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:  No Joiners Today.

Leavers: No Leavers Today.

Banquet Buffet

AEX Gold 28p £49.6m (AEXG.L)

The independent gold company with a portfolio of exploration licences in Greenland has applied for a new exploration licence in the Kobberminebugt region of South Greenland covering an area of approximately 266 km2. The Company will make further announcements in relation to the status and potential award of this application in due course. The area hosts numerous copper-gold showings including the small past-producing Josva copper mine, which was last worked in 1914 with reported grades up to 5% Copper, 1.5 g/t Gold and 250 g/t Silver. Copper mineralisation discovered to date is found within volcanic and sedimentary sequences as disseminated stratabound sulphides, and locally enriched into layers due to strong folding or in quartz veins and breccias. Sulphide concentrations vary from 1-50% volume depending on the style of mineralisation. Some showings can be followed for several hundred metres along strike with widths of up to several metres. Mineralisation has been interpreted as Iron-Oxide-Copper-Gold (IOCG) style by the Geological Survey of Denmark and Greenland (GEUS). The new licence is located approximately 100 km west of AEX’s Sava exploration project, (formerly known as Kangerluarsuk), which is targeting granite hosted IOCG mineralisation in the Julianehåb granitic batholith. AEX believes that the region is underexplored for IOCG deposits and shows many geological similarities to the IOCG province of northern Sweden, which hosts several operating mines.

Chariot 5.20p £19m (CHAR.L)

The Africa focused transitional energy company, announced the appointment of David Brecknock to the role of Drilling Manager, with responsibility for the Company’s planned Anchois gas appraisal well within the Lixus licence, offshore Morocco. The objectives of the drilling campaign are to further evaluate the resource volumes of the Anchois gas field to unlock the initial development, to provide a future producer well location and potentially drill the additional prospective sands with the aim of establishing a larger resource base for longer term growth. David has considerable experience with high profile deepwater offshore drilling with over 20 years of international experience gained with Enterprise, Shell, BG, Devon, Perenco, Ophir as well as leading Chariot’s drilling in Namibia in 2018.

The Panoply Holdings 265p £215m (TPX.L)

The technology-enabled services group focused on digital transformation, announces the acquisition of the entire issued and to be issued ordinary share capital of Nudge Digital Limited a digital services agency which delivers strategy-led services primarily to the pharmaceutical industry, health sector and, more recently, to local authorities, with a particular focus around care pathways. Bristol-based Nudge, founded in 2006 by CEO Luke Aikman, provides strategic consultancy and digital execution on mission-critical services, from global pharmaceutical projects to the software underpinning social housing and social care. Since its founding, Nudge has built up a strong client base including major pharmaceutical companies Roche and Galderma, private healthcare provider Bupa as well as the Greater London Authority, Hackney and Westminster councils. The Acquisition is strategically important to the Group and strengthens its overall position in healthcare and, importantly, provides an entry into the pharmaceutical industry at a time when the NHS is looking at precision medicine, risk stratification and data-driven personalised care plans for patients. The Acquisition is profitable and immediately earnings enhancing for The Panoply. Nudge has achieved significant revenue growth over the last two years of 151% and delivered revenues of £2.7m, adjusted EBITDA of £1.0m and adjusted profit after tax of £0.9m for the year ended 31 March 2021 (all unaudited). Nudge enters the group with a booked backlog of £2.5m for FY22. The Panoply is paying a total consideration of £5.0m with £1.75m being satisfied in cash and £3.25m by the issue of new ordinary shares in The Panoply. The cash portion of the consideration will be funded through the Group’s own cash reserves. The Group remains highly cash generative, with £4.9m net cash and a net debt position of £8.2m at 30 June, which remains at less than 1x pro forma EBITDA.

M.P.Evans 722p £391.9m (MPE.L)

M.P.Evans Group PLC, a producer of sustainable Indonesian palm oil, announces updates made by the Indonesian government to its palm-oil export levy which will take effect from 2 July 2021 (see Annex). These updates result in a reduction in the export levy of up to US$100 per tonne, dependent on the reference price of crude palm oil (“CPO”) used. Whilst these updates are expected to have a positive impact on the Group’s ex-mill-gate CPO pricing in the second half of 2021, it is not yet clear to what extent current pricing had already anticipated the updates and to what extent producers will see further pricing benefits. As reported in the recent trading statement, the board remains confident in the Group’s ability to deliver crop growth, improving results, and a rising dividend.

Origin Enterprises 3.38p £474.2m (OGN.L)

The international Agri-Services Group, today announces the sale of its Belgian fertiliser business, Pillaert-Mekoson, to Brokking Group (Brokking) for total consideration of EUR15.5m on a cash free / debt free basis. The proceeds from the sale shall be used for general corporate purposes. Brokking, through its Triferto fertiliser wholesaling business, operates across Germany, France and the Benelux region. Commenting on the announcement, Origin Chief Executive Officer, Sean Coyle, said: “Since entering the Belgian market in 2018, we have looked to acquire complementary businesses to add further scale to our fertiliser operations in the region. Without suitable consolidation opportunities we have therefore decided to exit this market, to focus on markets which offer greater growth potential. We would like to thank the Pillaert team for their significant contribution to the Group since acquisition and wish them continued success with their new owners.”

