A round up of the day’s news brought to you by the team at small-cap broker and advisor Hybridan.
Joiners: LungLife (LLAI.L), a developer of clinical diagnostic solutions for lung cancer enhanced by artificial intelligence (AI), has joined 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. £17m raised at 176p. Mkt Cap £44.85m
Helium Ventures PLC (AQSE:HEV), has joined the Access Segment of 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. Has raised £924k. Mkt Cap £2.6m
CMO Group PLC (CMO.L), the UK’s largest online-only retailer of building materials has joined 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. Has raised £27.3m primary and|£17.7m for selling shareholders. Mkt cap £95m.
Leavers: No Leavers Today.
Banquet Buffet
Deltex Medical Group 1.7p £9.8m (DEMG.L)
The specialist in oesophageal Doppler monitoring, today publishes an update on trading for the half-year ended 30 June 2021. Revenues for the six months ended 30 June 2021 were £1.1m (2020: £1.2m). Unlike 2020, where activity levels were at pre-pandemic levels in January and February, the whole of the first half of 2021 has been adversely affected by COVID-19 and subdued elective surgery activity levels around the world. The Group’s International division saw a significant increase in revenues, attributable to Deltex Medical’s French distributor beginning to place regular orders again to satisfy demand associated with a contract previously awarded by the Greater Paris University Hospitals (Assistance Publique-Hôpitaux de Paris). On the basis that the COVID-19 pandemic will abate as the year progresses, the Group continues to expect revenues to climb in the second half as the number of elective surgical procedures increases around the world. Cash at hand on 30 June 2021 was £0.6m (30 June 2020: £0.6m).
Diaceutics 126.5p £106.35m (DXRX.L)
The diagnostic commercialisation company, announces a trading update for the six months ended 30 June 2021. The Group has delivered a strong start to the 2021 financial year, in line with management’s expectations, against the backdrop of the continuing global COVID-19 pandemic, reflecting the growing momentum in the business following the launch of the DXRX platform on 28 October 2020. The Group expects to report revenue growth of approximately 13% to £6.0m (H1 2020: £5.3m), being 24% on a constant currency basis. The Group continues to invest in the development of the DXRX platform and closed the Period with net cash of £23.7m (H1 2020: £29.8m), in line with the Board’s expectations. At the start of the year, the Board set a target for 20% of full year revenue to be generated via the DXRX platform. The Group delivered revenue from 25 projects via the platform, representing over 30% of revenue in the Period.
Equals Group 46.5p £83.6m (EQLS.L)
The technology-led international payments group focused on the SME marketplace, provided a trading update for the six months ended 30 June 2021. Revenues in H1-2021 were £16.7m, a 21% increase over H1-2020 (£13.8m) and this was despite the continued absence of meaningful travel-related activity. Revenues in H1-2021 also rose 11% relative to H2-2020. Travel-related activity represented less than 5% of revenue in Q2-2021 compared to 31% in Q3-2019, showing the differential between pre Covid levels and therefore the potential for increased travel money revenues as Covid restrictions are relaxed. The engine of growth continues to be the Group’s B2B initiatives, encompassed in the Equals Money product suite for corporate customers. Within B2B, growth has been broad-based with International Payments seeing strong demand for its ‘own-name multi-currency IBAN’ offering and white-label platform and the Corporate Expenses platform achieving record results.
Mpac Group 480p £96.8m (MPAC.L)
The specialist in high-speed packaging and automation solutions, issued a trading update ahead of the release of its unaudited results for the six months ended 30 June 2021. “We are pleased to report that the strong momentum in the second half of 2020 has continued into the first half of 2021. Order intake in H1 2021 across all regions was significantly above the COVID-impacted H1 prior year, with the Americas region, underpinned by our previous investment in Switchback and an expanded commercial footprint, performing particularly well. Consequently, our order book going into the second half of 2021 is above the opening order book of £55.5m, providing enhanced coverage over H2 forecast revenue. The Board is therefore comfortable with current full year market expectations. Further good progress has been made with the integration of the Switchback business, acquired in September 2020, which continues to trade ahead of management expectations from the time of acquisition. The implementation of common business processes and systems was successfully completed in H1, which we anticipate will increase the Group’s capacity to accommodate future growth and further strengthens our ability to operate as a single entity business. While travel restrictions, particularly in EMEA and APAC, continue to present challenges to new business development and to machine installations, the impact is largely mitigated through both the ingenuity of our employees and the use of digital technology to provide our customers with the highest standards of customer service.”
Polar Capital Holdings 882.5p £883.5m (POLR.L)
The specialist active asset management group, today provides its quarterly update of its unaudited statement of its Assets under Management. Polar Capital reports that as at 30 June 2021 its AuM were £22.8bn compared to £20.9bn at the end of March 2021, an increase of 9% over the quarter. In the quarter, AuM increased by net inflows of £0.5bn and £1.4bn related to market movement and fund performance.
