Hybridan Small Cap Feast

A round up of the day’s news brought to you by the team at small-cap broker and advisor Hybridan.

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Banquet Buffet

1Spatial 42.50p  £47m (SPA.L)

AGM Statement from the specialist in Location Master Data Management (LMDM) software and solutions. “1Spatial continues to make good progress against its growth strategy, winning new customers and delivering on its expanding opportunity. Following a strong period of trading in the final quarter of the prior year, we entered the new year with increased levels of committed revenue and a strengthened financial position. In line with expectations, order levels for new sales in the current year are higher than in the comparable period as the Group continues to focus on growing recurring licence revenue and securing higher levels of committed revenue. The growing need for better quality, shareable location data to support infrastructure investment, new environmental initiatives and innovative digital services is driving increased demand for the Group’s 1Integrate, 1Data Gateway and Esri arcOpole Pro offerings across each of its three target sectors: Government, Utilities and Transport. New customers secured in recent months include two further US States for next generation 911 solutions, a new department of Tours Metropole in France and extensions with the US Federal Highways Administration and Ordnance Survey Great Britain. The Group has a strong and growing sales pipeline in all regions, both direct and through our valued partners, underpinning the Board’s confidence in a successful outcome to the year and exciting future ahead.”

Ariana Resources 4.85p  £52.6m (AAU.L)

Recent and substantial resource drilling results obtained from the Derya area of the Kiziltepe Mine.  Kiziltepe is part of the Zenit Madencilik San. ve Tic. A.S. Joint Venture with Proccea Construction Co. and Ozaltin Holding A.S. and is 23.5% owned by Ariana. Drilling programme testing the central and south-eastern extents of the Derya vein system over 670m of strike to depths of c.130m below surface. New significant intercepts within the vein system include: 4.2m @ 6.07g/t Au + 98.2g/t Ag;  7.1m @ 2.23g/t Au + 11.3g/t Ag;  2.5m @ 6.07g/t Au + 71.8g/t Ag. Confirmation of high-grade continuity to depths exceeding 100m from surface within the central part of the Derya vein. High-grade potential at Derya includes the previously reported “Bonanza Zone” intercept of 12.1m @ 13.1g/t Au + 187.6g/t Ag. Further pit optimisation will be undertaken in the coming months to determine the next stage of open-pit development in this area. 

Directa Plus 121.500p  £74.3m (DCTA.L)

The producer and supplier of graphene nanoplatelets based products for use in consumer and industrial markets, provided an update on the current financial year to 31 December 2021 ahead of its Annual General Meeting. At the time of the announcement of the 2020 final results, the Company reported a strong performance in the first four months of 2021 with revenues increased by almost 50% year-on-year to EUR2.8m.  The Board reported that this strong revenue growth is continuing in the last two months of the current first half and that the Company is trading in line with market expectations. In the environmental vertical, growth momentum is continuing at the Group’s subsidiary, Setcar,  which  is also benefitting from customer demand driven by the higher prices for oil reclaimed from its remediation services. In the emerging batteries vertical, the Board continues to be pleased with the progress being made with our partner NexTech in Li-S batteries. Overall, the global market for graphene is estimated by different market research to be growing at a compound annual growth rate above 30% , with a particular focus on high quality, sustainably produced graphene such as that produced by Directa Plus. The Company continues to develop both its production technology and suitable applications for its products.  This is reflected in the growing IP portfolio which now comprises 55 granted patents alongside an ever-deeper base of know-how covering the core production technology as well as the products launched or being developed by customers. Directa Plus continues to explore new vertical markets and is in negotiations with additional potential partners.

Joules Group 282p  £316.8m (JOUL.L)

Joules, the British lifestyle group, provides an update on trading for the financial year ended 30 May 2021. Revenue for the Period increased by 4% to approximately £199m (FY20: 190.8m) despite the significant challenges impacting the retail sector during the financial year. This performance primarily reflects the strength of the Group’s digital proposition and increasing active customer numbers, as well as the positive contribution from the acquisition of Garden Trading Company Ltd (“Garden Trading”) since February 2021. Profit before tax and exceptional items for the Period is anticipated to be in the range of £5.5m – £6.5m, slightly ahead of current market expectations. Retail revenue, which includes e-commerce sales as well as the Group’s stores, increased 9% year on year. This was primarily as a result of strong sales growth through the Group’s own digital channels with demand on Joules’ own websites, which includes the Friends of Joules online marketplace, growing approximately 48% year on year. This very strong digital performance reflected increased customer traffic to the Joules website as well as improved customer conversion trends. The Group’s stores have performed ahead of management’s expectations since their re-opening following the third national lockdown, with sales for the eight weeks since reopening ahead of the comparable period two years ago.

