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.

Dish of the day

No Joiners Today

Off the menu

No Leavers Today

Banquet Buffet

Good Energy Group 221p £36.8m (GOOD.L)

The 100% renewable electricity supplier and innovative energy services provider, announces it has made a further £1m strategic investment via a convertible loan note into Zap-Map’s parent company Next Green Car Ltd . Zap-Map is the UK’s leading Electric Vehicle mapping service and the investment will fund the next stage of growth and scale commercial opportunities.

As part of making charging simple for all EV drivers, Zap-Map have entered into a heads of terms agreement with Fleetcor UK, part of Fleetcor a worldwide leader in business payments, to integrate its Zap-Pay solution with the Allstar payment platform. This will cover commercial fleets of vehicles, aimed at delivering a solution to remove the payment complexities for businesses and commercial fleets.

FIH Group 197.5p £24.7m (FIH.L)

The international specialist services group with businesses in the Falkland Islands and UK, provides an update on the Group’s expected trading performance for the year ended 31 March 2021.

Trading in the second half remained challenging for the UK businesses, with a full national lockdown in four of the six months of trading. However, the Group’s Falkland Islands operations traded well, resulting, subject to audit, in an overall Group breakeven result, before exceptional items, for the full year. The emergence of the UK from lockdown restrictions will benefit the UK businesses, particularly Momart when the galleries and museums begin to reopen, and more generally the Portsmouth Harbour Ferry.

The Group’s cash position remains strong with cash balances at 31 March 2021 of over £14m. Bank borrowings at 31 March 2021 were £20.2m (£20.6m at 30 September 2020), including a £5m interest free CBILS loan, (taken out as a precaution and to be repaid, in full, in June 2021), and a £13.2m long-term mortgage on a freehold property at Leyton purchased in December 2018 for £19.6m.

SRT Marine Systems 33.45p £55m (SRT.L)

The global provider of maritime surveillance, monitoring and management systems, today announces a trading update for the year ended 31 March 2021.

The Company expects to report revenues of approximately £8.2m and loss before tax of £5.8m with gross cash as at 31 March 2021 of £5.3m. During the period, existing system contract customers made cash payments of £13m per agreed project payment schedules, with a further £5.7m due in the coming year. However, because of Covid lockdown related implementation delays, no invoice milestones were completed and thus no revenues recognised during the year. A fixed one-year CBILS support loan of £2.5m from the Company’s bankers was drawn down in April 2020. Following a review of detailed information on the pending new system contracts the renewal of this facility was agreed by the bank in March 2021 with repayments to be made on a quarterly basis commencing in July 2021 through to April 2023.

Next Fifteen Comm 759p £692m (NFC.L)

Acquisition of the entire issued share capital of data-led business Shopper Media Group Ltd and its subsidiaries, Capture Marketing Ltd, Lobster Agency Ltd and Threefold Agency Ltd.  Shopper Media Group specialises in commerce marketing activation, connecting retailers and brands with shoppers at the point of purchase both online and in-store. Clients include The Co-op Group, Deliveroo, The Very Group, Pladis and McCain Foods. 

The initial consideration for the acquisition is approximately £15.7m, of which approximately £11.8m is to be satisfied in cash with the balance to be satisfied by the issue of 569,181 new ordinary shares in Next 15. A Top-up payment is anticipated to be payable around February 2022 based on the EBITDA performance of SMG for the year ending 30 September 2021. Further deferred consideration is anticipated to be payable around June 2023 and June 2025 based on the EBITDA performance of SMG in the 2-year periods ending 31 January 2023 and 31 January 2025 respectively. The acquisition is expected to be earnings accretive for Next 15 in the current financial year. For the year ended 30 September 2020, SMG reported net revenues of £8.9m and adjusted profit before tax of £3.5m.

Ramsdens Holdings 165p £52m (RFX.L)

The diversified financial services provider and retailer, announces a pre-close trading update for the six months ended 31 March 2021 .

The Group delivered a resilient performance during the Period. The stronger restrictions imposed since it last updated the market in December 2020 significantly reduced high street footfall and the additional international travel restrictions further weakened demand for foreign currency exchange.

Against this backdrop, the Group maintained a prudent approach to controlling costs and protecting resources, whilst operating almost 90% of the Ramsdens store estate in a COVID-secure way to safeguard staff and customers. We have continued to invest in our online jewellery retail proposition, where revenue has more than doubled year on year.

As a result of these dynamics, the Board anticipates reporting a small loss for the Period but still traded cash positively.

