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.

While we were away:

Joiners:

The Artisanal Spirits Company (ART.L), the owner of The Scotch Malt Whisky Society, the provider of premium single cask Scotch malt whisky and other spirits for sale primarily online, announced to trading on AIM last week.  The company raised £26m at £1.12. The Fundraising raised gross proceeds of £15m for the Company and £11m for certain selling shareholders. On IPO, the company had a market cap of approximately £77.96m. Between FY16 and FY19, revenues grew from £7.6m to £14.6m. In FY20 revenue growth excluding sales from UK venues and events, was 22%.

African Pioneer (ASP.L) IPO’d on to the Standard List of the LSE last week. The company raised £1.75m at 3.5p, acquiring copper projects in Namibia, Zambia and Botswana. 

Imperial X (CDL.L) IPO’d on to the Standard List of the LSE last week. The company raised £2m at 3p. The company will hold equity positions and royalties in a variety of projects in the natural resources sectors across multiple jurisdictions, primarily in North America and Africa.  The Company has filed an application to change its name to Cloudbreak Discoveries Plc. 

Aquila Energy Efficiency Trust (AEET.L) IPO’d on to the Premium Segment of the LSE last week. The company raised £100m. The Company will seek to generate returns for shareholders, principally in the form of income distributions by investing in a diversified portfolio of Energy Efficiency Investments.

Pioneer Media Holdings (AQSE:PNER) IPO’d onto Aquis last week. The company raised £10k. Pioneer  is an investment company whose primary objective is to invest its funds for purposes of generating returns from capital appreciation and investment income. It intends to accomplish these goals through the identification of and investment in securities of private and publicly listed entities that are involved in or connected with the eSport and mobile gaming industries.

Arecor Therapeutics (AREC.L), IPO’d on to AIM last week. The company raised £20m at 226p per share. On Admission the Company had a market capitalisation of approximately £62.5m. The company is a 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™.

And today… Thungela Resources (TGA.L) completed its demerger from Anglo American with a dual LSE and JSE listing. Thungela owns interests in, and produces thermal coal predominantly from, seven collieries located in Mpumalanga, South Africa, namely Goedehoop, Greenside, Isibonelo, Khwezela, Zibulo, Mafube and Rietvlei collieries, which consist of both underground and opencast mines. Thungela’s operations are amongst the highest quality thermal coal mines in South Africa by calorific value.

While we were away:

Leavers:

B.S.D Crown (BSD), Signature Aviation (SIG), RSA Insurance Group (RSA) 
SPORTECH PLC Proposed delisting from the Official List and admission to AIM.

No Leavers Today.

Banquet Buffet

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

Following a detailed independent assessment of the Thule Black Sands Ilmenite Project in northern Greenland, the Company has declared a significant Exploration Target for the Project. An independent Exploration Target has been declared for TBS of 70-300Mt at a grade of 35-50% THM with an in situ ilmenite grade of 6-11%.  This would represent, at the lower end of the range, an almost three times increase in the current figures for contained ilmenite.  This Exploration Target is due to be tested in a forthcoming drilling programme.

EPE Special Opportunities 378p  £121.5m (ESO.L)

EPIC Investments LLP, a limited liability partnership in which EPE is the sole investor, has sold 4,500,112 shares in Luceco plc in the market. The shares sold represent 11.2 per cent of ESO’s interest in Luceco plc and returns £15.0m in cash to ESO. The Company intends to use the proceeds for new investments.

Destiny Pharma 152p £91m (DEST.L)

The clinical stage innovative biotechnology company focused on the development of novel medicines that can prevent life-threatening infections, welcomes the G7 Health Ministers’ Meeting communique  on 4 June 2021 and its strong message highlighting the global threat of the “silent pandemic” of Antimicrobial Resistance (AMR) and the urgent need for the development of new treatments. In the announcement the G7 have set out their clear intention to offer increased government support through regulatory frameworks, financial investment and commercial procurement schemes for new medicines that address AMR. They note that the COVID-19 pandemic has “brought into stark focus the impact a novel and initially untreatable infectious disease can have on humanity… [and] highlighted the importance of infection prevention and control measures to tackle AMR.” Destiny Pharma has been focused for many years on developing novel medicines from its XF platform that specifically address the AMR threat through the XF platform’s unique mechanism of action which can provide safe, effective and fast acting treatments that do not generate resistance. Its lead programme, XF-73 nasal gel for the decolonisation of patients prior to surgery who are carrying Staphylococcus aureus in the nose, recently delivered excellent Phase 2 data and will now move forward to its final Phase 3 clinical trials. 

