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

Pharma C Investments (AQSE:PCIL) has listed 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. Successful £1m fundraising at 0.7p per share.

Off the menu

Wey Education has left AIM following a recommended acquisition.

Banquet Buffet

Alba Mineral Resources 0.26p £16.5m (ALBA.L)

First set of assay results on bulk sample concentrates produced at the Company’s pilot processing plant at the Clogau-St David’s Gold Mine have been received by the Company from an accredited independent laboratory. Concentrates produced from Jack Williams Lode and floor material from Tyn-Y-Cornel area returned notable grades of 20.4 to 165.5 g/t. Concentrates produced from two other bulk sample locations returned lower-grade results, grade variability expected due to bulk sample locations (in previously worked-out areas) and inherent nature of Clogau vein system (irregular gold dissemination). The further bulk samples due to be taken this year will be from new, unworked veins, with prospects for higher-grade mineralisation. Pilot processing plant performing well in terms of ability to extract and concentrate coarse gold. Tailings values returned negligible gold grades indicating that plant operating with high efficiency. Underground and surface drilling progressing well.

Augean 248.5p £261m (AUG.L)

As an anticipated element of Augean’s ongoing dispute with HMRC, a landfill tax assessment, which has already been provided for, has been issued by HMRC to Augean. The assessment is for Augean South Limited for the final period from June 2018 to May 2019, for a total quantum of £1.5m (£1.6m including interest.) Practices within the Group were changed in May 2019, to prevent further potential assessments, despite the Group’s continuing view that HMRC’s assessments were incorrect. This Assessment had been provided within the Group’s final results for the year ended 31 December 2020. There will therefore be no impact on guidance going forward or on the Group’s profit as a result of the receipt of the Assessment. The Assessment will be paid forthwith in order to prevent further accrual of interest. The Group will appeal this Assessment at the forthcoming tax tribunal. The Group continues to believe, based on legal advice, that it has paid the correct amount of landfill tax and that HMRC’s assessments are incorrect. HMRC continues to consider whether penalties may be appropriate and there may be other final assessments for other time periods for Augean North Limited.

Cohort 633p £259.9m (CHRT.L)

The independent technology Group, today announced an unaudited trading update for its financial year ended 30 April 2021 and outlook for the current financial year. Trading performance for the year ended 30 April 2021 is in line with  expectations. Net funds stronger than expected at c.£2m (30 April 2020: net debt of £4.7m; 31 October 2020: net debt of £6.1m). Record order intake of around £210m (2020: £124.4m). Closing order book of c.£240m (30 April 2020: £183.3m). The closing order book underpins £100m (63%) of the market revenue expectations for the year ended 30 April 2022 (2020: £83m, 60%). Acquisition of ELAC completed in the year represented a significant expansion, adding a profitable and growing sixth stand-alone business to the Cohort Group. While the Board’s expectations for revenue growth for the current financial year are unchanged, given the expected mix of revenues and resulting margin impact, profit growth is expected to slow.

Crossword Cybersecurity* 42p £24.2m (CCS.L)

Crossword has acquired Verifiable Credentials Limited – the provider of Identiproof which is a central technology in applications for the issuing of digital certificates and documents that cannot be forged or transferred.  Identiproof will become Crossword’s third product, joining Rizikon and Nixer in the portfolio, as a cryptography based cyber security product. Crossword has agreed to pay a total consideration of up to £2.75m – £100k upfront cash with the remaining paid in shares dependent on certain commercial milestones.

CyanConnode 8.1p £15.1m (CYAN.L)

The specialist in Narrowband Radio Frequency Smart Mesh Networks, has signed a MOU (Memorandum of Understanding) with Intellismart, (Intellismart Infrastructure Private Limited), a joint venture company formed by EESL, (Energy Efficiency Services Limited), and NIIF, (National Investment and Infrastructure Fund). Intellismart is a Meter Asset Provider which deploys smart meters by funding CAPEX, which it then recovers through an OPEX model.  Intellismart is focusing on expediting the deployment of 250 million smart meters across India and it can operate at scale by leveraging the expertise and capital of EESL and NIIF.  Under the MOU, CyanConnode and Intellismart will work on existing EESL and Intellismart projects as well as new ones, in India and international markets.

