lemang PSC has increased to 100%. The Lemang PSC contains the Akatara gas field development. The field has been independently estimated to contain 18.7 mmboe of gross 2C resource, and is being developed to displace coal in local gas-fired power generation, as well as condensate sales and LPG for local residential use. Production remains on track for the first half of 2024.

Kibo Energy* 0.175p £5.3m (KIBO.L)

The renewable-energy-focused development company announces the signing of a renewed Memorandum of Understanding (MOU) with Tanzania Electric Supply Company Limited (TANESCO) in relation to the development of the Mbeya Power Project. The renewed MOU is an agreement between the parties on the process to agree and conclude a Power Purchase Agreement whereby TANESCO will purchase power from Mbeya Power Limited, a subsidiary of Kibo. The Mbeya Power is Kibo’s initial flagship energy project based in Tanzania where the Company aims to build a 300MW steam-powered power station in alignment with the Tanzanian Power System Master Plan (2020). The renewed MOU provides Kibo with the opportunity to reintroduce the Project into its development plans and specifically alongside the Company’s new bio-fuel initiative previously announced in the RNS dated 25 August 2022.

Marlowe 642p £615.5m (MRL.L)

The UK leader in business-critical services and software which assure safety and regulatory compliance, announces its unaudited results for the six-month period ended 30 September 2022. Revenue was up 66% to £222.9m and adjusted EBITDA was £39.2m, an increase of 80% from the same period last year. Net debt/EBITDA leverage ratio was 2.1x at 30 September 2022 (1.6x at 31 March 2022), within the target range of 1.5x to 2.5x. Increase in net debt reflects the cost of business acquisitions. The company continues to expect to reach c.£500m revenue and c.£100m adjusted EBITDA with 90%+ cash conversion materially ahead of original end of FY24 target.

Mkango Resources 15.5p £33.0m (MKA.L)

The developer of new sustainable primary and secondary minerals to meet the demand from electric vehicles, wind turbines and other clean technologies, announces the grant funded HyProMag project to develop Germany’s first rare earth magnet recycling HMPS plant with first production targeted for 2024. HyProMag GmbH has been awarded a EUR3.7m grant for a new project to further develop the local knowledge base, infrastructure and recycled NdFeB (neodymium magnet) production capacity to underpin its transition to commercial production in Germany. HyProMag GmbH is 80% owned by HyProMag Limited (42% Mkango).

Seeing Machines 6.68p £277.6m (SEE.L)

The advanced computer vision technology company that designs AI-powered operator monitoring systems to improve transport safety, has published its first set of non-financial Key Performance Indicators (KPIs) for the quarter ended 30 September 2022 (Q1 FY2023). Cars on road increased by 204% over 12 months to 559,302 units (Q1 FY22: 183,517). Guardian connections increased 19% over 12 months to 41,415 (Q1 FY22: 34,910). Guardian units sold, yet to be connected of 9,698 units. These KPIs aim to provide this additional transparency of quarterly progress across the company.

Ten Lifestyle Group 46.5p £38.9m (TENG.L)

The platform driving customer loyalty for global financial institutions and other premium brands, announces its preliminary results for the year ended 31 August 2022. Net revenue was up 35% to £46m and Adjusted EBITDA was up 11% to £4.9m. Net cash was at £3.2m (2021: £6.7m), with £3.4m debt raised in the year for working capital. The Company expects cash generation in H2 2023. Management is optimistic about another year of good progress and meeting the Board’s expectations for the year.

Webis Holdings 1.4p £5.5m (WEB.L)

The Group specialising in pool wagering and the operators of WatchandWager Cal Expo, the Californian harness track, announces that its Advanced Deposit Wagering (ADW) business, WatchandWager.com LLC, received its 2-year license for 2023-2024 from the California Horse Racing Board (CHRB). The ADW license renewal from allows WatchandWager to continue to accept online pari-mutuel wagers from residents of California on its range of global content. The license renewal from the CHRB is strategically important, not only for its access to the biggest population in the United States, but also for the potential of offering sports betting to California residents when the state legislature passes this into law.

Zinnwald Lithium 7.5p £22.0m (ZNWD.L)

The lithium development company provides an operational update as it advances its 100% owned Zinnwald Lithium Project in Germany towards its goal of a materially expanded Mineral Resource Estimate (MRE) and completion of a Bankable Feasibility Study (BFS) by the end of 2023. The project’s historic MRE was based solely on the Greisen beds and excluded the Albite Granites. One of the goals of the ongoing in-fill drilling programme is to materially increase the MRE, which could, in turn, accommodate greater mining capacity for an expanded Li-product output. Historic estimates quantified the tonnage potential of the Albite Granites alone at above 200Mt, an estimate that the Company is working to verify.

23 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.

Where possible this document is made available to all relevant recipients at the same time. Dissemination of research by Hybridan LLP is monitored to ensure that it is only provided to relevant persons. Research prepared by Hybridan LLP is not intended to be received and/or used by any person who is a retail client.

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