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:  LendInvest  (LIND.L) has joined AIM. LendInvest plc is the ultimate holding company of LendInvest Secured Income plc, which has debt securities admitted to the Official List of the Financial Conduct Authority and are admitted to trading on the Main Market for listed securities of London Stock Exchange plc. The Offer will raise primary gross proceeds of £40m which will be used to invest in LendInvest’s continued growth, through accelerating its technology roadmap and strategically expanding into new property finance product areas. Mkt cap £255.6m.

Seraphim Space Investment Trust PLC (SSIT.L), a newly established closed-ended investment company which will invest in a diversified international portfolio of early and growth stage Space Tech businesses, has joined the Premium Segment of the Main Market. Raised £178.4m. 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.

Leavers: No Leavers Today.

Banquet Buffet

Base Resources 15.5p  £182.5m (BSSE.L)

African mineral sands producer, Base Resources Limited  notes recent reports in the Kenyan media regarding statements made by the Cabinet Secretary for the Ministry of Petroleum and Mining at a recent Kenyan Chamber of Mines conference, that the proposed extension to the Kwale Special Mining Lease (SML 23) has been approved and that the licence will be issued soon. Base Resources looks forward to shortly finalising the form of Deed of Variation that will give effect to the proposed extension, at which time a further update will be provided to the market.  The proposed SML 23 extension will incorporate the additional Kwale South Dune Mineral Resources that currently fall outside the footprint of SML 231.

Baron Oil  0.08p  £8.7m (BOIL.L)

Results of an independent review of Prospective Resources by THREE60 Energy Asia Sdn. Bhd. for the TL-SO-19-16 Production Sharing Contract, offshore Timor-Leste (the Chuditch PSC or the PSC). Independent review of the Chuditch PSC, validated to SPE PRMS 2018 industry standards, indicates gross Mean Prospective Resources of 3,368 Bscf of gas and 30 MMbbl of condensate, equivalent to a total of 592 MMBOE.  Subsurface risks for prospects and lead estimated to be low since they share analogous geological characteristics to the Chuditch-1 and other gas discoveries in adjacent Timor-Leste and Australian waters.  High Estimate of gross Prospective Resources equivalent to 1,156 MMBOE may reflect potential for a single, large accumulation.

Bushveld Minerals 12.3p  £146.5m (BMN.L)

The AIM quoted, integrated primary vanadium producer and energy storage solutions provider, with ownership of high-grade assets in South Africa, advises that a claim form has been issued in the English High court by Garnet Commerce Limited against VRFB Holdings Limited and Enerox Holdings Limited (EHL). EHL owns a 100% interest in Enerox GmbH (Enerox), a Vanadium Redox Flow Battery manufacturer, providing grid scale and micro-grid energy storage solutions. Garnet’s claim form seeks declarations against VRFB-H concerning an alleged breach of the joint venture agreement in relation to EHL, in respect of the indirect investment into EHL through VRFB-H by Mustang Energy Plc, as announced on 27 April 2021. VRFB intends to robustly defend the claims. The Company will update the market accordingly of any developments. As previously announced, Bushveld Energy Limited has an indirect interest in Enerox of 25.25% through VRFB-H, which owns 50% interest in EHL. Garnet owns an interest in Enerox through its holding in EHL.

Cora Gold  13.5p  £33.2m (CORA.L)

The West African focused gold company, announced the seventh set of drill results from its largest ever drilling campaign at its Sanankoro Gold Project in Southern Mali.  This 35,000m programme, which has delivered extremely positive results to date, is on track to complete in the near future after which the Company is targeting an updated Mineral Resource Estimate after it has received all of the assays back. Results at Zone A continue to reinforce the excellent grade of oxide ore from surface: o  17m @ 5.54 g/t Au from 117m and, 19m at 3.03 g/t Au from 26m in hole SC0422 on section 1296125N,  15m @ 5.56 g/t Au from 123m in hole SC0427,  15m @ 5.43 g/t Au from 46m in hole SC413,  20m @ 3.20 g/t Au from 110m in hole SC0428,  13m @ 4.03 g/t Au from 26m in hole SC0410,  16m @ 3.25 g/t Au from 20m in hole SC0419, 10m @ 5.22 g/t Au from 63m in hole SC0425.  Results follow on from world class intersection at Sanankoro announced 7 July 2020 with 19m @ 31.56 g/t Au from 65m at Zone A. Follow-up Phase 2 development drilling has started at Zone A.

