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Hybridan Research’s Small Cap Feast – 28 February 2020

Here, the analysts at broker and adviser Hybridan serve up their daily selection of news highlights and the latest IPOs from the UK’s small-cap world.

Today’s specials include the likes of United Oil & Gas (LSE:UOG), Norman Broadbent (LSE:NBB), Walker Greenback (LSE:WGB), and St James House (LSE:SJH):

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Dish of the day

Incanthera—Specialist oncology company focused on transforming cancer treatment by creating environments in which cancer cannot survive . Has raised £1.205m on NEX. The lead product and focus is Sol, a potentially innovative topical product for the treatment of solar keratosis and the prevention of skin cancers. This has achieved proof of concept and the Company is now focussed upon delivering Sol to a commercial partner within 12-18 months.  Mkt cap £6.4m.

Off the menu

No Leavers Today

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What’s cooking in the IPO kitchen?

AIM

FRP Advisory Group, UK professional services firm specialising in restructuring advisory. Raising £80m (£20m primary). Expected market cap £190m.  Compound annual growth of 16.4 per cent. in revenue and 10.9 per cent. in operating profit since the beginning of FY17.o  Strong average EBITDA margins of 51 per cent. over FY17 to FY19, and consistently strong cash conversion

Main Market (Standard List)

The Proof Of Trust has announced its intention to list on the Standard Market.  The Blockchain based business, owns patents to a protocol which facilitates dispute resolution based upon smart contract disputes.  Transaction details TBC.

Main Market (Premium)

DRI Healthcare—investment company focused on investments in healthcare Royalty Assets  looking to raise $350m. Due 11 Mar.

Ninety One –proposed demerger and public listing of  Investec’s  global asset management business on LSE and JSE. 30 Sep 2019 AUM £121bn. Sale of existing shares. Expected free float of >60%. Due 16 march.

Cabot Square—Closed ended investment fund focussed on alternative assets and asset manager. Looking to raise £200m.  Will target investment opportunities that are expected to generate an attractive risk adjusted return and that can also make a positive ESG impact by focusing on some of the biggest challenges facing societies and economies.  Due 14 Feb.

The Global Sustainable Farmland Income Trust will invest in a diversified portfolio of operational farmland assets located in major agricultural markets including the United States, Europe, New Zealand, Australia and certain countries within Latin and South America. Raising up to $300m.   Due 28 February.

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Banquet Buffet

Norman Broadbent (NBB.L) 7.5p £4m

Update relating to Chief Financial Officer Succession Planning from the Professional Services firm offering a diversified portfolio of integrated Leadership Acquisition & Advisory Services .

Following the recent positive Trading Update which saw increased YoY revenues, growth at Net Fee Income level, and a return to full year profit for 2019, Will Gerrand, Group Chief Financial Officer, has advised the Board that now this milestone has been achieved, he plans to leave the Company in the near future and pursue other business interests. 

A process is underway to find a successor and to ensure a smooth handover. As we approach the release of our 2019 Full Year Results (scheduled for early April), a further announcement on this will be made in due course.

St James House (SJH.L) 41.5p £1.3m

 Trading Update.  The payments division continues to make progress in all areas, but particularly in non-card payments.  EURO IBAN account openings increased  a further 16% to the 21 February and growth of GBP accounts was in excess of 700%, however this is from a low base as this service only commenced during January; the Board will be able to present more meaningful data in the coming months as take-up numbers grow.  

As previously announced the number of Lottery lines played on a weekly basis continues to grow. The overall number of lines played is approximately 33% higher in February 2020 than for February 2019.

Working capital remains constrained and an area of focus, however the Board believes the improving operating performance will alleviate the position gradually.  Completion of the subscription for new shares and capitalisation of existing liabilities  is subject to today’s GM

Walker Greenbank (WGB.L) 70.5p £50m

 The luxury interior furnishings group, announced that its Clarke & Clarke brand is collaborating with TV personality Tess Daly on the launch of her first homeware collection, a delicately designed range of bedlinens, cushions, bolsters and throws.

The collection, of five different designs with co-ordinated plain colourways, features feminine and luxurious fabrics including velvets, metallic knits and embroideries along with sequin detailing and faux fur.

The collection, under the Tess Daly Home brand, was exclusively pre-launched online last month by Next and will be officially launched on 2 March 2020, when it will become available at a wide range of retailers.