Lexington Gold 4.20p  £11m (LEX.L)

The gold exploration and development company with projects in North and South Carolina, US updated on its ongoing operational activities.  Pivot Mining Consultants  has been engaged to review, interpret and model the complete dataset, including data from the Company’s recently completed Phase 1 six-hole drilling campaign, at the Jones-Keystone-Loflin Project (JKL), with the aim of working towards a potential maiden resource estimate on the south-western (Loflin) side of the project. All six holes from Phase 1 intersected gold mineralisation higher than 1 g/t Au above 100m depth and included several broad shallow gold intersections. Depending on the results of Pivot’s review, a Phase 2 drilling campaign can then be designed for JKL to either: enable a maiden resource estimation; expand on any potential maiden resource estimate that can already be determined from the current database. Completion of soil sampling and rock sampling programme at the Carolina Belle Project. The rock samples have been submitted to SGS in Vancouver, with the soil samples submitted to American Assay Laboratories in Nevada. A drilling campaign is currently being planned for the Carolina Belle Project and dependent on drill rig suitability and availability, will be incorporated into the Phase 2 drilling campaign for JKL. Detailed modelling, interpretation and drill target generation based on the geophysical data acquired over both the JKL and Carolina Belle projects is being undertaken by Core Geophysics based in Perth, Australia. The Company has successfully extended an existing 4.05 acre mining lease with an option to purchase agreement on the south-western  side of JKL for an additional six-month period to 17 December 2021. 

Litigation Capital Management 116.50p  £126.6m (LIT.L)

The alternative asset manager specialising in dispute financing solutions internationally, has entered into an agreement to provide a litigation finance facility to Geoffrey Carton-Kelly, a partner of FRP Advisory additional liquidator of CGL Realisations Ltd (In Liquidation), which until 21 October 2019 was known as Comet Group Ltd. The litigation finance agreement will cover proceedings issued in the High Court against Darty Holdings SAS.  Mr Carton-Kelly was appointed as additional liquidator by the court to specifically investigate and pursue potential  claims. At the time of its insolvency, Comet was the UK’s second largest electrical retailer with 239 stores and 6,900 employees.

Maestrano 14p  £23.6m (MNO.L)

The Artificial Intelligence platform for transport corridor analytics, announces the first paid project with Union Pacific Railroad, the second largest Class 1 Railroad in the United States (ranked by track miles). Maestrano’s specialist rail analytics subsidiary, Cordel Technology Inc (Cordel) entered the North American market in May 2020, commencing the process of establishing relationships and credibility with railroad companies and engineering service providers. This announcement is the first of several “Pilot” projects, engineered to demonstrate both the efficient data capture process and rapid Artificial Intelligence analysis of the resulting digital “point clouds”. The USA market is segmented into classes by revenue. The seven Class 1 Railroads are the trans-national heavy freight companies that own the majority of the 140,000 miles of track in the USA. Class 2 Regional railroads provide freight and passenger services intra-state and Class 3 railroads are typically local lines serving a small number of towns and industries. In addition short line railroads provide freight, commuter and light rail services.

Manolete Partners 242.50p  £105.7m (MANO.L)

The leading UK-listed insolvency litigation financing company, today announces the appointment of Lord Leigh of Hurley as Senior Independent Director and Chairman Designate. He will succeed the present Chairman, Mr. Peter Bertram at the conclusion of Manolete’s forthcoming Annual General Meeting (‘AGM’). Mr. Bertram, who has been Non-Executive Chairman since November 2018, will retire as Non-Executive Chairman and from the Board on the same date. Howard Leigh is a qualified Chartered Accountant. In 1988 he set up Cavendish Corporate Finance LLP where he remains Senior Partner. In 2000, Howard was appointed as the Chairman of the Faculty of Corporate Finance of the Institute of Chartered Accountants in England and Wales (ICAEW). In 2008, he was awarded the Faculty’s Outstanding Achievement in Corporate Finance award.

