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Hybridan Research’s Small Cap Feast – 23 March 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.

Dish of the day

Abal Group (formerly on AIM)  relist as Supply@Me, SYME.L on standard.  A growing innovative “inventory monetisation” platform, having originated more than EUR300m of prospective “inventory monetisation deals” in its first six months of operating (to June 2018). In the first half of 2019, an additional prospective EUR300m was originated. As at the date of the publication of the Prospectus and Circular to Abal shareholders, dated 4 March 2020 , EUR972m of prospective contracts have been originated. Raising £2.2m. In primary plus vendor placing. Mkt Cap £227.5m.

Off the menu

No Leavers Today

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What’s cooking in the IPO kitchen?

Main Market (Premium)

DRI Healthcare—investment company focused on investments in healthcare Royalty Assets  looking to raise $350m. Timetable now extended

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Banquet Buffet

Metal Tiger  0.8485p  £11.8m (MTR.L)

Notes that, further to its announcements of 10 and 11 February 2020 regarding the Company’s participation in a conditional A$10m share placement by ASX-listed, Southern Gold Limited , Southern Gold has withdrawn the placement owing to market conditions.

Southern Gold has instead offered an alternative opportunity for a subscription of, in aggregate, 40,000,000 Southern Gold shares at 10c per share, to raise A$4m before costs, to be settled in two tranches . Metal Tiger has participated in the Revised Fundraise through a subscription for, in aggregate, 22,000,000 shares at a total cost of A$2.2m.

“We believe that Southern Gold’s drilling campaign, which will include significant news flow over a 12-month period, is a high-impact opportunity and is another example of our Board identifying unique opportunities in order to drive shareholder value. “

Tristel   445p  £201m (TSTL.L)

The manufacturer of infection prevention and contamination control products has entered into a know-how licence and commercial collaboration with Byotrol. The Agreement relates to the joint development of a biocidal formulation and Byotrol’s development of two additional biocidal products and formulations that will be supplied and licensed to Tristel. 

This formulation will create a unique surface disinfectant product for hospitals by combining the two companies’ core technologies. 

In addition, Byotrol will licence two biocidal formulations to Tristel for incorporation in its surface disinfectants range which is branded Cache.  Cache represents a novel approach to today’s very relevant issues of hospital hygiene and environmental concern. 

Byotrol  4.78p  £21.06m (BYOT.L)

“We have seen a very substantial increase in demand for the full range of our infection prevention and control technologies over the last seven weeks, following broad recognition of the COVID-19 outbreak in Europe.  Firm orders currently sit at £1.7m for deliveries to end of June, with many more orders still being processed. Historically our order book at this time of year has been around £0.35m 

We have been working very hard with our contract manufacturers to increase availability of our products and satisfy the exceptional demand.  These manufacturers have themselves all been dealing with supply chain constraints, initially and especially in packaging materials (most of which originate in China), and increasingly now in commodity chemicals as the crisis accelerates. 

Byotrol’s results to 31 March 2020 are now expected to exceed the guidance given at the time of our interim results, where we confirmed our expectations of positive EBITDA for the full year.  The exact outturn will depend on the extent to which we can complete orders before the cut-off on 31 March.”

1Spatial  14p  £15.5m (SPA.L)

 The specialist  in Location and Geospatial Software Solutions and Location Master Data Management (LMDM), today provides an update on trading for the financial year ended 31 January 2020.

Another year of solid strategic progress and strengthening financials, delivering double-digit revenue and adjusted EBITDA growth

The Company expects to report revenue and adjusted EBITDA for the year ended 31 January 2020 in-line with consensus expectations, with revenues of no less than £23.0m (FY19: £17.6m) and adjusted EBTIDA of at least £3.0m (FY19: £1.2m). Revenues include recurring software revenues of £9.5m (FY19: £7.5m).

While cognisant of the rapidly evolving situation with COVID-19, our high levels of recurring revenues,   strong  bala­nce sheet and wide spread of customers provide the business with a level of resilience and we are confident in our ability to work through these challenging times .”

Gfinity  0.525p  £2.5m (GFIN.L)

The esports provider, has been selected to deliver the new F1 Esports Virtual Grand Prix series.  The F1 Esports Series has been created to enable fans to continue watching Formula 1 races virtually, in light of the ongoing COVID-19 situation that has impacted the live Grand Prix events.

