Small Cap Feast

27th June 2022

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What’s Cooking In The IPO Kitchen?

Immediate acquisitions (IME.L) is to re-join AIM via a Reverse Takeover of Fiinu Holdings Limited. Once complete the Company is proposing to change its name to Fiinu Group plc. Fiinu intends to be a provider of a consumer banking product, the Plugin Overdraft ®, which is designed to provide customers with an overdraft facility without having to change their current account or request an overdraft from their existing bank. Fiinu’s technology arm manages and develops the platform, using open banking, and once the platform is fully operational will also look to develop secondary revenue streams by licensing Fiinu’s intellectual property rights. Capital to be raised £8.01m. Target Mkt Cap c.£53m. Due 8 July.

Visum Technologies seeking admission to The AQSE Growth Market. The Company’s business is to own and operate an “on-ride” video and photographic camera system that it sells and/or licenses to customers (being theme parks, ride manufacturers, souvenir imaging providers, and other leisure operators). Due 30 June.

LifeSafe Holdings, a fire safety technology business with innovative fire safety products, intends to join AIM. LifeSafe has developed what the Directors believe to be market disrupting, eco-friendly fire safety protection products to both protect (via fire extinguishers) and detect (via carbon monoxide, smoke and heat alarms) fires. At the centre of the Group’s product range is the FER1000 extinguishing fluid, which has been developed by LifeSafe to extinguish five different types of fire: electrical, paper, textiles, cooking oil, and petrol and diesel. The Group’s best-selling product using this patent pending extinguishing fluid is the StaySafe 5-in-1 fire extinguisher. It was launched on Amazon Prime in the UK in August 2021 and subsequently became Amazon Prime’s top selling fire extinguisher in the UK in the same month. In n the year ended 31 December 2021, the Group generated revenues of £670k and a loss post taxation of £1.5m. £3m to be raised. Due early July 2022.

Altona Rare Earths, the AQSE listed mining exploration Company focused on the evaluation, acquisition and development of Rare Earth Elements mining projects in Africa, intends to join the Main Market. Admission to trading of the Company’s Ordinary Shares on the AQSE Growth Market will be cancelled simultaneously with Admission. It is also proposed that on Admission, the Company will change its EPIC from AQSE:ANR to REE. The Company also seeks to raise funds to finance its current and future rare earths mining projects in Southern and Eastern Africa. Due June 2022.


Breakfast Buffet

Arrow Exploration 17p £35.3m (AXL.L)

The junior oil and gas company focusing on Colombia and Western Canada announced the results of the Rio Cravo Sur-1 (RCS-1) well testing on the Tapir Block in the Llanos Basin of Colombia. The RCS-1 well was spud on May 23, 2022. RCS-1 targeted a three-way fault bounded structure with multiple high-quality reservoir objectives on the Tapir Block in the Llanos Basin of Colombia. Specific production test rates for the isolated new zones (shallowest to deepest) include Carbonera C7B (tested 1872 bopd, net 936 bopd, at the peak rate of 30 API crude) and Ubaque (tested 184 bopd, net 92 bopd, at the peak rate of 12-13 API crude). After the C7B test performance, the decision was made to put the C7B on production.

Begbies Traynor Group 152.5p £234.1m (BEG.L)

The business recovery, financial advisory and property services consultancy announces the completion of the acquisition of Budworth Hardcastle, a firm of chartered surveyors in Northampton, Kettering and Peterborough. In its financial year ended 31 August 2021, Budworth Hardcastle generated unaudited revenue of £1.8m and normalised pre-tax profits of £0.4m. This acquisition is part of the strategy to enhance and broaden our service offerings and geographical coverage. The business will integrate with Eddisons, the group’s property division at a run rate of c£30m in revenue.

Cake Box Holdings 184p £73.6m (CBOX.L)

The specialist retailer of fresh cream cakes announced its audited full year results ended 31 March 2022. Revenue increased by 51% to £33m (FY20: 22m) and operating profits was £7.8m, up 85% (FY: 4.2m). Earnings per share was 15.8p (FY20: 9.6p) and management is proposing a dividend of 5.1p (FY20: 3.7p). The company continues to increase its geographic presence and strengthen its digital capabilities but remains mindful of an increasingly challenging economy.

Caspian Sunrise 4.4p £98.5m (CASP.L)

The Central Asian oil and gas company with a focus on Kazakhstan announced its audited final results for the year ended 31 December 2021. FY21 revenue was up 75% at $25m (FY20: $14.3m). Loss after tax for the year was $5.5m after the $12.5m provision in respect of 3A Best. (2020: loss of $3.5m). Cash at bank was $0.4m at the year end (2020: $0.3m). For 2022, the company plans to further increase production from the shallow structures at BNG. Management does not expect the current discount for Urals Oil to the company’s output for much longer. The greatest impact would be success at our BNG deep structures.