Immotion Group 5.35p  £22m (IMMO.L)

Immotion Group, announced its UV cleansing division, Uvisan, has signed distributor and reseller agreements with 12 firms across Europe, USA, India and Australia. Uvisan was created as a direct need of its Location Based partner business needing a safe and secure system by which they could cleanse VR headsets. Demand for the CE, ISO, ROHS, IEC certified UV-C cabinets quickly grew and to date it has supplied products to a series of UK schools, universities, and healthcare organisations, as well as Aardman, the British animation studio behind Wallace and Gromit. The cabinets have also been recognised and approved by both HP, and Microsoft. The new distribution, and reseller deals will allow Immotion to scale sales of its solution for disinfecting shared tablets, laptops, VR and AR headsets, audio headsets, and other handheld electronic equipment goods, as well as its complete room cleansing product, without impacting on its core business. The new agreements will allow it to serve the whole of Europe, Scandinavia, USA, India, Singapore, Australia and New Zealand.

Intelligent Ultrasound Group  15.5p  £41.8m (IUG.L)

The ultrasound artificial intelligence (AI) software and simulation company, announces that Group revenue for the period to 30 June 2021 is expected to be £3.6m (H1 2020: £2.5m). The expected increase of over 40% is mainly due to a strong recovery by the Group’s simulation division, as well as a small contribution from the Group’s clinical AI division. Simulation sales from the Group’s direct sales team, which together cover the UK and USA, are expected to have grown by nearly 50% to £2.8m (2020: £1.9m), helped by strong sales from the Group’s ScanTrainer and BodyWorks simulators, which incorporate the free of charge Covid-19 lung training module that was developed in response to the pandemic in early 2020. Sales in the Rest of the World, that are made through the Group’s reseller network, are expected to have grown by over 30% to £0.8m (H1 2020: £0.6m). The Group’s clinical AI division is in the early stages of commercialising its first AI products – the ScanNav Anatomy Peripheral Nerve Block system, that received CE approval in March and was launched for sale in the UK in April, and the ScanNav Assist software that is integrated into GE Healthcare’s SonoLyst software on its Voluson SWIFT ultrasound machines. The division expects to recognise nominal revenue of £0.1m from its AI product range, with AI revenue expected to accelerate once the longer than anticipated Covid restrictions relax and face-to-face medical exhibitions and congresses re-start later in the year. Although the planned increases in R&D, office and warehouse expansion, and higher group insurance costs were mostly offset by an increase in gross profit, the operating loss for the period is expected to increase to approximately £2.3m (2020: loss of £2.0m). Cash at bank at 30 June 2021 is expected to be approximately £6.0m (31 December 2020: £8.8m). The expected £2.8m reduction in cash includes an increase in working capital of £1.0m since 31 December 2020.

Pires Investments 7.15p  £11m (PIRI.L)

Update on its investment in CameraMatics, the leading IoT fleet and vehicle safety technology specialist, which Pires is invested in through its circa 20% investment in Sure Valley Ventures (SVV). CameraMatics has partnered with UK transport and logistics operator Maritime Transport Ltd (Maritime) to fit connected smart camera systems across its entire fleet. Maritime operates a fleet of more than 1,500 trucks, employing over 2,000 drivers and covering some 120 million miles each year. So far, almost 1,000 vehicles have been fitted with CameraMatics, with the rest of the installations happening on a daily basis as Maritime’s fleet becomes safer, smarter and more efficient. Pires has a circa 20% interest in SVV, a venture capital fund focused on investing in the software technology sector with a specific focus on Artificial Intelligence, the Internet of Things, Cyber Security, Machine Learning, Immersive Technologies and Big Data. 

Science in Sport 75p  £101m (SIS.L)

The premium performance nutrition company serving elite athletes, sports enthusiasts and the active lifestyle community, announced a trading update for the first six months of its current financial year ending 31 December 2021. After an encouraging start in January and February, sales continued to recover well, gaining momentum through the second quarter, with record monthly sales in June. This period of profitable growth, together with positive prospects for the second half, including new product launches, places the Company in a strong position to meet market expectations for the full year. Revenue for the first six months increased by 24% to c. £29.3m, over the same period last year (H1 2020: £23.6m). Both brands, PhD Nutrition, an active lifestyle nutrition brand, and SIS, a leading endurance nutrition brand among elite athletes and professional sports teams, contributed strong double-digit growth, generating sales of £13.4m and £15.9m respectively (H1 2020: PhD, £11.7m, and SIS, £11.9m). New product launches accounted for 26% of revenue growth in H1. Underlying EBITDA profit increased to £0.6m, continuing the strong upward trend (H1 2020: loss of £0.2m), and after an estimated one-off £0.6m negative impact from Brexit. Gross margin increased to 52%  (H1 2020: 48%), driven by supply chain efficiencies and continued sales shift to online.  

