Hybridan Small Cap Feast

Joiners: No joiners today.  

Leavers: Avast Plc has left the Premium Segment of the Main Market.

Banquet Buffet

B.P. Marsh & Partners 302p  £113.1m (BPM.L)

The venture capital provider to early stage financial services businesses, provides a trading update for the six month period ended 31 July 2022. During the period, the investees in the insurance intermediary sector, Kentro Capital in London and XPT Group LLC in New York, have continued on growth trajectories. Rate increases continue to slow across the industry, although B.P. Marsh & Partners does not anticipate to see the repeat of the last soft market in the short to medium term.

Bushveld Minerals 5.6p  £70.3m (BMN.L)

The integrated primary vanadium producer and energy storage solutions provider with assets in South Africa, announces its unaudited results for the six-month period ended 30 June 2022. Revenue was US$76.2m, up 62% (H1 2021: US$47.0m) and adjusted EBITDA was US$15.6m (compared to US$10.8m in H1 2021), supported by higher vanadium prices and the currency benefits on costs due to weaker ZAR. Positive adjusted EBITDA and free cash flow are expected to continue into H2 2022, which will be used to fund capital requirements and debt repayments. 

Deltic Energy 3.73p  £52.4m (DELT.L)

The natural resources investing company focused on the Southern and Central North Sea, announces the successful completion of the Placing and Subscription announced on 12 September 2022. The Placing and Subscription raised gross proceeds of £15m and was significantly oversubscribed. Further, the company confirms the details of the Open Offer to raise gross proceeds of up to approx. £2m. The company’s Pensacola well is moving into the operational phase in the coming weeks and the Selene prospect is anticipated to spud within the next 12-18 months.

Eleco 71p  £59m (ELCO.L)

The international construction software specialist, announces its unaudited results for the six months ended 30 June 2022. Revenue was £13.4m (H1 2021: £13.8m) due to currency headwind. Operating profit was down 24% to £1.8m year-on-year, due to a lower gross profit margin. Geopolitical and inflationary pressures have severely impacted the timing of operational programmes for customers. However, Eleco has been absorbing these pressures with a strong balance sheet (£10.9m in cash and no borrowings). The company remains confident of meeting market expectations for the full year.

Facilities by ADF 53.5p  £40.7m (ADF.L)

The provider of premium serviced production facilities to the UK film and high-end television industry, announces its unaudited results for the six months ended 30 June 2022. Revenues was 10% ahead of H1-21 levels. Operating profit was down by 48% year-on-year due to lower gross margin and higher opex.  With the order book for 2022 filled and the oversubscription of services, the Group continues to trade in line with market expectations for 2022.  

Parsley Box Group 9.75p  £8.5m (MEAL.L)

The provider of ready meals focused on the 65+ demographic, announces its unaudited interim results for the six months ending 30 June 2022. Revenue was down 32% to £9.6m from H1 21 as high online shopping volumes during the pandemic were not sustained. Marketing expenses were reduced by 55% period on period for cost discipline. As a result, adjusted EBITDA loss decreased by 42% to £2.1m. The full year adjusted EBITDA loss forecast remains in line with market guidance as consumers feel the effects of the higher cost of living.  

Team17 Group 385p  £560.5m (TM17.L)

The developer of independent video games and publisher of edutainment apps for children, announces its unaudited results for the six months ended 30 June 2022. Revenues grew 33% to a record £53.2m but operating profit was down by 13% to £12m because opex was up by 120% to £13.6m year-on-year. The combination of Team17’s portfolio of new releases and continued contribution from the back catalogue is expected to underpin performance in H2 2022. The Board remains confident that the Group will continue to trade in line with its expectations.

Transense Technologies 59.5p  £9.5m (TRT.L)

The developer of specialist sensor systems announces its signing of a Memorandum of Understanding (MoU) with Meggitt SA, the manufacturer of complete condition monitoring, vibration monitoring and measurement solutions for the aerospace and energy markets. Transense will support Meggitt’s evaluation of potential market opportunities for SAW (surface acoustic wave) technology in the aerospace sector, with the shared intention for Transense to grant a licence covering relevant fields of use to Meggitt on or before 31 December 2023.

Tremor International 341.2p  £495m (TRMR.L)

The provider of Video, Data, and Connected TV advertising technology platform, announces the closing of its previously announced acquisition of Amobee, a global advertising platform. The acquisition is expected to generate accretive contribution ex-TAC (traffic acquisition cost) and adjusted EBITDA within the first 12 months. Tremor reiterates its expectation to achieve run-rate operating cost synergies of approx. $50m on a combined pro forma basis following completion of the integration, with meaningful synergies by the end of 2022 and the majority by the end of 2023.

Yü Group 197.5p  £32.8m (YU.L)

The challenger supplier of gas, electricity and water to the UK SME and corporate business sector, provides a trading update. Adjusted EBITDA, operational cashflow and net profitability has significantly exceeded management expectations, and the Board expects the strong performance to continue for the remainder of the financial year. As such the Board expects to deliver adjusted EBITDA in excess of £4.7m even after the payment of the annual ROC (Renewables Obligation Certificates) in August.

What’s cooking in the IPO kitchen?

Fintech Asia, an investment company established to acquire businesses in the Fintech sector, primarily targeting the Asia-Pacific region, intends to join the Standard Segment of the Main Market. The Company has raised £1.455m through the placing of 3,010,000 ordinary shares of no par value, with net proceeds of £841,845. Expected 15 September.

Ikigai Ventures, an investment company established to acquire businesses that have a strong positive social impact and/or ESG strategy as part of their core business in Asia, intends to join the Standard Segment of the Main Market. Expected 15 September.

Independent Living REIT plc, intends to float on the Premium Segment of the Main Market. The Company’s investment objective is to address the shortage of high-quality supported housing, delivering capital growth and inflation-linked income returns for its investors whilst providing a fair deal for society through savings for the UK taxpayer, and improved outcomes for residents. To be raised £150m. Expected 4 October 2022.

The Sustainable Farmland Trust PLC, intends to float on the Premium Segment of the Main Market. The Company invest in a diversified portfolio of farmland and related agriculture-focused assets predominantly located in the US. £200m to be raised. Due TBC.

Aurrigo Group plc, a international provider of transport technology solutions, intends to join AIM. The Group designs, engineers, manufactures and supplies OEM products and autonomous vehicles to the automotive, aviation and transport industries. Capital to be raised £8m. Anticipated Mkt Cap £20m. Expected 15 September.

Welkin China Private Equity, newly established closed-ended investment company dedicated to investing in unquoted Chinese companies, intends to join the Premium Segment of the Main Market. The Company is targeting a raise of up to US$300m.

Georgina Energy, focusing on the exploration, development and monetisation of helium, hydrogen and hydrocarbon interests located in Australia intends to join AIM. Georgina Energy has two principal onshore interests: (1) Mount Winter Prospect in the Amadeus Basin in Northern Australia, which the Company has a right to earn an initial 75% interest; (2) Hussar Prospect, 100% owned by the Company, located in the Officer Basin in Western Australia. Expected late September.

Altona Rare Earths, the AQSE-listed mining exploration company focused on rare earth elements projects in Africa, intends to join the Main Market. The trading of its ordinary shares on the AQSE Growth Market will be cancelled simultaneously and its EPIC will be changed from AQSE:ANR to REE. Conditionally raised £1.1m. Expected late September.

Mise en Place**

Markets in Europe saw some positive movement yesterday as gas prices dropped, However, US inflation figures came in higher than consensus forecasts, adding fuel to chatter that we may see a further 75bps rise in interest rates in the coming days. UK CFDs trading platform CMC Markets’ Chief Market Analyst Michael Hewson commented:

“In July we saw US CPI fall back from 9.1% to 8.5% prompting speculation that the Federal Reserve might have to start slowing down the pace of its rate rise cycle, with a view to starting to cut rates sometime in 2023. Since Powell’s Jackson Hole speech market expectations around the prospect of rate cuts in 2023 have shifted, helped by hawkish reinforcement from the likes of Neel Kashkari of the Minneapolis Fed, James Bullard of the St. Louis Fed and Esther George of the Kansas City Fed who appear to be leaning towards the prospect of a 75bps move next week.”

*A corporate client of Hybridan LLP

** Content not provided by 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).