Hybridan Small Cap Feast

12 mins. to read
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

Conditional dealings begin in global review platform (Main Mkt, Premium), (Trustpilot TRST.L).   Trustpilot provides an open platform, which creates a place where businesses and consumers can gain actionable insights and collaborate. Consumers are able to share feedback, at any time, about any business with a website and review feedback left by other consumers.  Total revenues were US$64.3m, US$81.9m and US$102.0m for the years ended 31 December 2018, 2019 and 2020, respectively.  The Offer comprises approximately 161 million Shares being sold by the Company’s existing shareholders and approximately 17.6 million Shares being issued by the Company.  This equates to a total offer size of approximately £473 million. The Offer Price has been set at 265 pence per Share. The Company’s total market capitalisation at the commencement of conditional dealings on the main market of London Stock Exchange will be approximately £1.08 billion based on the Offer Price.

Off the menu

No Leavers Today.

Banquet Buffet

Pantheon Resources 37.85p  £232.8m (PANR.L)

The oil and gas exploration company with projects located adjacent to transportation and pipeline infrastructure on the prolific Alaska North Slope, announced that further to its announcement on 19 January 2021, Pantheon has now received formal approval from the Alaska Department of Natural Resources for the acquisition of 100% of the share capital of Borealis Alaska LLC. Borealis owns a 10.8% working interest in each of the 16 leases in the Talitha Unit and thus the completion of this transaction increases Pantheon’s working interest in the Talitha Unit from 89.2% to 100% (with Pantheon’s net revenue interest increasing from 77.05% to 86.0%). In consideration for the acquisition, Pantheon will issue to the Vendor, Otto Energy Alaska LLC (a 100% owned subsidiary of Otto Energy Ltd) 14,272,592 ordinary fully paid shares which are subject to a lock-up until 30 June 2021.

UK Oil & Gas 0.1225p £15.9m (UKOG.L)

Construction of the Basur-3 appraisal well’s drilling pad and access road has now commenced. Construction works, located within the Company’s 50% owned 305 km² Resan licence, are scheduled to last approximately 60 days. The Basur-3 location lies approximately 1.2 km north and geologically updip from the 1964 Basur-1 oil discovery well, which as detailed in the Company’s 14 October 2020 and 15 January 2021 releases, produced 500 barrels of oil from a short 6-hour swab test, equivalent to an extrapolated daily rate of 2,000 bbl of oil per day.

Basur-3, the first modern appraisal well designed to confirm the extent and commerciality of the discovered Basur-Resan Mardin oil pool, will test the north western structural culmination of the 45 km² Basur-Resan geological structure. As per the Company’s 15 January 2021 release, Basur-Resan’s Mardin oil pool is estimated to contain aggregate gross mean and high case discovered recoverable resources (see glossary below) of 37.2 million barrels (mmbbl) and 67 mmbbl respectively. UKOG’s corresponding 50% net share being 18.6 mmbbl (mean case) and 33.6 mmbbl (high case).

Biome Tech 375p  £13.9m (BIOM.L)

The bioplastics and radio frequency technology business, has secured the anticipated contractual commitment with a second US end-customer to accelerate the commercialisation of its proprietary compostable filtration material. This important customer’s business will support a significant portion of the Group’s expected revenue growth in 2021 and beyond.

In the Company’s circular to shareholders at the time of its fundraising last September, Biome identified this project as the most important growth driver for 2021 in support of its ambitious KPIs. In the subsequent trading update on 29 October 2020, it was further stated that the implementation was moving forward assuredly and initial orders were expected later in Q4 2020. These initial orders enabled the customer to test Biome’s material extensively in the production environment, such production being enabled by supplementary equipment provided by the Group’s Stanelco RF Technologies division. This testing has proven successful and commercial production for consumer use began in Q1 2021.

This end-customer has now ordered further equipment, with a value US$70k and to be made by RF Technologies, that will help to unlock the use of Biome’s compostable filtration material on a significant portion of the customer’s installed capacity. It is anticipated that this will lead to significant additional revenues for the Group Bioplastics division during 2021.

Oxford Biodynamics 112p £104m (OBD.L)

Oxford BioDynamics announces US launch of its EpiSwitch® COVID-19 Severity Test (CST).

EpiSwitch® CST is a highly accurate prognostic test that predicts personalized risk of severe illness due to SARS-CoV-2 virus.

· Precision medicine blood test with strong performance metrics: Accuracy: 92%, Sensitivity: 96%, Specificity: 86%, PPV: 92%, NPV: 93%.

· Important tool to manage the uncertainty of daily life during the pandemic by identifying high-risk individuals and for those that cannot be vaccinated,

· Easy-to-interpret EpiSwitch® CST Risk Score helps to assess risk, to develop personal healthcare plans and guide patient care

· Next test to launch will be a predictive immune response profile for immuno-oncology (IO) checkpoint inhibitor treatments in 2021

Everyman Media 157p £143m (EMAN.L)

Everyman has agreed an increase in its debt facilities from £30m to £40m, to improve the Group’s liquidity position for growth going forward. The facilities continue to be provided by Barclays Bank PLC and Santander UK PLC and the increase is subject to an Ordinary Resolution being passed at the AGM.

