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

Alphawave IP Group (AWE.L)  has joined the Main Market (Standard) raising gross proceeds of approximately USD 500m at 41op and an offer of existing Shares to be sold by existing shareholders. Alphawave IP is a leading semiconductor IP company focusing on the hardest-to-solve connectivity challenges created by the exponential growth of data. During the year ended 31 December 2020, the group generated revenue of USD 32.8m, exhibiting robust growth and delivering a CAGR of 161% since the year ended 31 May 2018. Market cap £3.1bn.

Off the menu

No Leavers Today.

Banquet Buffet

Alumasc Group 229p £82.7m (ALU.L)

The premium building products, systems, and solutions Group, today provides a trading update for the 10 months ended 30 April 2021. Following a record first half year performance that saw double digit revenue growth and also a double digit return on sales, it is pleasing to report that this momentum has continued into Alumasc’s last four months. All of Alumasc’s divisions have contributed to this strong performance in the period. The businesses have been successful in winning market share and have been further supported by encouraging export sales. Additionally, the restructuring during FY 2020, which delivered £2.4m in annual cost savings, has supported improved margins. Levolux continues to benefit from its turnaround plan, with a return to consistent profitability and a substantially improved performance this financial year. Conditions in its markets, particularly in the new build housing and RMI sectors, have continued to be strong into the second half year, underpinned by the government’s continuation of its stamp duty holiday and first-time buyer support, and Alumasc would anticipate demand remaining strong through the remainder of the year to 30 June 2021.

Aquis Exchange 670p £182m (AQX.L)

The exchange services company, has made a series of management changes to better reflect its post-Brexit structure, as well as its future growth and expansion plans for both its London and Paris offices. David Stevens joined Aquis this month in the newly-created role of Chief Revenue Officer. David, who will be based in London, will oversee the sales and client servicing activities across all geographies and across a number of Aquis’ revenue streams; Aquis Exchange, Aquis Stock Exchange and data. Prior to joining Aquis, David was CEO of foreign exchange broker Global Reach Group. Previous roles also include senior positions at Investment Technology Group, JP Morgan and Goldman Sachs. Graham Dick, who currently holds the role of Head of Sales for the Company as well as CEO of Aquis Exchange Europe, is retiring. He will, however, remain as a consultant to the Company. Jonathan Clelland, the Company’s Chief Financial Officer and Chief Operating Officer will be moving to Paris in the summer and will take on the additional role of Chief Executive Officer of Aquis Exchange Europe, subject to regulatory approval from the French authorities. Jonathan is a fluent French speaker and previously worked in France. Jonathan will continue in his other roles. In the finance department, Richard Fisher joined Aquis as Director of Finance earlier in the year and is based in London. Prior to joining Aquis, Richard was Director of Finance at Redwood Bank and other previous roles include Chief Accountant at RBS Group. Richard’s appointment follows that of CTO Viet Lee’s arrival in 2020.

Diaceutics 125p £105m (DXRX.L)

Diaceutics announces a new partnership with LGC SeraCare, the US-based manufacturer of diagnostic test reference standard controls. The partnership sees LGC SeraCare join the Diaceutics DXRX Network, the world’s first end-to-end digital solution for the development and commercialisation of precision medicine diagnostics, expanding the range of test standardisation solutions available via the platform. DXRX has been designed to accelerate diagnostic testing accuracy to ensure that precision medicines are correctly prescribed to eligible patients at the right time in the treatment journey, securing the best possible outcomes. LGC SeraCare joins a growing network of industry leaders in precision medicine diagnostics who use the platform’s technology to collaborate digitally to enable seamless diagnostic testing for precision medicines, ahead of market launch. By providing these critical technologies to the DXRX platform, both LGC SeraCare and Diaceutics will be able to advance their goal of enabling greater adoption of precision medicine by enabling all laboratories to provide consistently high quality testing using reference material to validate their test system, faster.

