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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Banquet Buffet

Alba Mineral Resources 0.26p  £16.24m (ALBA.L)

All remaining 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. Results received in this final batch of results significantly exceed results from the previous results announced on 26 May 2021. Concentrates produced returned grades up to 461 g/t. Concentrates produced from the Grandfathers Stope ranged from 86.8 g/t Au to 461 g/t Au with an average of 187 g/t Au. Results significantly exceed assay results of bulk sample concentrates announced previously which had returned grades of 20.4 to 165.5 g/t. Planning is progressing for the identification of new, unworked veins for bulk sampling later in 2021.

Diversified Energy Company 109.9p  £933.5m (DEC.L)

Diversified Energy  has completed the purchase of certain upstream assets and related infrastructure within its Central Regional Focus Area as previously announced on 20 May 2021. The purchase enlarges the Company’s presence in its Central RFA with an entry into the Barnett producing area. Net consideration of $166m represents a ~3.5x cash multiple on approximately $48m of estimated next twelve months’ Adjusted EBITDA. Current production(a) of ~16 MBoepd (~95 MMcfepd) includes ~820 net operated wells with an average production-weighted well age of 11 years. PDP reserves of ~79 MMBoe (473 Bcfe) with pretax PV10 of ~$238m at the effective date of 1 April 2021 and based on 7 May 2021 NYMEX strip. Retention of ~50 skilled Blackbeard field personnel who provide continuity of operations and who will facilitate clear identification of Smarter Asset Management opportunities to create value. Hedge contracts covering ~80% of remaining CY2021 production at an average floor price of $2.93/MMBtu.

Franchise Brands 150.5p  £144m (FRAN.L)

The multi-brand franchise business, provides a trading update for the six-month period ended 30 June 2021. The Board is pleased with the progress the Group has made over the past six months. As the country has thankfully progressed out of lockdown with the successful vaccination programme, the franchisees have continued to serve their underlying customers. System sales at Metro Rod have returned to their strong pre-COVID growth levels, increasing by 21% compared to H1 2020 and 17% compared to H1 2019. This represents record system sales of £23.8m for the six-month period (H1 2020: £19.7m; H1 2019: £20.2m). The growth accelerated during the period as restrictions have been eased resulting in record system sales in June of £4.3m, an increase of 41% compared to H1 2020 and 26% compared to H1 2019. Willow Pumps, which was acquired in October 2019, has a greater exposure to hospitality and was more impacted by lockdown. However, invoiced sales increased by around 9% compared to H1 2020. In addition, Willow Pumps continues to facilitate the growth of pump-related work within Metro Rod, where pumps system sales by our franchisees have increased 159% to £0.7m (H1 2020: £0.3m). The B2C division has also performed strongly, and 40 new franchisees have been recruited (H1 2020: 27; H1 2019: 34) taking the number of B2C franchisees to 393 (H1 2020: 389; H1 2019: 394). Overall, the Group’s trading in the first half gives the Board strong confidence in delivering a full year performance at least in line with market expectations and it will provide a further update on current trading and outlook at the time of the half year results.

Fast Forward Innovations 8.15p  £17.3m (FFWD.L)

Fast Forward has invested EUR3m (c.£2,577k at today’s exchange rate) in Eurox Group (Eurox), a German-based, European vertically integrated medical cannabis company. FFWD expects to hold 8.85% of Eurox following the issue of new shares resulting from the financing round. Investment in Eurox provides FastForward with direct exposure to a company focused on the German medical cannabis market, by far the largest in Europe. Eurox is well positioned in Germany and the broader European medical cannabis sector, with its main operations being in Germany, Portugal and the United Kingdom. FFWD’s Vice President of Investment Analysis, Alfredo Pascual, is to join the Eurox supervisory board (Aufsichtsrat) in due course.

Lok’nStore 660p  £196m (LOK.L)

Lok’nStore, the fast-growing self-storage company, updated on its growing new store development pipeline. Significant development of new store pipeline, when delivered, will result in the Group operating 51 stores. Contracts exchanged on two new freehold and one leasehold acquisition. Planning permission granted for two stores and one store extension. Good progress building three new stores, due to open late 2021 and early 2022. Delivery of the pipeline is expected to add c.658,500 sq.ft. of lettable space, following occupancy increasing in the twelve months to 31 January 2021 from 67.1% to 81.6% of available space. New stores to be funded from the Group’s existing revolving credit facility, operating cash flow and proceeds of sale of surplus land. Post investment loan-to-value ratio (LTV) will increase to between 20% and 25%. New Salford store opened in April and trading is very encouraging. Overall trading continues to be excellent.