Everyman is the fourth largest cinema business in the UK by number of venues, and is a premium, high growth leisure brand. Everyman operates a growing estate of venues across the UK, with an emphasis on providing first class cinema and hospitality.

Drumz 0.75p £2.59m (DRUM.L)

Acuity Risk Management Limited (Acuity), in which Drumz has a 20% shareholding with an option to acquire a further 5%, has secured two contracts worth a total of £290,000.

The first is a new contract with an NHS Trust worth £184,000 over three years being a combination of software licences and consulting. The other is the renewal of a software contract with a US insurance company for an additional two years.

Simon Marvell, CEO of Acuity, said “We are proud to announce these contracts, both are important as they show the increasing number and value of the opportunities we are generating and the confidence of organisations in our STREAM product and related services.”

Angus Forrest said “These developments begin to demonstrate that the work put in to develop Acuity’s STREAM product is driving demand and the revisions to the commercial infrastructure are beginning to deliver higher value contracts”.

Proactis Holdings 43p £41m (PHD.L)

The business spend management solution provider has signed a 5-year contract with a transportation company in Germany to provide its business spend management solution. This contract win represents the third new customer in Germany to sign up under the Group’s new go-to market strategy. The customer has selected Proactis to digitise its procurement processes and offers further potential for new business through invoice automation and workforce management.

As announced previously, the Group adopted a new go-to market strategy for each of its US, France and Germany territories designed to replicate that of the UK and the Netherlands. This contract builds upon the contracts already signed across those territories.

Chariot Oil & Gas 9.93p £38.6m (CHAR.L)

The Africa focused transitional energy company, has signed share purchase agreements (SPAs) for the acquisition of the business of Africa Energy Management Platform (AEMP) for consideration of up to US$2 million payable primarily in Chariot Ordinary Shares, representing up to c.4% of Chariot’s enlarged share capital.

AEMP is a renewable and hybrid energy project developer, with an ongoing strategic partnership with Total Eren, a leading global player in renewable energy, predominantly in solar and wind. Total S.A., the French multinational energy company, has a shareholding of about 30% (directly and indirectly) in Total Eren. AEMP and Total Eren are looking to provide clean, sustainable, and more competitive energy to operational mines in Africa, which represents a giant, largely untapped market in which Chariot’s management has numerous high-level contacts. The Partners are in discussions with African mine operators with an aggregate requirement for 500MW of power for whom the Partners could provide viable energy solutions.

Quartix Holdings 510p £246m (QTX.L)

Quartix Holdings plc, one of Europe’s leading suppliers of subscription-based vehicle tracking systems, software and services, issued a trading statement ahead of its Annual General Meeting later today.

The Board reports that trading for the two-month period to 28 February 2021 was consistent with meeting market expectations for the year. The Board believes that consensus market expectations for 2021 prior to this announcement, were as follows: Revenue: £25.6m; Adjusted EBITDA £5.1m; Underlying Free Cash Flow (before expenditure on 3G swap out in the US – see 2020 Annual Report): £ 4.0m.

Wynnstay Group 470p £94m (WYN.L)

AGM statement from the agricultural supplies group. “Trading in the first four months of the new financial year ending 31 October 2021 has been in line with management expectations. Farmer sentiment has continued to improve, buoyed by higher farmgate prices and greater clarity over the future direction of UK farming, following the Trade Agreement with the European Union and the passage into law of the Agriculture Bill.”

What’s cooking in the IPO kitchen?

Cornerstone FS to join AIM, an SME focused, cloud-based provider of international payment, currency risk management and electronic account services focused on removing the complexity of international payments for customers. Raising £2.2m. Mkt Cap £12.3m. Due 18 Mar.

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 £1.5 million by way of placing of new Ordinary Shares to support further prospect acquisitions. Current Mkt cap £4.7m. Expected April 2021.

Parsley Box, the direct to consumer provider of ready meals to the 60+ demographic, recently announced its AIM IPO plans. Parsley Box provides ready meals, which are not required to be stored in a fridge or freezer, have a shelf life of up to six months and are cooked in minutes. The company reported revenue of £24.4m for the financial year ended 31 December 2020 (unaudited). Deal details TBC and admission is expected to occur late March/ early April 2021.

ActiveOps, a UK-based leader in Management Process Automation (MPA), providing a SaaS platform to large enterprises with complex and often global back-offices is planning to join AIM. Details TBA. Due late March.

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.

Deliveroo is considering applying for admission of the Company’s Shares to the standard listing segment of the Official List of the FCA and to trading on the main market of the London Stock Exchange. Deliveroo works with over 115,000 best loved restaurants, takeaways and grocery stores globally and provide work to over 100,000 riders across 800 locations in 12 markets, serving 6m customers globally.

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).

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