DX Group 36p £206.5m (DX.L)

The provider of delivery solutions, including parcel freight, secure courier and logistics services updated on current trading for the 53 weeks ending 3 July 2021. DX’s trading performance since interim results were reported on 2 March 2021 has been stronger than expected. While trading at DX Express has been in line with management expectations, revenue growth at DX Freight is now expected to be around £10m higher than previously anticipated. This has been driven by significantly increased volumes, both from existing customers and through new customer wins. As a result, the Board anticipates that DX will significantly exceed existing market expectations for adjusted profit before tax in the current financial year, with an associated improvement in operating cash flows.  Given the Group’s strong financial position and continuing business momentum, the Board has decided to repay government furlough payments totalling £0.6m, received in support of the current financial year. With increased confidence in the Group’s growth prospects and the outlook, the Board also proposes to accelerate its plans to expand DX’s delivery network by targeting the opening of 12 new depots over the next two years.

Gaming Realms 36.9p £106m (GMR.L)

The developer and licensor of mobile focused gaming content has signed a four-year licensing deal with Scientific Games, a world leader in gaming entertainment offering games, systems and services for casino, lottery, social gaming, online gaming and sports betting. Thismarks an extension to the Company’s existing agreement with Scientific Games, in which Scientific Games has been provided exclusive rights to create and produce SLINGO-branded lottery instant scratch games, terminal generated and draw-based games. In addition, Scientific Games has the opportunity to offer SLINGO-branded digital lottery games. The renewed deal continues this existing agreement in the North American, European, UK, New Zealand and Australian markets.

Helium One Global 17.85p £108m (HE1.L)

Official award of an Environmental Impact Assessment (EIA) Certificate for its planned exploration drilling programme at Rukwa Project (100%) in Tanzania. The official award of the EIA certificate, which was signed on the 4th May, means that Helium One has all necessary permits in place to commence exploration drilling in early June. 

Immedia SUSPENDED (IME.L)

FY Dec 20 results. The Group undertook a full review in 2020 to refine Group strategy resulting in the adoption of a new unified brand – AVC Immedia – and a single clear message defining the Group’s services – Audio Visual Communication for Brands. Successful cost restructuring exercise, which will leave the Group well placed for the post-Covid era. 43% decrease in revenue to £2,310,872. Improved EBITDA trading loss of £504,510 (2019: loss of £699,583). Raised gross proceeds of £1.1m in September 2020 to address uncertainty around the 2020 outturn via a Placing and Subscription at £0.10 per share. Since the year end, the Group raised further gross proceeds of £3m via a Placing and Subscription at £0.25 per share. Loss before tax of £733,181 (2019: loss of £991,461). Cash balances increased to £464,232 (2019: £237,574).

Kazera Global 1.52p £10.7m (KZG.L)

Investment progress, Diamond Production, HMS Licences and Tantalum Sample. Despite an additional level of due diligence, proposed investment of EUR9.13m at approximately 2.7p per share, appears to remain on track. Other potential investors are also expressing interest. Diamond production is focusing on larger stones with a higher market value. Heavy Mineral Sands licenses now appear to be progressing. A sample of Tantalum is being assayed for a Chinese smelter preparatory to negotiating an offtake agreement.

Rural Broadband Solutions* 3.95p £12m (AQSE:RBBS)

Further rural broadband opportunities. Building Digital UK (BDUK), part of the Department for Culture, Media and Sport (DCMS), re-launched its rural gigabit-capable funding scheme under the new brand ‘Project Gigabit’ on 19th March. The company has identified a larger customer base opportunity which can be developed in parallel with, and in addition to, the original 5,000 properties it has targeted over 36 months. They have initially identified 20 new ‘gigabit town’ projects within the Shropshire area, consisting of over 2,000 business and 42,000 domestic properties. With continued steady growth, the company has increased its number of recurring Fixed Wireless Access (FWA) customers to 2,560. The company are now fully accredited with Openreach to enable re-use of its Ducts and Poles along with access to its telephone exchanges and dark fibre. It can now proceed to add an FTTP solution to its portfolio, not only within the newly identified towns, but also within the original villages.