Oracle Power 0.47p  £10.4m (ORCP.L)

Further to the announcement of 23 June 2021, the geochemical sampling programme covering almost the entire tenement at its 100% owned Jundee East Gold Project, is now underway.  This new geochemical programme will expand on the maiden geochemical sampling programme which returned the highly positive results announced on 14 June 2021. Naheed Memon, CEO of Oracle, commented: “Jundee East delivered highly compelling results from the maiden geochemical sampling programme and we are confident that this expanded programme will provide the Company with a much more comprehensive insight into the mineralised footprint of this significant tenement area which covers an area of approximately 90km2 in one of the most productive gold regions globally.  The sampling is expected to take 10 days, with assay expected four to six weeks after this. Jundee East represents an exceptionally exciting prospect for Oracle and this soil sampling programme will continue to lay the foundations for a maiden drill programme later this year.”

Real Estate Investors 40.5p  £72.6m (RLE.L)

H1 Trading Update the UK’s only Midlands-focused Real Estate Investment Trust (REIT), with a portfolio of 1.6m sq ft of commercial property across all sectors . Strong Rent Collection for H1 2021 of 97.22% (adjusted for monthly and deferred agreements). Completed 8 asset disposals totalling £10.7m (an aggregate uplift of 10.3% above book value). Pipeline disposals of £5.53m (£5.35m unconditionally exchanged and £0.18m conditionally exchanged). Occupancy levels at 83.43% with near-term potential to rise to 88.15% (based on 4.72% in pipeline lettings) with the reduction in occupancy dominated by the loss of Npower in Oldbury and Premier Inn in West Bromwich. Improved WAULT to 5.01 years to break and 6.70 years to expiry (FY 2020: 4.84 years / 6.54 years). March 2021 renewal of £51m facility with National Westminster Bank plc for 3 years at 2.25% above LIBOR with £4.1 repaid since March 2021 · Fixing of £35m of £51m NatWest facility at competitive rates. As at 1 July 2021, hedge facility has improved by £716k for half year to 30 June 2021. All banking covenants continue to be met with headroom available. Non-Executive directorate changes in line with succession planning. Dividend payment of 0.75p per share for Q1 2021.

Rosslyn Data Tech 5.8p  £19.7m (RDT.L)

The global big data technology company, today announces that Hugh Cox, Founder and Chief Information Officer of the Company, will be retiring from the board with immediate effect. He will remain an employee of the Company and this change will enable him to spend more time on the operations of the business including supporting clients with their complex procurement data analytics challenges.

Tekcapital 17.5p  £22.9m (TEK.L)

The UK intellectual property investment group focused on transforming university discoveries into valuable products to improve quality of life, is pleased to announce that portfolio company Lucyd Ltd’s U.S. operating company, Innovative Eyewear, Inc. has signed an exclusive purchase and distribution agreement with 8 Points Inc, a subsidiary of Marca Eyewear Group Inc, a leading Canadian distributor that provides high-end spectacles for optical stores and eye care professionals.  This agreement sets out a minimum purchase requirement of US$4.6m worth of Lucyd® Lyte® e-glasses over 30 months, to maintain retail distribution exclusivity in Canada. Monthly minimum committed purchases increase incrementally over the term of the agreement. In the event that 8 Points Inc does not meet the minimum monthly purchase requirements, Lucyd may convert 8 Points Inc’s exclusive rights to non-exclusive rights for the remainder of the term or terminate the agreement.

Westmount Energy 9.5p  £11.75m (WTE.L)

The oil and gas investing company focussed on the Guyana-Suriname Basin reports that it has received a shareholder communication from its investee company, JHI Associates Inc, which confirms that the Jabillo-1 well on the Canje Block was safely drilled in 2,903 meters of water by the Stena Carron drillship to its planned target depth of 6,475 meters. The well did not encounter commercial hydrocarbons. The focus of the ExxonMobil operated Canje drilling campaign now switches to the Sapote-1 well, which is located more than 100 kms to the southeast. This well will be drilled in a new depositional setting, linked to the Berbice canyon system, and closer to Upper Cretaceous discoveries in the Stabroek Block and Suriname’s Block 58. Sapote-1 is an independent multi-layer prospect, which will evaluate several Upper Cretaceous targets, and is potentially the largest prospect drilled on the Canje block to date. Current guidance indicates that Sapote-1 will be spudded in mid-August using the Stena DrillMAX drillship with results anticipated in mid-October.

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 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.

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