Small Cap Feast

25th July 2023

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What’s Cooking In The IPO Kitchen?

Announced ITF 12 July: Substrate Artificial Intelligence, an artificial intelligence company based in Spain that creates, buys and scales companies around AI in diverse sectors such as fintech, agritech, energy, human resources, and health, intends to join the Access Segment of the AQSE Growth Market.

Announced ITF 6 July: Blackpoint Biotech plc, a medical cannabinoids company established to fulfil gaps in the medical cannabis market by creating products that provide fast onset of action and accurate dosing, intends to join the Access Segment of the AQSE Growth Market. Admission delayed.

Announced ITF 3 July: Metals One Plc, a company focusing on acquiring natural resources projects with a focus on critical battery metals, including nickel, lithium, cobalt and copper intends to join the AIM Market. The Company will have interests in the Paltamo and Rautavaara projects (nickel, copper, zinc) in Finland (together the Black Schist Project) and the Brownfield Råna Nickel project in Norway (Brownfield Rana Project). These projects represent opportunities to develop deposits of scale, in stable jurisdictions, well situated to supply fastest growing European electric vehicle and energy storage markets. The Company aims to raise £2.5m at 5 pence per share with an anticipated market cap of £10.72m. Expected Admission 27 July 2023.


Breakfast Buffet

Aeorema Communications 81p £7.7m (AEO.L)
The strategic communications group, announces an update on trading for the year ended 30 June 2023 (FY2023). FY2023 revenue is expected to be no less than £19.8m (2022 audited: £12.2m). Profit before tax is expected to be no less than £950k (2022 audited: £844k). Cash balance at year end of £2.4m (2022: £1.7m). Dividend payments are expected to increase subject to audited results. The Group is confident that the 2024 financial year will be another successful year.

Aferian 13p £11.1m (AFRN.L)
The B2B video streaming solutions company, announces the completion of a Placing. Aferian has raised gross proceeds of approximately US$4m at 12 pence per share. The placing price represents a premium of approximately 20% to the closing middle market share price of 10 pence per share on 24 July 2023. In conjunction with the Placing, certain Directors and a member of the senior management team have agreed to subscribe for an aggregate of 2,020,833 Placing Shares at the Placing Price. Net proceeds of the Placing will be used for general working capital replacing the need for further drawdown of the Group's existing shareholder loan from Kestrel, of which £2.125m remains committed but undrawn.

Alumasc Group 162.5p £58.7m (ALU.L)
The sustainable building products, systems and solutions group, announces that it has agreed, subject to regulatory approval, to acquire the entire issued share capital of ARP Group, a manufacturer and distributor of specialist metal rainwater and architectural aluminum goods, for a maximum cash consideration of £10.0m on a cash and debt free basis, and subject to adjustments for normalised working capital. The consideration comprises an initial £8.5m, adjusted for net cash/debt and normalised working capital, payable at completion; with additional consideration, capped at £1.5m, payable subject to ARP's performance over the two years ending November 2024. ARP is expected to be immediately accretive to underlying earnings and will be funded from current cash and debt facilities.

DXS International* 3.25p £2.08m (AQSE:DXSP)
The healthcare information and digital clinical decision support systems provider, announces its audited final results for the year ended 30 April 2023. Revenue increased by 3% to £3.39m (2022: £3.28m) and profit after tax increased 1% to £225k (2022: £222k). Cash at bank at the period end was £372k (2022: £452k) and post-period, the Company raised £500k in May from existing and new investors. The Fertility Clinic Referral Study continued to deliver significant results with referral rejection rates now down from 36% to 0% and waiting times down by 55%. The pace of accessing the NHS market remains challenging, as a result the market expectation of £4.7m annual revenue in the current financial year may no longer be achievable, but the Company remains confident that it will be achieved in the calendar year 2024.

Diaceutics 93p £78.6m (DXRX.L)
The technology and solutions provider to the pharmaceutical industry, provides a trading update for the six months ended 30 June 2023. Revenue growth was approximately 32% to £9.9m (H1 2022: £7.5m, 25% on a constant currency basis) with c.47% of revenues in the period recurring in nature (H1 2022: 37%). The Group’s order book has increased 43% in H1 2023, providing forward visibility as it continues to capitalise on the significant market opportunity. Cash at 30 June 2023 was £17.9m (31 December 2022: £19.8m), reflecting the acceleration in investment and the Company has sufficient financial resources in place to execute its growth plans.

