Small Cap Feast

3rd August 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.

Breakfast Buffet

CMO Group 22.5p £16.2m (CMO.L)
The UK online-only retailer of building materials, provides a trading update for the half year to 30 June 2023. The Board expects EBITDA to be in line with market expectations for the year of £2.5m, albeit with sales lower at c.£80m. Sales in the first half of £36.9m represent a one year like-for-like decline of 12%, 15% up on pre-Covid like-for-like and representing an increase of 57% on a four-year view. Net cash at the end of the period was £1.0m, a reduction since the year end of £0.4m. Cash on the balance sheet was £4.7m at the period end (FY2022 £6.2m), with drawn facilities of £3.7m (Y/E 2022 £4.6m). As previously announced, the Group have laid out key strategic priorities for 2023 to reduce cost, improve margins, address carriage costs and adapt to current slower sales growth. The Group expects to improve profitability in the second half and deliver full year results in line with expectations.

Coro Energy 0.265p £7.5m (CORO.L)
The South East Asian energy company with a natural gas and clean energy portfolio, announces that it has received an indicative funding proposal and is now in advanced talks with Capton Energy regarding possible co-investment solutions for Coro's Vietnamese rooftop solar projects. Capton Energy, based in Dubai, is a joint venture between Siemens Financial Services and Desert Technologies. The platform is focused on Energy Transition infrastructure in Africa, the Middle East, and Asia. The funding proposal received is for Capton to buy into Coro's current Vietnamese solar projects and provide investment into Coro's project pipeline of up to 50 megawatts. Coro has committed to a four-month period of exclusivity for the parties to conclude the transaction.

Global Invacom Group 4.85p £5.6m (GINV.L)

The global provider of satellite communications equipment and electronics, provides a trading update for the six months ended 30 June 2023. The Group expects to record a net loss of approximately US$2.1m for 1H FY2023 (H1 2022: net loss of US$3.3m). Group revenue is expected to be approximately US$31.3m versus US$37.4m in H1 2022. Despite the decrease in revenue, gross profit has increased to US$8.3m (H1 2022: US$7.4m) with gross profit margin increasing to 26.5% (1H 2022: 19.7%), due to increased business focus on product mix. The Group’s efficiency initiatives at its US manufacturing facilities, combined with actions from the ongoing strategic review, have contributed to improved profit margins and reduced losses.

Horizonte Minerals 157.5p £424.4m (HZM.L)
The nickel company developing two Tier 1 assets in Brazil, reports that it is continuing to make good progress on the construction of its 100%-owned Araguaia Nickel Project Line 1, with first metal production on-schedule for Q1 2024. Approximately 65% of the overall construction of Araguaia was completed as of 30 June 2023. Several major milestones were achieved during the quarter including the delivery of the Rotary Kiln and commencement of ore mining. US$329m has been spent on the Araguaia construction out of the budgeted capital requirement of US$537m. Araguaia Nickel Project Line 2 Feasibility Study (FS), which aims to double nickel production from 14,500 tonnes per annum to 29,000 tonnes per annum, is to be published later this year. Liquidity and funding sources of US$344m as of 30 June 2023.

LifeSafe Holdings 40.5p £8.7m (LIFS.L)
The fire safety technology business with innovative fire extinguishing fluids and fire safety products, announces its intention to raise gross proceeds of up to, in aggregate, approximately £0.94m by means of a placing of new Ordinary Shares at a price of 37 pence per share. The Placing Price represents a discount of approximately 8.6% to the Closing Price on 2 August 2023. The Placing is being conducted in two tranches with the initial tranche of Placing Shares being issued under the Company's pre-existing share capital authorities and the issue of the second tranche of the Placing Shares being subject to the requisite shareholder approval at the forthcoming General Meeting. In addition, the Company is proposing to raise £0.14m a Subscription and £0.25m via a retail offer, both at the Placing price. The net proceeds of the Fundraising will be utilised to procure stock for H2 2023 and for general working capital purposes.

