Hybridan Small Cap Feast

Joiners: TMT Acquisition (TMTA.L) has joined the Main Market (Standard) pursue opportunities to acquire businesses in the technology, media and telecom sector. Raised £5m, mkt cap £5.5m.

Leavers: NMCN Plc has left the Main Market (Premium) following the appointment of administrators.

Banquet Buffet

Argentex 97.6p  £110.5m (AGFX.L)

The provider of bespoke foreign exchange services to institutions, corporates and high net worth individuals, today issues a trading update for the first half of the financial year ending 30 September 2021. Argentex expects to report a 33% increase in revenues for the six-month period to £15.7m (H1 2021: £11.8m) and a 67% growth in FX turnover to £8.3bn (H1 2021: £5bn). Clients trading with Argentex increased by 27% to 1241 (H1 2021: 981) with the Group continuing to benefit from a highly diversified and quality client list. The Group’s financial performance has been supported by ongoing recovery in client trading volumes following the onset of Covid-19. The Group remains committed to its long-term growth strategy including investment in technology and overseas expansion, with the Amsterdam office performing in line with expectations and delivering half on half revenue growth. 

Ascent Resources 4.35p  £4.758m (AST.L)

The onshore Caribbean, Hispanic American and European focused energy and natural resources company updated on gas prices at its Petisovci gas project in Slovenia. The Company notes recent significant increases in global gas prices. Central Eastern Gas Hub spot prices are currently circa Eur 105.0 / MWh whilst Central Eastern Gas Hub pricing for Q1 2022 futures are currently Eur 104.725 / MWh. This is an 905% increase from the EUR 11.4 / MWh price as set out in the Company’s 10 September 2020 announcement. The Company now expects, at current gas prices and production levels, the PG-10 and PG-11A production wells to generate net production revenues (after extraction, processing and handling costs) of at least Euro 100k per month, net to Ascent. Furthermore, the Company announced that, following a recent Operating Management Committee meeting and partner engagement process in Slovenia, it is aligned with its JV partner on key workstreams including the long term concession extension, environmental impact assessment and permitting to re-stimulate the PG-10 and PG-11A wells.

Bidstack 1.65p  £15.32m (BIDS.L)

The native in-game advertising group announced the expansion of its relationship with the Swedish mobile game publisher Illusion Labs for two new free-to-play games. Having successfully teamed up with the studio to deliver unintrusive ads generating incremental revenue into Touchgrind BMX2, Bidstack will now add both Touchgrind Scooter and Touchgrind Skate 2 to its growing portfolio of titles. Antoine Jullemier, Head of Supply at Bidstack said: “I am so pleased we are strengthening our relationship with Sweden’s most innovative mobile publisher. We are really excited to be boosting our growing portfolio with the impressive global scale Illusion Labs bring given their popularity with gamers.  This partnership is a further endorsement of Bidstack’s value proposition for free-to-play games and demonstrates the benefit of creating an entirely new revenue stream where game publishers can tap into our relationships with premium brands.”

Diurnal 60.8p  £102.7m (DNL.L)

The specialty pharmaceutical company targeting patient needs in chronic endocrine (hormonal) diseases, announces that the results from the Company’s Phase 1 clinical trial for its development product DITEST™ (native oral testosterone formulation) as a treatment for male primary and secondary hypogonadism have been published in the peer-reviewed European Journal of Endocrinology. DITEST™ is the Company’s third product and is a native oral testosterone therapy in development for the treatment of male hypogonadism. The Company’s Phase 1 study (DITEST-001) evaluated the pharmacokinetics, safety and tolerability of a single dose of native oral testosterone in 24 adult men with primary or secondary hypogonadism demonstrating the achievement of testosterone levels within the healthy young male adult normal range after oral administration. The article in the European Journal of Endocrinology concludes that dosing independent of food and a lower risk of supraphysiological DHT levels may be advantages for patients with hypogonadism.

Feedback  0.8p  £8.5m (FDBK.L)

The specialist clinical communication company, announces it has signed a Memorandum of Understanding with Quest Teleradiology Solutions to develop strategic opportunities for Bleepa, its flagship clinical communications platform, in the large and growing Indian healthcare market, the UK and internationally. Bleepa offers the opportunity to expand Quest’s existing teleradiology service by enabling direct case discussion between requesting clinicians and reporting Radiologists alongside the traditional teleradiology reporting model. Quest is one of India’s emerging teleradiology organisations with customers across India, the UK and throughout Africa. 

Intercede Group 90.5p  £51.8m (IGP.L)

Trading update from the specialist in digital identity, credential management and secure mobility. Revenues for the six months ended 30 September 2021 totalling £4.9m are approximately 9% higher than last year on a constant currency basis and 2% higher on a reported basis (2020: £4.8m on a reported basis). This is in line with expectations and reflects orders received from both new and existing customers as previously advised in announcements on 5 July and 15 September 2021. Continued tight cost control has resulted in a positive operating cashflow during the period with cash balances as at 30 September 2021 totalling £8.5m compared to £8m as at 31 March 2021.

Oracle Power 0.38p  £8.5m (ORCP.L)

The international natural resources project developer has signed a non-exclusive co-operation agreement with PowerChina International Group Ltd with the objective of jointly developing a green hydrogen production facility in Pakistan. Naheed Memon, CEO of Oracle, commented: Green hydrogen is potentially the single most important tool the international community has in our collective bid to transition to a carbon neutral future. I am delighted to announce our agreement with PowerChina as we explore options of jointly developing a green hydrogen facility in Pakistan, which would represent the first production facility of its kind in the country and could support multiple industries including steel and fertiliser production, power generation, shipping and the aviation industry. Green hydrogen is already high on the agenda for many countries, including India and many of the Gulf nations, however this agreement would make Oracle a first mover in Pakistan, a jurisdiction which has abundant renewable resource and land available.  I am delighted that we have entered into an agreement with PowerChina, given PowerChina’s position and experience in the field of energy and power development and contracting. We jointly plan to set up a 400MW capacity hydrogen plant to produce approximately 150,000 kg of green hydrogen per day.”

Science Group 465p  £212.5m (SAG.L)

Following the business update on 6 September 2021, Science Group has continued to perform well. Despite component supply constraints, FX headwinds relative to prior year and increasing inflationary cost pressures, the Board anticipates further upside in the Group’s 2021 profitability forecasts. This third upgrade during the current year reflects the strength of the Group, the success of the Frontier acquisition and the balance of financial discipline with investment for the future. It should also be noted that the advisor costs associated with the recent corporate activity have been expensed as incurred and are therefore absorbed within this profit upgrade. Following the successful Placing in September, and after the strategic investment in TP Group plc, at 30 September 2021 Science Group had gross cash of £34.7m and net funds of £19.1m. Furthermore, the Board is currently discussing a potential new revolving credit facility of up to £25m with the Group’s bank, incremental to the existing fixed term loan which runs to 2026. The Board continues to explore opportunities to deploy its capital, in conjunction with the Group’s management resources, to enhance value to Science Group shareholders.

Seeing Machines 9.9p  £383.5m (SEE.L)

The advanced computer vision technology company that designs AI-powered operator monitoring systems to improve transport safety has signed a Global Framework Agreement with Shell Global Solutions International B.V. for the provision of its Driver Distraction and Fatigue Technology, Guardian, to enhance safety across its worldwide operations. Shell, a global group of energy and petrochemical companies with more than 80,000 employees in over 60 countries, is very focused on road safety and its employees and contractors drive a combined distance of around 500m kilometres every year. There is a clear focus on safety across the Shell group of companies and they are regular participants in research projects to better understand driver behaviour and fatigue. Shell is planning to deploy Guardian in areas where fatigue and distracted driving are considered to be a safety risk. 

Woodbois  4.55p  £84.5m (WBI.L)

Q3 2021 update: Increased Gabon forest interests by 75% through the acquisition of 71,000 hectares bringing total forest under sustainable management there to 166,000 hectares.  Consideration was US$1.5m, of which $0.9m was settled in cash and the remainder in four quarterly payments commencing this month. Highest 2021 quarterly production of both sawn timber and veneer as well of containers shipped. Q3 2021 revenues of $4.5m vs $3.2m for Q3 2020, an increase of 41%. Revenues of $12.7m for first 9 months of 2021 vs $11.8m for same period in 2020, up 8%.  2021 Group gross margin for first 9 months of 20% vs 8% for FY 2020. Finance charge of $0.5m for first 9 months of 2021 vs $2.7m in same period in 2020, a reduction of 81%. Working capital of $10.2m (including $2.8m cash) as at 30 September 2021, excluding bank loans of $8.8m.

What’s cooking in the IPO kitchen?

Harmony Energy Income Trust to join the Specialist Fund Segment of the Main Market raising up to £230m. The Company’s investment objective is to provide investors with an attractive and sustainable level of income returns, with the potential for capital growth, by investing in commercial scale energy storage  and renewable energy generation projects, with an initial focus on a diversified portfolio of battery energy storage systems located in Great Britain. The Company has contracted with Tesla Motors Limited in respect of its initial portfolio of battery storage projects, to be acquired on IPO, which will benefit from Tesla’s 2-hour duration Megapack systems and Autobidder AI revenue optimisation platform. Due Early Nov.

Stelrad Radiator Group,  the specialist manufacturer and distributor of steel panel radiators in the UK, Europe and Turkey, is considering an IPO on the Main Market (Premium). Potential secondary and primary (c.£25m) offer. Timing TBA.

Pantheon Infrastructure to join the Main Market (Premium). PINT will target attractive risk-adjusted total returns comprising capital growth and a progressive dividend through making equity and equity-related investments in private infrastructure assets alongside other leading private asset investment managers. Due Mid Nov.

Quantum Exponential to join AQSE. The Company intends to identify investment opportunities in the quantum technology sector primarily in the NATO allied countries. The Company has identified over 175 start-ups which potentially meet their investment strategy with a focus on seed funding for start-ups with second stage funding plans in preparation. Offer and timing TBA.

Pod Point, one of the United Kingdom’s leading providers of Electric Vehicle charging solutions is considering a Main Market (Premium) listing. As at 30 June 2021, Pod Point had installed more than 89,000 home charge points and over 13,000 commercial units, including those located at workplaces and destination locations (such as shops and leisure attractions).  Timing and offer TBA.

Tungsten West to Join AIM. Tungsten West is the 100% owner and operator of the historical Hemerdon tungsten and tin mine located near Plymouth in southern Devon, England. Hemerdon represents the world’s third largest tungsten mineral resource, with a JORC (2012) compliant Mineral Resource Estimate of approximately 325Mt at 0.12 WO3.  Expected 21 Oct. Offer TBA

Softline  the global solutions and services provider in digital transformation and cybersecurity, with its headquarters in London, is considering proceeding with a potential initial public offering of global depositary receipts representing its ordinary shares. The Company is considering applying for admission of the GDRs to the standard listing segment of the Official List of the FCA and to trading on the Main Market for listed securities and on Moscow Exchange.  The Group had a turnover of US$1.8 bln for the year ended 31 March 2021, employs c.6,000 people globally, and operates in more than 50 countries across emerging markets.  Primary proceeds from the Offer are expected to be around US$400m. Due Late Oct.

Marks Electrical, a fast growing online electrical retailer, announced its intention to proceed with an initial public offering and to seek admission to trading on AIM. Marks Electrical sells, delivers, installs and recycles a wide range of household electrical products.  In the year to 31 March 2021 revenue grew to £56m, up 78% against the previous financial year, while EBITDA increased to £7.45m, at a 13.3% EBITDA margin. The Group has made a strong start to its current financial year to 31 March 2022, with revenue growth of 78% in H1 FY2022, versus 47% growth in H1 FY2021.  Offer TBA Admission is expected to take place in late October 2021.

Future Metals NL (ASX:FME) (formerly named Red Emperor Resources NL) to join AIM. No funds being raised. Future Metals is a platinum group metals exploration and development company that holds a 100% interest in the Panton PGM Project in Western Australia (the “Panton Project”). The Panton Project comprises 3 granted mining leases (M80/103, M80/104 and M80/105), which cover an area of approximately 23km2 and are located 60km north of Halls Creek and 1km from the Great Northern Highway, in the East Kimberly region of Western Australia. The Panton Project has a JORC (2012) Mineral Resource Estimate of 14.3Mt at 2.19g/t platinum, 2.39g/t palladium, 0.31g/t gold, 0.27 per cent. nickel and 0.08 per cent. copper. Due mid October. Mkt cap c£35.8m.