Judges Scientific 5,980p £377.1m (JDG.L)

The group focused on acquiring and developing companies in the scientific instrument sector, has entered into new banking facilities with Lloyds Banking Group plc which replace its existing banking arrangements with the Bank, which were for an aggregate amount of £35m. This new Facility will provide greater acquisition financing capacity, both in terms of higher frequency and/or larger deals, in support of the Group’s buy and build strategy. The Facility is for an aggregate £60m consisting of a £19m term loan, a committed £35m revolving credit facility plus a £6m accordion facility, which can be drawn at the discretion of the Bank. The Facility replaces the Group’s previous facilities of which £19m remained drawn. The Facility has a five year term (“Borrowing Term”) with covenants and interest consistent with the previous bank facilities.

Netcall 68.5p £102m (NET.L)

The provider of intelligent automation and customer engagement software, is today launching a new Liberty platform solution, Tenant Hub, tailored to address the specific needs of the housing sector. Like other industries, the housing sector is implementing digital transformation initiatives to streamline operations and improve increasingly complex customer interactions. The importance of these initiatives is further amplified by an expected surge in housing demand as a result of the lock-down placing the housing sector under increasing pressure. Powered by Netcall’s Liberty platform, Tenant Hub is a housing specific suite of solutions centred on Liberty Create low-code capabilities, with self-service and integration to Liberty’s omnichannel contact centre solutions. The result for tenants is improved online access to vital services, including rent statements and repair services, as well as more choice when it comes to engaging, including via Twitter and Facebook Messenger.

Revolution Bars 23.75p £29.7m (RBG.L)

he UK operator of 66 premium bars, trading under the Revolution and Revolución de Cuba brands, announced the results of its Bookbuild launched yesterday. Subject to, inter alia, the necessary resolutions being passed at the General Meeting which is to be held on 14 June 2021, in aggregate, 105,001,866 New Ordinary Shares are to be issued pursuant to the Firm Placing and the Placing and Open Offer, at an Issue Price of 20 pence per New Ordinary Share, raising gross proceeds of approximately £21m (approximately £19.9m net of expenses).

SDI Group 183.5p £180.6m (SDI.L)

The Group focused on the design and manufacture of scientific and technology products for use in digital imaging and sensing and control applications updated on trading for the year ended 30 April 2021. “Following the Company’s February Trading Update, March and April sales and order intake have been robust across all of our businesses, evidencing a further and welcome return towards normality in our served markets. Subject to any audit adjustments, we now expect to report Revenue of approximately £35.3m and Adjusted Profit Before Tax of approximately £7.4m, both of which are higher than those provided in our 10 February 2021 Trading Update. We have not changed our expectations for our current financial year ending 30 April 2022 compared with the update provided on 10 February 2021 (Sales > £42.0m, Adjusted PBT > £8.7m).”

Telit Comms 228p £305m (TCM.L)

Telit announced the launch of commercial operations of its new mobile core network, Telit NExT, enabling new and enhanced turnkey services that give enterprises, IoT service providers and other users access to over 600+2G, 3G and 4G networks in 190 countries.The new IoT conceived core network is a key element in the expansion of Telit’s cloud & connectivity offering and the latest example of Telit’s commitment to providing the entire ecosystem with services and solutions that enable seamless, flexible, reliable connectivity.

What’s cooking in the IPO kitchen?

UK SPAC (formerly Mountfield Group and now an AIM Rule 15 Shell) has applied for admission to the AQSE Growth Market. The Company recently raised £3.1m in a placing, giving the Company flexibility in pursuing a reverse take-over transaction. The Directors of the Company are currently in the process of identifying and assessing reverse takeover opportunities with a particular focus on the European medicinal cannabis sector. The Directors are working closely with specialists in this industry in order to evaluate opportunities. Due 3 June.