The Group’s balance sheet and liquidity remains strong with cash of approximately £15m at the Period end and an undrawn revolving credit facility of £10m.

Arc Minerals 6.25p £67m (ARCM.L)

Further to the announcement made by Arc Minerals on 18 March 2020 to sell Arc’s entire 99.43% interest in Casa Mining Limited to Golden Square Equity Partners Limited for a consideration of up to $50m, Arc wishes to inform shareholders that it has been informed by Golden Square that Golden Square has been approached by a third party interested buyer. Any such transaction requires the consent of Arc Minerals. Arc Minerals is reviewing the proposed transaction, which potentially looks attractive, and will update the market in due course.

The Company also announces that the US$5m consideration due to Arc Minerals in the form of a loan note resulting from the sale of its interest in Casa, which had been due to mature on 19 March 2021, has been extended for a further 120 days to 16 July 2021.

Accrol Group 60p £187m (ACRL.L)

Acquisition of John Dale Limited, a highly scalable flushable and biodegradable wet wipes business, for a total cash consideration of £3.9m, funded from the Group’s existing cash reserves. · John Dale has a long-established and unrivalled reputation as a privately-owned manufacturer of high quality own branded and private label wet wipes and facial tissues for the UK retail market.

Accrol and John Dale share several customers, but John Dale also brings a number of significant new accounts into the Group. The product range includes flushable and biodegradable moist toilet wipes, anti-bacterial and anti-viral wipes, facial cleansing wipes, baby and toddler wipes and feminine hygiene wipes. The addition of incremental volume to the Accrol facial tissue business will serve to leverage the Group’s existing production facility in Blackburn.

The business currently operates a single daily shift, five days a week, from its owned premises in Flint, North Wales, which is currently generating annualised revenue of c.£6.0m and EBITDA (normalised) of c.£0.6m.

Equals 39.5p £70.6m (EQLS.L)

The technology-led international payments group focused on the SME marketplace, confirmed the appointment of Christopher Bones as an Independent Non-Executive Director with immediate effect.

 Chris has held senior executive positions at major companies including Diageo and Cadbury. Chris co-founded Good Growth Ltd, a successful e-commerce consulting business whose clients include Diageo, Kraft Heinz, WH Smith, Pets at Home, ITV, Boohoo, Channel 4, and others. Good Growth has grown into a successful SME powering rapid digitally-fueled growth in both B2C and B2B businesses across Europe and North America and he will be bringing this experience to the Board in support of Equals’ growth.

Open Orphan 41.5p £278m (ORPH.L)

Official launch of the  Disease in Motion® platform. This unique data-focused platform includes clinical, immunological, virological and digital (wearable) biomarkers. The Disease in Motion platform has multiple infectious disease applications that are applicable to a wide variety of end users including big tech, wearables, pharma and biotech companies.

 hVIVO has been at the forefront of running human challenge studies for more than 20 years and has built up one of the most comprehensive, multi-parametric bio and databanks ever created for infectious diseases. This dataset from the Disease in Motion platform is continuously gathered throughout the onset, progression and resolution of an infection which is enabled by hVIVO’s challenge study model. The Company is committed to volunteer patient data privacy and data is only collected from fully consented volunteers in accordance with all relevant privacy guidelines.   For more information on the platform visit www.hvivo.com/DiseaseInMotion .

Versarien 43.2p £82.1m (VRS.L)

The advanced materials engineering group, has entered into a wide-ranging series of agreements with Graphene Lab Co Ltd a South Korean based company specialising in chemical vapor deposition  graphene, including sensors, OLEDs, and flexible transparent touch panels, with the intention of advancing both Versarien’s and Graphene Lab’s proposed activities in South Korea.  This follows the Company’s acquisition of certain graphene production related assets and intellectual property from South Korea based Hanwha Aerospace Co. Ltd , as announced on 22 December 2020.

 In addition, Graphene Lab has made a strategic investment of £1.93m in the Company through a subscription for 4,280,000 new Ordinary Shares  at an issue of price of 45 pence per Ordinary Share.  The Subscription Shares, which represent 2.2% of the enlarged share capital of the Company, will be subject to a 12-month lock-in.

What’s cooking in the IPO kitchen?

Wickes to demerge from Travis Perkins and list on the Main Market. Expected 28 April.

Advance Energy to complete an RTO on AIM indirectly acquiring up to 50% of Carnarvon Petroleum Timor  which holds a 100 per cent. working interest and is the contractor under the Buffalo PSC, offshore Timor-Leste. Carnarvon Petroleum Timor is a subsidiary of ASX listed company, Carnarvon Petroleum Limited. The net proceeds of the Placing of approximately £20.01m (approximately US$27.51mm) will be used to fund the Acquisition.  Due 19 April.