Omega Diagnostics Group 2.5p £5.9m (ODX.L)
The specialist medical diagnostics company focused on industry-leading Health and Nutrition products, announces its audited results for the year ended 31 March 2023. Despite sales growing by c.80% in the UK, overall revenues decreased by 12% to £7.5m (2022: £8.5m). Order intake was up by 71% to £2.4m (2022: £1.4m) over the prior year due to new installations and an increase in educating consumers and driving awareness. Operating loss (continuing operations) was £3.2m (2022: £0.9m) and Adjusted EBITDA (continuing operations) was £2.0m (2022: £0.2m). Cash balance was £5.0m as at 31 March 2023. During the period, the Company disposed of the CD4 business and launched MyHealthTracker digital app. This year has seen the final steps in the withdrawal from the Global Heath business and the full relocation to the Health and Nutrition manufacturing site in Ely, Cambridgeshire. The year ahead will be the first full year with the focus on the Health and Nutrition business.

One Heritage Group* 29p £11.2m (OHG.L)
The UK-based residential developer, development manager and property manager focused on the North of England, announces that its parent company and majority shareholder One Heritage Property Development Ltd (OHPD) has extended its support and increased its £12.3m debt facility by £1.7m to £14.0m. The extension has been made at the same interest rate of 7% and a repayment date of 31 December 2024.

Polarean Imaging 16.5p £35.3m (POLX.L)
The commercial-stage medical device leader in advanced MRI scanning of the lungs, announces it has received 510K clearance from the U.S. Food and Drug Administration (FDA) for the Company’s specialised MRI chest coil to now include Philips 3.0T MRI scanners for the visualisation of the Xenon-129 (129Xe) nuclei. The Polarean XENOVIEW™ 3.0T Chest Coil is a flexible, single channel, transmit-receive RF coil tuned to image 129Xe nuclei while a patient is positioned inside a multinuclei-capable MRI scanner. The XENOVIEW Chest Coil is to be used in conjunction with compatible 3.0T MRI scanners and approved hyperpolarised 129Xe for oral inhalation for the evaluation of lung ventilation. The addition of the new Philips configuration does not affect the intended use of the device; the safety and effectiveness has been confirmed with testing.

Sareum Holdings* 100p £68.1m (SAR.L)
The clinical-stage biotechnology company developing next generation kinase inhibitors for autoimmune diseases and cancer, announces that it has agreed terms on an Equity Prepayment Facility of up to £5m with RiverFort Global Opportunities PCC Ltd, with an initial deposit of £2m, expected to be received by the Company on 4th August 2023, net of associated costs. The Company intends to use the Facility, if fully drawn, together with the receipt of anticipated tax credits to the amount of £1.6m, to complete the Phase 1a/b clinical development of its lead candidate SDC-1801, which is expected to be a primary catalyst for driving shareholder value, and for general working capital to Q4 2024. The Company expects to provide a further update on Part 1 of Phase 1a trial of SDC-1801 once initial safety and pharmacokinetic data observed in the single ascending dose part of the study provide sufficient support for progression to Part 2 of the study, the multiple ascending dose, expected in H2 2023.

ScS Group 167.75p £57.0m (SCS.L)
One of the UK's largest retailers of upholstered furniture and floorings, provides a trading update for the 52 weeks ended 29 July 2023. The Group expects to report full year profit in line with market expectations, driven by effective cost management and improved trading in the second half of the year. Following ScS’s updated brand and strategy, like-for-like order growth of 6.0% from weeks 34 to 52 building on the 5.7% previously announced for weeks 27 to 33. As a result of this growth, following a challenging first quarter, order intake for the full year was in line with FY22. The Group's financial position remains robust, with cash at 29 July 2023 of £69.5m and no debt. Despite challenging conditions, ScS continues to expect to grow its market share while selectively investing in store and other strategic growth opportunities.

3 August 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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