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.

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Bilby 37.2p £22.34m (BILB.L)

The gas heating, electrical and building services provider, provided a year-end update for the twelve months ending 31 March 2021. Bilby continued delivering essential, regulation-driven maintenance and building services for its clients, despite the year being enveloped by the uncertainties stemming from Covid-19 and UK Government restrictions. Whilst the Company was impacted by often significant no access rates and delays, Bilby expects to report a solid performance for the financial year. Bilby had a strong performance in the second half and, as a result, expects revenues of approximately £60m for the full year ending March 2021. However, margins were affected by higher operational costs arising from the increased no access rates and mix of works. Adjusted EBITDA for the second half of the year is expected to be comparable to the first half, delivering approximately £3m for the full year ending March 2021. “Encouragingly, as we enter the new financial year, there is evidence that the improving Covid-19 situation is enabling our clients to plan more confidently for a return to “normality” and we look forward to this being reflected in our results moving forward.”

Clontarf Energy 0.355p £2.55m (CLON.L)

£500k placing at 0.325p with new and existing holders. The net proceeds of the Placing will fund any costs associated with the ongoing negotiations regarding the Company’s Bolivian lithium and Ghanaian assets and will also provide the Company with additional working capital, as the Company’s board continues to assess new projects. Bolivian salt pans contain at least 50% of the world’s brine lithium yet it has not been developed. The EU now estimates that global demand by 2050 will be 60 times the current lithium supply. The Board believes there is no economic way to supply this without major Bolivian supplies.

Gateley 200p £236.6m (GTLY.L)

The legal and professional services group, provided an update in respect of the Group’s trading for the year ended 30 April 2021. Following a very strong end to the financial year, revenue in FY21 is expected to be materially ahead of consensus market expectations. As a result of the Group’s continuing prudent approach to costs and cash management, profitability is therefore expected to be significantly ahead of consensus market expectations with a cash position at 30 April 2021.

GetBusy 98.5p £48.8m (GETB.L)

The developer of document management and productivity software products updated on trading ahead of today’s Annual General Meeting. The new year has started well, with recurring revenue in the 4 months ended 30 April 2021 up 12% compared to the same period last year and total revenue up 10%, both on a constant currency basis. The Group’s balance sheet remains strong, with net cash of £2.1m at 30 April 2021, and the £2m loan facility remains entirely undrawn. SmartVault has led the recurring revenue growth, with a 44% increase in the value of new business over the Period. Encouragingly, the average selling price of new business has been over 40% higher per customer than the same period in 2020, reflecting early success in the Board’s strategy to broaden SmartVault’s appeal to larger clients. Virtual Cabinet celebrated a significant new customer win in the insolvency and restructuring space, underlining the increasing strength of its credentials in that very buoyant sector. Annualised recurring revenue for the GetBusy product has grown in excess of 50% over the Period from the relatively low base at 31 December 2020.  The GetBusy product has now launched within NetSuite’s SuiteApps store. Current efforts are directed towards building our relationships with NetSuite’s own sales teams and its substantial partner network to build brand awareness and articulate the value the product provides.

Joules Group 240p £267m (JOUL.L)

The premium British lifestyle brand has extended its current funding arrangements with Barclays Bank Plc, that include a £25m revolving credit facility and £9m term loan, to September 2024, and has converted the facility to an ESG-linked financing arrangement. The new financing agreement links the margin on the facility with Joules’ performance against three Sustainability Performance Targets (SPTs) that are aligned with Joules’ ESG focus areas. Under the terms of the agreement, Joules will benefit from a lower interest rate loan margin if the Group delivers on the following targets: reducing its carbon emission intensity; delivering 100% more sustainable materials in the manufacturing of its products; and increasing its employee engagement score. The details of the targets and progress against them will be reported alongside the publication of the Group’s annual results and its Responsibly Joules update each year.

