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

Mast Energy Developments (MAST.L) commenced its first day of dealings this morning on the Standard List.  They raised £5.54m  at 12.5p with a market cap of circa £23m on Admission.  The company 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.  They have an initial portfolio of small-scale power generation assets, which it aims to develop at scale and pace, as opposed to a project-by-project basis, enabling it to advance rapidly towards significant revenue generation.  Mast expects to have circa 9 MW in production capacity imminently, circa 20 MW in production capacity within the first six months from listing, and another circa 20 MW in production capacity over the next six months.  AIM quoted Kibo Energy* (KIBO.L) holds a 55.42% interest in Mast.

Off the menu

Volga Gas has left AIM following a takeover.

Banquet Buffet

Kibo Energy* 0.415p £10m (KIBO.L)

The multi-asset, Africa focused, energy company announces that the ordinary shares of MAST Energy Developments Plc (“MED”), in which Kibo holds a 55.42% interest, today commences trading on the Official List for listed securities of the London Stock Exchange plc (‘LSE’) under the ticker MAST. Louis Coetzee, CEO of Kibo Energy, commented: “I am delighted with the strong support that MED has received from key institutions and retail investors, which has valued this business at £23 million on Admission.  As MED’s majority shareholder, with an interest of 55.42%, this crystallises the value of this component of our company and also provides us with significant upside to the UK flexible energy industry.  We believe that MED is entering a period of high impact news flow and we look forward to updating the market on this in due course”.

Rockfire Resources  0.925p  £7.7m (ROCK.L)

The helicopter-supported geophysical survey has returned a much larger target than originally thought at the Company’s 100%-owned Copper Dome porphyry copper project  in North Queensland, Australia. A recent geophysical magnetic survey has resulted in high resolution images, with the magnetic data offering a detailed insight into the geology and structure beneath the dome, which had previously not been possible at Copper Dome.· The revised target, based on the new aeromagnetic signature, has increased significantly in area from 1 km x 2 km to a much larger area of 4 km x 3.5 km.· At least three separate intrusions are evident. With one intrusion having been historically drilled and copper found, this adds significant potential for the discovery of copper and gold associated with the additional two intrusions.· Previous drilling had focussed on only one of the three intrusions. Shallow, historical drilling results include 15 m @ 0.9 % Cu, 12 m @ 0.6 % Cu and 24 m @ 0.3 % Cu. Only sporadic gold analysis was done, with a peak gold value of 1.86 g/t Au in drilling.

Verici Dx 69.5p £98.5m (VRCI.L)

The developer of advanced clinical diagnostics for organ transplant, announces it has entered into a Material Transfer Agreement  with the Icahn School of Medicine at Mount Sinai and Principal Investigator Dr. Peter Heeger, to allow access to samples from the CTOT-19 (Clinical Trials in Organ Transplant1) trial in an effort to validate the performance and development of commercial tests designed to improve short and long-term graft and patient survival. The Company has secured an agreement, providing access to de-identified samples generated from participants in the CTOT-19 study, titled: “Effects of Inhibiting at Early Inflammation in Kidney Transplant Patients.”2 This randomised controlled trial was initiated in November 2015 with the aim to enrol 300 kidney transplant recipients at 15 transplant centres in the US and Canada, with a primary completion date expected July 2021.

K3 Capital Group 346p £238m (K3C.L)

The multi-disciplinary professional services firm providing advisory services to SMEs provided a further update on the Group’s trading for the current financial year ending 31 May 2021. In the trading update dated 4 March 2021, it was stated that following a strong start to H2 the Group was trading ahead of expectations. This trend has continued, with all business divisions having continued to perform well, with a particularly strong performance by KBS. As a result, K3 now anticipates the result for the year ending 31 May 2021 to be significantly ahead of revised consensus market expectations, with revenue expected to be in the region of £45m and Adjusted EBITDA of no less than £13.25m.

Tlou Energy 3.5p £21m (TLOU.L)

Tenders have been awarded to Zismo Engineering (Pty) Ltd for the construction of the overhead lines and to OptiPower for construction of substations at Lesedi and Serowe.  The Company looks forward to finalising the contracts with both groups and subsequent commencement of construction. Tlou is focused on delivering cleaner electricity in Botswana and southern Africa using gas and solar power. The Company’s first proposed development is the Lesedi Power Project (“Lesedi”) which includes the construction of a power station and sale of electricity in Botswana. In addition, the Company has two large exploration areas designated Mamba and Boomslang.

