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.

Joiners: Saietta Group (SED.L), has joined 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. The Company and the Selling Shareholders have successfully raised gross proceeds of £37.5m. Mkt Cap c.£102.1m.

Wise, the global technology company building a better way to move money around the world has listed on the London Stock Exchange (Standard), in a direct listing. Wise plans to establish a customer shareholder programme, OwnWise, which will reward customers joining as shareholders after admission to support its long-term mission. The direct listing is possible due to the company’s sustainable approach to growth. Wise has been profitable since 2017, with a 54% revenue CAGR over the last 3 years reaching £421m of revenue in FY2021. The company has no plans to raise primary capital. The shares have settled at c.800p in early trading equating to a market cap of circa £8bn.

Leavers: Watchstone Group has left AIM pursuant to AIM Rule 41, but remains tradable on the Aquis Stock Exchange (AQSE:WTG)

Banquet Buffet

7digital  0.975p  £26.4m (7dig.L)

The specialist in B2B end-to-end digital music solutions, has expanded its presence in the global fitness market by signing 24-month contracts with two new clients: Barry’s, the global fitness brand, and Volava, a European interactive fitness platform. The companies will use 7digital’s music platform-as-a-service to power their services in the fitness industry, a strategic growth market for 7digital. Both contracts, signed with Barry’s Bootcamp Holdings, LLC, and Volava S.L., respectively, commence immediately and consist of an upfront set-up fee as well as recurring monthly revenues.

Ariana Resources 5.2p  £56.4m (AAU.L)

Recent drilling results obtained from the Kokkinoyia Sector of the Magellan Project  which is 100% owned by Venus Minerals Ltd. Venus is focused on the exploration and development of copper and gold assets in Cyprus. Ariana is continuing its earn-in to 50% of Venus and is currently entitled to 26%. Gold confirmed to be a significant component of the Kokkinoyia deposit, with an average grade of the mineralised zone returning 128.77m @ 0.5% Cu + 0.55g/t Au. Significant drilling intercepts from the first hole (VMD001) at Kokkinoyia include:  11m @ 1.11% Cu + 1.05g/t Au, including underground development back-fill with 2m @ 2.05% Cu + 2.50g/t Au. 5.87m @ 0.53% Cu + 4.55g/t Au, including underground development back-fill with 1.37m @ 0.41% Cu + 12.75g/t Au.   12m @ 0.99% Cu + 0.29g/t Au.  Eight remaining holes are pending assay results, which will be released within the coming weeks.

Brave Bison 1.7p  £10.4m (BBSN.L)

Brave Bison, the social media and marketing group, announces that it will publish its interim results for the six-month period to 30 June 2021 on or before Monday 16 August 2021. Trading in the first half of the year has continued to be strong and the Board now expects the Company to exceed current market expectations for the full year. Revenue for H1 2021 is expected to be not less than £7.3m (H1 2020: £5.5m) and H1 2021 Adjusted EBITDA is expected to be not less than £0.5m (H1 2020: £0.4m loss). Net cash increased by £0.2m to £2.9m at 30 June 2021 (30 December 2020: £2.7m).

Cadence Minerals 29.25p  £45m (KDNC.L)

Cadence Minerals has noted that Macarthur Minerals (TSX-V: MMS) (ASX: MIO) has announced that it is about to commence a geotechnical drilling campaign to support mine planning work being undertaken as part of the current Feasibility Study for its flagship Lake Giles Iron Project in the Yilgarn region of Western Australia. The drill programme is planned to commence during July and will involve the drilling of 8 diamond core holes for a total depth of 1560m, with varying depths of between 175 to 230m each. The drill programme will be undertaken as efficiently as possible and is expected to take between 6 to 8 weeks to complete. Cadence holds approximately 1% of the issued equity interest in Macarthur, which is an Australian mining exploration company focused primarily on iron ore, nickel, lithium and gold in Western Australia. It also has a lithium project in Nevada, USA.