Mercantile Ports & Logistics 0.825p  £15.7m (MPL.L)

Mercantile Ports & Logistics Limited, which is operating and developing out its port and logistics facility in Navi Mumbai, Maharashtra, India, has secured a new multi-year contract. MPL has signed a contract with Esquire Shipping and Trading Pvt. Ltd. (“ESQUIRE”), a cargo logistics solutions provider based in Mumbai; and Sai Om Petro Specialties Ltd. SOPSL, a Mumbai-based company engaged in the business of bulk cargo handling. The Contract is for an initial period of ten years, extendable by a further five years and with revenue of approximately GBP 7m over the next three-year-period.

Touchstar 85p  £7.2m (TST.L)

AGM statement from Touchstar plc, which supplies turnkey mobile solutions to the logistics, transportation and fuel delivery markets in addition to providing access control to high profile and public sector buildings. “The encouraging trends observed across our business have continued and Touchstar’s performance this year to date has exceeded our expectation. This has been achieved by favourable revenue development, an increase in margins and continued tight management of expenses. The order book is building back, it has increased by over 50% since the year end and currently stands at over £750k reassuringly it is beginning to include orders from sectors most impact by the pandemic. A key focus for management is upon achieving an increasing percentage of sales from long term recurring revenue contracts. In the year to date these revenues are up 12% compared to the equivalent period last year. We expect a strong first half performance to, at a minimum, underpin the full year results. We will more formally update expectations for both 2021 and future years when we release the Group’s interim results which we expect to be announced by the middle of September.”

What’s cooking in the IPO kitchen?

Seraphim Space Investment Trust PLC, a newly established closed-ended investment company which will invest in a diversified international portfolio of early and growth stage Space Tech businesses, announces the publication of its Prospectus in connection with the IPO to the Premium Segment of the Main Market. The Company is targeting gross proceeds of up to £180m through the issue of up to 180 million Ordinary Shares by way of the Initial Placing, the Offer for Subscription, Direct Subscriptions and the Intermediaries Offer at 100 pence per Ordinary Share. The Company will subsequently also acquire stakes in four Space Tech businesses upon the completion or termination of currently pending corporate activity in relation to those assets. Assuming the successful completion of these transactions currently underway, the Company’s investment manager, Seraphim Space estimates approximately £70m of value relating to the Retained Assets could be acquired by the Company.

Future Biogas Group plc, is a newly formed holding company which will acquire 100% of Future Biogas Limited (“FBL”). Future Biogas is a clean energy company that operates biogas plants in the UK. It is one of the largest biogas producers in the UK, delivering approximately 5,000 cubic metres per hour of green gas to the Gas Grid. FBL was formed in 2010 in order to develop and operate biogas plants.  The Group has deployed over £125 million and built 12 biogas plants in the UK since then, largely through tax efficient funding such as VCT and EIS. In 2020, the ten biogas plants operated by the Group generated over 426 GWh of renewable energy. TBC ordinary shares of £0.01 each in the capital of the Company. In addition to the biogas plants it operates on behalf of third parties, the Company intends to build on its experience by constructing its own portfolio of new bioenergy plants with carbon capture storage (“BECCS”). Target fundraise up to £35m. Anticipated market cap TBC. Admission date TBC

Saietta Group, announces intention to list on AIM. Saietta, is a UK company that has developed an innovative AFT electric motor (a design of axial flux motor), designed to deliver class-leading performance for its target markets whilst being low cost and built for mass market production. Saietta’s initial target market is the high volume, fast growing lightweight mobility market including motorcycles in Asia. Admission date and market cap TBC.

Silverbullet is a provider of digital transformation services and products which assist brand owners and advertisers to optimise their digital marketing investment, with a particular focus on unlocking the potential of first party data and contextual intelligence. The Company announced its intention to seek admission of its shares to trading on AIM, with admission expected to take place on 28 June 2021. Seeking to raise £9.5m. Expected mkt cap c£34.5m.