Symphony Environmental Technologies* 17.25p £30.5m (SYM.L)

The global specialists in supplying and developing specialised plastic products and technologies that make plastic “smarter, safer and more sustainable” updated on its legal action against the Commission, Parliament, and Council of the European Union in relation to their decision to adopt Article 5 of the Single Use Plastics Directive 2019/904 . As set out in Symphony’s announcement on 21 December 2020, Symphony’s legal action is a compensation claim for damage to its business caused by the failure of the EU Institutions to make it clear that their intended ban of “oxo-degradable plastic” does not apply to “oxo-biodegradable plastic”. Symphony also considers that the ban is in any event illegal due to a failure to accord due process, and because it is disproportionate and discriminatory. Symphony has now received the defences from each of the Defendants which are being considered by the Company’s specialist legal team. This will take several weeks, and the Company will make a further announcement, if appropriate, when the detailed evaluation has been completed. Michael Laurier, CEO of Symphony stated: “The Group remains focused on delivering its objective to improve plastic by making it protective against viruses, bacteria, fungi, fire and insects, and reducing its negative impact on the environment by making it biodegradable.  The legal costs and demands on management time pertaining to the legal action are not expected to be significant during this year. The preparation and service of the proceedings was accounted for in 2020.”

What’s cooking in the IPO kitchen?

Pioneer Media Holdings Inc to join the Access Segment  AQSE Growth Market. The Company is an investment company focused on the eSports and mobile gaming industries, and all business sectors related thereto. No funds being raised. Due 25 May.

Pharma C Investments to list as a SPAC on the Access Segment of the AQSE Growth Market. It is specifically seeking to take advantage of the dynamic regulatory environment surrounding legal Medicinal Cannabis.  Due 26 May. No shares being issued on admission.

Aquila Energy Efficiency Trust to admit its shares on the Main Market (Premium). Seeking raise of up to £150m. The Company will seek to generate attractive returns for Shareholders, principally in the form of income distributions by investing in a diversified portfolio of Energy Efficiency Investments. Due 2 June

Taylor Maritime Investments to join the Main Market (Premium). The Company is an internally managed investment company with an Executive Team led by Edward Buttery. The Executive Team has to date worked closely together for the Commercial Manager, Taylor Maritime. Established in 2014 by Edward Buttery, Taylor Maritime is a privately owned ship-owning and management business with a seasoned team that includes the founders of dry bulk shipping company Pacific Basin Shipping (listed in Hong Kong 2343.HK) and gas shipping company BW Epic Kosan (formerly Epic Shipping) (listed in Oslo BWEK:NO). Taylor Maritime’s team of experienced industry professionals is based in Hong Kong and London. Taylor Maritime’s principals have been some of the most active buyers of Handysize and Supramax dry bulk ships having made over US$1.3b of asset purchases and sales since 1987. Seeking a $250m raise. Due 27 May 2021

Kitwave Group, the independent, delivered wholesale business to join AIM. The Placing of the Placing Shares will raise gross proceeds of £64.0m for the Company and the Placing of the Secondary Placing Shares will raise gross proceeds of £17.6m for the Selling Shareholders. Mkt cap £105m. The management team, led by Paul Young, has overseen significant growth in both revenue and operating profit with revenue and Adjusted EBITDA growing to £592.0m and £27.6m respectively in FP20 (an 18-month period). In the 12 months to 30 April 2020, the Group’s revenue and Adjusted EBITDA was £399.0m and £17.5m respectively. Due 24 May.

Belluscura to Join AIM.  The designer and manufacturer of FDA cleared, lightweight and portable oxygen concentrators to raise £15m, with an expected pre-money market capitalisation of £35-40m. Due late May.

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% compared to FY19. The majority of the Group’s revenue is generated in the Americas (FY20: 76.6 %) followed by EMEA (FY20: 17.0%.), and APAC (FY20: 6.4%.) Earnings before interest and taxation was £2.02m in FY20 having grown from £0.25m in FY19. 

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.

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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