Eco (Atlantic) O&G 26p £89.9m (ECO.L)

The oil and gas exploration company focused on the offshore Atlantic Margins announced the successful completion of an equity fundraise of US$12.3m (subject to TSX Venture Exchange approval). The newly issued shares represent 9.8% of the company’s issued capital post fundraising. The proceeds will be used for the cash consideration of US$1.5m for the acquisition of a further 6.25% Participating Interest in Block 3B/4B and the remaining US$10.8m will be used to reprocess 3D seismic data and commence potential well exploration operations at Block 3B/4B and Guyana Orinduik Block.

Ingenta PLC 83p £13.6m (ING.L)

The software and service provider to the global publishing industry announces its audited results for the year ended 31 December 2021. FY21 revenues was stable at £10.1m (FY20: 10.2m) reflecting a focus on core software offerings. Annual Recurring Revenue (ARR) was £8.9m, or 88% of total revenue (FY20: 8.7m, 86%) and operating margin was 7.4% (FY20: 4.6%). FY21 net profit includes a £1.2m deferred tax credit and hence earnings per share was 10.93 pence, up 309% (FY20: 2.67 pence). Management indicated that 2022 has started well, with reported profits ahead of budget and the prior year.

Invinity Energy Systems 51p £59.2m (IES.L)

The global manufacturer of utility-grade vanadium flow batteries announced its results for the year ended 31 December 2021. Revenue for the year of £3.2m, a 690% increase from FY20. Gross margin was –108% (FY20:-200%). Net loss was £21.4m (FY20: -24m). Year-end closed sales backlog was £13.8m and inventory was £9.9m, including prepaid inventory, Year-end cash was £26.4m (FY20: 22.0m). The company remains debt free, excluding leases. Between January 2021 and June 2022, the company sold 9.34 MWh of products. The majority of its £13.8m backlog is expected to be delivered during the remainder of 2022.

Northern Bear 60.5p £11.3m (NTBR.L)

The specialist building services provider in Northern England provides a trading update for the six months to 30 September 2021 (HY22), in the context of the challenges with respect to the availability and price inflation of construction materials and the well-publicized issues with attracting and retaining employees in the industry. Management emphasises its strong operating results in HY22 and expects operating profit for FY22 will be between £2.5m and £2.6m, before amortisation, one-off costs and other adjustments (in the format used in prior years’ results).

Poolbeg Pharma 6.1p £30.5m (POLB.L)

The clinical stage infectious disease pharmaceutical company announced that Artificial Intelligence (AI) partner OneThree Biotech, Inc., has completed the build and optimisation of a tailored AI model of Poolbeg’s Respiratory Syncytial Virus (RSV) human challenge data and can now commence its analysis, with results expected in Q4 2022. The company believes this is the first time that AI analysis has been used to identify new drug targets and treatments for RSV using human challenge trial data. Process will identify novel drug targets and treatments quicker and in a more cost-efficient manner than previously possible.

Symphony Environmental Technologies* 16p £28.3m (SYM.L)

The global specialist in technologies that make plastic and rubber products smarter, safer and more sustainable announced that following legal action by Symphony’s distributor in Peru, a clear distinction has been officially acknowledged between oxo-degradable and oxo-biodegradable technologies. Government of Peru confirms that d2w is not an oxo-degradable plastic, and does not generate microplastics. This legal outcome has significant implications for Symphony’s commercial growth in Peru and in Latin America generally.

27 June 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.

Hybridan LLP and/or its associated undertakings may from time-to-time provide investment advice or other services to, or solicit such business from, any of the companies referred to in this document. Accordingly, information may be available to Hybridan LLP that is not reflected in this material and Hybridan LLP may have acted upon or used the information prior to or immediately following its publication. In addition, Hybridan LLP, the members, officers and/or employees thereof and/or any connected persons may have an interest in the securities, warrants, futures, options, derivatives or other financial instrument of any of the companies referred to in this document and may from time-to-time add or dispose of such interests.

This document may not be copied, redistributed, resent, forwarded, disclosed or duplicated in any form or by any means, whether in whole or in part other than with the prior written consent of Hybridan LLP.

MIFID II status of Hybridan LLP research
The cost of production of our corporate research is met by retainers from our corporate broking clients. In addition, from time to time we issue further communications as market commentary (such as our daily newsletter, Small Cap Breakfast), which we consider to constitute 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 the MIFID II Regulation.

Hybridan LLP is a limited liability partnership registered in England and Wales, registered number OC325178, and is authorised and regulated by the Financial Conduct Authority and is a member of the London Stock Exchange. Any reference to a partner in relation to Hybridan LLP is to a member of Hybridan LLP or an employee with equivalent standing and qualifications. A list of the members of Hybridan LLP is available for inspection at the registered office, 2 Jardine House, The Harrovian Business Village, Bessborough Road, Harrow, Middlesex HA1 3EX.

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