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: No joiners today.

Leavers:  No leavers today.

Banquet Buffet

ADM Energy* 2.6p  £4.1m (ADME.L)

The natural resources investing company, announced the appointment of Oliver Andrews to the Board as Non-executive Chairman with effect from 2 August 2021. Mr Andrews will take up the position from Peter Francis, who is stepping down as Non-executive Chairman for personal circumstances, effective from the same date. Mr Andrews was formerly Executive Director and Chief Investment Officer at the Africa Finance Corporation (AFC), one of the biggest investors in natural resources and infrastructure solutions in Africa, where he oversaw the growth of assets under management from US$1bn to over US$8.4bn including significant investments in the oil and gas sector. In addition, Mr Andrews pioneered the project development asset class at AFC, and led strategic formulation and business development, portfolio management and execution of investments.  He previously served as CEO of TCI Infrastructure and the Gambia Ports Authority. He is the Founder and Chairman of TOCAM Capital Limited, a transaction advisory firm that specialises in project development and transaction advisory services across Africa.  Mr Andrews was also previously a Director at Thor Explorations Ltd., whilst it was listed on the TSX Venture Exchange, a diversified resource company that has assembled a portfolio of exploration assets in West Africa. Osamede Okhomina, CEO of ADM Energy, said: “I am delighted to welcome Oliver as the new Chairman of ADM Energy. Oliver is a prominent figure in the African natural resources scene having run one of the continent’s largest investment funds as Chief Investment Officer and overseen the development of several landmark projects. His extensive experience in originating and evaluating transactions, as well as financing and developing projects, will provide invaluable insight. I look forward to Oliver’s guidance as he supports our strategy to unlock the upside from our asset base while seeking attractive new opportunities. On behalf of all at ADM, I would like to thank Peter for his outstanding dedication and contribution to the company throughout his tenure and wish him the very best for the future.”

Egdon Resources 1.3p  £6.7m (EDR.L)

The established exploration and production company focused on the hydrocarbon-producing basins of the onshore UK updated on operations at its Wressle Oil Field Development located in North Lincolnshire, covered by Licences PEDL180 and PEDL182 and where the Company holds a 30% operated interest. Egdon advised that the proppant squeeze operation on the Ashover Grit reservoir interval in the Wressle-1 well has been completed safely and successfully.  A total of 146 cubic metres of gelled fluid with 17.3 tonnes of ceramic proppant were injected into the Ashover Grit formation in line with the authorised programme. The injection operations lasted a total of only 1 hour and 30 minutes over a two-day period. There were no health, safety, environmental or security issues experienced during the operations; and as predicted, real time monitoring confirmed there was no induced seismicity and that the noise levels were well within the permitted limits.  The operation was subject to a pre-operational inspection by the Health and Safety Executive and active monitoring by the Environment Agency.  Ground and surface water monitoring has continued in accordance with the requirements of the Environmental Permit. All equipment and personnel associated with the operation have now demobilised from site. The Wressle well will now be subject to a coiled tubing operation to fully clean out the production tubing prior to bringing the well back into production through the site’s permanent production facilities. Based on the implemented programme, pre-operational simulation modelling concluded that the proppant squeeze operation would result in constrained flow rates of 500 barrels of oil per day (gross). Once the well is brought back into production, we will provide a further update to report on the stabilised flow rates achieved from the proppant squeeze.

Empresaria 81p  £40m (EMR.L)

The global specialist staffing group, provides a trading update ahead of announcing its interim results for the six months ended 30 June 2021 on Thursday 12 August 2021. H1 profits expected to be significantly ahead of prior year. H1 net fee income up 1% on 2020 (up 4% in constant currency) with Q2 up 30% and Q1 down 19%. Net debt increased to £16.5m (31 December 2020: £13.6m) reflecting working capital outflows as activity levels increased, with headroom remaining strong at £12.4m. Operational investment accelerated with appointment of highly experienced industry leadership to regional management roles.

