Small Cap Awards 2024: IPO Of The Year Nominees

Inaugurated in 2013, the Small Cap Awards is an annual event celebrating and rewarding the finest in the sub-£350m market cap quoted company sector.

The Awards celebrates those professionals and companies that work within the AIM and Aquis communities and is attended by listed companies, institutions, fund managers, brokers and advisors.

The 2024 Awards will take place on Thursday 13th June 2024 at One Moorgate Place in London.

The nominees for IPO of the Year are:

Onward Opportunities

Onward Opportunities is a specialist investment vehicle focused on UK smaller companies listed on the London Stock Exchange, with potential for increased valuation through strategic, operational, or management initiatives. It aims to hold minority stakes of 5-25% in Investee Companies, and typically invests in companies with market capitalisations of no more than £250 million, with a particular focus on those below £100 million in the micro small companies sector and AIM.

In terms of identifying investment opportunities, our Portfolio Manager conducts a thorough search and evaluation using a proprietary database and operational resources. This process is done on behalf of the Company to ensure we deliver the best possible results for our clients.

The portfolio is composed of 10 core positions, with a further 10 in a ‘nursery’ holding. These can become full positions once approved by the investment committee. Companies within the portfolio share similar characteristics: Balance sheet asset backing, competitive advantage, attractive cash flow potential, visibility of earnings and  scope for an active shareholder to trigger value creation. The current net asset value is around £20 million.

Onward’s philosophy is to focus on the tangible. We believe in investing in businesses, strategies and catalysts that we can see and understand. This we think gives us the best opportunity to value a company today and to assess its intrinsic value tomorrow. We then aim to purchase it at a discount to both of those values.

Once we have found what we are looking for, we apply private equity techniques to our due diligence to allow us to deep dive on the earnings, valuation and capital allocation potential of an investment. This will typically involve direct and indirect engagement on a number of identified catalysts and variables in an investment to drive improved earnings, capital allocation or valuation.

The investment policy is overseen by a board with extensive relevant experience . Our investment team and committee have a combined experience of c.160 years and a history of value creation for clients. 

Since IPO, the company has gone on to deliver market leading NAV and share price returns and raised money a further two times through share issuances at premiums. It is one of the only investment companies on the LSE trading at a premium.

FADEL Partners Inc

Fadel Partners Inc. was founded in July 2003 by Tarek Fadel with the aim of designing and developing enterprise-scale applications. FADEL has since emerged as a leading provider of brand compliance, rights management, and royalty billing software. Its clients include prominent names in media, entertainment, publishing, fashion, beauty, high-tech, and advertising industries. The Group has a blue-chip customer base, with customers such as Pearson, L’Oréal, Hasbro and Marvel Entertainment.

FADEL has two main solutions being IPM Suite (rights and royalty management for publishers and licensing) and Brand Vision (an integrated platform for Brand Compliance and Monitoring that includes Content Services, Digital Rights Management, AI Powered Content Tracking, a Brand Monitor and 100 million Ready-to-Licence images).

FADEL’s main country of operation is the United States where it is headquartered in New York with further operations in the UK, France, Lebanon and India. FADEL has grown to a team of 136 full time employees plus an additional 45 contractors.

FADEL successfully completed its IPO on the London Stock Exchange’s AIM market in April 2023, raising £8 million.

FADEL’s success over the past year stands as a testament to its strategic vision and the dedication of its team. During 2023 and 2024, FADEL experienced a transformative period marked by strategic expansion, significant client wins, and a shift in business strategy. With the funds raised during the IPO, FADEL expanded its sales and marketing teams and developed in-house outbound lead generation. This investment helped diversify FADEL’s product range from the original IPM Suite to include Brand Vision and PictureDesk, along with the launch of its newest offering, LicenSee a platform designed to enhance and automate the management of royalties for consumer product licensees in the mid-market. These enhancements broadened FADEL’s target markets, enabling territory diversification and new focused use cases, accelerating client acquisition and cross-selling opportunities.

The Company observed a surge in demand for content tracking and mid-market consumer products licensing, capitalising on investments in the IPM Suite and Brand Vision’s AI-based image and video tracking capabilities.

In the past year, FADEL secured significant software licenses with major clients such as PepsiCo, Kimberly-Clark, Sanofi, and Philip Morris, leading to a 31% increase in total recurring revenue for 2023. This shift validated FADEL’s go-to-market strategy and investment in Brand Vision.

Additionally, FADEL is transitioning to a SaaS business model to drive future scalability, aiming for a higher mix of SaaS revenues despite some delays in ramping up sales hires. This strategic transition is expected to reduce reported revenues in FY24 but is designed to achieve sustainable long-term growth and enhance the proportion of recurring revenue, with a goal to reach EBITDA break-even by FY25.

Over the last year, FADEL has made calculated investments in their products and people that position the Company well for significant growth over the next few years with an optimised approach to marketing and selling their expanded range of services into a total available market which has never been greater.