Europa Metals 11.25p  £5.53m (EUZ.L)

Initial assay results from its Pre-Feasibility Study (PFS) diamond drilling programme being conducted by Sondeosy Perforaciones Industriales de Bierzo SA (SPI Drilling) at the Company’s 100% owned Toral Pb, Zn & Ag project.  Significant intersections from drillholes TOD-028, 029, 030 & 031, including:  TOD-028: 2.4m @ 10.58% ZnEq(PbAg); TOD-029: 20.45m @ 2.68% ZnEq(PbAg) including: §3.8m @ 8.87% ZnEq(PbAg); and TOD-029: significant widths over 20m suitable for metallurgical ore sorting testwork. Laurence Read, CEO of Europa Metals said: “Today’s assay results are excellent and we look forward to incorporating a new resource zone into the early years of potential future production at Toral. This will clearly be dependent on the results of an independent JORC (2012) resource update to be commissioned in due course, however the campaign’s findings to date are supportive of us meeting this objective. It is particularly pleasing to see the team’s decision to initiate daughter holes off TOD-029, pre assay, being supported by today’s results. By securing meaningful metallurgical samples for PFS level work, Europa Metals can build on its existing metallurgical testwork findings as well as further assessing the implementation of ore sorting within the upper siliceous zone of the project. Further enhancement of the early pay-back and economics for the Toral Project at a PFS level remains one of our key objectives.”

Idox 62.4p  £277.8m (IDOX.L)

The supplier of specialist information management software and solutions to the public and asset-intensive sectors announced the acquisition of Aligned Assets Holdco Limited a UK based public sector software business.  Acquisition enhances Idox’s leading offering to local authorities. Builds on public sector software focused growth strategy, following disposal of Content division. Maximum consideration £10.5m. Initial cash consideration of £7.5m paid from Idox’s existing resources. Expected to be immediately earnings enhancing. For the year ended 31 March 2021, Aligned Assets expects to report revenues of £2.7m, of which 75% are recurring and £1.4m of EBITDA, under Idox’s accounting policies, with gross assets of £0.4m. 

Mkango Resources 29.25p  £40.8m (MKA.L)

Mkango and Grupa Azoty Zakłady Azotowe “have agreed to work together towards development of a rare earth separation plant in Poland”. A new Polish wholly owned subsidiary of Mkango, Mkango Polska, has been established and a highly experienced Country Director for Poland, Dr Jarosław Pączek, has been appointed, together with rare earth separation experts, Carester, and a strong team of technical advisors and engineers. Grupa Azoty PULAWY (Warsaw Stock Exchange: ZAP) is part of The Grupa Azoty Group, the European Union’s second largest manufacturer of nitrogen and compound fertilizers, and a major chemicals producer. Its products are exported to over 20 countries around the world, including Europe, the Americas and Asia.

Oakley Capital Investments 334p  £603.2m (OCI.L)

Oakley Capital Origin Fund has acquired controlling stakes in Afterbuy and DreamRobot, leading providers of e-commerce software in the German-speaking region. OCI’s indirect contribution via Origin Fund will be £6m. OCI’s liquid resources available for future deployment (including this transaction) are estimated to be £173m. The two companies provide a comprehensive suite of Software as a Service (SaaS) solutions for small to mid-sized online merchants selling their products through web shops and online marketplaces, such as Amazon or eBay. The platform enables its users to manage and automate difficult, manual and time-critical processes, such as multi-channel product listing, data collection and stock management. Together, more than EUR 50bn of Gross Merchandise Volume has been processed across the businesses to date.