Symphony Environmental Technologies* 21.5p  £38m (SYM.L)

The global specialists in technologies that make plastic and rubber products “smarter, safer and sustainable” received approval from the U.S. Food & Drug Administration for its d2p antimicrobial food contact technology, for a much greater loading of the d2p technology, and also wider use, of Symphony’s original bread-packaging approval under FCN no. 2031, as announced on 26 February 2020 (RNS number: 1106E). More specifically, the FDA’s approval for Symphony’s d2p antimicrobial food contact technology, now applies to all types of polyolefin and polyester film for wrapping bread, instead of just linear low density polythene (“LLDPE”). Low density polythene (“LDPE”) and polypropylene (“PP”) are common packaging materials which are both now included. Symphony’s d2p technology is intended to inhibit the growth of bacteria on the surface of the packaging film and is vital to a very hygiene-conscious industry. According to the Global Data report 2019 (Bread & Rolls (Bakery & Cereals) Market in the United States of America – Outlook to 2023) the US Packaging/Industrial Bread & Rolls Market by Volume in 2018 was 3,628 million kgs with a market value of more than $20bn. This represents a significant opportunity for Symphony as it expects the d2p solution to prove a key source of commercial differentiation for packaged bread manufacturers.

The Mission Group 76.5p  £69.6m (TMG.L)

HY Jun 21 trading update from the creator of work that counts comprising a network of 16 Agencies delivering real, sustainable growth for its Clients. Trading during the first half of 2021 has been ahead of the Board’s expectations. Despite severe lockdown restrictions continuing to be in place in all of its trading markets during this period, the Group has continued to see a marked sequential quarter on quarter recovery in both revenue and profitability. MISSION expects to report revenues for the period of £31.6m (2020: £29.1m) and a Headline operating profit of £2.0m (2020: loss of £1.8m). The Group has a historic second half year weighting in profitability and it currently expects to be on track with full year expectations. The Group is well financed with committed banking facilities of £20.m. It made no new acquisitions in the period but settled £1.2m of obligations in relation to acquisitions made in prior years, paid the deferred 2019 dividend (£1.4m) and repaid all outstanding, deferred HMRC payments (£3.1m). The Group’s net bank debt at 30 June 2021 was better than expected at £3.8m (30 June 2020: £0.9m, 31 December 2020 £1.2m).

What’s cooking in the IPO kitchen?

South West Brands the multi-brand cannabidiol consumer goods company  intends to float on the Main Market (Standard). Raising funds to continue to develop its existing portfolio of brand IP and pursue its strategy of adding brand IP assets to the portfolio over the course of the first 24 months following Admission. The Company expects Admission to occur in July 2021. Timing and offer TBA.

GENinCode to join AIM, a UK-incorporated company engaged in the risk assessment, prediction and prevention of cardiovascular disease (CVD), the leading cause of death worldwide accounting for approximately 18m deaths annually. Due 22 July. Offer TBA 

Zenova to join AIM. The Company, is the holder of intellectual property to underpin a suite of fire safety and temperature management products and technology applicable to industrial, commercial and residential markets. Capital to be raised on Admission: £4.5m. Anticipated market capitalisation: £17.74m. Due 22 July.

Microlise to join AIM. Microlise is a leading provider of transport management technology solutions, delivering a globally enabled SaaS platform that digitises the business processes of enterprise organisations running highly complex logistics operations. As at 31 December 2020, the Group had over 400 enterprise customers and over 500,000 vehicle subscriptions.  Due Mid July. Offer TBA.

Lords Group Trading to join AIM. Lords Group Trading plc is a consolidator of specialist merchant businesses across the Southeast and Midlands, adding value to the supply of building materials through product expertise and next day delivery. £30m primary, £22m shareholder sale, Mkt Cap £150m.  Due 20 July.

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.

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.

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.  Raised £25m. Mkt Cap £50m. Due 19 July 2021.

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 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

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