Ocean Harvest Technology

Ocean Harvest Technology (“OHT”) is pioneering the use of blended seaweed additives for animal feed to generate improved performance and sustainability in livestock production.

OHT has demonstrated that its products, blended from red, green and brown seaweeds, have a pre-biotic effect in animals which has been shown to lead to higher growth rates, lower mortality and improved feed efficiency in multiple species of animals. The company has been granted a patent which protects these performance claims for a wide range of seaweed blends and for use in a wide range of animals. The granting of this patent demonstrates that OHT is the innovator in this area and has first mover advantage.

OHT sells its OceanFeed blended seaweed additive to customers globally who use the product in a range of animal species. Examples include:

  • the use of OceanFeed in piglet diets to help support the animal in its early life without having to rely on antibiotics;
  • in dairy cattle diets to improve milk production and milk quality; and
  • in layer hen diets to increase egg production and increase eggshell strength.

All of these lead to improvements in profitability for our customers and an improvement in the sustainability of their animal production practices.

The global animal feed additive market is worth over US$40bn per annum providing OHT with significant growth opportunities as customers seek out new products which are natural and help to deliver improvements in performance and sustainability in their animal production systems.

OHT sources wild blooming seaweed from south east Asia, Africa and the north Atlantic. These seaweed blooms are often invasive and their harvesting restores the biodiversity in the waterways from where they are collected. Unlike most other ingredients in animal feed, seaweed uses no arable land, fresh water or fertilisers and hence it has a much lower carbon footprint than other ingredients and additives which they can replace.

OHT continues to invest in its research and development to demonstrate additional benefits of using its OceanFeed products. The company will continue to report the results of these trials and then leverage them to further grow its addressable markets.

2023 was a strong year for OHT. The completion of the IPO enabled it to raise the capital to fund its business plan through continuing investment in its three key focus areas of sales and marketing, supply chain development and research & development.

OHT has strong growth opportunities as it on-boards new customers in this large global market. Its customers are looking for natural products which can help them deliver improved animal performance, improve the sustainability of their production systems and address their profitability issues. OHT’s OceanFeed blended seaweed product is a unique solution for these customers as it is 100% natural and has a pre-biotic effect with demonstrated results which have been patented. The products also have a lower carbon footprint than most other animal feed ingredients and improves the sustainability of production animals when included in their diets.

Chapel Down

Chapel Down is England’s leading and largest winemaker and the power brand of English wine, the world’s newest international wine region. From its home in Kent in the heart of the Garden of England, Chapel Down produces a range of sparking and still wines which consistently win prestigious international awards for their quality. Chapel Down has over 1,000 acres of vineyards, of which 750 acres are fully productive.

Chapel Down’s status as the most recognised English wine brand is supported by its partnerships with flagship sporting and cultural events. including Ascot, the Boat Race and Pub in the Park, and Chapel Down is the ‘Official Sparkling Wine’ of the England and Wales Cricket Board.

Chapel Down is listed on the London Stock Exchange’s AIM and has over 9,000 retail investors who enjoy discounts on Chapel Down’s wines and tours and tastings at the brand’s home at Tenterden Kent, which each year attracts c60,000 visitors.

Chapel Down is strongly committed to growing its business in balance with the environment and sustainability is a strong, ongoing focus. The company is a founding member of Sustainable Wines of GB and practices sustainable viticulture.

In 2023 we continued to build our position as England’s leading winemaker.

Chapel Down is the leading brand in English sparkling wine with higher awareness and penetration, and a larger social media following, than any other brand. We are positioned as a fresh, innovative challenger in the traditional method sparkling wine market, with our excellent, award-winning wines at the heart of the brand. We continue to premiumise the brand, as is reflected in our refreshed design, range architecture, continued strong ASP growth (+13%), and our brand leading position in sponsorship and events.

The scale and breadth of our distribution is unmatched and growing rapidly. We have an incredible home market, where English sparkling wine as a category grew 16% last year. We also see increasing opportunities in export markets which are currently under-served by English sparkling wine.

Traditional method sparkling wine remains our strategic focus and largest category. NSR in 2023 grew 25% to £12.0m (2022: £9.6m), driven by a mix of an increased ASP of 10% and a 12% volume increase to 887k bottles (2022: £789k).

Favourable growing conditions, combined with the skill of our world-class viticulture and winemaking team, resulted in an exceptional, high-quality harvest in 2023. Chapel Down delivered a record 3,811 tonnes of grapes, 86% higher than 2022 (2,050 tonnes), and 75% higher than Chapel Down’s previous record (2018: 2,173 tonnes). This will create c.3.4m bottles of wine.

A successful listing on AIM on 7 December 2023, was a move which reflects the maturity of the business and the ambitious growth plan that we are committed to delivering in the years ahead and maintains the inheritance-tax free status of Chapel Down’s shares.

Master Investor: