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.

Joiners: Voyager Life (AQSE:VOY), the health and wellness company established to supply high-quality Cannabidiol (CBD) and hemp seed oil products, has joined the Access Segment AQSE Growth Market. 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. Raised £400k at 58p. Market Cap £5.4m.

Baltic Classifieds Group (BCG.L)  the leading online classifieds group in the Baltics, has joined the Premium Segment of the LSE. The directors intend to use the net proceeds from the Primary Raise for the repayment of existing debt in conjunction with the refinancing of the Senior Facilities Agreement targeting a net debt at IPO of approximately 2.75x FY21 Adjusted EBITDA. Market Cap £825m at 165p. 61.3m primary shares and 138.7 shareholder sale shares equating to an offer of £330m.

Leavers: No Leavers Today.

Banquet Buffet

88 Energy 1.4p  £182.8m (88E.L)

The Alaska-focused oil exploration and appraisal company across ~440,000 net acres has adopted the Environmental, Social and Governance (ESG) framework designed by the World Economic Forum (WEF). Impact monitoring technology company, Socialsuite, a leading provider of Impact Management Systems, to measure 88 Energy’s performance across 21 core ESG metrics and disclosures. 88 Energy to report its ESG progress across each sustainability area.

Advance Energy 2.28p  £23.4m (ADV.L)

The energy company seeking growth through acquisition or farm-in to non-operated interests in discovered upstream projects, updated on the Buffalo-10 well drilling operations, including the selection of a jack-up drilling rig for the expected commencement of drilling in late October 2021. The Operator, Carnarvon Petroleum Limited (has announced an update on the Buffalo-10 well drilling operations. A jack-up drilling rig for the Buffalo-10 well has been selected. A Letter of Intent has been agreed and the formal rig contract is being finalised. On the current schedule, drilling of the well is expected to commence in late October 2021. The results of the well can be expected to be available in late November/early December 2021.

Brandshield Systems 17.38p  £20.5m (BRSD.L)

The provider of cybersecurity solutions from brand protection to online threat hunting has completed a contract with a further customer in the pharmaceutical industry. This follows previous pharmaceutical sector contracts with the Pharmaceutical Security Institute and Bristol Myers Squibb announced in November 2020 and December 2020 respectively. It is one of a number of additional clients secured in June over and above the 18 new clients BrandShield secured between January and May 2021 which the Company revealed alongside the publication of its 2020 Accounts on 21 June 2021. The customer, which is based in Europe, has signed an annual recurring contract with BrandShield to protect several of its drugs from online threats which have become increasingly prevalent during the COVID-19 crisis. These threats cut across standalone websites, social media platforms and ecommerce marketplaces. 

Egdon Resources 1.4p  £4.6m (EDR.L)

The UK-based exploration and production company focused on onshore exploration and production in the hydrocarbon-producing basins of the UK, has conditionally raised approximately £1.44m before costs via a subscription at 1.25p. It also announces that the holders of the Convertible Loan Notes have exercised their right to convert into new ordinary shares. The Issue Price represents a 16.67% discount to the closing price yesterday. Each Subscription Share will be granted a right to subscribe for 0.5 of a new Ordinary Share at a price of 2.5 pence per share, exercisable at any time until the date of the second anniversary of their issue. The funds raised will enable Egdon to strengthen its liquidity position and provide additional funding of ongoing core projects. “We are pleased with the continuing support of Petrichor and the Concert Party and also welcome Shard Capital as a new cornerstone shareholder.”

Europa Oil & Gas  1.25p  £7.1m (EOG.L)

MOU signed with Causeway Geothermal (NI) Ltd to carry out studies to assess the potential of West Firsby as a test site for sustainable, clean geothermal energy systems; West Firsby regarded as an ideal geothermal energy test site due to comprehensive dataset, existing well bores and geothermal gradient; Potential to convert onshore legacy oilfields into sources of clean and reliable energy forms part of Europa’s ESG strategy.

GETECH Group 25p  £16.7m (GTC.L)

The provider of geoscience data, software and analytic products and services to the energy industry, announced a significant sale of its geoscience data and a regional study package, with a value of US$536k, which is expected to be fully recognised in the current financial year. Getech continues to trade in line with current market expectations for FY2021.

HSS Hire  20.1p  £140m (HSS.L)

AGM trading statement from HSS Hire Group which provides tool and equipment hire and related services in the UK and Ireland. Building on the encouraging momentum in Q1 2021, trading has continued to improve since the Group reported its 2020 year end results, with underlying revenues in Q2 2021 at 102% of FY19 levels. Q2 2021 EBITDA and EBITA remain ahead of the comparable FY19 levels with the Group’s digitally-led, lower cost operating model delivering further margin expansion. Based on the performance in the second quarter, EBITDA2 for 2021 is expected to be slightly ahead of market expectations and EBITA2 is now expected to be materially ahead of expectations, including the benefit of reduced depreciation following the change in operating model. Cash collection has also remained strong throughout the quarter and, combined with improved profitability, we expect to achieve our net debt leverage2 2021 exit rate target of below 2x at the half-year. The Board will provide further details on Group performance at HSS’ 2021 half year results update, expected to be held in September 2021.

