Hybridan Small Cap Feast

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Hybridan Small Cap Feast

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AB Dynamics 1,735p  £392.5m (ABDP.L)

The designer, manufacturer and supplier of advanced testing, simulation and measurement products and services to the global transport market, issued an AGM update. Current trading and outlook: Trading during the first four months of FY2022 remained consistent with its expectations as at the time of the full year results, on 24 November 2021. Whilst the current operating environment still presents challenges in relation to supply chain disruption, inflation and labour availability, underlying demand conditions in our key international markets and customer activity levels both remain positive. The Group continues to make good progress in the execution of its strategy and the Board’s expectations for the year are unchanged. ABD Solutions contract award: ABD Solutions has been awarded its first development contract, by an industrial equipment supplier in Japan, for a driverless retrofit solution for mining vehicles. The contract, while not financially significant at £1.1m for delivery over eighteen months, will provide the opportunity to validate the technology for this application. Financial position: The balance sheet remains strong with net cash at 31 December 2021 of £27.4m (31 December 2020: £32.9m, 31 August 2021 £22.3m), underpinning the Group’s investment plans. The Group will report its interim results for the six months ended 28 February 2022 on 27 April 2022.

Accrol Group Holdings 25.1p  £80m (ACRL.L)

The UK’s leading independent tissue converter, today provides a trading update for the current financial year ending 30 April 2022. In the period since the Company’s last trading update of 20 October 2021, the Group has experienced further inflationary pressure on input costs including pulp prices, supply chain costs and most significantly energy costs. The Group has implemented further cost efficiencies and has engaged with all its customers successfully securing substantial price increases, over and above those secured in mid-2021 and, as a result, the Board was confident of meeting its revised expectations for FY22. However, unavoidable surcharges to parent reel prices, relating to exceptional energy price increases, have very recently been levied on the Company, which will significantly impact margins. The Board is confident that this is a timing issue and that further cost increases, including these recent surcharges, will continue to be passed on successfully to Accrol’s customers, and remains confident in the medium-term prospects for the Group. In FY22, revenue is now expected to grow by 17% to c.£160m (FY21: £136.6m), generating adjusted EBITDA of c.£9.0m (FY21: £15.6m) with margin recovery anticipated in FY23. The Group continues to operate well within its existing banking covenants and has more than sufficient liquidity to meet its existing and future needs. In light of the above and the short-term but inherent volatility of earnings experienced in the current year, the Board has concluded that it is now appropriate for Accrol to conduct a full strategic review of its business. Such review will be designed to capitalise on the evident strength of the business’ market position, its balance sheet, and its solvency, underpinned by significant banking support, to ensure that the shareholder value is optimised.

Alien Metals 0.69p  £27.1m (UFO.L)

Update on findings and results on its Phase 3 drilling programme at the Company’s Hancock Iron Ore project, part of its Hamersley Iron Ore Project, Western Australia, further to its announcement of 11 November 2021. Extensions to existing Inferred Resources have been identified in the recently completed Reverse Circulation( RC) drilling programme.46 RC holes for 1,146m were completed prior to the end of 2021, targeting extensions to known deposits and infill drilling on existing Resource of 10.4Mt @ 60.4% Fe. As part of the ongoing development studies, the Company also collected a bulk sample of about 1,000 Kg of high-grade material for initial metallurgical test work. The previously designed diamond drill programme commenced on Monday, 10 January 2022.The 7 hole, 650m programme is designed to further increase the confidence in the JORC 2021 Inferred Mineral Resource Estimate, as well as to provide additional material for early metallurgical and commutation testing as part of ongoing mining studies. The Company has also delineated new drilling targets from laboratory XRF results of 60 rock chip samples collected during the recent field reconnaissance programme. On the Company’s Brockman tenement, management is pleased to announce the successful completion of the Heritage and Ethnological Surveys that will enable exploratory fieldwork to commence shortly.

Bradda Head Lithium 10.25p  £32.5m (BHL.L)