NFT Investments plc is an investment company that specialises in non-fungible tokens (NFT). Has applied for admission to the Access segment of the AQSE Growth Market. No funds being raised. Due 16 April.

Thor Explorations (TSXV:THX) seeking a secondary listing on AIM. The Company is targeting Admission during Q2 2021.   Segun Lawson, President & CEO, stated: “Thor Explorations has advanced significantly, in both project development and capitalisation since the acquisition of Segilola in 2016. This year, the Company is well positioned to achieve two major milestones with the commencement of gold production at Segilola in Nigeria and a maiden resource at Douta in Senegal, as well as continuing to progress our highly prospective Nigerian exploration portfolio on the Ilesha Schist belt.”

MAST Energy Developments (MED) is to IPO on the Standard List on 14th April 2021 under the ticker MAST.  The company has raised £5m giving a market capitalisation on listing of c. £23m.  MED is currently a 100% subsidiary company of AIM quoted, Kibo Energy*.   MED was established to acquire and develop a portfolio of flexible power plants in the UK and become a multi-asset operator in the rapidly growing Reserve Power market.

PensionBee has confirmed its intention to float on the High Growth Segment  of the Main Market of LSE.  The online pension provider had approximately 130,000 Active Customers and £1.5bn of assets under administration, in each case as at 28 February 2021.  The Offer will comprise new Shares raising gross proceeds of approximately £55m and existing Shares to be sold by certain existing small minority  shareholders of up to £5m. None of the founders, directors or members of senior management of PensionBee are selling any existing Shares. Expected in April.  

Imperial X (AQSE:IMPP) to join the Main Market (standard). It is also proposed that on Admission to the Official List, the Company will change its name to Cloudbreak Discovery Plc.  With effect from Admission, Imperial X will hold equity positions and royalties in a variety of projects in the natural resources sector across multiple jurisdictions, primarily in the Americas and Africa. The Company is proposing to raise up to £1.5m by way of placing of new Ordinary Shares to support further prospect acquisitions. Current Mkt cap £4.7m Expected April 2021.

Proposed move to AIM from the main market (standard)  by Emmerson (EML.L)  to provide Emmerson with access to a market and environment which is more suited, in the Board’s view, to the Company’s current size and strategy ahead of pivotal period for the Company with the commencement of mine construction at the Khemisset Potash Project expected by end of 2021. Follows recent award of Mining Licence granting Emmerson exclusive right to develop and mine the potash deposit and £5.5m raise to fund ongoing project development work.  

NextEnergy Renewables  to launch an IPO on the Main Market. NREN is a differentiated renewables investment Company that aims to capture the most attractive private renewables and energy transition infrastructure investment opportunities globally.  Targeting a £300m raise.   NREN is targeting total returns of 9-11 per cent. per annum (net of all fees and expenses but including the Target Dividend and capital appreciation) . The Company’s target dividend yield for the first full financial year to 31 December 2022 is 5.5 pence. Due Early March 2021.

Digital 9 Infrastructure launch an initial public offering  on the Specialist Fund Segment of the Main Market of the London Stock Exchange, by way of an initial placing and offer for subscription for a target issue £400m. Digital 9 Infrastructure plc is a newly established, externally managed investment trust. The Company will invest in a range of digital infrastructure assets which deliver a reliable, functioning internet. The IPO Prospectus is expected to be  published in March 2021.

Fix Price announces its intention to float on the Main Market of the London Stock Exchange.  Fix Price is one of the leading variety value retailers globally and the largest in Russia, with more than 4,200 stores. Fix Price has revenues of RUB 190.1bn, RUB 142.9bn and RUB 108.7bn for 2020, 2019 and 2018, respectively. Adjusted EBITDA for the same years was RUB 36.8bn, RUB 27.2bn and RUB 14.2bn, respectively. The Offer would consist of an offering of GDRs by certain existing shareholders of the Company.

Great Point Entertainment Income Trust PLC announced its prospectus has been approved by the FCA.  Great Point Entertainment Income Trust PLC is a newly established, externally managed closed-ended investment company. The Company will provide project finance to content makers and commissioners in the global television and film production industry via senior loans secured against pre-sold intellectual property (IP) rights. GPEIT’s investment objective is to provide Shareholders with dividend income and modest capital growth through exposure to media content finance.

*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).