Tungsten Corp 39.3p  £49.6m (TUNG.L)

The provider of digital financial management and software solutions, has been selected by a global human resources software leader, whose turnover is $14bn, to support its new e-invoicing initiative in Europe and the U.S., with over 650K invoices in scope, underlining the growing momentum of customer’s taking Tungsten’s Total AR solution. The Customer’s 16 European entities will use Tungsten’s Total AR solution to streamline and digitise its accounts receivable processes. In the U.S., the solution will allow the Customer to send invoices to its customers via the Tungsten Network, eliminating manual invoice entry systems. Anticipated benefits include productivity gains via process standardisation, resource efficiencies, and new operational capabilities. The Customer is one of the largest global automated payroll providers, whose solutions are used by some of the biggest companies in the world. This deal will see Tungsten implement their Total AR solution for the Customer in the U.S. and Europe. 

Windar Photonics 28.5p  £15.8m (WPHO.L)

The technology group that has developed a cost efficient and innovative LiDAR wind sensor for use on electricity generating wind turbines, announced that the Company has entered into a new four year development project focused on developing a drone based emission detection system. The Development Project, which brings together five private companies and the Technical University of Denmark, has a total budget of Euro 2.2m and is backed by a public grant of Euro 1.7m from the Innovation Fund Denmark, under its Grand Solutions program. The aim of the Development Project is to develop a mobile, cost-efficient laser based gas sensor for remote sensing of important greenhouse gasses such as CO2 and CH4, and at a later stage, NH3 and H2O. The core detection technologies will be based around the current LiDAR technologies developed by Windar.

Venture Life Group 89p  £115m (VLG.L)

The Specialist in developing, manufacturing and commercialising products for the international self-care market, announces that is has acquired BBI Healthcare Limited (BBIH), a global market leading Women’s Health and Energy Management/Diabetes company, for a total consideration of up to £36.0m.  The acquisition of BBIH, which is expected to be immediately earnings enhancing, is from BBI Diagnostics Group Limited, a company ultimately majority owned by Exponent Private Equity. For the year ended 31 December 2020, BBIH generated adjusted EBITDA of £2.6m (reported EBITDA £2.3m) on revenues of £10.2m. Net assets at 31 December 2020 were £2.4m.

What’s cooking in the IPO kitchen?

Baltic Classifieds Group PLC, the leading online classifieds group in the Baltics, announced their intention to IPO and  the intended publication of a registration document (the “Registration Document”). Should BCG proceed with the IPO, the Company will apply for admission of its entire issued Ordinary Share Capital to the Premium Listing Segment of the LSE.

The UK Residential REIT, a proposed closed-ended real estate investment trust established to invest in a diversified portfolio of affordable, privately rented residential real estate assets in attractive locations outside of London, announces its intention to IPO onto the Premium Listing Segment of the LSE. URES is targeting Gross Issue Proceeds of  150m before expenses by means of a placing, offer for subscription and intermediaries offer of 150m Ordinary Shares plus an Issue of up to 50m Consideration Shares in connection with the acquisition of Seed Assets at an issue price of £1.00 per Ordinary Share. Expected market capitalisation following the completion of the acquisition of Seed Assets of £200m.

Nord Gold plc, the internationally diversified pure-play gold producer, announces the intended publication of a registration document (the “Registration Document”) and its potential intention to undertake an IPO. Should Nord Gold proceed with the Offer, the Group will apply for admission of its Shares to the Premium Listing Segment. The Company has also applied for admission of the Shares to trading on the Moscow Exchange.

Victorian Plumbing Group Limited the UK’s leading online retailer of bathroom products and accessories, announces its intention to seek admission of its ordinary shares to trading on AIM. Group has grown rapidly in recent years and is now the UK’s leading online specialist bathroom brand by revenue in 2020 and the second largest retailer of bathroom products in the UK with an estimated 14.2% of the bathroom market by revenue in 2020. The Company’s growth trajectory was maintained in current financial year, delivering results of £140.7m revenue, and £20.1m adjusted EBITDA for the six months ended 31 March 2021.

LionTrust ESG Trust PLC announces the publication of the Prospectus in connection with the IPO on the Premium Segment of the Main Market. The Company is targeting an initial issue of £150m by means of an Initial Placing, Offer for Subscription and Intermediaries Offer of Ordinary Shares at an issue price of 100 pence per Ordinary Share. In addition, pursuant to the Prospectus, a placing programme will allow the Company to issue up to an additional  250m Ordinary Shares and/or C shares, in the 12 months from the date of publication of the Prospectus and following Initial Admission.

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 11 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. Expected June.

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.

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. 

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. Due 7th June.

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.”

*A corporate client of Hybridan LLP

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