Everyman Media 142.5p  £129.9m (EMAN.L)

The independent, premium cinema group provided a trading update for the 26 weeks ended 1 July 2021. 33 venues re-opened safely on 17 May 2021, with Glasgow re-opening on 6 June and Belsize Park closed for refurbishment. The business returned to profit and cash generation on re-opening and for the remainder of the period, social distancing measures remained in place until 19 July. £21m liquidity headroom.

IOG 21p  £102.7m (IOG.L)

The UK gas company targeting growth and high returns via an infrastructure-led hub strategy, announced the execution of a gas sales agreement (GSA) with Gazprom Marketing & Trading Limited. This follows a competitive offtake process involving more than 10 bidders over recent months. The GSA relates to IOG’s equity production for the first two years from the Elgood and Southwark fields, part of the Company’s Phase 1 development, and the Nailsworth and Elland fields that form part of our Phase 2 development, with a mutual extension option. Gas will be sold on a day-ahead daily nomination basis at a price linked to the National Balancing Point (NBP, the UK traded gas benchmark). A separate gas sales agreement with BP Gas Marketing Limited was signed on 24 February 2014 for Blythe, the other Phase 1 field. Following a two-month period to establish consistent production, the GSA incorporates the potential for physical gas hedging, which the Company intends to undertake as part of its overall risk management programme. GM&T is the London-based energy marketing and trading subsidiary of Gazprom, the world’s largest gas producer. It has been active in the UK gas market for over two decades and has around 900 employees based in London and eight other international offices.

Mortgage Advice Bureau 1360p  £715m (MAB1.L)

Trading update for the six months ended 30 June 2021, ahead of publishing its interim results on 28 September 2021. The Group achieved revenue of circa £91m for the six months ended 30 June 2021. This represents a 43% increase on H1 2020 (£63m), which was heavily affected by the Covid-19 pandemic, and a 49% increase compared to H1 2019. The increase in revenue since H1 2019 is driven by the combination of a 28% increase in the average number of mainstream  Advisers to 1,584 over the two-year period (H1 2019: 1,242) and a 17% increase in revenue per mainstream Adviser. At 30 June 2021, total Adviser numbers had grown to 1,694, an increase of 114 (or 7%) in the first half (31 December 2020: 1,580). The Group’s lead generation capability continues to build strongly. Significant new lead sources, including most recently a long-term agreement with one of the UK’s leading price comparison websites, were secured during the period. MAB also secured a long-term agreement with The Nottingham Building Society, which includes servicing a fast-growing customer base of over 50,000 Lifetime ISA online savers through the Beehive Money app. Helping these future first-time buyers to secure their first homes will increase MAB’s market share in this core sector.

Novacyt 324.7p  £231.7m (NCYT.L)

The international specialist in clinical diagnostics, announces the appointment of David Allmond as CEO and a member of the Board of Directors effective from 18 October 2021. At that time Graham Mullis, having informed the Board that he wishes to retire after 13 years with the expanded Group, will stand down as CEO and board member. David, aged 51, brings relevant leadership experience in life science companies experiencing significant development and growth, and developing businesses into new global markets. Currently he is Chief Business Officer at Amryt Pharma (Nasdaq: AMYT, AIM: AMYT), where he has played a key role in developing the company into a leading global rare and orphan disease drug company. Earlier in his career David held sales and marketing roles of increasing seniority at Amgen, Celgene, and Aegerion Pharmaceuticals. David received a BSc in microbiology from Imperial College. David will be supported by Novacyt’s recently strengthened executive management team. Graham will be retiring after 13 years with the wider business, both as CEO of Novacyt and formerly CEO of Lab21, which was acquired by the Group in 2014. Graham is committed to ensuring a smooth transition with David and will continue to lead the Group as CEO until David joins the Company.

Open Orphan 24.25p  £162.7m (ORPH.L)

The rapidly growing specialist clinical research organisation (CRO) which is the world leader in testing vaccines and antivirals using human challenge clinical trials, announces a contract to supply consultancy services to support a Phase II trial in Onchocerciasis Disease, an infectious disease commonly known as river blindness. Venn Life Sciences, a subsidiary of Open Orphan, will provide Data Management & Biostatistics services to support the Phase II trial of an antibiotic drug candidate for Drugs for Neglected Diseases initiative (DNDi), a not-for-profit research organisation developing new affordable and patient-friendly treatments for neglected patients around the world. DNDi was founded in 2003 by Médecins Sans Frontières, the World Health Organisation, and five international research institutions.

SEC Newgate 98p  £24m (SECN.L)

The insight-driven global strategic communications group that works at the nexus of business, politics, communities, markets and media, is pleased to announce that it has acquired a 70% shareholding in Twister Communications Middle East, the Dubai-based branch of Italian PR firm Twister Communications Group. The Acquisition is in line with the Group’s Strategic Plan 2021/2023 for expansion in key strategic markets, including Middle East. Twister ME, which will be rebranded SEC Newgate ME, has a strong business base, with a combination of private and institutional clients, both Italian and international. The agency’s specialist team of consultants offers a broad portfolio of services, including media relations, digital communications and brand management. The agency was established in 2013 as a branch of Italian PR firm Twister Communications Group jointly with founding partner and CEO Elena Gramatica, whose career started in Italy in the marketing sector before moving to the Gulf as an advisor in the luxury sector in a multinational PR Group. Twister ME,  despite the effects of the Covid-19 pandemic in the region, reported revenues in excess of EUR500k for 2020 and was breakeven. SEC Newgate will acquire 70% of Twister ME’s equity for a consideration of EUR340k payable in cash. 

Vertu Motors 46.4p  £170.3m (VTU.L)

As a consequence of the continuing strong trading performance, the Group is providing an update on current trading and an upgrade to the full year outlook. Exceptional UK used car market conditions have resulted in the Group experiencing strong gross margin retention, which has had a material positive impact on profitability and cash flow.  Whilst used vehicle supply remains tight, particularly in the premium segment, the Group has been successful in maintaining inventory and sales volumes at higher levels than previously anticipated.  New vehicle supply constraints, due to semi-conductor shortages, have had no material impact on the Group’s trading performance to the end of June 2021.  New vehicle volumes and margins have remained strong.  Service revenues and profits have, as expected, strengthened in recent weeks as the impact of the timing of annual service and MOT work mirrors the prior year’s lockdown and release. The Board now anticipates that the Group’s adjusted profit before tax for the six-month period ending 31 August 2021 will be no less than £40m.  At this stage, despite the exceptional performance during the first half of the year, the Board retains a cautious outlook but nevertheless now anticipates that the Group’s adjusted profit before tax for the current financial year ending 28 February 2022 will be in the range of £40m – £45m (previously £28m – £32m). The Board remains very confident in the prospects for the Group, which is strategically well placed to capitalise on the changes and opportunities in the UK motor retail sector.

What’s cooking in the IPO kitchen?

SpectrumX Holdings, a leader in proprietary formulations of HOCL (Hypochlorous Acid), is expected to list on the London Stock exchange. This Pre-IPO offering outlines opportunities for commercialisation of novel formulations of HOCL in the healthcare and pharmaceuticals markets. SpectrumX is focused on developing an inhaled respiratory treatment with blockbuster potential and has a sanitiser product that looks set to generate significant near-term revenues.

Technology Minerals Limited, a battery metals specialist with a green twist, submitted its listing prospectus to the London Stock Exchange in mid-June. Technology Minerals completed an oversubscribed pre-IPO funding round estimated to have brought in £4m of new investment. The raise will be used to develop battery recycling plants.

Yooma Wellness Inc, a global vertically integrated wellness platform that develops and markets a portfolio of CBD and wellness brands, announces it has secured subscriptions for its latest financing round and will submit an application for the admission to the AQSE Growth Market. Yooma, together with its European deal coordinator, Chrystal Capital Partners LLP, have raised gross proceeds of US$9.7m, or approximately GBP £7.1m, through the placing of 13,504,301 Common Shares, at a price of C$0.90 (£0.5232) per share. Investors have also been granted a half warrant for each Placing Share subscribed for with each Warrant exercisable at a price of C$1.35 (£0.7849) per Common Share, and which expire on the third anniversary of listing on AQSE. In aggregate Yooma has granted investors a total of 6,752,139 Warrants. Expected Admission 10^th August.

Southern Energy Corp, an established oil and gas producer headquartered and incorporated in Alberta, Canada, with oil and gas interests in properties located in the south-eastern United States, primarily in Mississippi, to list on AIM. The Group has controlling operated interests in properties covering approximately 30,000 net acres in the Mississippi Interior Salt Basin (“MISB”), which include its two principal properties Mechanicsburg and Mount Olive East, and approximately 1,200 net acres in the Black Warrior Basin. The majority of the Company’s leases (97%) contain producing wells and are ‘held by production’, requiring no additional drilling or operations for the Group to maintain its existing interest. The Group currently has a working interest in 239 producing wells. No Capital to be raised on Admission. Anticipated Mkt Cap £18.86m. Expected Admission 10^th August.

Quantum Exponential Limited, a company formed to identify investment opportunities in the quantum technology sector, to apply for admission of its Ordinary Shares to trading on the Aquis Stock Exchange Growth Market. Raising up to £5m targeted for August.

SigmaRoc (on AIM) to complete RTO of Nordkalk Oy Ab, a wholly-owned subsidiary of Rettig Group, for a total Consideration of EUR470m. Nordkalk was established in 1898 as a limestone developer in Finland and since expanded across northern Europe to become the leading limestone company in the area. The Company has raised £260m from the Placing and £1.6m from the Retail Offer. Based on the Placing Price, Mkt Cap on Admission is expected to be approximately £542m. Due Late August.

BiVictriX Therapeutics to join AIM, a UK based drug development company which was incorporated in February 2016 and has developed its proprietary Bi-Cygni® technology. This technology utilises Antibody Drug Conjugates (ADC”s), an existing class of potent biological drugs, for the treatment of various cancers including Acute Myeloid Leukaemia, the first condition which BVX intends to treat.

Central Copper Resources, a company focused on delivering a high grade copper project into production and exploration of assets in the Democratic Republic of the Congo (DRC) and in the Republic of Zambia to join AIM. By 2022, CCR intends to be ready to commence the project financing of its Mbamba Kilenda copper project.  Offer TBA. Due early August.

South West Brands the multi-brand cannabidiol consumer goods company intends to float on the Main Market (Standard). Raising funds to continue to develop its existing portfolio of brand IP and pursue its strategy of adding brand IP assets to the portfolio over the course of the first 24 months following Admission. The Company expects Admission to occur in July 2021. Timing and offer 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.

*A corporate client of Hybridan LLP

This document has been prepared by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment objectives, financial situation or needs of any specific entity and is not a personal recommendation to anyone. Recipients should make their own investment decisions based upon their own financial objectives and financial resources and, if any doubt, should seek advice from an investment advisor. The information contained in this document is based on materials and sources that are believed to be reliable; however, they have not been independently verified and are not guaranteed 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, directors, officers, employees, agents or associated undertakings in relation to the accuracy, completeness or reliability of the information in this document nor should it be relied upon as such. Any and all opinions expressed are current opinions as of the date appearing on this document only. Any and all opinions expressed are subject to change without notice and Hybridan LLP is under no obligation to update the information contained herein. To the fullest extent permitted by law, none of Hybridan LLP, its members, directors, officers, employees, agents or associated undertakings shall have any liability whatsoever for any direct or indirect or consequential loss or damage (including lost profits) arising in any way from use of all or any part of the information in this document. This document is sent to you as market commentary only. As market commentary this document does not constitute any of (i) investment research and financial analysis or other forms of general recommendation relating to transactions in financial instruments for the purposes of the UK retained version of section B of annex I to Directive 2014/65/EU (“MIFID II Directive”); or (ii) investment research as defined in the UK retained version of article 36(1) of Commission Delegated Regulation 2017/565/EU made pursuant to the MIFID II Directive; or (iii) non-independent research (as such term is defined in the Financial Conduct Authority’s Conduct of Business Sourcebook).