RWS Holdings 578.75p £2,252m (RWS.L)
The provider of technology-enabled language, content management and intellectual property support services, announces that on 7 July 2021 it completed the acquisition of Horn & Uchida Patent Translation, Ltd, a specialist in patent translation based in Osaka, Japan for cash consideration of Y349m (£2.3m). Horn & Uchida was founded in 2000 and has built a reputation for high quality services to Japanese corporates and law firms. Horn & Uchida will be acquired by KK RWS Group, RWS’s fast growing subsidiary in Japan, and will extend RWS’s in-house patent translation capability and its geographic coverage in Japan. Andrew Brode, Chairman of RWS, commented: “The acquisition of Horn & Uchida is an ideal fit for RWS and will complement and strengthen our existing patent translation services business in Japan. It will also help our US and European customers to internationalise their intellectual property in the important and growing Japanese market.”
Secure Income REIT 387.25p £1,254m (SIR.L)
Update on the collection of rents due up to the date of this announcement, following the end of the rent collection cycle for the June quarter and monthly rents due from May to July 2021. 98.7% of the £25.7m of rent that fell due between 8 April 2021 and 7 July 2021 has been collected. As a consequence of the delay from 21 June in the lifting of government regulations in response to the pandemic and the anticipated full reopening of UK businesses, a deferral of £0.6m of rents in total that would otherwise have been due from one tenant in May and June 2021 has been agreed. Those rents will be receivable in the period between September 2021 and August 2022. Only 0.3% of the annualised gross rent roll is outstanding at the date of this announcement for the current and any prior rent due dates.
Shanta Gold 16.65p £174.5m (SHG.L)
The East Africa-focused gold producer, developer and explorer provided an exploration update at the Bauhinia Creek (BC) East Area 1 target at New Luika Gold Mine (NLGM) in South Western Tanzania, relating to drilling conducted in Q2 2021. This update relates to 22 diamond core and 16 reverse circulation holes drilled in Q2 2021 at BC East Area 1 totalling 6,782 metres. Drilling at BC East Area 1 has generated 39,786 ounces of Indicated Resources of gold grading 4.74 g/t at a cut-off grade of 1.0 g/t Au; In aggregate with the additional ounces announced on 19 April 2021, 116,247 oz have been added to Indicated Resources at NLGM in H1 2021 grading 6.47 g/ t, at a cut-off grade of 1.0 g/t Au (before H1 2021 depletion). Drilling at BC East Area 1 is aimed at testing the continuity of mineralization below the BC pit, to the east of the Central Fault where there is surface evidence of vein systems/shear zones. Historically these have only been tested by limited and relatively shallow drill holes.
Sureserve Group 83.5p £134.5m (SUR.L)
The industry provider of Compliance and Energy Services, announced that two of its wholly owned subsidiaries (K&T Heating Services Ltd and Aaron Services Ltd) have successfully secured a long-term Gas Servicing, Repair, Installation and Electrical Testing Contract with a new client, PA Housing. The Contract term is capped at 8 years, commencing on 1st August 2021, and is expected to generate a combined sales revenue of £36m over the entirety of the Contract term. PA Housing are a large registered provider of social housing who own and manage more than 23,000 homes across the Midlands, London and South East.
Surface Transforms 63p £123m (SCE.L)
HY Jun 21 update form the manufacturers of carbon fibre reinforced ceramic materials Revenue in H1-2021 grew 34% to £1.2m (H1-2020: £0.9m), exceeding managements’ original expectation that sales in the period would be broadly unchanged from the run rate achieved in H1-2020. As previously announced, revenues are expected to further increase in the final quarter of 2021, following start of production (SOP) on the multi-year OEM contracts already awarded to Surface Transforms. Cash as at 30 June 2021 was £17.2m (31 December 2020: £1.1m) reflecting the successful £19m fund raise (after fees) in February 2021. A tax credit of £0.6m is expected in August and the drawdown of the £1m Liverpool City Region Combined Authority loan in October. SCE reported continuing progress with regard to both customer discussions and product testing; Accordingly, the Board still expect to announce significant further contract wins with both new and existing OEM customers in the current financial year. On new capital equipment , OEM Production Cell One will be ready for the ramp up in sales forecast for the final quarter of 2021. Additionally, following the fund raise, the Company has satisfactorily concluded its discussions with the furnace manufacturers for the next stages of manufacturing expansion and will be issuing both purchase orders and providing deposits totalling £3m across July and August to the furnace and other equipment suppliers.
What’s cooking in the IPO kitchen?
Bridgepoint Group to float on the Premium Segment of the Main Market. Bridgepoint is the leader in middle market investing, with a global reach that leverages its strong pan-European footprint and Bridgepoint’s ability to deploy meaningful amounts of client capital across several well established strategies. Raising £300m. Timing TBA.
HydrogenOne Capital Growth to IPO on the Premium Segment of the Main Market. HGEN is targeting a raise of £250m. First London listed investment fund dedicated to clean hydrogen. Due by the end of July.
Forward Partners Group to join AIM. The Group has made 65 equity investments in early stage, high growth British companies, to build a portfolio that has a net asset value of £103.0m as of 31 March 2021. Offer TBA. Due mid July.
Bradda Head Holdings to join AIM. Bradda Head, previously called Life Science Developments Limited and before that Copper Development Corporation, is a delisted company previously quoted on AIM. In January 2018 Bradda Head acquired Bradda Head Limited, a lithium focused exploration company established to develop a portfolio of USA based lithium projects. Raising £6.2m. Mkt Cap £16.1m. Due 19 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.
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 early July.
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.
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.
*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).