Small Cap Feast

26th October 2022

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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. The offer will initially comprise new ordinary shares and the proceeds will be used to repay existing shareholder debt, including a capital note in favour of DKL Energy Limited, the Company’s immediate shareholder. Immediately following Admission, the Company will target a free float of at least 10% of its issued share capital and expects to be eligible for inclusion in the FTSE UK indices.

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.

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.

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

Agronomics 15p £146.7m (ANIC.L)

The cellular agriculture company shares that its Finnish foodtech portfolio company Solar Foods Oy, “Solar Foods”, has received its first regulatory approval in Singapore for its novel protein containing Solein®. This highly sustainable protein is planned to begin commercial production and sales in 2024. Agronomics has invested a total of EUR 6m to date and owns approximately 5.80% of Solar Foods, subject to conversion of the outstanding convertible loan notes.

Bidstack Group 2.9p £27.0m (BIDS.L)

The in-game brand activation platform shares an update on its growth strategy, based on its early evidence of its success in selling directly into North America and Japan. As announced on 20 September 2022, the company is targeting annual revenue from the US market of US$100m or more within the next 3 years. As demand for in-game advertising continues to grow in line with advancements in measurement and brand safety, Bidstack’s product roadmap for 2023 consists of (1) further SSP capabilities by expanding enterprise partnerships and integrating new ad formats to scale inventory access; and (2) expanded data infrastructure to ingest third-party data sources for verification, viewability and attribution and reporting capabilities for audience activation and campaign optimisation.

CentralNic Group 125.5p £362.3m (CNIC.L)

The global platform that derives recurring revenue from online marketplaces and online marketing services, announces that it has entered into an agreement to acquire Intellectual Property Management Company, Inc., a California-based domain name management business for an enterprise value of US$7.6m in cash, representing c.2.8x its 2021 unaudited revenue and c.7x its 2021 Adjusted EBITDA, subject to customary adjustments for net cash and working capital. With this acquisition, CentralNic Group expects better coverage and increased market share in North America, as well as synergies from streamlining procurement and operations. The acquisition will be immediately earnings accretive.

Ceres Power 328.1p £629m (CWR.L)

The developer of electrochemical technologies both in fuel cells for power generation and electrolysis for the creation of green hydrogen and energy storage, announces the publication of its inaugural Sustainability Report. The report makes the full disclosure of Scopes 1 and 2 and now expansion of Scope 3 emissions in line with the Streamlined Energy & Carbon Reporting (SECR) framework. It adopts the SASB guidance on the disclosure of financially material sustainability measures, refining and adapting the metrics to align with Ceres’ business.

DeepMatter Group 0.12p £4.8m (DMTR.L)

The digital chemistry data and software company announces that it will licence to the Life Science business sector of Merck, certain proprietary data for machine learning-based applications. After the 9 months of the financial year and having now signed a material agreement with Merck, the Group expects revenue for the current financial year to be no less than £1.5m, an increase of over 50% (2021: £1.0m).

Novacyt 77.07p £54.6m (NCYT.L)

The international specialist in clinical diagnostics, announces that its genesig® Real-Time PCR SARS-CoV-2 Winterplex ® 3G assay panel (Winterplex® 3G) has been approved in the UK under the UK Health Security Agency’s Medical Devices (Coronavirus Test Device Approvals) (Amendment) Regulations 2021 (CTDA), making it the Company’s 6th PCR test to be added to the CTDA register of approved COVID-19 diagnostic products. Winterplex® 3G is a high throughput multiplex screening assay (with 96 reactions per kit) for the detection of influenza A, influenza B, respiratory syncytial virus, and SARS-CoV-2 (specifically the detection of ORF1ab, S and M genes targets) from oropharyngeal, nasopharyngeal or sputum samples.

REACT Group 0.78p £8.1m (REAT.L)

The specialist cleaning, hygiene and decontamination company, announces a trading update on the year ended 30 September 2022 (FY22). Subject to audit, revenues are expected to be approximately £13.6m, in line with the consensus and up 92% from £7m in FY21. Adjusted EBITDA is approximately £1.0m (FY22 market forecast: £1.3m) (30 September 2021: £0.79m). The cash balance on 30 September 2022 was approximately £1.53m (30 September 2021: £0.57m). In addition, the Company has an ID facility of £2.0m, against which it had drawn down £0.5m as of 30 September 2022 and a 5-year term loan of £1.0m.

Shanta Gold 11.875p £124.5m (SHG.L)

The East Africa-focused gold producer, developer and explorer announces its operational results for the quarter ended 30 September 2022 (3Q 2022) for its East African assets, including New Luika Gold Mine and Singida Project in Tanzania and West Kenya Project in Kenya. Gold production was 19,532 oz (Q2: 17,527 oz), up 11% from the prior quarter. The full year production expected to achieve the low end of the 68,000 – 76,000 oz guidance range. Cash and available liquidity was US$14.0m at 30 September 2022 (Q2: US$14.3m), which includes 3,851 oz contained within doré available for sale at the end of the period (Q2: 3,843 oz).

Solid State 1175p £133.0m (SOLI.L)

The specialist value added component supplier and design-in manufacturer of computing, power, and communications products, announces a trading update for the six months ended 30 September 2022 (1H FY22). Revenues was approximately £59.0m, up 51% (1H FY21: £39.0m). Adjusted profit before tax was approx. £5.0m (2021: £3.25m), a 54% year on year increase. The company expects to exceed the current revenue expectations and be marginally ahead of the adjusted PBT consensus expectations1 for FY23, despite the expected increase in interest charges.

Virgin Wines 50p £27.6m (VINO.L)

The direct-to-consumer online wine retailer in the UK announces its audited results for the year ended 1 July 2022 (FY22). Revenue was £69.2m, down 6% (FY21: £73.6m). After adjusting for exceptional costs in the prior year, underlying profit before tax was virtually unchanged at £5.1m (FY21: £5.2m). Cash balance at 1 July 2022 was £15.1m (2 July 2021: £15.7m), including £7.7m WineBank deposits not used to fund working capital. Management expects revenue growth to be broadly flat and EBITDA margins of approximately 8% (previously 9%) for FY23.

26 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.

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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