Small Cap Feast

2nd February 2023

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What’s Cooking In The IPO Kitchen?

Conviction Life Sciences, a newly established closed-ended investment company seeking to list on the Premium Segment of the Main Market to invest in a portfolio of life sciences and medical technology businesses, was targeting to raise c.£100m but has now decided not to proceed with its IPO due to current market uncertainty.

Fulcrum Metals, a holding company of a mineral exploration group with base, precious and energy metal projects in Canada, intends to join AIM. On Admission, the Group's projects will comprise six gold and base metal projects in Ontario, Canada. The Group's projects are pre-discovery with large, diversified land packages that have either substantial historical samples or prospective geology and are located nearby mineral rich deposits or producing mines. Expected mid-February 2023.

Constance Iron Limited, whose principle activities will be the development and production of magnetite iron ore projects in Australia announces a consideration of an IPO and admission of shares onto the Standard Segment of the Main Market of the London Stock Exchange. The Company is targeting to raise gross proceeds of c. £60m which will be ustilised to fund the exploration and development to production of the Norseman Iron Ore Project where the Company has a 65% net profit interest in the Project.

Breakfast Buffet

ADM Energy* 0.625p £1.9m (ADME.L)
The natural-resources investing company provides an update on its interest in the Barracuda oil field. As announced on 13 December 2021, the Company and K.O.N.H. (UK) Ltd (KONH) obtained an interim injunction at the Federal High Court of Nigeria, Lagos restraining Noble Hill-Network Limited (NHNL), its officers, agents, privies, or person howsoever connected from selling, disposing, divesting, or tampering with the 70% shareholding interest of KONH in NHNL to third-party investors. Further to the announcement on 16 November 2022, ADM Energy has been advised that the court has adjourned this matter until 28 March 2023. The interim injunction continues to stand in the meantime and a further update will be made in due course.

Bigblu Broadband 42.5p £24.9m (BBB.L)
The provider of alternative broadband solutions throughout Australasia and the Nordics, announces that its fully owned Australian business, SkyMesh, has completed the acquisition of the Satellite operations of Harbour ISP PTY LTD, a subsidiary of Uniti Group in Australia. The total cash consideration on completion was AUD$4.72m (£2.7m) with a retention of AUD$0.2m (£0.1m), to be paid in March 2023 post reconciliation of customer numbers. The satellite operations acquired currently consist of c.5.9k customers. As announced on 5 December 2022, the acquired operations are expected to generate annualised revenues of c.£2.5m and EBITDA of c.£0.7m with positive cash generation.

Echo Energy 0.0825p £4.6m (ECHO.L)
The Latin American focused energy company provides a business update. The company has secured two new gas sales contracts with materially improved terms compared with the contracts announced on 3 May 2022. These contracts have an initial term of 12 months, with gas sales beginning in May 2023. The Contracts provide gross 6.8 MMscf/d of committed production (4.8 MMscf/d net to Echo) at an increased average price of US$4.48 per Mmbtu for 2023-2024(compared with US$4.33 per Mmbtu for the previous period). In addition, an upfront gross cash payment of US$1m (US$0.7m, net to Echo) will immediately be paid and applied towards the working capital of the Santa Cruz joint venture.

Ingenta 113.5p £16.5m (ING.L)
The software and services provider to the publishing and media industries, provides a trading update for the year ended 31 December 2022: revenue of approx. £10.45m (2021: £10.15m) and adjusted EBITDA of approximately £1.95m (2021: £1.45m), in line with market expectations. Closing year end cash balances were £2.4m (2021: £3.0m) after completion of the previously announced £2.07m tender offer in November 2022. Ingenta has no debt. In line with the previously stated intention to implement a progressive dividend policy, the Board intends to pay a final dividend of 2.25 pence (2021: 2 pence) per ordinary share for the 2022 financial year.

