Hybridan Small Cap Feast

15 mins. to read
Hybridan Small Cap Feast

Joiners: No joiners today.

Leavers: No leavers today.

Banquet Buffet

Begbies Traynor 143.7p  £218.7m (BEG.L)

The latest red flag research for Q3 2021 from Begbies Traynor, which monitors the financial health of UK businesses has recorded 562,550 businesses in ‘significant financial distress’, with a 139% uplift in CCJs in the past year. However, the number of businesses in significant financial distress has fallen 14% since Q2 2021. This fall can most likely be attributed to rising corporate revenues as pent-up customer demand has fuelled a boom in consumption and allowed some companies to improve their short term debt position, whilst improving cashflow. Whilst this has eased the immediate threat to many companies’ survival, there is uncertainty if these trading patterns will continue. Unfortunately, considerable challenges lay ahead for UK businesses, including constrained raw material availability, rising inflation, labour availability, spiralling energy prices and rising COVID rates, combined with a winding back of government COVID support measures that could yet impact failure rates in Q1 2022 and beyond.

GYG 61.5p  £28.7m (GYG.L)

The market leading superyacht painting, maintenance and supply company, notes today’s announcement from Harwood Capital LLP that it is no longer considering making an offer for GYG. Following collaborative discussions throughout the due diligence process, the Board of GYG is in agreement with Harwood’s decision that now is not the appropriate time to progress a potential offer. As such, the Company is no longer in an offer period. The Board welcomes Harwood’s confirmation of its continued support as a significant shareholder in the Company.  

Helium Ventures 15.75p  £2.65m (AQSE:HEV)

The special purpose acquisition vehicle focused on investments in helium related assets has announced its first investment in the helium sector: Company: Blue Star Helium Limited (ASX: BNL). Helium Ventures investment: AUD 400k at AUD 5.6 cents per share. Blue Star is an independent helium exploration and production company, headquartered in Australia, with operations and exploration projects in North America. Helium Ventures’ investment was made as part of an AUD 15m fundraise completed on 28 October 2021. The funds have been raised following Blue Star’s receipt of approval to proceed with its helium well drilling programme in Las Animas County, Colorado. Well #1 is now permitted and scheduled.

Panthera Resources 11.5p  £10.45m (PAT.L)

Its subsidiary, Indo Gold Pty Limited has entered into various agreements to acquire Metal Mining India Private Limited, the Company’s joint venture partner in India, in respect of the Bhukia and Taregaon projects. Ownership interest in the Bhukia and Taregaon projects in India via IGL will increase to 100% (giving Panthera a 95% interest) if prospecting licences (PLs) are granted in the future. IGL will acquire all of MMI’s shares and has secured cooperation from the former shareholders in relation to a potential claim under the Australia-India Bilateral Investment Treaty (ABIT) together with their rights to bring a claim under the ABIT. Fasken, Panthera’s ABIT legal adviser, advises that a potential claim under the ABIT has legal merit. Ongoing discussions with several potential litigation funders to support a potential claim under the ABIT. Ongoing discussions with a potential new JV partner.

Prospex Energy 2.85p  £5m (PXEN.L)

The investment company focused on European gas and power projects, provides an update on the El Romeral well intervention project in southern Spain, in which the Company holds a 49.9% working interest, through its interest in Tarba Energia. Unfortunately the measurements in well Rio Corbones-1 demonstrated that the planned restoration of the gas production was not possible. The equipment was then transferred in turn to the three producing wells to complete the data acquisition programme acquiring downhole pressures, temperatures and flowrates for the calculation of remaining reserves and production optimisation. The gross budget for the well intervention work was EUR103k comprising EUR79k for the well intervention and EUR24k for data acquisition. The final expenditure for the overall programme is estimated to be less thanEUR80k owing to the reduced scope of work. The planned plant optimisation programme has been delayed by equipment supply chain issues.  The necessary equipment to automate plant operations to allow continuous operation of the generators is expected on site next week and the upgrades will then commence immediately. As stated in the announcement on 1 October 2021, the system optimisation project is expected to boost income from power generation by up to 65% by achieving 24-hour operations.

SkinBio Therapeutics 71p  £111.3m (SBTX.L)

The life science company focused on skin health, has today announced the commercial launch of AxisBiotix-Ps™, its probiotic food supplement to help alleviate the symptoms associated with psoriasis, on World Psoriasis Day; 29 October 2021. The launch follows the highly positive results from its  consumer study  which concluded in May 2021. “The launch of our first commercial product is a momentous occasion for SkinBioTherapeutics. The interest in AxisBiotix-Ps™, and overwhelmingly positive response from participants, has been hugely encouraging. We’re delighted to introduce our product to the market on the most important of days for the global psoriasis community, as planned. Since the exciting results from the consumer study, announced back in May this year, we have seen an growing interest in our product. We have been working hard ever since to establish a reliable supply chain to ensure a continuous supply to all our customers upon launch. I want to thank the team for their efforts to make the launch possible in Q4 of 2021, on schedule.”

SysGroup 30.5p  £14.9m (SYS.L)

The award-winning managed IT services and cloud hosting provider provided a trading update for the half year ended 30 September 2021, together with a notice of results. The Group expects to report revenue for H1 of £7.58m (H1 FY21: £9.01m), 15.8% lower than H1 FY21. As noted at the time of the Group’s FY21 final results, customers have continued to defer and curtail expenditure decisions as a result of the pandemic and our sales teams have continued to face restrictions in their ability to have in-person interactions with customers and prospects to develop the sales pipeline. Operationally, performance has been robust. SysGroup continues to benefit from lower overheads as a result of integration synergies delivered from past acquisitions and has diligently managed its operations whilst continuing to invest as required in the business. The Group expects adjusted EBITDA to be £1.34m for the first half which is in line with management’s expectations (H1 FY21: £1.41m). The Group ended the half year period with a very healthy net cash position of £1.96m (H1 FY21: net cash of £1.17m).

VR Education 17.5p  £290m (VRE.L)

The virtual reality technology company which recently confirmed its planned name change to ENGAGE XR Holdings plc,  announced that the group company and its proprietary software platform ENGAGE has been awarded ISO27001 certification. ISO27001 is an internationally recognised information management security standard. The certification will speed up the process of procurement that larger companies and organisations are required to go through before adopting ENGAGE.

Yellow Cake 352p  £540m (YCA.L)

The specialist  company operating in the uranium sector with a view to holding physical uranium for the long term, announced that, further to its successful equity fundraise on 27 October to purchase up to 3 million lb of U3O8, it has now elected to exercise its option to purchase 2 million lb of U3O8 from Curzon Uranium Limited at a price of US$46.32/lb. It is expected that delivery of the U3O8will take place by the end of November 2021. Once the U3O8 from Curzon has been delivered, the Company’s total holdings will increase to 17.86 million lb of U3O8 on a proforma basis. The Company also expects to conclude an agreement with JSC National Atomic Company Kazatomprom to purchase approximately 1 million lb of  U3O8 at a price of $47.58/lb for delivery by June 2022 and will update the market in due course.

Zephyr Energy 7.05p  £91m (ZPHR.L)

The Rocky Mountain oil and gas company focused on responsible resource development from carbon-neutral operations, provides an update related to the land position on its flagship project in the Paradox Basin, Utah, where the Company is currently production testing the State 16-2LN-CC well. Following its recent activity on the State 16-2LN-CC well, the United States Bureau of Land Management has approved the formation of a new 25,000-acre Federal Unit to be operated by Zephyr. The new unit, named the White Sands Federal Unit, incorporates all the Company’s existing leases covered by its historic 3D seismic survey, including the lease on which the State 16-2LN-CC well is situated. The WSU approval, effective 1 October 2021, is a key milestone in the Company’s ongoing development of the Paradox project. By consolidating over twenty separate leases into one overarching land agreement, Zephyr can focus on an optimal long-term development plan for the project as a whole, rather than maintaining its lease position in an ad-hoc fashion.

What’s cooking in the IPO kitchen?

Katoro Gold plc (AIM: KAT), the AIM listed gold and nickel exploration and development company,  announced that the Company and Target Mine Consulting (Pty) Ltd have agreed to seek admission for 100% of the Blyvoor Joint Venture project (BV)  by vending each of their separate interests into a new company to be listed on the Standard List of the London Stock Exchange. Katoro will look to recover its total cash expense to date of c.£1.5m in Project development, from the IPO. Timing TBA.

ATOME headquartered in Leeds, focussed on the large-scale production of green hydrogen and ammonia intends to join AIM towards the end of the year. ATOME intends to be spun-out from AIM-listed President Energy Plc, an oil and gas company which has incubated and financially supported ATOME to date, by way of a dividend in specie and flotation.

Devolver Digital to join AIM, an award-winning digital video games publisher and developer in the indie games space. Recently awarded indie ‘Publisher of the Year 2021’ by GamesIndustry.biz. Offer TBA. Due early Nov.

Life Science REIT to join AIM  raising up to £100m. This will be the first London listed real estate investment trust (REIT) focused on UK life science properties. Due mid  Nov.

Alinda Capital Infrastructure Investments to join the Specialist Fund Segment of the Main Market of the London Stock Exchange raising up to £350m. Due Late November.

Nu-Oil and Gas  to acquire Guardian Maritime Ltd and Guardian Barriers IP Ltd and become Guardian Global Security plc and join the Main Market (Standard). Guardian is a technology group that supplies products to prevent unauthorised entry into areas that are deemed to have value, with maritime security being the main focus initially. Q4 2021.

ProCook, the UK’s leading direct-to-consumer specialist kitchenware brand, is considering applying for admission of the Shares to the Main Market (Premium). ProCook’s revenue grew by 37% to £53.4m in FY21 (ending 4 April 2021), with Adjusted EBITDA growing by 246% to £13.3m in the same period. Timing TBA.

Silverwood Brands, an investing company established to identify investment opportunities including, but not limited to, in the foods, organic food, wellness, lifestyle and leisure sectors, targeting admission on  the to join the AQSE Growth (Access). Due 8th Nov. Offer TBA.

Kasei Holdings, a technology specialist investor that focuses on cryptocurrencies and blockchain technologies, due to join the AQSE Growth Market 27 Oct. No funds being raised. Due 3rd Nov.

Following the previously announced intention to demerge trading on the LSE’s Main Market on 2 November, Hostmore plc from Electra Private Equity PLC, it is expected that the Demerger will be completed and the Hostmore shares will be admitted to the Premium Segment. Hostmore is a growing hospitality business with its current operations focused on the American-themed casual dining brand, Fridays, and the cocktail-led bar and restaurant brand, 63rd+1st.

Rubix Group Holdings, the market leading pan-European distributor of industrial maintenance, repair and overhaul products and services  is considering an IPO on the Main Market (Premium).  In the six months ended 30 June 2021, Rubix generated revenue from ongoing operations of EUR1,312m and adjusted EBITDA of EUR123m (9.4% adjusted EBITDA margin from ongoing operations), an increase of 10.6% and 19.3% compared to the six months ended 30 June 2020, respectively. Raising EUR850m, potential sale of existing ordinary shares by current shareholders. Timing TBA.

Firering Strategic Minerals to join AIM, a holding company for a group of exploration and development companies set up to focus on developing assets towards the ethical production of critical metals. The Company’s portfolio of assets is located in Côte d’Ivoire and contains projects that the Directors believe to be prospective for lithium and columbite-tantalite. Due Early Nov. Offer TBA.

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 invest 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. 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). Secondary and primary (c.£25m) offer. Early Nov.

Pantheon Infrastructure to join the Main Market (Premium). PINT will make investments in private infrastructure assets. Due Mid Nov.

Quantum Exponential to join AQSE. The Company intends to identify investment opportunities in the quantum technology sector. 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. Due 1st Nov.

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. Timing and offer TBA.

Marks Electrical, a fast growing online electrical retailer, announced its intention to proceed with an initial IPO 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 early Nov 2021.

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.

Central Copper Resources, a company focused on delivering a high grade copper project into production and exploration of assets in the 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 30th September to late October. The amount to be raised is still yet to be confirmed.

*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).

Comments (0)

Leave a Reply

Your email address will not be published. Required fields are marked *