Cohort 588p  £241m (CHRT.L)

The independent technology group, announced that its wholly owned subsidiary ELAC SONAR GmbH has received an order valued at over EUR49m from Leonardo S.p.A., a leader in the design and supply of systems for naval defence and maritime and coastal surveillance. ELAC will provide sonar systems for two new U212 Near Future Submarines (NFS) being supplied by Fincantieri for the Italian Navy. The contract also includes delivery of special test and training tools and associated technical services. Work on the contract will commence immediately and will complete in 2030, it also includes options for two more U212 NFS submarine.

ECR Minerals 1.77p  £17.5m (ECR.L)

The  Department of Resources (DoR) and Environmental Authority have approved work programmes for three Exploration Permits (EPM) at its Lolworth District licence territories in North Queensland, Australia. The EPM licenses have yet to be approved but now that the work programmes have been approved, the EPM’s will be advertised, following which there will be a 4-month consultation period. The Directors believe the licences should be granted in approximately 6 months time, and further announcements will be made at that time. Once approved, all three are valid for an initial period of 5 years to enable the Group to complete the planned exploration program, with a right to apply for permit extensions for up to a total of 15 years. The licenses will be held in the name of LUX Exploration Pty Ltd which is a 100%-owned Australian subsidiary of ECR Minerals.

 Newbury Racecourse 815p  £27.3m (AQSE:NYR)

Newbury Racecourse today announces that it has signed a media rights agreement with Arena Leisure Racing Limited, a subsidiary of Arena Racing Corporation Limited. The Agreement will commence from 1 April 2023 and will cover all fixtures at Newbury Racecourse until 31 December 2028. As part of the Agreement, through Attheraces Limited, these fixtures will be broadcast on Sky Sports Racing, adding a valuable portfolio of prominent fixtures across both Flat and Jump racing to further enhance the broadcaster’s growing output, which already includes a number of high-profile events including Royal Ascot, the St Leger and Chester’s May Festival fixtures. The Agreement covers all media rights (retail, digital, raceday data, terrestrial & international TV, media, production and access) and will replace the existing contract with Racecourse Media Group Limited which expires in respect of retail rights on 31 March 2023 and in respect of all other rights on 31 December 2023. The Agreement is anticipated to give Newbury Racecourse both commercial and strategic benefits when the deal becomes fully effective in 2024. Further, signing the Agreement secures the key media rights income stream for the Company until the end of 2028.

Seeing Machines 10.1p  £384m (SEE.L)

The advanced computer vision technology company that designs AI-powered operator monitoring systems to improve transport safety, announced that it has signed an Agreement with Airservices Australia to integrate the Company’s technology into the Air Traffic Control environment. The initial program of work  is valued at around A$250K and will see the Company work with Airservices to jointly pursue the development and integration of head, eye and face tracking and the related high-level signals including; workload, fatigue and attention to support and optimize safe and effective controller performance in an increasingly automated Air Traffic Control environment.  This collaboration will launch Seeing Machines’ capability into the highly regulated and safety critical console-based environment with a key focus on the ‘human-in-the-loop’. 

Starcom 0.98p  £3.6m (STAR.L)

As announced on 18 June 2021, Starcom recently won the Smart Guard Innovation Challenge for its Lokies keyless padlock at the recent DHL Logistics & Supply Chain Summit. This has led to the initiation of a trial of Lokies by DHL in one of its main global hubs in Singapore to examine all aspects of the product, both technical and commercial, with a view to DHL potentially trialing the Lokies smart padlock with some of its customers. Should it be successful, the Directors hope that these studies will be expanded in due course to other centres within the DHL network. At this stage there is no commitment from or contract with DHL, or significant revenue from the trial, and the duration of the trial is unknown. Avi Hartmann, CEO of Starcom, said: “We are once again proud with the technological achievement of one of our unique products being assessed by a global conglomerate such as DHL. Whilst there is no commitment from DHL at this stage we are encouraged by their interest and the possibilities it may bring.”