AdEPT 265p £66.3m (ADT.L)

AdEPT, one of the UK’s leading independent providers of managed services for IT, connectivity, unified communications solutions, and cloud services, announced that yesterday it completed the acquisition of the entire issued share capital of Datrix Limited for an initial cash consideration of £9.0m which has been funded through the Group’s new bank facility. Datrix is a well-established, award-winning supplier of advanced cloud-based networking, communications, and cyber security solutions, headquartered in London, with expertise in the growing Software Defined Wide Area Networking (SD-WAN) market. Following the Acquisition, Group run-rate revenue and adjusted EBITDA for the year ended 31 March 2022 is expected to increase by c.18% and c.13% respectively.

Palace Capital 228.5p £105.3m (PCA.L)

The Main Market listed property investment company that has a diversified portfolio of UK commercial real estate in carefully selected locations outside of London, provided a trading update ahead of its annual results for the period ended 31 March 2021, which are expected to be announced in early June. Rent collection continues to be very strong, despite the backdrop, with 92% of rents received for the December quarter and 94% collected for the financial year to 31 March 2021. Notwithstanding the tight restrictions imposed due to the pandemic over the last 12 months, the Company’s flagship Hudson Quarter development in York is due to be completed on budget and handed over to Palace Capital before the end of this month. At least a further 15 properties with an aggregate value in excess of £30m have been identified for disposal during the course of this financial year.

Atalaya Mining 314.5p £435m (ATYM.L)

Operations update for the first quarter of 2021 Proyecto Riotinto Operating Highlights · Copper production in Q1 2021 was 13,979 tonnes, 5.7% higher than Q1 2020 although slightly lower than Q4 2020 due to lower copper grades and recoveries during the Period. · As a result of the robust copper price environment and strong mill performance, the Company continues to supplement mill feed with some stockpiled lower grade ore in order to maximise the long-term value of the orebody. · The plant processed a record 4.0m tonnes of ore during Q1 2021 despite seven days of planned maintenance stoppage during February, which were offset by a new monthly performance record in March when 1.5m tonnes were processed.

Iomart Group 300.25p £329m (IOM.L)

The cloud computing company has further strengthened its senior leadership team with the appointment of a new Chief Operating Officer. Neil Christie, who had been running the Infrastructure as a Service side of the iomart business, will now take responsibility for the Group’s day-to-day operations, reporting into CEO Reece Donovan. Neil has worked in the cloud computing industry for over 10 years. He is focussed on building a culture of quality, service delivery excellence and innovation by developing the systems, skills and processes required to support iomart and its customers. After training as a chartered accountant with PricewaterhouseCoopers, Neil jointly ran a web hosting company, which iomart acquired in 2011. He is a member of the technical and IT faculty committees for the Institute of Chartered Accountants in England and Wales.

MJ Hudson Group 47p £81.1m (MJH.L)

MJ Hudson, the integrated solutions provider to the asset management industry, announced that it has been selected by the asset servicing arm of the Mitsubishi UFJ Financial Group, one of the world’s largest banks, as its global partner for private markets ESG services and reporting. The partnership will provide MUFG Investor Services’ clients with an array of services catering to investor needs, starting at the pre-investment stage. These include services pertaining to policy creation and investment strategy integration, SFDR consultancy and due diligence, as well as ESGIQ, a proprietary digital platform for the monitoring of and reporting on ESG factors, and supporting marketing services.

What’s cooking in the IPO kitchen?

Semper Fortis Esports* recently announced its intention to IPO onto the Access Segment of the Aquis Stock Exchange Growth Market.  Semper is a multi-operational Esports organisation focusing on gaming technology solutions, brand enhancement and high growth team infrastructures.  The company plans to raise £2.5m to develop their three core areas of establishing an esports team, forming partnerships with brands for sponsorship and B2B consultancy services.  The Board are highly experienced in sports and corporate deal making (Keith Harris, former Chairman of The Football League), technology and electronic gaming (Nolan Bushnell, founder of the pioneering company, Atari), esports and game tech (Kevin Soltani and Jassem Osseiran) and as FD Max Deeley.  Target Admission Date of 26 April.

Darktrace plc. Announcement of Intention to Publish a Registration Document and Potential IPO on the main market of the London Stock Exchange.  Darktrace was founded in 2013 with a mission to fundamentally transform the ability of organisations to defend their most critical assets in the face of rising cyber threats. Darktrace is a world-leading provider of AI for the enterprise, with the first at-scale in-the-enterprise deployment of AI in cyber security  Timing TBA

musicMagpie   is a leader in re-commerce in the UK and US in the circular economy of consumer technology (including smartphones, tablets, consoles and personal computers), books and disc media (including CDs, DVDs and video games).  Expected 28 April. Offer details TBA

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$27.51m) 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 21.   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.”

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 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.

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. Due 27 April.

*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).