The North America-focused lithium development group, announced positive results from its preliminary metallurgical test-work programme that it has completed with SGS Canada, the well-known and respected international metallurgical test-work laboratory, on samples from its 100%-owned Burro Creek East lithium deposit. Burro Creek East already has a JORC compliant resource identified, and an updated resource is expected in Q1 2022. The results have shown that it is possible to upgrade the Li content in the proposed feed fraction by approximately 15%, by selecting only the -11micron size fraction. Impressive acid leach results indicate a 99% lithium extraction to solution within 1-hour utilising a 90 degrees Centigrade, sulphuric acid leach at atmospheric pressure approach. Significantly, only low levels of accessory minerals were extracted (levels of Al, Fe, K and Na) during the leaching step. The above results highlight an opportunity to lower potential process plant Opex and Capex costs and compares favourably with other previous results on extracting lithium from claystone mineralisation. The Company’s primary aim is to develop a suitable process flowsheet with a minimum carbon footprint, whereby the target processing cost of Li extraction is less than US$4,000/t LCE (Lithium Carbonate Equivalent), allowing it to be competitive in a more challenging Lithium Carbonate pricing environment. Current spot prices are over US$40,000/t. Bradda is continuing its metallurgical process test-work to potentially further upgrade Li contents in Li clay using mini-cyclone for classification, and froth flotation. Following on from above, more detailed metallurgical test-work will be undertaken to produce battery-grade Lithium Carbonate Equivalent (LCE). During the ongoing test-work programme Bradda is also considering the recovery of co-products from the feed material. The potential recovery of co-products may add substantially to the cash flow of the company and differentiates Bradda from other developers in this field.

Haydale Graphene 5.9p  £31.1m (HAYD.L)

The global advanced materials group, has been awarded a SMARTCymru grant from The Welsh Government that will enable the Ammanford-based company to progress with the development of its anti-counterfeiting ink technology, PATit. The Project has a total cost of £169k and is expected to take 6 months to complete. The SMARTCymru grant, which is part-funded by the European Regional Development Fund, will cover circa 50% of the anticipated project costs. PATit is an anti-counterfeiting technology that uses graphene-enhanced, high-performance conductive inks and proprietary software codes for brand and security protection that is non-copiable and does not require expensive printing processes or electronic chips (NFC / RFID). PATit has been developed to address a market need for smart disruptive technologies in the security tag sector. The anti-counterfeiting technology is planned to be manufactured in Wales. Funded by SMARTCymru, which supports growth of Welsh industry by increased investment in research, development, and innovation, PATit aims to provide a mass market anti-counterfeiting technology that addresses the current market need for secure low-cost anti-counterfeiting technologies. Central to the overall performance of PATit is Haydale’s patented plasma enhanced surface functionalisation process, which allows the surface chemistry of nanomaterials such as graphene to be altered to improve the physical and electrical properties.

IQGeo Group 131.5p  £75.6m (IQG.L)

The developer of geospatial productivity and collaboration software for telecoms and utility network operators, updated on the Group’s trading for the year ended 31 December 2021 ahead of the release of its final results in March 2022. The Group expects to report results marginally ahead of expectations, with growth across all key metrics. Revenue for the year is expected to show an increase of approximately 48% to not less than £13.7m (2019: £9.2m) with growth across both the IQGeo core business and the OSPInsight (OSPI) business acquired in December 2020. The Group has expanded its base of customers from 262 to 324 with recurring revenue net retention at approximately 113% (2020: 140%). The Group has a strategic focus on becoming a high recurring revenue business and expects to report that approximately 43% of the Group’s total revenues are now recurring (up from 35% for the year to 31 December 2020), with the Exit ARR of these contracts as at 31 December 2021 increasing by 55% to approximately £8.2m (2020: £5.3m). In year orders have grown by over 60% to £19.5m (2020: £11.9m) resulting in a record closing order book of approximately £14.5m (2020: £9.2m) to be taken as revenue in future years. Gross margins have, as previously reported, improved as the proportion of subscription revenues have increased and are expected to exceed 60% (2020: 52%). Consequently, the Group expects to report a significantly improved adjusted EBITDA loss of not more than £1.0m (2020: loss of £2.5m) without compromising a disciplined approach to investment for the future. The Group had net cash of £11.5m at the year-end (2020: £10.5m).

Kinovo 47p  £29.2m (KINO.L)

The specialist property services Group that delivers compliance and sustainability solutions, announces that it has entered into an agreement to sell the Company’s non-core construction division, DCB (Kent) Limited, for a total deferred consideration of up to £5m. The construction division has been acquired by MCG Global Limited on the following terms, consisting of four constituent elements: firstly, up to £1.9m will be payable on the successful completion of current projects, most of which are due in the calendar year 2022; secondly, up to £2.1m will be payable on trade settlements relating to these current contracts; and the third and fourth elements, upon which £0.5m will be payable for each element, relate to the achievement of a £3m profit before tax target, for each of the years ending March 2023 and March 2024 respectively. For the year ending March 2021, DCB  generated revenues of £20.82m and delivered an operating profit of £0.26m with profit before tax of £0.24m.