Petards Group* 12.5p £7.2m (PEG.L)

The developer of advanced security and surveillance systems, announces that it has been recently awarded an export contract worth over £0.5m to supply ProVida systems to a new overseas customer. The contract, awarded to Petards’ subsidiary QRO Solutions (QRO), is for the supply of ProVida in-car speed enforcement systems and associated online training and support. The equipment is expected to be fully delivered during the second half of 2021 and will be installed by the end user in its fleet of police vehicles. Raschid Abdullah, Chairman of Petards Group plc said : “We are delighted that ProVida has been selected for this overseas application for in-car speed detection and enforcement capability and to have added a significant new customer to QRO’s customer list, and we look forward to the possibility of working with them on future projects.”

Sareum Holdings* 6.70p £223.3m (SAR.L)

The specialist drug development company delivering targeted small molecule therapeutics to improve the treatment of cancer and autoimmune diseases, is pleased to announce encouraging top-line results from its UKRI grant funded Covid-19 research project. The project has completed on schedule, with the final results confirming the initial encouraging results as noted in the Company’s Interim Results, published on 23 April 2021. The results of the project found that SDC-1801 reduced the levels of cytokines associated with Acute Respiratory Distress Syndrome (ARDS) in human lung cells infected with SARS-CoV-2 and demonstrated a profile that was superior to the anti-inflammatory steroid dexamethasone and similar to baricitinib, a JAK1/JAK2 inhibitor. A secondary objective, the investigation into whether treatment with SDC-1801 in disease models could protect against bacterial pneumonia following SARS-CoV-2 infection was inconclusive, due to technical shortcomings in the disease model. Subject to successful completion of the ongoing preclinical toxicology studies, requisite approvals and financing, the Company aims to commence Phase 1 clinical trials for SDC-1801 in early 2022. The timing and design of the clinical trials for Covid-19 applications will be determined following consultations with experts in the field.

Scirocco Energy 1.00p £7.6m (SCIR.L)

The AIM investing company targeting attractive production and development opportunities within the European energy market, updated on the operational activities in the Ruvuma PSA. ARA Petroleum Tanzania Limited has now completed the tendering work for the acquisition of 454 km2 3D seismic and contract award will follow the approval by the Tanzanian authorities for the issue of the seismic acquisition contract. The Operator expects that acquisition will commence later in the third quarter of 2021. The Chikumbi-1 exploration and appraisal well is now expected to spud early in the third quarter of 2022. Assuming a successful outcome from the drilling of the Chikumbi-1 well, first gas from the project is anticipated to be delivered by the end of 2024. The work programme scheduling is in line with the Company’s expected funding commitments towards it. APT has also re-interpreted the existing 2D seismic dataset and considers the Ntorya gas reservoir to be the product of a stacked, high-energy, channelised sand system. The Operator’s revised mapping and internal management estimates suggest a mean risked gas in place for the Ntorya accumulation of 3,024 Bcf in multiple lobes and a mean risked recoverable gas resource of 1,990 Bcf which will be appraised by the planned seismic and drilling programme. The partners in the Ruvuma PSA are APT (50%, Operator), Aminex plc (25%) and Scirocco (25%).

TMT Investments* 10.65p £310.8m (TMT.L)

The company has provided a portfolio update covering current and new investments. Pandadoc and 3S Money Club have both completed new equity funding rounds (an uplift of US$10.4m and US$1.9m respectively). Klear was acquired by Meltwater B.V., for US$17.8m in a combination of cash and earn-out. TMT’s total expected cash proceeds from this disposal is US$0.5m, representing a revaluation uplift of US$0.4m. NAV growth of approximately US$0.43 per share, 7.1% from the previously stated figure of US$6.10 per share as of 31 December 2020. The Company has also made a number of exciting new investments in cybersecurity and e-commerce. TMT has invested a total of US$14.6m in 2021 to date. As of 30 June 2021, TMT had approximately US$22.8m of cash. TMT provides investors with a liquid route to invest in a globally diversified portfolio of hard-to-access, fast-growing, privately held technology companies.

Xeros Technology Group 234p £55.6m (XSG.L)

The developer and licensor of platform technologies which transform the sustainability and economics of clothing and fabrics during their lifetime, has signed a co-operation agreement with Hanning Elektro-Werke Gmbh & Co.KG., to test and market XFiltra™ to domestic washing machine manufacturers. Hanning is a leading manufacturer of component parts for major industries with expertise in moving fluids. They develop and supply parts, including drain and circulation pumps, to a number of the world’s largest washing machine manufacturers. The non-exclusive agreement allows for Hanning and Xeros to develop and test an XFiltra product for incorporation into domestic machines. Legislation in France currently requires this to be the case by 1st January 2025.

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).