Gfinity worked closely with Formula 1 on the conception of the F1 Esports Virtual Grand Prix series and will now oversee the delivery of the tournament, tournament operations and broadcast production.

The F1 Virtual Grand Prix will be played every weekend in place of a postponed Grand Prix.  The first race, the Virtual Bahrain Grand Prix took place on Sunday, 22 March and featured Formula 1 drivers and a host of celebrities. The Virtual Grand Prix’s are currently scheduled to take place until May and will be extended if the COVID-19 pandemic results in further Grand Prix cancellations. 

The series uses the official F1 2019 PC video game, developed by Codemasters.  Each race is broadcast live from the Gfinity Esports Arena in London and will be available on the official Formula 1 YouTube, Twitch and Facebook channels.

Zoo Digital 35.5p  £26.5m (ZOO.L)

The provider of cloud-based localisation and digital distribution services to the global entertainment industry, today issues the following trading update in respect of the year ending 31 March 2020.

Group revenue expected to be approximately $30m, representing an increase of around 4% over the prior year and with H2 revenues up at least 12% over H1

The Company has successfully executed its core strategy of partnering with major media companies to provide localisation and digital packaging. This resulted in the company’s first appointment to deliver end-to-end services, two further engagements as a preferred vendor and the successful deployment of ZOOstudio for managing OTT localisation and digital packaging operations.

The Company expects to report EBITDA for the year of not less than $2.2m, up from $0.4m in the prior year period.

As we approach the start of the new financial year we are currently experiencing higher levels of interest in our cloud-based localisation services from major media companies. Given that the full impact of COVID-19 on our customers remains unclear, the Board does not believe it is prudent to provide guidance on the potential full year outcome for FY21 and FY22 at this time.”

SDX Energy  12.5p  £25.6m (SDX.L)

The MENA-focused oil and gas company, announces that as a result of the announcement made by the Financial Conduct Authority on 21 March 2020 requesting that, as a result of COVID-19 uncertainties, all listed companies should observe a moratorium on the publication of preliminary financial statements for at least two weeks, it has been forced to delay today’s planned publication of its preliminary financial statements and its audited financial and operating results for the year ended 31 December 2019. 

The Company is in dialogue with AIM and other regulatory authorities on this matter and will endeavour to seek permission to release its preliminary financial statements and its audited financial and operating results for the year ended 31 December 2019 as soon as possible.

Amryt Pharma  101p  £156m (AMYT.L)

Market update.  Business performance in Q4 2019 was strong and this positive momentum has continued into Q1 2020. For the twelve-month period to 31 December 2019 on a pro forma basis:

Combined revenues of $154.1M, compared with $136.3M for the year ended December 31, 2018, representing a growth rate of 13.1%;

Juxtapid®/ Lojuxta® (lomitapide) generated revenues of $68.0M compared with $64.0M for the year ended December 31, 2018, representing a growth rate of 6.3%;

Myalept® / Myalepta® (metreleptin) generated revenues of $85.4M, compared with $71.4M.

The significant growth in metreleptin was driven by the ongoing rollout of Myalepta® in Europe following the approval of the product by the European Medicines Agency  in Q3 2018. $65m as at 31 Dec.

The majority of our revenues are recurring in nature and therefore, we do not anticipate significant changes to our existing revenues as a result of COVID-19. Amryt has in excess of 12 months of labelled and unlabelled finished products on hand for both lomitapide and metreleptin.  Continue­s patient recruitment for the EASE trial but may focus resources on those geographies less impacted by COVID-19 than others.”

FireAngel Safety Tech 11p  £8.4m (FA..L)

One of Europe’s leading developers and suppliers of home safety products, announces a proposed open offer and placing to raise approximately £6.1m to strengthen the Company’s balance sheet and to deploy and support its connected homes technology.

Breedon Group 71.7p  £1.2bn (BREE.L)

The construction materials group in Great Britain and Ireland, notes the announcement by its associate company BEAR Scotland Limited, a leading integrated services provider in road maintenance, that it has been confirmed by Transport Scotland as the Operating Company for the new Network Management Contract to manage and maintain Scotland’s South East Trunk Road Unit, an eight-year contract with an option to extend for up to a further four years estimated to be worth up to £720m.

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Hybridan are small-cap brokers and advisers, dedicated to fundraising, 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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