Steppe Cement 51p  £111.7m (STCM.L)

In the first half of 2021, Steppe Cement Ltd sold 840,661 tonnes of cement for 16,657m Tenge, compared with 764,752 tonnes of cement for 13,677m Tenge in the first half of 2020. This represents an increase of 10% in volume and an increase of 22% in turnover over the same period in 2020. The average price for the current period for delivered cement was 19,814 Tenge per tonne (ex-VAT) compared with 17,884 Tenge per tonne in the corresponding period of 2020. The ex-factory price for the current period was 16,571 Tenge per tonne, compared with 14,727 Tenge per tonne in the corresponding period of 2020. The cement market in Kazakhstan increased by 25% during the first half of 2021, compared with the same period last year. This significant increase can be partly justified as the government has allowed partial withdrawals from individual’s pension funds to be invested in real estate. Imports represented 5.2% of the local market, remaining stable, and exports from Kazakhstan were increased by 12% to 0.96m tonnes. Steppe Cement’s local market share was 14.3% in the first half of 2021 and the Company exported 8.5% of its sales.

What’s cooking in the IPO kitchen?

Bridgepoint Group to float on the Premium Segment of the Main Market. Bridgepoint is the leader in middle market investing, with a global reach that leverages its strong pan-European footprint and Bridgepoint’s ability to deploy meaningful amounts of client capital across several well established strategies. Raising £300m. Timing TBA.

HydrogenOne Capital Growth to IPO on the Premium Segment of the Main Market. HGEN is targeting a raise of £250m. First London listed investment fund dedicated to clean hydrogen. Due by the end of July.

Forward Partners Group to join AIM. The Group has made 65 equity investments in early stage, high growth British companies, to build a portfolio that has a net asset value of £103.0m as of 31 March 2021. Offer TBA. Due mid July.

Bradda Head Holdings to join AIM. Bradda Head, previously called Life Science Developments Limited and before that Copper Development Corporation, is a delisted company previously quoted on AIM. In January 2018 Bradda Head acquired Bradda Head Limited, a lithium focused exploration company established to develop a portfolio of USA based lithium projects. Raising £6.2m. Mkt Cap £16.1m. Due 19 July.

CMO Group PLC, the UK’s largest online-only retailer of building materials, announced its intention to seek admission to AIM. The Group currently operates seven specialist websites, Roofingsuperstore.co.uk, Drainagesuperstore.co.uk, Insulationsuperstore.co.uk, Doorsuperstore.co.uk, Tileandfloorsuperstore.co.uk, cmotrade.co.uk and Totaltiles.co.uk. Due 8 July raising £27.3m primary and |£17.7m for selling shareholders. Mkt cap £95m.

Seraphine Group,  intends to IPO on the Premium Segment on the Main Market. Seraphine, and together with its subsidiaries, is an international digitally-led maternity and nursing wear brand. The final offer price will be determined following a book-building process. Admission expected July.

Literacy Capital PLC, announces its intention to seek admission of its ordinary shares of £0.001 to trading on the Specialist Fund Segment of the Main Market. The Company was created in September 2017 as a permanent capital vehicle to allow longer term decision making and with the intention to generate substantial investment returns. As at 31 March 2021, the Company’s unaudited Net Asset Value is approximately £96.4m. Literacy Capital Asset Management LLP is the Company’s investment manager.

LungLife, a developer of clinical diagnostic solutions for lung cancer enhanced by artificial intelligence (AI), announces intention to seek admission to AIM. The Company’s technology is a combination of the recovery of rare cells and blood-based biomarkers shown to be altered in lung cancer. The Company employs machine learning to improve upon existing computer software to identify informative cells from blood, and intends to build a deep, novel pool of lung cancer-related data for AI-enabled applications designed to improve test performance over time. Admission due early July.

Helium Ventures PLC, announces admission to the AQSE Growth Market. The Company has been formed to identify either investment opportunities or acquisitions in the upstream natural gas sector and in particular in helium. Admission date TBC.

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 180m 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 £125m 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 early July

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

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 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

*A corporate client of Hybridan LLP

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