James Halstead 195p £843m (JHD.L)
The commercial flooring manufacturer and distributor, provides a trading update. The revenues for the six months to 31 December 2022 are expected to be 8-9% up year-on-year. Trading of UK manufactured goods has been adversely affected by the lack of availability of international shipping to several territories most notably Australia, North and South America. That said, the Company saw signs of reduced international freight costs and raw material costs. Energy costs remain at historically high levels but have not escalated. Profit before tax for the half year will be short of the comparative period but not significantly so. However, the Board's expectations for the full year remain positive and unchanged.

Oriole Resources 0.135p £3.7m (ORR.L)
The exploration company focussed on West Africa provides a update on its 90%-owned Central Licence Package (CLP) project in Cameroon. The district-scale CLP project comprises nine contiguous licences covering 4,091 square kilometres of previously unexplored Paleo-Proterozoic to Pan-African age rocks highly prospective for a range of commodities, including orogenic-style gold mineralisation and lithium. Since Q4-2022, the team has been undertaking early-stage exploration at two of these licences, Ndom and Gamboukou, to assess their potential to host lithium-bearing pegmatites. A number of pegmatite units have now been identified that help underpin the source of the c.9 kilometre lithium-in-soil anomalies reported in Q4-2022 (announcement on 29 November 2022). Mapping and sampling programmes are continuing at Gamboukou.

Safestyle UK 24p £33.3m (SFE.L)
The UK focused retailer and manufacturer of PVCu replacement windows and doors for the homeowner market, issues a trading update for the year ended 1 January 2023 (FY22). Revenue is expected to be c.£154.3m, c.7.7% higher than the prior year, and an underlying loss before tax in line with market expectations. The cash position has reduced in line with the trading performance by c.£4.1m to £8.0m at 2 Jan 2022. Meanwhile, the replacement of the Group's existing facility with a new £7.5m revolving credit facility to the end of 2026 has been completed. CEO Rob Neale indicates that management is confident that the business will return to profitability in 2023.

Smarttech247 32p £39.7m (S247.L)
The AI-enhanced cybersecurity company offering services on Managed Detection and Response Platform, VisionX, provides an update on contract wins during the last quarter. These include a three-year agreement with a large US tech company headquartered in Massachusetts and a two-year agreement with a university in Ireland worth c.$400k and c.$450k respectively over the lives of the contracts. The contract wins build on the three-year $800k contract in October 2022 with a Fortune 150 automotive retailer in the USA with annual revenues of over $20bn.

Xpediator 40.5p £57.4m (XPD.L)
The provider of freight management services across the UK and Central and Eastern Europe, provides trading update for the year to 31 December 2022. Annual revenue will be just below £400m, up 35% (2021: £297m). As a result, adjusted profit before tax is expected to be significantly ahead of previous guidance of £9m. Net debt is expected to be reduced to £3.6m from £8.0m as at 30 June 2022. The trading of the freight forwarding operations was strong in Lithuania, Bulgaria and Romania in the closing months of 2022. In the UK, the financial performance of Delamode Anglia also improved in the latter months of the year.

88 Energy 0.625p £112.2m (88E.L)
The Alaska-focused oil exploration company announces its plan to raise up to A$12.0m (£6.8m), with the ability to accept over-subscriptions to increase the total amount raised to up to A$15.0m (£8.1m) at a placing price of A$0.0095 (equivalent to £0.0055). The proceeds will strengthen its balance sheet and will provide sufficient capital to fund the planned Hickory-1 well at Project Phoenix, payment for the new Project Leonis acreage, finance potential portfolio expansion / new ventures. Following completion of the proposed Placing, the Company will have sufficient cash to fund its ongoing working capital and administrative overheads for at least 12 months.

2 February 2023
*A corporate client of Hybridan LLP or retained by Hybridan LLP for certain services
** Arranged by most recent first
*** Alphabetically arranged
**** Potential means Intention to Float (ITF) has been announced, or it is a rumour


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