Poolbeg, Proposed AIM listing and demerger from Open Orphan (ORPH.L). Funds raised as part of Admission will be used primarily to fund the clinical trial costs associated with the development of the Company’s POLB 001 asset as a treatment for severe influenza and to acquire and develop new portfolio assets.  Offer details and timing TBC

Wise, the Fintech and payments start-up is planning to pull the trigger on a direct listing on the London Stock Exchange, becoming the latest tech firm and this time a Unicorn to cash in on the ongoing boom in flotations on the UK’s public markets. Wise plans to establish a customer shareholder programme, OwnWise, which will reward customers joining as shareholders after admission to support its long-term mission. OwnWise, open for pre-applications from UK eligible customers today, provides participants with the chance to receive bonus shares in Wise, representing 5% of the value of the shares they buy and hold for at least 12 months (based on market value at the time of purchase) up to a cap of £100, amongst other perks. All existing investors, including the company’s team of current and previous Wisers (employees) who hold options and shares, will be offered time-limited enhanced voting shares to support Wise’s focus on its mission as it transitions to being a listed company. Admission Due TBC

Orcadian Energy, the North Sea focused, oil and gas development company, announces its intention to seek admission to AIM. The Company’s key asset is the 100% interest in the Pilot oilfield, with audited proven and probable reserves of 78.8m barrels (audited by Sproule BV). Orcadian plans to raise gross proceeds of c. £5m to progress its assets. Expected June/ early July.

Itim Group Limited (to be renamed itim Group plc) is a software technology company, established in 1993. Itim adds value by helping multi-channel retailers optimise their business and stores to improve financial performance and compete more effectively in the digital world of modern retailing. The Company provides flexible solutions proven at adding value as retailers transform stores, digital capabilities and operations suitable for modern retailing and profit improvement. The company plans to raise up to £8m on Admission on AIM, through a placing of new equity at an issue price of 154 pence. Market Cap £48.1m. Due date 28^th June.

Baltic Classifieds Group PLC, the leading online classifieds group in the Baltics, announced their intention to IPO on the Premium Segment of the LSE. The Offer will comprise an offering of both new Shares to be issued by the Company, with gross proceeds expected to total approximately EUR 120m and existing Shares to be sold by ANTLER Equity Co S.à r.l and certain BCG shareholders. The directors intend to use the net proceeds from the Primary Raise for the repayment of existing debt in conjunction with the refinancing of the Senior Facilities Agreement targeting a net debt at IPO of approximately 2.75x FY21 Adjusted EBITDA. Expected early July.

The UK Residential REIT, a proposed closed-ended real estate investment trust established to invest in a diversified portfolio of affordable, privately rented residential real estate assets in attractive locations outside of London, announces its intention to IPO onto the Premium Segment of the LSE. URES is targeting Gross Issue Proceeds of  150m before expenses by means of a placing, offer for subscription and intermediaries offer of 150m Ordinary Shares plus an Issue of up to 50m Consideration Shares in connection with the acquisition of Seed Assets at an issue price of £1.00 per Ordinary Share. Expected market capitalisation following the completion of the acquisition of Seed Assets of £200m. Due 16 July

LionTrust ESG Trust PLC announces the publication of the Prospectus in connection with the IPO on the Premium Segment of the Main Market. The Company is targeting an initial issue of £150m by means of an Initial Placing, Offer for Subscription and Intermediaries Offer of Ordinary Shares at an issue price of 100 pence per Ordinary Share. In addition, pursuant to the Prospectus, a placing programme will allow the Company to issue up to an additional  250m Ordinary Shares and/or C shares, in the 12 months from the date of publication of the Prospectus and following Initial Admission.

Voyager Life, the health and wellness company established to supply high-quality Cannabidiol (CBD) and hemp seed oil products, announces the Company’s intention to seek admission to trading on the Access Segment AQSE Growth Market. Voyager was incorporated in November 2020 as a health and wellness business focused on CBD and hemp seed oil products. The Company’s directors believe that a significant opportunity exists in the CBD market due to the forecast growth and ongoing regulatory changes. Due 30th June.

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