Panthera Resources 11.75p  £12.6m (PAT.L)

The diversified gold exploration and development company with assets in West Africa and India,  announced that assay results from the 2,430 metre air-core (AC) drilling programme completed in December 2021 have now been received and assessed. 2,430 metre AC drilling in 94 drill holes completed, aimed at defining RC drill targets. Five of the twenty targets identified have been drill tested along with partial testing of a further two. Anomalous gold intersected at all targets tested· Better intercepts include: 30m @ 231ppb Au from surface (to end of hole); 10m @ 209ppb Au from 10m; 20m @ 317ppb Au from surface; 17m @ 305ppb Au from surface (to end of hole); 20m @ 164ppb Au from surface (to end of hole); 29m @ 143ppb Au from surface (to end of hole) incl. 4m @ 462ppb Au (eoh); 24m @ 166ppb Au from 5m (to end of hole); 5m @ 343ppb Au from 5m.

Portmeirion Group 675p  £86.7m (PMP.L)

The designer, manufacturer and worldwide distributor of high quality homewares under the Portmeirion, Spode, Royal Worcester, Pimpernel, Wax Lyrical and  Nambé brands,  updates on full year trading for 2021. “We are pleased to report an excellent Christmas seasonal trading period, with very high demand for our consumer homeware brands around the world and strong sell-through across our key channels. We therefore now expect sales to be at least £104m or 10% above current consensus market expectation forecasts for FY21. This is 18% above 2020 sales of £87.9m and 12% ahead of pre-Covid sales of £92.8m in 2019. This represents the highest ever level of sales for the Group driven by strong progress on our strategy in developing new sales channels, particularly online. As a result we expect our profit before tax for FY21 will be at least £7m, an increase of 9% over current consensus market expectations and a multiple increase compared to £1.4m in 2020.”

Randall & Quilter Investment Holdings  177.5p  £488.5m (RQIH.L)

The non-life global specialty insurance company focusing on program management and legacy insurance businesses,  announced that R&Q Accredited has signed a 5-year program management agreement with First Underwriting, a fast-growing UK-based MGA. The agreement will see R&Q Accredited and First Underwriting partner on a 5-year deal with targeted capacity of c. £1bn in gross written premium over the period. The program will be supported by a panel of highly rated reinsurers. First Underwriting is a UK-based MGA that writes across a range of products including specialist motor, property, casualty and bonds. R&Q Accredited has supported First Underwriting since its launch in 2018.

What’s cooking in the IPO kitchen?

Genflow Biosciences, a UK-based biotechnology company focused on longevity and the development of therapies to counteract the effects of aging and diseases associated with advanced age intends to float on the Main Market (Standard). The Company will become the first longevity biotechnology firm to list in Europe. Genflow has raised £3.7m in an oversubscribed placing, conditional upon admission becoming effective. The flotation will value Genflow at approximately £23.4m.

SuperSeed Capital Limited, to join the AQSE Growth Market. The Company will invest in technology-led innovation primarily through unquoted funds managed by SuperSeed Ventures, the Company’s Investment Manager, with the objective of maximising the investors’ long term total returns – principally through capital appreciation. Mkt Cap and Capital to be raised TBC.

Carbon Air, a nano-technology company which leverages the adsorption properties of activated carbon and other advanced materials to improve suspension systems, enhance acoustics or reduce noise, to join AIM. The Company’s proprietary technology has allowed it to develop a unique portfolio of solutions for a variety of sizeable end markets, including vehicle suspension systems, acoustic insulation for domestic appliances and micro-speakers for smartphones. Mkt Cap and Capital to be raised TBC. Due Late Jan.

i(x) Net Zero, the investing company which focusses on Energy Transition and Sustainability in the Built Environment, announces its intention to join AIM and raise money to provide development and expansion capital to certain of its investee companies, for future investments in companies that fall primarily within its areas of interest in Energy Transition and Sustainability in the Built Environment and to provide working capital for the Group. Capital to be raised £20m. Expected admission late Jan.

Superdielectrics to join AIM, a Company which is focused on developing technology to build supercapacitors with high energy density, low cost, and environmentally benign electrical energy storage devices that will help create a clean and sustainable global energy and transportation system. Admission is expected to take place in mid Jan 2022.

Spiritus Mundi due to join the Main Market (Standard), a special purpose acquisition vehicle which will seek acquisition targets in Europe and Asia in the clinical diagnostics sector. The Company has already raised approximately £1.2m in a pre-IPO fundraising round. Due late Jan 2022.

Recycling Tech Group to join AIM, a UK-based engineering, research and manufacturing company that has developed a modular and mass producible machine, the RT7000, which processes hard to recycle plastic waste into a synthetic oil that can be sold back to the petrochemicals industry as a chemical feedstock to make new plastics. Targeting a £40m raise. Due early Q1 2022. 

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. Due 24th Jan 2022.

*A corporate client of Hybridan LLP

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