Karelian Diamonds (KDR.L) 2.85p £1.2m

HY Nov 19 results.  Highlights Include:

Presence of coloured stones including pink diamonds confirmed at the Lahtojoki diamond deposit. Examination of the pink diamonds indicates that these diamonds are of high quality and therefore potentially especially valuable.

The process in relation to compensation for landowners at Lahtojoki is now at an advanced stage.

Material from kimberlite boulders to the south of the Lahtojoki diamond deposit indicate that the boulders may come from an undiscovered kimberlite up ice.  The Company has been granted an exploration permit over the relevant area.

Exploration work is also continuing in the Kuhmo region of Finland.

Howard Bird joined the Board of the Company as a NED and will also continue in his role as a geoscience consultant.

Loss of EUR250k.  Post period a subscription and issue of a convertible loan note raised a total of £240,000. This subscription and issue of convertible loan note was subscribed by a new investor Fredrik Björnberg.

Mr Björnberg, qualified in geology, was involved in the early stages of the discovery of the Lahtojoki diamond deposit and is a member of a prominent family in Finland with a range of business activities.

Alpha Real Trust (ARTL.L) 203p £121.2m

The Trust  targets investment, development, financing and other opportunities in real estate, real estate operating companies and securities, real estate services, infrastructure, infrastructure services, other asset-backed businesses and related operations and services businesses that offer attractive risk-adjusted total returns.

· NAV per ordinary share 212.7p: 31 December 2019 (213.5p: 30 September 2019).

· Basic earnings for the period ended 31 December 2019 of 5.7p per ordinary share (2.7p per ordinary share 30   September 2019).

· Adjusted earnings for the period ended 31 December 2019 of 4.8p per ordinary share (3.0p per ordinary share 30 September 2019).

· Declaration of a quarterly dividend of 1.0p per ordinary share expected to be paid on 9 April 2020

SIMEC Atlantis (SAE.L) 10.75p £46.1m

 The global developer, owner and operator of sustainable energy projects, announces that Mr. Andrew Dagley will stand down as Chief Finance Officer (“CFO”), at the end of February 2020. Andrew will remain an Executive Director on the Board of Atlantis and will lead the financing of the Uskmouth waste to energy conversion project. 

The Company is pleased to announce that Mr. Stephen Hutt, who joined Atlantis as part of the acquisition of Green Highland Renewables in 2019, will be appointed as Group CFO with effect from 1st March 2020 but will not be joining the board at this time. Stephen will be based at the Company’s head office in Edinburgh.

Benchmark Holdings (BMK.L) 34.5p £230m

Q1 results was impacted by continuing market weakness in Advanced Nutrition.  As a result, Group revenues from continuing operations were 15.5% below the prior year and Adjusted EBITDA from continuing operations a loss of £2.0m. Positive performance and outlook in Genetics.

·The Company is accelerating its restructuring and cost savings plan  and overall the Company expects to deliver on expectations for the full year.

To date, the coronavirus has led to a suspension of shrimp imports to China, affecting shrimp producers principally in Ecuador and India. · Post period end, the Company: raised £42m net proceeds through a placing and open offer; completed the sale of its conferences business, completed the sale of a small non-core nutrition business, and closed its marketing services business; and  submitted the regulatory dossier for BMK08.

Empire Metals (EEE.L) 1.35p £1.8m £600k placing at 1p.

The net proceeds of the Placing will be primarily used to maintain activities in Georgia following the  recent confirmation of tenure over two of the Company’s priority assets, in addition to identifying compelling new assets through which the Company can add short term value, as well as for general working capital purposes.

United Oil & Gas (UOG.L) 2.875p £9.9m

Completion of the acquisition of Rockhopper Egypt Pty Ltd. from Rockhopper Exploration plc. The Acquisition, which has an effective date of 1st January 2019, includes a 22% non-operating interest in the producing Abu Sennan concession, onshore Egypt, where production averaged 7,900 boepd in the first half of February 2020 (over 1,700 boepd to UOG’s net working interest).$16m consideration in cash & shares with aa £4.8m equity raise at 3p.

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Hybridan are small cap brokers and advisers, dedicated to fund raising, promoting investor awareness and providing market-driven corporate finance advice.

Derren Nathan: 0203 764 2344/ derren.nathan@hybridan.com

Niall Pearson: 0203 764 2343/ niall.pearson@hybridan.com

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