Small Cap Feast

9th June 2022

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Dish Of The Day:
Psych Capital PLC, (AQSE:PSY) has listed on the AQSE Growth Market. Psych operates the Psych Platform (a business-to-business networking platform), that is developing the Blossom Database pursuant to a third party licensing arrangement. The Company also has an investment of 426,000 common shares in Awakn, a Canadian NEO Exchange listed psychedelics research and clinical group, with operations in the UK and Europe. Psych is developing the Blossom Database pursuant to a third-party licensing arrangement, and Psych will work to develop an artificial intelligence platform that will provide biotech companies advanced clinical data that will be able to fast-track drug development and loop back the real-world data, in a centralised database, to provide feedback on molecules and associated therapy programmes.
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What’s Cooking In The IPO Kitchen?

AssetCo plc, intends to join re-join AIM. The Company’s strategy is to develop an agile asset and wealth management company that meets the needs of investors in the 21st century by acquiring, managing and operating asset and wealth management activities and interests, together with other related services. The Company is in the process of acquiring the entire issued share capital of River and Mercantile Group plc (RMG), via a reverse takeover and therefore a Readmission Document is required for the enlarged group. Due 15 June 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.

Silverwood Brands (AQSE:SLWD), has signed a conditional share purchase agreement for the acquisition by the Company of Balmonds Skincare Ltd, a UK based skincare company that manufactures cosmetic skincare products primarily for consumers who suffer from skin conditions such as eczema, psoriasis and dermatitis. Balmonds’ product line is made from natural ingredients that work to protect and hydrate sore and inflamed skin. The proposed acquisition of Balmonds constitutes a reverse takeover under the AQSE Growth Market Rules. AGM to be held on 15 June 2022.


Breakfast Buffet

Altus Strategies 48p £56.3m (ALS.L)

Altus has received record quarterly royalty income of US$1.54m (before tax) (+24.2% QoQ) for the first quarter of 2022 from its effective 0.418% net smelter return (NSR) royalty interest on the Caserones copper mine in Chile. In addition, the Company notes that the mine operator is now forecasting a mine life of 28 years based on its most recent declaration of reserves, representing an 11 year (65%) increase to the previous mine life.

D4T4 Solutions 276.5p £111m (D4T4.L)

The data solutions provider, announces that its Celebrus Fraud Data Platform (FDP) has been recognised by the Global InfoSec Awards 2022. Celebrus FDP was recognised in the categories of “Most Comprehensive in Identity Management” and “Most Comprehensive in Account Takeover Protection” based on the following criteria: propensity to understand future threats; Cost-effectiveness of solution; Awareness and mitigation of breach and cyber risk. The Global Infosec Awards, now in their 9th year, are run by Cyber Defense Magazine, the industry’s leading electronic information security publication.

Hargreaves Services 580p £188m (HSP.L)

The diversified group delivering services to the industrial and property sectors, provides a update on trading ahead of reporting its preliminary results for the year ended 31 May 2022. The Board expects to report results ahead of market expectations, due to the continued strong performance of the Group’s Joint Venture in Germany (HRMS). As noted in the statement released on 3 May 2022, commodity prices, including zinc and pig iron, have maintained their high level, which has led to an expectation that HRMS’ contribution to the Hargreaves results for the year ended 31 May 2022 will now be £3.5m after tax greater than prior consensus estimates. The Board anticipates reporting strong results in each of its business segments. Revenue will be lower than the prior year due to the cessation of its coal activities, Profit before Tax is expected to be higher. This improvement on the prior year PBT is anticipated due to increased contributions from the Services and HRMS businesses.

Kistos 410p £340m (KIST.L)

AGM update from the low carbon intensity gas producer pursuing a strategy to acquire assets with a role in energy transition. Pro forma net production for the five months to end of May 2022 was 12.0 kboe/d, unhedged as of 1 April 2022. Cash balances on 31 May 2022 were EUR128.6m. Acquired EUR27.7m (nominal) of Kistos NL2 bonds in February 2022. Net cash on 31 May 2022 of EUR6.3m. Acquisition of 20% interest in the Greater Laggan Area West of Shetland from TotalEnergies progressing towards completion. The transaction has an effective economic date of 1 January 2022. Development studies are ongoing for the Q11-B gas discovery and the Orion oil discovery. The Q10-Gamma exploration prospect and infill drilling opportunities at the producing Q10-A gas field are also being evaluated. In line with its strategy, the Group continues to evaluate several potential growth opportunities that meet its investment criteria.

Northbridge Industrial Services 203p £57m (NBI.L)

AGM trading update from the power reliability company. As previously noted at the time of the announcement of the results for the year ended 31 December 2021, trading during the first quarter was ahead of management’s expectations and this has accelerated further into the second quarter. Along with the strong trading already seen in the first half, the pipeline for both rental and sales is building well for the remainder of the year. As a result, the Group is trading ahead of upgraded expectations and visibility for the remainder of 2022 is now such that the Group is increasing its outlook for the year as a whole. The UK factory expansion has now been completed on budget and schedule and production has already begun, which will enable the Company to meet the continued strong demand it is experiencing both for sales and rentals of power reliability equipment.

Oracle Power 0.3p £8.7m (ORCP.L)

Positive metallurgical results have been returned from the first of three samples from its 100% owned Northern Zone Gold Project, located 25km east of Kalgoorlie in Western Australia. The results indicate that good gold recoveries can be achieved within six hours of 83.3%, and up to 90.4% gold recovery over 72 hours. Based on the previously announced Exploration Target of 200 – 250Mt at 0.4 – 0.6g/t Au for 2.5 – 4.8Moz Gold, the positive metallurgical results form the basis for moving forward with drilling to define a maiden inferred JORC resource. Northern Zone is an Intrusion Related Gold System with wide gold mineralised felsic porphyry intrusions. Intrusion Related Gold System deposits can host significant ounces of gold, such as Boddington Goldmine, Fort Knox, Dublin Gulch and Timbarra. Planning for a diamond and RC drilling programme to define a maiden inferred JORC resource will be finalised in the coming weeks.

Powerhouse Energy 2.15p £89.4m (PHE.L)

The UK technology company commercialising hydrogen production from plastic, announced that its UK channel partner Peel NRE, part of Peel L&P, has been granted planning approval for a hydrogen facility in West Dunbartonshire, Scotland. The £20m 13,500 tonne facility at the site at Rothesay Dock on the north bank of the River Clyde, will be the second site in the UK planning to use Powerhouse’s technology to turn waste plastic into hydrogen. The hydrogen will be used as a clean fuel for vehicles, with plans for a linked hydrogen refuelling station on the site. It follows the UK Government doubling its hydrogen production target by 2030 as part of the recently-published Energy Security Strategy, so more clean and affordable energy can be produced in the UK as energy prices continue to rise globally.

Trufin 85p £80.1m (TRU.L)

TruFin announced that its subsidiary, Satago, a leading provider of invoice financing and Lending as a Service software solutions, has signed a LOI to enter into a three-way partnership with Sage and Lloyds Bank. The partnership will formalise plans to create an embedded finance solution within Sage, the leader in accounting, financial, HR and payroll technology for small and medium-sized businesses, and aims to help these businesses better manage cash flow as the need arises. Powered by Satago, Sage customers will be able to access instant financing from Lloyds, based on invoices due, regardless of payment terms. Satago, Sage and Lloyds have signed a LOI with the final terms of the partnership subject to commercial negotiation. Planned for roll out initially in the UK, Sage and Satago intend to subsequently deliver the solution globally, working with local Banks in respective countries.

Xpediator 36p £51m (XPD.L)

AGM update from the provider of freight management services across the UK and Central and Eastern Europe. Following a strong initial start to trading in the year, particularly from the Group’s CEE operations, the Company has continued to trade well despite the effect of Russia’s invasion of Ukraine, the impact from which, to date, has been largely offset with increased volumes in other markets. The Group is in a good position, and with its asset light base, it is shielded from some energy and other inflationary cost pressures, but not all. The Company recognises the economic uncertainty and resulting potential headwinds created by the events in Ukraine driving up inflation and creating caution around business and consumer spending and constantly reviews its plans and performance to mitigate these. These matters aside, the Company continues to trade well and will enter the traditionally stronger second half of the year well placed to continue to perform. Xpediator is encouraged by the potential for further growth within the business. In particular, there are clear organic opportunities to improve the underlying performance of the UK business, and the new management team are well placed to address any other challenges and to capitalise on any opportunities that arise within the wider business.

Velocys 5.45p £75.9m (VLS.L)

The sustainable fuels technology company, announced the appointment of Philip Sanderson as an Executive Director of the Company and as Chief Financial Officer with effect from 22 June 2022. This follows the Company’s announcement in February 2022 that Andrew Morris had advised of his intention to step down as CFO and will not stand for re-election at the Company’s annual general meeting on 21 June 2022. To ensure a smooth transition, Andrew will remain with the business for an agreed period. Philip joins Velocys with over 30 years of international finance and commercial expertise in advanced fuels and lubricants, large scale capital project execution and low carbon energy in a range of divisions and affiliates of Shell Plc. Philip is joining us directly from a role of Vice President Finance Global Marketing. Philip has an impressive track record in commercial delivery, strategic planning, corporate governance and consistently driving shareholder value. Philip’s experience includes roles in business partnering, financial and risk management, governance and assurance, and major transaction engagement. Additionally, he has extensive experience of capital project development and project financing. Philip holds a BA (hons) in Mathematics from The University of Oxford and is an Associate of the Chartered Institute of Management Accountants.

9 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).

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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.

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