Kibo Energy* 0.36p £8.5m (KIBO.L)

The multi-asset, Africa & UK focused energy company notes an RNS by MAST Energy Developments PLC (MAST.L) issued today. We highlight some key points. The UK-based multi-asset operator in the rapidly growing Reserve Power market provided its first operational update, following its successful listing on 14 April 2021. Bordesley now has numerous optimisation options to develop as a Reserve Power generation hub by virtue of shared infra-structure with Target 2, power generation off-take by proxy sales and economy of scale due to two close-by Reserve Power sites totalling 14.12 Mw of generating capacity, which culminates in EPC and Balance of Plant economy of scale project costs and timelines.  Updated EPC proposals are expected in early May 2021, which will enable MAST to assess final project capital costs and to report on the final timeline to commence construction and ultimately commissioning and steady state production during this year.  Target 2 (9Mw) Sale and Purchase Agreement expected to finalise in the next 10 days. Expects GBP £42,500 per month in revenue from this site as soon as the full site achieves steady state production. Other targets are proceeding to plan. MED is currently engaging with a number of Reserve Power site developers and has access to sites of varying capacity totalling circa 166 Mw.  Louis Coetzee, Non-Executive Chairman said:  “We are delighted with the progress we have made since announcing the successful IPO of MED and the fact that we are on schedule to deliver in accordance with the various targets set out in the Company Prospectus. We are, in particular, pleased with the fact that we remain confident that all the projects identified in the company’s working capital budget, as stated in the Company Prospectus, can be delivered within the said budget.”

Quixant 153p £101.67m (QXT.L)

AGM Statement from the provider of innovative, highly engineered technology products principally for the global gaming and broadcast industries. “We have continued to see healthy demand for our products across the business consistent with that communicated in the announcement of our financial results for FY2020 on 14 April 2021. Order intake remains strong, providing us with further improved order coverage for our internal full year budget. The global shortage of semiconductors is impacting many industries, including our own, and remains a risk we are continuing to manage.”

Rockfire Resources 0.775p £6.46m (ROCK.L)

Placing of new ordinary shares in the Company, raising gross proceeds of £850k. These funds will be used to commence Inaugural drilling at the Company’s Copper Dome and Copperhead projects, as well as to fund on-going drilling at the Company’s Plateau Gold Deposit, part of the Lighthouse tenement in North Queensland, Australia. All projects are 100 per cent. owned by Rockfire.

Shearwater Group 168p £40m (SWG.L)

The organisational resilience group which provides cybersecurity, advisory and managed security services, announces that its group company, Brookcourt Solutions Limited, has extended its framework arrangement with a leading British multinational investment bank and financial services company, headquartered in London, England for a further five years. The framework extension provides for the continued supply of leading-edge cyber security, networking services and solutions to the client, to whom Brookcourt has been a key partner for more than 15 years. Brookcourt has assisted the bank in attaining its position as an industry leader in security through the introduction, integration and maintenance of complex security and infrastructure solutions. This extension reinforces the long-standing partnership between Brookcourt and the client, demonstrating confidence in the Group’s ability to provide optimal solutions both domestically and internationally. 

Somero Enterprises 470p £264m (SOM.L)

The manufacturer of technologically advanced concrete placing equipment and associated machinery updated on trading for the current financial year ending 31 December 2021.  As a result of stronger than anticipated trading momentum in the US in the first four months of the year alongside signs of improving activity levels in Europe and Australia, it now expects to exceed previous guidance for FY 2021 established in the 10 March 2021 final FY 2020 results statement. The Company’s previous guidance for FY 2021 indicated revenues were expected to grow in the single mid-digit percentage range from the US$ 88.6m reported for FY 2020, adjusted EBITDA would grow modestly from the US$ 26.1m reported for FY 2020 and ending net cash would approximate US$ 27.4m.  The Board now expects FY 2021 annual revenues will approximate US$ 100.0m, adjusted EBITDA will approximate US$ 31.0m, and a consequential improvement in the anticipated year end net cash position.

What’s cooking in the IPO kitchen?

Dianomi, the provider of native digital advertising services to premium clients in the Financial Services and Business sectors, announces its intention to seek admission of its shares to trading on AIM. Admission is expected to take place during May 2021. Offer details TBA. In FY 2020, revenue was £28.43m, representing growth of 58.8 per cent. compared to FY19. The majority of the Group’s revenue is generated in the Americas (FY20: 76.6 per cent.), followed by EMEA (FY20: 17.0 per cent.), and APAC (FY20: 6.4 per cent.) Earnings before interest and taxation was £2.02m in FY20 having grown from £0.25m in FY19. 

National World (NWOR.L) to admit its Ordinary Shares to listing on the standard segment of the Official List of the FCA and to trading on the Main Market of the London Stock Exchange following a suspension in December 2019 as a result of media speculation that the Company was considering acquiring JPIMedia Publishing Limited. The Acquisition of the JPI Group and the funds to implement the Company’s plans for its development were financed by the Company’s cash resources of £4.2m, the issue of £20m convertible secured loan notes and the issue of £1m of unsecured loan notes. The implied market capitalisation of the Company at the Conversion Price is £28.5m. The objective of the Company is to create a modern platform for news publishing through the implementation of a new operating model across multiple brands and platforms by acquiring a number of media and digital technology assets, and leveraging its portfolio to launch new media brands across the UK. Due 7 May. 

Boanerges Limited, announces an application of admission onto the Aquis Stock Exchange. The Directors believe that an opportunity exists to acquire and consolidate holdings in SMEs operating in the technology sector, with the intention of creating value for Shareholders. Initially, the Company’s focus will be searching for companies which are based in the UK or Europe where there may be a number of opportunities to acquire interests in undervalued or pre-commercialisation technologies, or current commercialisation technologies, which when applied, produce cost saving or revenue enhancement for customers. Technology company acquisitions may include those involved in Big Data, Machine Learning, Telematics and Internet of Things sectors. Early acquisition of these innovative technologies should provide maximum returns for Shareholders. Expected 17th May.

Voyager Life, the health and wellness company established to supply high-quality Cannabidiol (CBD) and hemp seed oil products, announces the Company’s intention to seek admission to trading on the Aquis Stock Exchange Growth Market (Access Segment). Admission on AQSE is expected to occur before the end of June 2021. Voyager was incorporated in November 2020 as a health and wellness business focused on CBD and hemp seed oil products. The Company’s directors believe that a significant opportunity exists in the CBD market due to the forecast growth and ongoing regulatory changes.

Glantus Holdings, a provider of accounts payable automation and analytics solutions, is considering a listing on the AIM market of the LSE. It is focusing on three product areas; Active AP Discovery, Intelligent AP Automation and Advanced AP Analytics, it utilises its internally developed data platform to offer an integrated solution for the finance function, accounts payable in particular. These solutions are offered to over 300 customers, more than 50 of which Glantus classifies as large enterprises. The Group headquarters is in Dublin, Ireland. The main office for EMEA operations is in Harpenden, England. The main office for US operations is in San Jose, California. The core product development team is based in Katowice, Poland with additional team members in a satellite office in Vilnius, Lithuania, and management support from the Dublin headquarters. Valuation, amount to raise, and timing TBC

Alphawave IP Group is considering an IPO on the standard listing segment of the London Stock Exchange. Alphawave IP is a leading semiconductor IP company focusing on the hardest-to-solve connectivity challenges created by the exponential growth of data. Funds and accounts managed by BlackRock, and Janus Henderson, have each entered into cornerstone agreements with the Company to subscribe for, subject to certain conditions, in aggregate, c. USD 510m of Offer Shares at an offer price representing an equity value of up to USD 4.5b for the Group at Admission. During the year ended 31 December 2020, the group generated revenue of USD 32.8m, exhibiting robust growth and delivering a CAGR of 161 per cent. since the year ended 31 May 2018.

Catena Group (CTNA.L) to complete reverse takeover and be renamed Insig AI and is acquiring the remaining shares of  Insight Capital Partners. Insight, which is based in the UK, is a data science and machine learning solutions company that provides bespoke web-based applications, advanced analytical tools and modern technology infrastructure to make machine learning accessible to investment professionals. Insight has developed five products specifically aimed at accelerating an asset manager’s data science and machine learning strategy. Capital to be raised on Admission approximately £6.1m. Mkt cap c. £66.4m. Due 10 May.

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.”

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 tbc.

*A corporate client of Hybridan LLP

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