TECC Capital plc is a SPAC applying to be listed on the Access Segment of the AQSE Growth Market with the intention to identify and acquire a suitable business opportunity or opportunities and undertake an acquisition or merger or a series of acquisitions or mergers. The focus will be investing in businesses which are developing and/or supporting the application of technology in innovative sectors such as: artificial intelligence and machine learning; telematics; life sciences (including medicinal cannabis and cannabidiol (CBD) wellness); cyber security; and eCommerce (including big data and the internet of things (IOT). Due 3 June

MADE, a digitally native lifestyle brand in home has announced its intention to IPO onto the Premium Listing Segment of the LSE. MADE’s mission is to make high-end designer furniture and homeware products accessible to everyone.  Their gross sales, net revenue and Adjusted EBITDA were £109.5m, £82.4m and £1.8m, respectively, for the three months ended 31 March 2021 and £315m, £247m and (£5.1m), respectively, for the year ended 31 December 2020.  The Offer would comprise a primary offer to raise proceeds to further develop growth in existing markets, improve service through reduction of lead-times offered to customers, scale its homeware range and give the Group increased working capital flexibility. MADE would seek to raise approximately £100m of primary proceeds. 

The Artisanal Spirits Company to join AIM. It is the holding company of the Group, whose principal operating subsidiary, The Scotch Malt Whisky Society Limited (“SMWS”) trades under the Group’s flagship brand The Scotch Malt Whisky Society. SMWS is the leading curator and provider of premium single cask Scotch malt whisky and other spirits for sale primarily online to a discerning global membership. SMWS has a presence in over 30 international markets. Offer TBA. Due 4 June

Arecor Therapeutics announces intention to Float on AIM.  The revenue generating biopharmaceutical company that is targeting improving patient care by bringing innovative medicines to market through the enhancement of existing therapeutic products using its innovative proprietary formulation technology platform, Arestat™. Admission is expected to occur in early June 2021.  Deal details TBC. 

Marex Spectron Group expected intention to float on the London Stock Exchange. Marex have a broad service offering, primarily across energy, commodity and financial markets through its Market Making, Commercial Hedging, Price Discovery and Data & Advisory businesses, and has strong positions across its core energy and commodities markets, executing around 35m trades and clearing over 175m contracts in 2020.  Headquartered in London, the Group was formed in 2011 and currently has 19 offices worldwide with around 1,000 employees and more than 12,000 clients across Europe, Asia and America.  In the year ended 31 December 2020, the Group’s net revenue increased by 17.7% from $352.2m to $414.7m, and adjusted operating profit before tax increased by 15.2% from $53.4m to $61.5m. Should Marex proceed with an IPO, the current expectation is that the shares would be admitted to the Premium Listing Segment of the LSE and the offer would comprise of an offer of existing shares to be sold by certain existing shareholders of the Company.

Trellus Health which is commercialising a scientifically validated, resilience-based, connected health solution for chronic condition management to float on AIM. Expected to raise gross proceeds of approximately £25m. Due 28 May.   

Elcogen Group has announced its intention to IPO on AIM.  They are a manufacturer of ceramic anode-supported, low temperature solid oxide cell technology. Elcogen has two core product lines, ElcoCell and ElcoStack. Both product lines are used by customers to integrate into their own end products or systems either for distributed power generation (fuel cells), green hydrogen production (electrolysers) or syngas production (co-electrolysis).  The Group operates in Estonia and Finland with headquarters in Tallinn, Estonia. Company financials and deal details TBC. Expected admission date early June 2021. 

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 29 May.

Clarify Pharma, an investment vehicle specialising in biotech and life sciences companies seeking to prove the safety and efficacy of psychedelic-based substances, announced its intention to apply for admission of its Ordinary Shares to trading on the Access Segment of the AQSE Growth Market. The flotation is expected to value Clarify Pharma at approximately £10.5m. The Company plans to raise approximately £5m. 

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.

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.

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 Access Segment AQSE Growth Market. Admission 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. Due 3 June.

*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).