Fadel Partners 147p £29.4m (FADL.L)
The brand compliance and rights and royalty management software provider, provides a trading update for the six months ended 30 June 2023, based on unaudited management accounts. Revenue growth is in line with expectations, although H2 2023 will show an increase in revenue relative to H1 23 due to the timing of annual contract renewals for certain enterprise licenses which are now heavily weighted towards the Company’s year-end. Recurring revenue is expected to increase to c.80% of total revenue for FY23 (FY22 65%). Services revenue is expected to reduce relative to the prior year, due to the successful completion of a number of implementations and regional roll-outs for existing clients. Cash and cash equivalents of $8.2m at 30 June 2023 (net cash $7.3m).

hVIVO 16p £108.6m (HVO.L)
The tester of infectious and respiratory disease products using human challenge clinical trials, announces a £13.1m contract with an existing top five global pharmaceutical client to develop an Influenza B human challenge model. The contract scope includes the manufacture of an influenza B challenge virus, a characterisation study, and a supplementary fee to ensure sufficient capacity is available to complete the characterisation trial in an expedited manner. The successful manufacturing of the challenge virus is a prerequisite for the characterisation trial revenue to be delivered, and with the Good Manufacturing Practice challenge agent manufacture now in its final stages, the Company will be able to commence the characterisation study in Q4 2023. Subject to the successful completion of the characterisation study and the receipt of relevant regulatory approvals, the Company expects to conduct an influenza B human challenge trial in H1 2024. Revenue from this human challenge model development contract will be recognised throughout 2023 and 2024.

Proton Motor Power Systems 9p £139.9m (PPS.L)
The designer and producer of hydrogen fuel cells and hydrogen fuel cell electric hybrid systems, announces that it has received an order from a supplier of gas related energy and infrastructure in Spain, for a standalone fuel cell system based on a 50kW container solution. The system will be deployed by the end customer at a hotel in Palma de Mallorca, Spain, as part of the Green Hysland project. The Green Hysland project aims to deploy a fully functioning hydrogen (H2) ecosystem in Mallorca, turning the island into Europe's first H2 hub in Southern Europe. This will be achieved by producing green hydrogen from solar energy and delivering it to the end users, such as the island's tourism, transport, industry and energy sectors, including gas grid injection for green heat and power local end-use. Proton Motor anticipates that the system will be delivered to the Customer in the first half of 2024, with revenues correspondingly being recognised in that year.

Tristel 372.5p £176.2m (TSTL.L)
The manufacturer of infection prevention products, provides a trading update for the year ended 30 June 2023. Demand for Tristel’s infection prevention products for medical device decontamination and for the sporicidal disinfection of surfaces continues to be robust across all key geographical markets. As a result, revenues for the year were up 16% to £36.0m (FY 2022: £31.1m), ahead of consensus forecasts and above the Company’s long-term target for revenue growth. Adjusted profit before tax (adjusted for share-based payments) will be slightly ahead of consensus forecasts of £6m. Tristel continues to be debt free and cash generative. Cash balances on 30 June 2023 were £9.5m (30 June 2022: £8.9m).

Wynnstay Group 477.5p £107.7m (WYN.L)
The agricultural supplies group, announces its involvement as a consortium partner in a revolutionary research project into the use of daffodils to reduce cattle methane emissions. The Dancing with Daffodils project aims to transform the efficiency and sustainability of ruminant livestock farming and is supported by the Department of Farming, Environment and Rural Affairs and Innovate UK. The project is developing a novel feed additive, using a specific alkaloid extracted from daffodils, which has been shown in the laboratory to achieve exceptional results in methane reduction and protein utilisation in ruminants. The consortium is also spearheading the cultivation of daffodils to support the roll-out of this new feed additive and developing a precision on-farm gas analyser to monitor in real-time individual ruminant emissions of methane, hydrogen, carbon dioxide and ammonia.

25 July 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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