Bens Creek Group to join AIM. Bens Creek, together with its subsidiaries, will, on Admission, own and operate a metallurgical coal mine located on 10,000 acres in the southern part of the state of West Virginia and eastern edge of the Commonwealth of Kentucky, in the central Appalachian Basin of the eastern United States of America. The Mine’s operations are located primarily in Mingo County, West Virginia. The Mine includes a wash plant and rail loading facility located on the freehold land. Capital to be raised on Admission: £7m. Anticipated Mkt Cap on admission: £35m. Due 19 Oct.

M7 Regional E-Warehouse REIT intends to apply for admission onto The Property Stock Exchange (Wholesale Segment). On admission, the company plans to acquire a portfolio of UK retail warehouses worth £120m from M7 Real Estate Investment Partners VIII. The portfolio currently comprises 18 retail warehouse properties across the UK totalling 978,317 sq ft and fully let to 53 occupiers. Rent collections for Q2 2021 stand at 93% and are expected to revert to 100% in the coming quarters.

Castlenau Group to join  the Specialist Fund Segment of the LSE’s Main Market. Castelnau was incorporated with limited liability in Guernsey under the Companies Law on 13 March 2020 as a closed-ended company limited by shares. The Company’s investment objective is to compound shareholders’ capital at a higher rate of return than the FTSE All Share Total Return Index over the long term. The Company is targeting an issue in excess of £170m. Sir Peter Wood, British entrepreneur and innovator, has committed to make a cornerstone investment of £25m  in the Initial Placing. Due 18 Oct.   

Light Science Tech Holdings, the holding company of the Group’s contract electronics manufacturing division, UK Circuits and Electronics Solutions Limited, and its controlled environment agriculture division, Light Science Technologies Ltd to join AIM. Due early Oct. Offer TBA.

Responsible Housing REIT to join the Main Market (Premium) raising up to £250m. The Company’s investment objective is to generate a consistent and sustainable income-based return from the provision of Supported Housing accommodation assets and aligned sectors. The Company will acquire and create quality, fit-for-purpose accommodation assets to cater for supported residents across a number of care sectors including adults and young people with learning disabilities, mental health issues, physical disabilities, addiction, those with support needs, those in need of temporary accommodation, the elderly and otherwise vulnerable individuals.

Arrow Exploration, currently on the TSX Venture exchange to dual list on AIM. Arrow has a portfolio of operated and non-operated interests in producing Colombian oil assets, together with a producing Western Canadian natural gas asset. The Company also has interests in development assets in Colombia. The Company has interests in six onshore blocks in Colombia, held through Arrow’s wholly-owned subsidiary in Colombia, Carrao Energy S.A., and in oil and gas leases in seven areas in Alberta, Canada, held through Arrow’s wholly-owned Canadian subsidiary Arrow Holdings Ltd. Offer TBA. The company last said Sept 13th that it expected to list end of September which has now passed.

Marley Group, a UK leader in the manufacture and supply of pitched roof systems to the construction market , today announces that it is considering an initial public offering on the Main Market (Premium). In HY Jun 2021 revenues grew from £52.1m to £76m with underlying EBITDA more than doubling to £21.8m Timing and offer TBA.

Fruugo.com  which owns and operates a high growth and profitable global cross-border marketplace employing its own proprietary technology and data science, announces its intention to seek admission of its shares to trading on AIM. Due early Oct. Timing and offer TBA.

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. It pushed back its AIM float on 30^th September from end September to late October. The amount to be raised is still yet to be confirmed.

Euro Sun Mining Inc (TSX:ESM) seeking to join the Main Market in Q3 2021. The Company’s main asset, the Rovina Valley Project, which contains the Rovina, Colnic and Ciresata deposits, is one of the largest undeveloped copper-gold projects in Europe, holding approximately 400Mt of confirmed resources containing 7.0m ounces of gold and 1.4 bn lbs of copper.

*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).