InfraStrata 24.75p  £30.1m (INFA.L)

The UK quoted company focused on strategic energy infrastructure, fabrication, shipbuilding and vessel repairs provided a trading update for the 11-month period to 30 June 2021. Macro-economic recovery, directly translating into increasing contract values and higher client spend; Revenues of circa £9m booked; c£3m of which was booked in the latest quarter; Growth momentum established within the renewables, cruise & ferry and defence markets. Company’s single largest contract award to date announced in April 2021; £27m from Saipem for the fabrication of wind turbine generator jacket structures for the NNG project in Scotland; potential for this contract to grow. Successful equity placing and open-offer conducted in May 2021; c£12m raised (pre costs); for a combination of performance bonds for the jackets contract, capex and general working capital; Company is performing in line to meet expectations on revenues for the 17 month period ended 31st Dec 2021.

KEFI Gold and Copper 1.86p  £40m (KEFI.L)

AGM Statement from the gold and copper exploration and development company with projects in the Federal Democratic Republic of Ethiopia and the Kingdom of Saudi Arabia “Of particular note is that we have this week formally confirmed to the regulatory authorities in Ethiopia that the Company, its subsidiary Tulu Kapi Gold Mines Share Company, our project contractors, the project finance syndicate members and the other Government agencies involved are all ready to proceed in July with finalisation of detailed documentation and the gaining of formal approvals. We will then trigger the full development programmes for our Tulu Kapi gold project. The passing of the resolutions at today’s Annual General Meeting is one part of the various approvals required to be formalised. On another note, it is also pleasing to witness first-hand the joy and pride in the recent democratic elections in Ethiopia. It was also pleasing that the Government has declared a ceasefire in the Tigray conflict area, which is more than 1,000 kilometres from any Tulu Kapi activities. Over in Saudi Arabia, we continue to quickly advance our field work and engineering studies for potential development of the Hawiah copper-gold-zinc-silver discovery we made last year. It is getting bigger, with higher-grades and we are excited by its prospects. The Jibal Qutman gold discovery is also being pursued, but remains in regulatory entanglement. Whilst gold is the most valuable metal for KEFI, copper now has also become important to the Company. The Company’s beneficial interest in the in-situ metal content of the three projects is a combined 2.1 million oz in gold equivalent terms. KEFI’s market capitalisation is approximately US$27/oz gold-equivalent, compared to a current gold price of approximately US$1,772/oz.

SulNOx Group 39p  £34.7m (AQSE:SNOX)

Bureau Veritas has certified that High FAME B20 & B30 diesel fuels using the SulnoxEco™ Fuel Conditioner are compliant with EN16709 as well as EN590 (the standard for all diesel fuels). This is an exciting and major step forward for SulNOx Group as these “Biodiesel Fuels” are critical in the path to Zero Emissions by 2050. B20 and B30 are diesel fuel blends which contain 20% and 30% biodiesel respectively, the remaining 80% and 70% being conventional diesel refined from crude oil. Jimmy Redman Jnr, the creator of the SulNOx proprietary technology commented, “When we received our certification for both Petrol and Diesel, we were justifiably excited, however, the world also needs biofuels that are renewable. This Certification for these new fuels shows that SulNOx is technologically very advanced and now can address a market that is expected to grow exponentially in the decades ahead”. Ben Richardson, the CEO of the SulNOx Group commented, “Our unique, natural technologies already have the ability to immediately improve >70% every barrel of oil by enhancing diesel, petrol and HFO. Until the advent of a fully green alternative, however, we will still need solutions to reduce fossil fuel emissions. Low emission biofuels will help and are a very fast expanding market, and SulNOx’s green tech can play an important part of that growth by helping to further reduce their emissions whilst also addressing the lubricity and issues arising from water with biofuels”.

What’s cooking in the IPO kitchen?

CMO Group PLC, the UK’s largest online-only retailer of building materials, announced its intention to seek admission to AIM. The Group currently operates seven specialist websites, Roofingsuperstore.co.uk, Drainagesuperstore.co.uk, Insulationsuperstore.co.uk, Doorsuperstore.co.uk, Tileandfloorsuperstore.co.uk, cmotrade.co.uk and Totaltiles.co.uk. Admission due early July.

Seraphine Group,  intends to IPO on the Premium Segment on the Main Market. Seraphine, and together with its subsidiaries, is an international digitally-led maternity and nursing wear brand. The final offer price will be determined following a book-building process. Admission expected July.

Literacy Capital PLC, announces its intention to seek admission of its ordinary shares of £0.001 to trading on the Specialist Fund Segment of the Main Market. The Company was created in September 2017 as a permanent capital vehicle to allow longer term decision making and with the intention to generate substantial investment returns. As at 31 March 2021, the Company’s unaudited Net Asset Value is approximately £96.4m. Literacy Capital Asset Management LLP is the Company’s investment manager.

LungLife, a developer of clinical diagnostic solutions for lung cancer enhanced by artificial intelligence (AI), announces intention to seek admission to AIM. The Company’s technology is a combination of the recovery of rare cells and blood-based biomarkers shown to be altered in lung cancer. The Company employs machine learning to improve upon existing computer software to identify informative cells from blood, and intends to build a deep, novel pool of lung cancer-related data for AI-enabled applications designed to improve test performance over time. Admission due early July.

Helium Ventures PLC, announces admission to the AQSE Growth Market. The Company has been formed to identify either investment opportunities or acquisitions in the upstream natural gas sector and in particular in helium. Admission date TBC.

Seraphim Space Investment Trust PLC, a newly established closed-ended investment company which will invest in a diversified international portfolio of early and growth stage Space Tech businesses, announces the publication of its Prospectus in connection with the IPO to the Premium Segment of the Main Market. The Company is targeting gross proceeds of up to £180m through the issue of up to 180m Ordinary Shares by way of the Initial Placing, the Offer for Subscription, Direct Subscriptions and the Intermediaries Offer at 100 pence per Ordinary Share. The Company will subsequently also acquire stakes in four Space Tech businesses upon the completion or termination of currently pending corporate activity in relation to those assets. Assuming the successful completion of these transactions currently underway, the Company’s investment manager, Seraphim Space estimates approximately £70m of value relating to the Retained Assets could be acquired by the Company.

Future Biogas Group plc, is a newly formed holding company which will acquire 100% of Future Biogas Limited (“FBL”). Future Biogas is a clean energy company that operates biogas plants in the UK. It is one of the largest biogas producers in the UK, delivering approximately 5,000 cubic metres per hour of green gas to the Gas Grid. FBL was formed in 2010 in order to develop and operate biogas plants.  The Group has deployed over £125m and built 12 biogas plants in the UK since then, largely through tax efficient funding such as VCT and EIS. In 2020, the ten biogas plants operated by the Group generated over 426 GWh of renewable energy. TBC ordinary shares of £0.01 each in the capital of the Company. In addition to the biogas plants it operates on behalf of third parties, the Company intends to build on its experience by constructing its own portfolio of new bioenergy plants with carbon capture storage (“BECCS”). Target fundraise up to £35m. Anticipated market cap TBC. Admission date TBC

Saietta Group, announces intention to list on AIM. Saietta, is a UK company that has developed an innovative AFT electric motor (a design of axial flux motor), designed to deliver class-leading performance for its target markets whilst being low cost and built for mass market production. Saietta’s initial target market is the high volume, fast growing lightweight mobility market including motorcycles in Asia. Admission date and market cap TBC.

Poolbeg, Proposed AIM listing and demerger from Open Orphan (ORPH.L). Funds raised as part of Admission will be used primarily to fund the clinical trial costs associated with the development of the Company’s POLB 001 asset as a treatment for severe influenza and to acquire and develop new portfolio assets.  Offer details and timing TBC

Wise, the Fintech and payments start-up is planning to pull the trigger on a direct listing on the London Stock Exchange, becoming the latest tech firm and this time a Unicorn to cash in on the ongoing boom in flotations on the UK’s public markets. Wise plans to establish a customer shareholder programme, OwnWise, which will reward customers joining as shareholders after admission to support its long-term mission. OwnWise, open for pre-applications from UK eligible customers today, provides participants with the chance to receive bonus shares in Wise, representing 5% of the value of the shares they buy and hold for at least 12 months (based on market value at the time of purchase) up to a cap of £100, amongst other perks. All existing investors, including the company’s team of current and previous Wisers (employees) who hold options and shares, will be offered time-limited enhanced voting shares to support Wise’s focus on its mission as it transitions to being a listed company. Admission Due TBC

Orcadian Energy, the North Sea focused, oil and gas development company, announces its intention to seek admission to AIM. The Company’s key asset is the 100% interest in the Pilot oilfield, with audited proven and probable reserves of 78.8m barrels (audited by Sproule BV). Orcadian plans to raise gross proceeds of c. £5m to progress its assets. Expected June/ early July.

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 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. Due 16 July

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.

*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).